10 December 2013


Story first appeared on DetroitNews.com.

Detroit — Former Mayor Kwame Kilpatrick was ordered Tuesday to pay almost $4.6 million in restitution to the bankrupt city stemming from the City Hall corruption conviction.

U.S. District Judge Nancy Edmunds also ordered Kilpatrick to pay $195,000 to the Internal Revenue Service. It remained unclear where Kilpatrick will be sent to serve a 28-year prison sentence though the judge has agreed to recommend a federal prison in Texas so the former Detroit mayor can be near his wife, three children and extended family.

Kilpatrick, who is being temporarily housed at a federal prison in Milan, did not attend the hearing, which capped a years-long federal prosecution and one of the country’s biggest public corruption trials.

A $4,584,423 restitution bill represents proceeds obtained through a racketeering conspiracy headed by Kilpatrick that involved steering more than $73 million worth of contracts to his friend, contractor Bobby Ferguson, according to prosecutors. The government also wants Kilpatrick to pay $195,000 to the Internal Revenue Service.

Edmunds said there was adequate trial testimony showing Ferguson shared money with Kilpatrick from corrupt contracts and did little or no work on several taxpayer-funded jobs.

“The city was directly harmed by the defendant’s criminal conduct,” Assistant U.S. Attorney Linda Aouate said Tuesday.

The money may never be repaid to the city though the federal restitution will remain in place for 20 years after Kilpatrick leaves prison. Kilpatrick, 43, was sentenced in October to 28 years in federal prison for heading a criminal enterprise in City Hall.

“He owes a lot of money to the citizens of Detroit but as far as the likelihood of paying that back, I don’t know,” said Michigan Department of Corrections spokesman Russ Marlan.

Kilpatrick’s lawyers fought for a lower restitution amount.

The judge could alter terms of the restitution later because six people have filed claims, arguing they were victimized by the corruption and deserve money. The filers include Walbridge, a construction company caught up in Kilpatrick's racketeering scandal. The firm has staked a claim to millions in restitution but a company spokesman said it would donate any cash to the community.

Kilpatrick has a long and checkered history with court-ordered restitution. He owes $854,063 in restitution to the bankrupt city under terms of a deal that resolved criminal charges in the text-message scandal and hasn’t made a payment since February.

A spotty payment history and allegations Kilpatrick hid income and assets led to jail and extended prison stints, most recently in January.

In March, Ferguson, 44, agreed to forfeit his interest in a Detroit home, $460,000 seized by the FBI during the city hall corruption probe, 15 pieces of heavy equipment and a Riverfront Towers condominium.

Ferguson’s restitution hearing is Jan. 9. Prosecutors want him to pay $6,284,000.

Both men say they are broke.

Kilpatrick said he was destitute and received a taxpayer-funded legal team during the corruption trial, which ended in March. He was found guilty of 24 crimes, including racketeering.

Ferguson, who is serving a 21-year sentence and awaiting retrial on federal bid-rigging charges, was found guilty of nine charges. He recently surrendered a Ford Mustang convertible that was sought by the automaker’s finance company.

Kilpatrick was on state parole before the federal City Hall corruption jury found him guilty in March. The state investigated his finances after Kilpatrick made late restitution payments to the city.

They were unable to determine what happened to proceeds of his autobiography. Kilpatrick denied receiving any money from the book.

“Throughout the course of our supervision he was less than forward about many of those details — how he was able to live and money coming in,” Marlan said. “He was taking steps to hide income and assets from us.”

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