Former Detroit Mayor Kwame Kilpatrick ordered to pay additional $500K in luxury benefits scheme

Kilpatrick accused of accepting benefits for investing city money in business

Former Detroit Mayor Kwame Kilpatrick (WDIV)

DETROIT – Former Detroit Mayor Kwame Kilpatrick has been ordered to pay more than $500,000 for investing city pension fund money into a business in exchange for personal luxury items, according to court records.

Scheme details

The U.S. Securities and Exchange Commission accused Kilpatrick and former Detroit Treasurer Jeffrey Beasley of receiving luxury gifts for approving deals with Mayfield Gentry Realty Advisors head Chauncey Mayfield.

MGRA received around $115 million in investments from the city's pension funds, while Kilpatrick and Beasley received money, gifts and trips, according to court documents.

"On several occasions in 2007, the trustees of the Pension Funds voted to continue and expand their business relationship with Mayfield and MGRA," a court order said.

According to records, the SEC served a complaint and summons to Kilpatrick at his home in Grand Prairie, Texas, on May 16, 2012. Kilpatrick and Beasley didn't answer the summons or appear in court, officials said.

On May 23, 2014, the SEC filed a motion requesting the court to enter default judgments, disgorgement, civil penalties and permanent injunctions against Kilpatrick and Beasley. Neither responded before the court ruled on the motion, according to records.

Kilpatrick said he received a copy of the SEC's motion for entry of final judgment April 12, 2018. He said he doesn't remember the scheme or receiving any documents in the case.

Kilpatrick said when he was made aware of a default judgment against him on July 13, 2012, it was one month before his criminal trial. He was found guilty in the federal corruption case and sent to prison for 28 years.

The court took the SEC's allegations as true and ordered Kilpatrick to pay back the $122,922.87 he received in luxury items from Mayfield, $39,939 in prejudgment interest and $390 to the SEC in civil penalties.

In total, Kilpatrick is ordered to pay $552,861.87.

The SEC's request for permanent injunction was denied, officials said.

Kilpatrick's restitution

Earlier this year, a federal judge ordered Kilpatrick, Derrick Miller and Bobby Ferguson to pay contractor Willie McCormick more than $7.4 million for profits lost to bid-rigging on water department contracts.

Kilpatrick was ordered in August to pay $1.5 million in restitution to the Detroit Water Department for his 2013 corruption conviction.

Kilpatrick has said he's broke. In 2014, he owed $800,000 to Detroit for restitution in another criminal case and $195,000 to the IRS.

Plea for pardon

In June, Kilpatrick was moved from a prison in Oklahoma to a prison in Philadelphia. He was then moved to a low security federal prison in New Jersey.

Kilpatrick wrote a blog post shortly after his move, asking President Donald Trump for a pardon on the "Free Kwame Project" website.

"I pray that I will receive the opportunity for pardon/clemency from the President of the United States as well," Kilpatrick wrote.

In the post, he wrote that he had been behind bars for seven years, including five and a half years in federal prison. He isn't scheduled to be released until Aug. 1, 2037.

Full court order

You can view the full court order from the SEC's allegations below.

About the Author:

Derick is the Lead Digital Editor for ClickOnDetroit and has been with Local 4 News since April 2013. Derick specializes in breaking news, crime and local sports.