Detroit – Federal prosecutors showed dramatic photos of hidden safes stuffed with cash during opening arguments in the $12 million bid-rigging case against contractor Bobby Ferguson, a close friend of former Mayor Kwame Kilpatrick.
Money is a central theme of one of the most eagerly anticipated criminal cases stemming from a years-long FBI probe of City Hall corruption.
“This is a case of fraud, deceit and money,” Assistant U.S. Attorney Bruce Judge told jurors Tuesday inside federal courthouse in downtown Detroit.
The prosecution’s narrative chronicled how Ferguson allegedly schemed and lied to win a multimillion-dollar public housing contract and pressured city officials to pay inflated invoices in the dying days of Kilpatrick’s administration.
Ferguson’s lawyer, Gerald Evelyn, offered a contrasting view, portraying Ferguson as a skilled businessman who is being tainted by an alleged friendship with Kilpatrick. He tried to discredit the government’s case, saying it relies on witnesses who struck plea deals with prosecutors and sensational photos of cash.
“Don’t buy the sensationalism or let the shadow of people who are not here linger over the trial and influence your position,” Evelyn said.
Opening statements will continue Tuesday afternoon following a controversial six-day jury selection process.
Earlier Tuesday, lawyers involved in the case finalized picking four alternate jurors – two white men, one white woman and a black man. Prosecutors removed another black man and an Indian man from the pool despite renewed defense complaints about a lack of diversity on the jury.
Defense lawyers objected to prosecutors dismissing the black man, but U.S. District Judge David Lawson said the attorneys failed to show intentional discrimination.
The man expressed some bitterness toward the government and said he could not vote to convict Ferguson even if prosecutors proved the case beyond a reasonable doubt.
“It’s a very easy call,” Lawson said in letting prosecutors dismiss the black man.
Opening statements follow six days of jury selection in the high-profile case distinguished by a battle over the jury’s racial makeup.
The jury of five men and seven women includes one black woman and one man whose race is unknown, but who lawyers involved in the case think is black. He’s the jury’s only Detroiter.
Prosecutors removed a black woman from Detroit last week based on her appearance, large tattoos and because she did not look at one of three assistant U.S. Attorneys, defense lawyers wrote in a court filing.
Ferguson, 43, chose to stand trial in the $12 million bid-rigging case after rejecting an offer to plead guilty and spend 13 years in prison – an offer first reported by The News last month.
Ferguson was indicted in September 2010 on eight federal charges, including conspiracy to defraud the United States, conspiracy to commit mail fraud and conspiracy to launder money. If convicted of the most serious charges, he could spend up to 20 years in prison.
He also is facing gun charges. Ferguson was charged with being a felon in possession of firearms after federal agents found two semi-automatic pistols during a raid of his Detroit office.
In the bid-rigging case, Ferguson is accused of falsifying bids, laundering money and dumping debris on the grounds of the old Herman Gardens public housing site on the west side.
Prosecutors contend Ferguson orchestrated false bids as part of a scheme to make it look like a bid by one of his companies was the lowest.
The Detroit Building Authority in January 2007 named a Ferguson-affiliated company, Xcel Construction, to oversee the building of roads and other infrastructure on the 139-acre site. The work eventually grew into a job worth $11.7 million.
At the time, the authority was headed by Ayanna Benson, Kilpatrick’s cousin, and its commissioners included Derrick Miller, a top Kilpatrick aide who has since pleaded guilty in the racketeering case, and Christine Beatty, the former mayor’s chief of staff and lover.
Ferguson is standing trial alongside two executives at related companies: Michael Woodhouse of West Bloomfield Township, president of Xcel Construction, and Calvin Hall of Detroit, vice president of Xcel Construction.
Prosecutors have secured guilty pleas against four others.
The prosecutor also told jurors that one of Ferguson’s companies, Ferguson Enterprises, dumped contaminated debris from other city projects at the Garden View site – and then Xcel tried to charge $725,000 to haul it away, Judge said.
Not true, Evelyn said.
The Garden View site had become a dumping ground for about 10 years before Ferguson ever got involved in the project, Evelyn said.
The prosecutor walked jurors down a trail alleging how the money from the Garden View contract ended up in Ferguson’s pocket – or more specifically, hidden safes.
Ferguson used executives at Xcel to deposit and withdraw thousands in cash. In 2008, co-defendant Calvin Hall withdrew $50,000 – all in $50 and $100 bills. The money was given to Ferguson, prosecutors said.
Ferguson also used a company, AF Environmental, to hide money, Judge said.
“The only purpose was for Bobby Ferguson to get cash without leaving a trail,” Judge said.
Evelyn disagreed, saying AF was a real company that worked on real projects.
FBI agents were looking for cash when they raided Xcel’s offices on the 24th floor of the Guardian Building in downtown Detroit.
Inside Ferguson’s office, agents found a hidden wall safe.
Ferguson told agents it was empty, Judge said.
“This is what they found,” Judge said, showing jurors a photo of the inside of the safe. The photo showed a safe stuffed from top to bottom with $261,000 cash.
Agents found more money and a semi-automatic firearm inside another safe at the Detroit offices of Ferguson Enterprises in August 2009.
The firearm is Ferguson’s, prosecutors claim.
He’s not supposed to possess firearms because Ferguson is a convicted felon.
Ferguson told a colleague to claim the gun was his. That colleague, Shakib Deria, has pleaded guilty in the case and is cooperating against Ferguson.
The money was not related to the Garden View project, Evelyn said. Ferguson needed to keep cash in safes, Evelyn said, because bank officials would close his accounts after being questioned by federal investigators.
“Bobby Ferguson was not hiding a thing. He never hid a dime and paid taxes on every penny earned,” Evelyn said, his finger tapping the lectern to punctuate each word. “The government is trying to play games with smoke and mirrors and to shock you with cash. He can put money wherever he wants – a bank or a shoebox if he wants to.”
Ferguson’s lawyer urged jurors to consider several cooperating witnesses – including four co-defendants – have reached plea deals with prosecutors.
“The government purchased their testimony,” Evelyn said.
Deria’s plea deal means he won’t be deported to his native Somalia or Canada, Evelyn said.
“Look at who’s testifying and look behind the testifier and evaluate if they have reason to lie,” Evelyn said.