The government in the Kwame Kilpatrick federal corruption trial alleged Wednesday that the former Detroit mayor neglected to report more than half a million dollars on his tax returns to the Internal Revenue Service. Read: Courtroom blog: Day 59 of trial.
The first witness on the stand this morning was Gregory Terrell, a Certified Public Accountant in private practice at Gregory Terrell & Company. Terrell prepared Kwame and Carlita Kilpatrick's tax returns for the years between 2003 and 2007.
The witness testified that he met Kilpatrick through his father Bernard. Terrell told the court that he and Kilpatrick would speak on the telephone to go over the tax returns.
In the period between 2003 and 2007, Carlita only listed income once.
That was in 2003 when Carlita reported that she had been paid $19,465.57 by the Next Vision Foundation, a charity run by her husband's sister.
And for that same period, the former Detroit mayor only once listed a source of income additional to his salary working for the city. It was also in 2003: Kilpatrick entered in his returns that he earned $2,500 from a speaking engagement at Wilberforce University in Ohio.
Kilpatrick's total reported income for that period: $188, 220 in 2003, $167,940 in 2004, $156,329 in 2005, $153,024 in 2006, $167,005 in 2007 and $127,059 in 2008.
Yet federal investigations revealed cash transactions into Kilpatrick's account totaling $531,401 in the period between 2002 and 2008.
In 2007, Kilpatrick also claimed a tax deduction by providing a gift receipt from Florida A & M Foundation for $5,000 in October 2007.
U.S. Attorney Mark Chutkow then showed jurors a $5,000 check written to Florida A & M drawn from the account of the Kilpatrick Civic Fund, a non profit.
Terrell told the court that he never saw the Kilpatrick Civic Fund check because if he had he would never have put it towards a deduction.
On cross examination, Kilpatrick's lawyer James Thomas asked the CPA if taxpayers did not sometimes omit information inadvertently. The witness conceded that it happened.
Terrell also agreed with the defense lawyer that loans and gifts, cash or otherwise, were not taxable income for the recipient.
That was not the case with the tax preparer from Texas.
Anca Bucur, a tax adviser with the Southlake, Texas office of H & R Block, testified that she met Kilpatrick after he set up an appointment online for April 2009. Bucur told the court that the only income Kilpatrick reported for 2008 was his salary as mayor of Detroit.
While Bucur agreed that loans were non taxable, she disagreed that cash gifts were not saying that anything over $12,000 was subject to taxation.
"You are relying on your training for that?" asked Thomas sarcastically. Earlier, the defense lawyer had questioned whether the witness had even finished high school.
Yes replied Bucur. Jurors also heard more of Bernard Kilpatrick's wire tapped telephone recordings. The main subject of Bernard's calls was his attempt to get his clients Capital Waste Management on site for the Book Cadillac renovation project in 2008.
Between 2002 and 2008, Capital Waste made payments totaling $222,000 to Bernard's Maestro & Associates.
In the series of calls made on February 14th 2008, Bernard is heard attempting to get contractor Jenkins Construction thrown off the contract. Jenkins had opted to go with one of Capital Waste's competitors to truck out debris from the site.
Talking to Bobby Ferguson, Bernard muses whether George Jackson, director of the Detroit Economic Growth Corporation which oversaw the Book Cadillac renovation project, can't take take care of the problem. "Can he make trouble for Jim Jenkins over there? Can he run him out of there?"
Court resumes Thursday morning at 9AM.