ANTOIN “TONY” REZKO
Close adviser and fundraiser for Blagojevich
STUART LEVINE
Blagojevich appointee to state Teachers’ Retirement System Board
Political insiders Antoin “Tony” Rezko and Stuart Levine used Rezko’s influence with public officials to sustain their scheme to collect kickbacks from firms that wanted state business, prosecutors charged Wednesday.
The alleged scheme hinged on Levine’s status as one of Gov. Rod Blagojevich’s appointees to the state Teachers’ Retirement System Board and the Illinois Health Facilities Planning Board.
According to prosecutors, Rezko, a top fundraiser for Blagojevich, was able to stack the boards with loyal allies who would vote to give business to firms that paid kickbacks. The government’s charges against Rezko fall into three broad categories:
1. Levine and Rezko sought payments totaling millions of dollars from seven investment firms seeking to do business with the Teachers’ Retirement System (spring 2003 to July 2004).
ONE DEAL PROSECUTORS SAY DIDN’T WORK
Prosecutors allege that in spring 2004, Rezko and Levine threatened to hold up a deal to invest $220 million from the Teachers’ Retirement System in real estate. They gave the real-estate firm’s principal a choice to keep the deal alive: Pay their consultant $2 million or donate $1.5 million to the campaign of a public official.
Prosecutors didn’t identify the real-estate investor or the public official.
Sources familiar with the investigation said Gov. Rod Blagojevich was the public official whose campaign was to receive the donation, however.
The real-estate investor is Thomas Rosenberg, the Academy Award-winning producer of the Clint Eastwood film “Million Dollar Baby,” the sources said.
The scheme collapsed when Rosenberg threatened the unidentified consultant, saying that he would go to law enforcement, prosecutors charge.
As a result, Rezko and Levine allowed the $220 million investment to go through but agreed Rosenberg’s firm wouldn’t get more retirement system business, the indictment charges.
ONE DEAL PROSECUTORS SAY DID WORK
$250,000
Rezko and Levine allegedly diverted it from a $375,000 finder’s fee that was paid through a sham consulting agreement they had set up.
The scheme began, authorities said, when the men diverted $250,000 from a finder’s fee that an investment firm paid after getting business with the Teachers’ Retirement System.
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In 2003, the system’s board approved a $50 million investment deal, according to the indictment.
The company that got the deal paid a $375,000 finder’s fee to a consultant selected by Rezko and Levine.
They allegedly diverted $250,000 of that to a Rezko business associate who did no work on the deal.
Levine instructed attorney Steven Loren to create a bogus document “that would pass scrutiny if someone like the U.S. attorney looked at it,” according to the indictment. Loren has pleaded guilty in the case.
Prosecutors alleged that some of the money that went to Rezko’s business associate wound up being used for the benefit of Rezko.
2. Levine and Rezko sought a $1 million kickback from a contractor who hoped to build a new hospital for Mercy Health System in Crystal Lake (spring 2003 to July 2004).
$1 million
The money did not exchange hands, and the project faltered after Levine and others learned of the federal probe.
The charges allege that Rezko and Levine used their influence to help Mercy Health System win approval from a state oversight board to build a hospital in Crystal Lake. In return, the two demanded a $1 million kickback from a developer.
The Health Facilities Planning Board granted a permit for the construction in April 2004. The facility was never built, and the kickback was not paid, the government said.
3. Rezko allegedly set up a phony transaction involving the sale of his pizza restaurants in Illinois and Wisconsin. Prosecutors said he sold them at inflated prices to a straw buyer while keeping ownership and $10 million in loans for the sale.
$10 million
Rezko was charged in a separate indictment accusing him and four unnamed co-schemers of using bogus information to secure $10 million in loans from the General Electric Capital Corp. for Rezko’s Papa John’s Pizza restaurants in Milwaukee and Chicago.
Rezko was charged with two counts of wire fraud, with authorities alleging he falsely portrayed the sale of his pizza restaurants. U.S. Atty. Patrick Fitzgerald said Rezko sold the businesses at inflated prices to an individual who was really a straw purchaser, and it was Rezko who was going to own them.
“Meanwhile, Mr. Rezko’s other investors were not told about the sale; they were simply told that this was a refinancing,” Fitzgerald said Thursday.
Prosecutors said Rezko concealed the fact that all of the assets were being transferred to himself.
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