Feds sue Kilpatrick associate for $16.4 million

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Federal prosecutors filed forfeiture papers over the weekend, seeking more than $16.4 million from Bobby Ferguson, the contractor friend of ex-mayor Kwame Kilpatrick. Ferguson was indicted in September on charges of bid-rigging a $12 million contract connected to a Detroit affordable housing development.

Officials are looking to recover more than $3.9 million in cash, checks and certificates of deposit seized or frozen by authorities, as well as two handguns and ammunition.

In addition, if Ferguson and his co-defendants are convicted, the government wants damages of $12.5 million, the amount they received on the bid-rigged housing contract.

Ferguson’s co-defendants are all executives at companies owned by Ferguson, and include Shakib Deria, vice president of A&F Environmental/Johnson Construction Services; Michael Woodhouse, president of Xcel Construction and Calvin Hall, vice president of Xcel Construction.

Separately, in December, Ferguson was indicted on charges of extortion, bribery and fraud over construction contracts involving city sewer and water main work, in which millions of dollars were diverted to Ferguson, Kilpatrick’s father and other city hall insiders.

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Mass. politician convicted of extortion was also tax dodger

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Newly unsealed court documents show that former state Sen. Dianne Wilkerson had far more issues than just the extortion conviction she earned for taking $23,500 in bribes from a Boston businessman-turned-FBI informant.

Following her arrest on public corruption charges, Wilkerson resigned from the Massachusetts Senate in November 2008, after serving 16 years as one of its most high-profile members.

The court documents made public this week show that Wilkerson had also failed to report “gifts” she solicited in 2004 to help settle an old tax bill.

After agreeing to pay the IRS over $80,000 for unpaid income taxes dating back to 1991 through 1994, Wilkerson solicited a number of benefactors to help bail her out, having cleared the plan with the state’s ethics commission.

Under the pretense of paying off the IRS, Wilkerson quickly raised $115,750 in the first half of 2004. After paying the IRS $80,000, Wilkerson spent at least $20,000 of the money on furniture, paying down credit cards, making mortgage payments and handing out checks to her children.

Among those who gave her $10,000 each were developer Arthur M. Winn, Senate Majority Leader William “Biff” MacLean Jr., Partners HealthCare Chairman John “Jack” Connors and lawyer Thomas R. Kiley.

“It is unclear whether her solicited ‘donors’ knew that she ended up with a net profit from this solicitation, or whether they were defrauded by her claims that the funds would be used to pay the outstanding tax debt,” the records state.

Although gifts are considered taxable income, Wilkerson neglected to report any of the monies to the IRS. The U.S. Attorney’s Office declined comment on whether she would face new charges on tax evasion, according to The Boston Herald.

Wilkerson was sentenced last week to 3 ½ years in prison.

After her sentencing, Wilkerson told the press that the government’s action against her was “the most corrupt and outrageous abuse of the justice system.” Although she said she accepted her sentence, she added “My acceptance can’t negate the despicable actions of the government and its collaborators.”

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FBI wants bribe money back from Boston politician caught in sting

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Adding to his mounting troubles, Boston city councilor Chuck Turner, convicted on corruption charges in October 2010, is now being asked by prosecutors to return the $1,000 bribe he took from an FBI informant.

After taking a $1,000 bribe from an FBI informant, the feds want their money back.

Turner was caught on videotape taking a $1,000 bribe from the local businessman turned FBI informant, for agreeing to help secure a liquor license. After the incident, he lied three times to the FBI about it. The sting was part of an operation targeting corrupt politicians. Turner is scheduled to be sentenced on Jan.25.

Last week, Turner filed complaint with the U.S. District Court seeking a temporary restraining order to halt the action the city council took on Dec. 1 to remove him from office.

Turner’s lawyer, Barry Wilson, also filed papers yesterday seeking a postponement of the scheduled hearing date. Wilson said that Turner is suffering from depression, and is out of the country recovering from his “rigorous trial schedule.”

Wilson has proclaimed his innocence, telling jurors that he only took $200 in what he called “a preacher’s handshake.”

The Boston Herald

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Ex-Detroit mayor and cronies arraigned on 38 counts of corruption

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Former Detroit Mayor Kwame Kilpatrick, his father Bernard, and three other men were arraigned on Monday in U.S. District Court, on federal racketeering and corruption charges.

Disgraced ex-Detroit mayor Kwame Kirkpatrick has his most difficult legal struggle ahead of him, perhaps in 2012.

Kilpatrick is currently serving time in federal prison in Milan, Mich. on a parole violation charge. Instead of the typical prison uniform, Kilpatrick appeared in a coat and tie, although he appeared to have lost some weight and sported a bushy beard.

Kilpatrick appeared to be in good spirits, joking around with his fellow co-defendants and blowing air kisses to his sister in the courtroom audience. All five men entered non-guilty pleas to U.S. Magistrate Judge Mark A. Randon. All but Kilpatrick were released on $10,000 bail.

Observers say the current charges are the most serious brought to date against Kilpatrick, 40, who was considered a rising star in Michigan politics until forced to resign in 2008, after state convictions of perjury and obstruction of justice.

In mid-December, a 17-member federal grand jury indicted Kilpatrick, his father Bernard Kilpatrick, former mayoral aide Derrick A Miller, Kilpatrick close friend and contractor Bobby Ferguson and former Detroit water chief Victor Mercado.

The 89-page indictment described a culture in which Kilpatrick orchestrated million dollar schemes to steer city business to contractors who would pay kickbacks to Kilpatrick and his group. The U.S. Attorney’s Detroit office filed the 38-count indictment, charging the group with racketeering conspiracy and accusing them with extortion, bribery and fraud. Tens of millions of dollars of municipal contracts were steered to Ferguson using coercion exerted by Kilpatrick’s office.

The government brought charges under the Racketeer Influenced and Corrupt Organizations Act which makes it easier to sue interconnected entities in complex cases. A RICO case, often used in instances of organized crime, also provides harsher sentencing provisions and recovery of triple damages.

Ferguson is a close friend of Kwame Kilpatrick and a hauling and construction contractor. He was previously indicted in September on separate charges of bid-rigging a $12 million contract connected to a HUD affordable housing project in the Detroit area.

Bernard Kilpatrick was involved in the corruption schemes through a consulting firm, Maestro Associates LLC, which he started around the time his son was elected mayor. He was part of the team including Kwame Kilpatrick, Derrick Miller and Victor Mercado that regularly extorted monies from legitimate contractors involved in city sewer and water main work, often steering a portion of the contract to pal Bobby Ferguson. In some cases, Ferguson received big fees for doing no work at all.

The government alleges that Ferguson kicked back over $420,000 to Kilpatrick and his father Bernard, and said Bernard Kilpatrick deposited more than $600,000 in cash into his personal bank accounts while his son served as the mayor of Detroit from 2002 through 2008.

Most of the contracts were valued in the tens of millions of dollars, although the men tried to extort a company into giving Ferguson a large piece of a $140 million contract for a new pumping station. The Kilpatrick group, called Kilpatrick Enterprises by prosecutors,  worked together in instances of rig-bidding, so that Ferguson would be guaranteed contract wins by manipulating the bidding process.

Kilpatrick resigned from office in 2008 after being charged with 10 felonies, including perjury, misconduct in office and obstruction of justice. He pleaded guilty to lesser charges and served 99 days in jail, but was sent back for violating the terms of his parole.  He is currently serving time in federal prison in Milan, Michigan.

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Former Mass. senator sentenced to 3 ½ years for corruption

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Dianne Wilkerson, the first black woman elected to the Massachusetts Senate, was sentenced on Thursday to 3 ½ years in prison , after pleading guilty to eight counts of attempted extortion for taking $23,500 in bribes from a Boston business owner, Ronald Wilburn, who was cooperating with the FBI.

Former Mass. state senator Dianne Wilkerson was taped on eight occasions taking bribes from an FBI informant.

Wilkerson was a high profile member of the state Senate, where she served for nearly 16 years. She resigned in Oct. 2008 following her arrest on the bribery charges.

Wilkerson was infamously videotaped by FBI agents stuffing a roll of cash into her bra, on one of eight occasions that she received the bribes.  Wilkerson took the bribes in exchange for her help in securing a liquor license for a nightclub and to intercede on a property development deal.

After her sentencing, Wilkerson told the press that the government’s action against her was “the most corrupt and outrageous abuse of the justice system.” Although she said she accepted her sentence, she added “My acceptance can’t negate the despicable actions of the government and its collaborators.”

U.S. District Judge Douglas Woodlock handed down the sentence, also noting her conviction on tax evasion charges in the 1990’s and repeated violations of state campaign finance and ethics laws. Prosecutors earlier promised that they would recommend no more than four years of prison time, in exchange for the guilty plea.

The Boston Democrat said she wasn’t motivated by money and always worked hard to serve her constituents.

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Jailed political consultant, who pleaded guilty, wants taxpayers to fund his appeal

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A prominent figure in the Detroit city hall corruption scandal led by Former Mayor Kwame Kilpatrick, has asked U.S. District Judge Marianne O. Battani to approve his request for a court appointed lawyer to appeal his guilty plea.

Pleaded guilty to bribery and extortion charges, now wants taxpayers to pay for a lawyer to appeal his conviction.

Political consultant and top aide to former Detroit councilwoman Monica Conyers, Sam Riddle pleaded guilty to conspiracy to commit bribery and extortion in July 2010, and was sentenced to 37 months in prison. Riddle has been in federal custody since May 2010, and in October, filed a notice to appeal.

Judge Battani rejected the pleading saying that Riddle failed to prove that he was unable to pay for the cost of a lawyer, because on the application, he simply wrote “indigent.” She said that once he properly files the forms, that the court could begin reviewing the application and make a decision.

Conyers, wife of U.S. Rep. John Conyers, also pleaded guilty to bribery and extortion charges and is also serving a 37 month prison sentence. Like Riddle, she too has decided to change her guilty plea, saying she was pressured by her own lawyer, prosecutors and the media.

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Detroit grand jury indicts former mayor Kilpatrick’s fraud and corruption ring

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A 17-member federal grand jury indicted former Detroit Mayor Kwame Kilpatrick, his father Bernard Kilpatrick, former mayoral aide Derrick A Miller, Kilpatrick close friend Bobby Ferguson and former Detroit water chief Victor Mercado.

The U.S. Attorney’s Detroit office announced the 38-count indictment, charging the group with racketeering conspiracy and accusing them with extortion, bribery and fraud. “Tens of millions of dollars of municipal contracts” were steered to Ferguson using coercion exerted by Kilpatrick’s office.

Kwame Kilpatrick, Detroit's mayor from 2002 through 2008, is currently serving time in a federal prison for violating parole in another case.

Ferguson is a close friend of Kwame Kilpatrick and a hauling and construction contractor. He was previously indicted in September on charges of bid-rigging a $12 million contract connected to a HUD affordable housing project in the Detroit area.

The government brought charges under the Racketeer Influenced and Corrupt Organizations Act which makes it easier to sue interconnected entities in complex cases. A RICO case, often used in instances of organized crime, also provides harsher sentencing provisions and recovery of triple damages.

The FBI said that it has been investigating the case for six years, and alleges that some of the corruption can be traced back to when the younger Kilpatrick was a state representative, prior to his election as mayor in 2001. The FBI says that its investigation of the Kilpatrick-era city hall corruption is not over.

Besides the FBI, other agencies involved in the investigation include the criminal division of the IRS, the U.S. Environmental Protection Agency and Department of Housing and Urban Development.

Bernard Kilpatrick was involved in the corruption schemes through a consulting firm, Maestro Associates LLC, that he started around the time his son was elected mayor. He was part of the team including Kwame Kilpatrick, Derrick Miller and Victor Mercado that regularly extorted monies from legitimate contractors involved in city sewer and water main work, often steering a portion of the contract to pal Bobby Ferguson. In some cases, Ferguson received big fees for doing no work at all.

The government alleges that Ferguson kicked back over $420,000 to Kilpatrick and his father Bernard, and said Bernard Kilpatrick deposited more than $600,000 in cash into his personal bank accounts while his son served as the mayor of Detroit from 2002 through 2008.

Most of the contracts were valued in the tens of millions of dollars, although the men tried to extort a company into giving Ferguson a large piece of a $140 million contract for a new pumping station. The group also worked together in instances of rig-bidding, so that Ferguson would be guaranteed contract wins by manipulating the bidding process.

Kilpatrick resigned from office in 2008 after being charged with 10 felonies, including perjury, misconduct in office and obstruction of justice. He pleaded guilty to lesser charges and served 99 days in jail, but was sent back for violating the terms of his parole.  He is currently serving time in federal prison in Milan, Michigan.

The Detroit News

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