IRS summons Kilpatricks' real estate deals, bank accounts

New legal woes are brewing for former Detroit Mayor Kwame Kilpatrick and his wife, Carlita Kilpatrick, after the Internal Revenue Service launched an investigation into the couple's real estate transactions and bank accounts.

The IRS has asked their attorney, Harold Gurewitz, to fork over all of the couple's bank accounts and real estate transactions, according to a new federal court filing. The records include bank statements, deposit detail, canceled checks and any other documents for each account.

The IRS has also asked Gurewitz to "identify each person who gave money (in cash, check, other) to Kwame Kilpatrick from 1992 through 2008," according to the documents.

The IRS has also asked for all documents related to the sale of the Kilpatricks' former homes at 18923 Santa Rosa and 4343 Leslie.

Gurewitz represented Kilpatrick in his criminal court case, where Kilpatrick was charged and found guilty of 24 counts for crimes including racketeering, extortion and bribery in March 2013.

Kilpatrick, 44, is serving a 28-year sentence in a federal prison in Oklahoma. Kilpatrick has appealed his convictions and is awaiting a decision. According to Gurewitz, briefs have been filed and arguments have been heard, but a decision has yet to be made by the U.S. Court of Appeals for the 6th Circuit.

"I expect that I will continue to represent him in any further proceedings that are part of the appeal process," Gurewitz wrote.

The IRS issued a summons to Gurewitz on Feb. 19, asking him to produce documentation and the identification of every individual. On Feb. 25, Gurewitz objected to producing any and all of the records and information requested by the summons.

In an April 3 letter, IRS Acting Associate Area Counsel Mayah Solh-Cade advised Gurewitz that he would be given until April 21 to hand over the documentation, but he declined to do so again in a letter sent to the IRS on April 20.

Gurewitz said he will not produce the information. Gurewitz cited Kilpatrick's ongoing legal woes, attorney-client privilege, attorney work-product doctrine and the Sixth Amendment as reasons for objecting to the summons. Gurewitz said Kilpatrick was ordered to pay $195,403.61 in restitution to the IRS, which is now part of his ongoing appeal. Gurewitz said those proceedings are "far from final," furthering his stance that the IRS does not have the authority at this time to issue a summons.

"By all relevant definitions, Mr. Kilpatrick's criminal case is not final at this time while the appeal process is ongoing," Gurewitz wrote. "It also appears that some, if not all, of materials requested by the summons are presently in the custody or control of the IRS or the prosecution team in which the IRS participated during the lengthy criminal investigation and trial. Both of these factors, the lack of a final disposition and current possession or control of documents requested are substantial grounds for objection to the summons issued to me."

The Kilpatricks' finances previously came under fire during a court hearing in October 2009 in which he claimed he did not have enough money to make his restitution payments to the city. Prosecutors raised questions about bank accounts belonging to Kilpatrick and his wife, Carlita.

The hearing revealed that Kilpatrick had received thousands of dollars from high-powered Detroit businessmen after his felony plea in the text message scandal. Kilpatrick's many court proceedings also revealed that the then-mayor received cash gifts on his birthday and other occasions from friends, admirers and even his office staff, who were expected to do so.

Businessman and Ambassador Bridge owner Manuel (Matty) Moroun gave $50,000 in cash to Kilpatrick's wife and kids, prosecutors said. Kilpatrick said the gift came while he was in jail.

In February 2009, Kilpatrick received a $240,000 loan from racing magnate Roger Penske, Compuware CEO Peter Karmanos, chemical company executive Jim Nicholson and Rock Financial founder Dan Gilbert. The men said they loaned the money to help the city move on from the scandal, and to help the family.

Free Press staff writer Jim Schaefer contributed.

Contact Katrease Stafford: kstafford@freepress.com or 313-223-4759. Follow her on Twitter @KatreaseS_Freep.