Former Mayor and Treasurer of Detroit Convicted in Pay-to-Play Scheme, Along with Investment Adviser

The SEC brought suit against former Detroit mayor Kilpatrick, former city treasurer Beasley, and an investment adviser and its CEO, based on lavish gifts provided by the latter to peddle influence over the investment process of the city’s public pension funds. Ultimately, the boards of trustees for the funds voted to invest approximately $117 million in a REIT controlled by the investment adviser, without the knowledge that Kilpatrick, Beasley, and associates had been supplied with extravagant travel and perks during the preceding 10 months. The elected officials were sentenced to lengthy prison terms.