Close pal of gov indicted

CHRISTOPHER G. KELLY | Blagojevich's onetime gambling adviser accused of wagering millions, using business to avoid taxes

Christopher G. Kelly, once the governor's go-to guy on state gaming issues, gained a ton of experience with gambling -- firsthand.

He wagered millions of dollars with bookies and at Vegas casinos, federal prosecutors say.

But paying his gambling debts legally?

Not so good, the feds say.

Kelly, the former chief fund-raiser for the governor, was charged Thursday with understating his personal and business income by more than $1.3 million over five years.

Kelly, 49, of Burr Ridge, allegedly used money from his roofing company business to pay debts to bookies and casinos and tried to conceal the source of the cash, according to the 12-count indictment.

The Chicago Sun-Times first reported Sunday the feds were investigating Kelly for alleged tax crimes related to his gambling.

Kelly's indictment was one of three announced by the U.S. attorney's office in Chicago as it continued its widening probe of the governor's inner circle. The indictments, released in one fell swoop, crank up the pressure on individuals who are charged or under investigation to cooperate in the federal probe.

Kelly's attorney, Michael Monico, said Thursday the feds are wrong, and Kelly owes no taxes.

"One thing we believe, having spoken with our experts, is that at the end of the day, when all the evidence is in, the government will see, as will everyone else, that Mr. Kelly owes no tax," Monico said.

Monico stressed the charges had nothing to do with Kelly's political or fund-raising activity.

The governor, too, noted in a brief statement the allegations dealt with his friend's personal life.

"I know the pain it must be causing him and his family," the statement reads. "My thoughts and my prayers are with them during this difficult time. In fairness to Chris, I believe it is important to let the legal process play out and not rush to judgment."

The governor's comments sharply contrast with an interview he gave the Daily Southtown in October of last year. Then, the governor said he was "confident" Kelly would not get indicted. The governor stressed how tight he was with Kelly -- much more so than with another one of his fund-raisers who had been indicted, Tony Rezko.

Kelly used his business, BCI Commercial Roofing, to pay gambling debts to bookmakers, allegedly disguising one payment as a company loan.

In another case, Kelly had his business pay a casino debt by putting it on the books as an expense from a roofing contract with an airline, the indictment alleges.

Kelly also is charged with having his company pay for part of his home, lawn maintenance and such items as electronics equipment, hardwood floors and draperies.

To help wash the money, Kelly is accused of using an unnamed friend. Kelly would make business checks out to his pal, who would cash them then return the money to Kelly.

Kelly also made out one check to his friend's 4-year-old child as well as Kelly's own children, the indictment alleges.