Big loan gets Rezko jailed
Update: Rezko to remain in jail; judge won't grant bond. DETAILS TO FOLLOW
An unreported $3.5 million loan from an Iraqi-born billionaire helped land Tony Rezko in jail Monday -- a week after Rezko's ties to Sen. Barack Obama became an issue in the Democratic presidential campaign.
Calling Rezko "a risk of flight," U.S. District Judge Amy J. St. Eve revoked Rezko's $2 million bail and ordered him jailed at least overnight.
(Brian Jackson/Sun-Times)
* Oct. 11, 2006: Tony Rezko is indicted on corruption and fraud charges. He remains free, with restrictions, on $2 million bail.
* Monday: Rezko's bail is revoked after he's accused of hiding millions of dollars in assets.
* Today: Rezko will have a court hearing this afternoon, seeking to be released pending trial.
* Feb. 25: Rezko is set to go on trial in the first of the two criminal trials he faces -- the corruption case.
Her ruling came after prosecutors accused Rezko of repeatedly lying about his finances. "The defendant has played a shell game" and "misled the court about what his assets are," Assistant U.S. Attorney Reid J. Schar told St. Eve.
The judge noted that Rezko claimed last January "he has no money and no access to funds." But prosecutors said he subsequently paid $260,000 to a family member who had posted two properties as a condition of Rezko's release on bail. That would eliminate the financial risk the relative might face if Rezko fled and the properties were forfeited. Rezko also had been paying the mortgage on another property that was security against his bail, prosecutors said.
Rezko, 52, who was once a key fund-raiser for Obama and Gov. Blagojevich, was arrested early Monday at his Wilmette mansion.
His lawyers said any misstatements about Rezko's finances were the result of miscommunication. They are due back in court this afternoon in hopes of getting Rezko released pending the Feb. 25 start of the first of two criminal trials he faces.
In that first case, Rezko is accused of using two state-government boards to try to enrich himself, friends and Blagojevich's campaign fund. The governor has not been charged with any crimes.
A small portion of the hundreds of thousands of dollars Rezko is accused of obtaining through one of his schemes -- $10,000 -- wound up being donated to Obama's 2004 U.S. Senate campaign, the Chicago Sun-Times reported Jan. 19. Obama, who is not accused of any wrongdoing, announced that same day he was donating more than $40,000 in Rezko-related contributions to charity. That was on top of about $44,000 he already gave away amid questions about links to Rezko.
Two days later, during a nationally televised debate, Obama's key Democratic rival, Hillary Clinton, accused him of having done legal work for Rezko's "slum landlord business" -- a reference to Sun-Times reports last April about Rezko's failed affordable-housing ventures; their ties to the law firm where Obama once worked; and Rezko's role as an Obama fund-raiser. Obama's campaign said Clinton distorted the senator's relationship with Rezko.
On Monday, prosecutors said that, in 2005, Rezko "directly appealed to the State Department" and, "it appears, asked certain Illinois government officials" to let Iraqi-born billionaire Nadhmi Auchi enter this country. At the time, Auchi was "unable to enter the United States" because of a criminal conviction in France. His sentence "was suspended as long as Auchi committed no new crimes."
Aides to Obama and Blagojevich said Monday that Rezko never requested -- nor did they deliver -- any help to Auchi, whose business empire includes 62 acres in the South Loop that Rezko's development company once owned.
Last April 4, Auchi's firm, General Mediterranean Holding, transferred $3.5 million to a bank account held by the law firm Freeborn & Peters on behalf of Rezko, according to prosecutors. The next day, more than $1.3 million of that was paid to a Rezko-controlled business, three family bank accounts -- including $700,000 to his wife Rita's bank account, which previously had a balance of $4,000 -- and to creditors. Among them was Dr. Robert Simon, head of Cook County's $1 billion hospital system, who got $50,000.
Simon said Monday he's known Rezko for years, calling him "a philanthropist to the medical community." "I provided him with a loan that was solely based upon a personal friendship, and it was repaid to me in full," Simon said in a statement on county letterhead.
Rezko spent much of the rest of the remaining money on lawyers, prosecutors said.
Contributing: Dave McKinney, Tim Novak
