McHenry County Blog

Mentiioned specifically in the press release from the United States Attorney about corrupt sales practices to area governments are

• U46 School District out of Elgin,
• the City of Elgin and
• the Village of Rosemont.

There is a Woodstock connection in that Keogh, Inc., was based in Woodstock before it moved to Lake Bluff. (Anyone know if Lawrence Keogh, now 79, lived or near McHenry County?)

The company writing the incentive checks having been based at one time in Woodstock, I’d be surprised if this “incentive” program did not include local schools and governments.

Here is the U.S. Attorney’s press release:

Lawson Products to Pay $30 Million under Deferred Prosecution Agreement Involving Corrupt Sales Practices

CHICAGO – A suburban Des Plaines company has agreed to pay $30 million in forfeiture and restitution for the corrupt conduct of its sales agents in Chicago and elsewhere who systematically provided nearly $10 million in illicit purchasing incentives over 13 years to employees of its customers to buy more products at higher prices, federal authorities announced today.

Lawson Products, Inc., a publicly- traded company that sells tools, hardware and chemicals to entities in the public and private sectors, was charged today with mail fraud in a criminal information filed in U.S. District Court.

At the same time, the company entered into a deferred prosecution agreement under which the criminal case will be dismissed in three years so long as Lawson abides by all of the terms and conditions.

Separate criminal charges were also filed today against two former sales managers for Lawson and a third man who allegedly aided and abetted the corrupt incentive scheme, bringing to 19 the number of defendants who have been charged in connection with the Lawson scheme in Chicago and other cities since early 2007, said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

Mr. Fitzgerald announced the charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; and Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division. The U.S. Attorney’s Office in Chicago coordinated the investigation nationwide, while the U.S. Attorney’s Offices in Dayton, Philadelphia and Springfield, Ill., assisted by handling cases in their respective jurisdictions.

All but one of the cases involve the recipients of bribes or kickbacks or commissioned sales agents for Lawson or its subsidiary, Drummond American Corp., which together with other Lawson affiliates have approximately $400 million in annual sales of systems, services and products.

Thirteen defendants, including seven former Lawson sales agents were charged in April 2007 in Chicago and other cities. Twelve of those 13 have been convicted so far.

All of the charges are part of an investigation that resulted in federal search warrants being executed in December 2005 at Lawson and Drummond offices at 1666 East Touhy Ave., and 2150 Frontage Rd., Des Plaines, and the offices of a third company, Keogh, Inc., in Lake Bluff and formerly of Woodstock.

Among the individuals charged today was Lawrence Keogh, president of Keogh, Inc., which administered one of the incentive programs used by Lawson sales agents.

According to the documents filed today, between at least 1992 and December 2005, the maintenance and repair operation of Lawson Products engaged in corrupt sales practices through its sales agents. These agents were permitted to negotiate with customers over the prices the customers would pay for Lawson’s merchandise. As a general rule, Lawson’s profits and the agents’ commissions were greater if they sold more products at higher prices. Lawson maintained programs through which its sales agents could provide items of value to individuals purchasing Lawson’s merchandise on behalf of those individuals’ employers. Among the illicit programs were “Winners Choice,” “Cavalcade of Awards,” “LPI” and “Spike Special.”

Lawson and its sales agents often provided a greater amount of incentive rewards through the illicit programs if the purchasing individuals ordered a greater amount of merchandise on behalf of their employers. Some Lawson agents received training suggesting that they provide customers’ employees with rewards totaling approximately four to five percent of the amount of the sale. Lawson set up “promotional funds” for each sales agent that allowed the company and the agents to split the cost of the illicit programs.

Through the Winners Choice program, which was administered by Keogh, Inc., Lawson provided approximately $9.7 million in Winners Choice checks to employees of Lawson customers to induce them to purchase and to reward them for purchasing merchandise from Lawson on behalf of their employers.

Under the program, sales agents would order “Certificates of Award” for designated purchasing individuals and Keogh would issue checks to those individuals. The certificates, often awarded in multiple $25 increments, entitled recipients to receive checks for a certain amount that could be used to purchase items at various retail stores. Keogh, Inc., would then issue the checks, often times in multiple $50 increments.

Under the deferred prosecution agreement, Lawson Products admits that it is responsible for the acts of its officers, employees and sales agents. The company agreed to continue implementing a compliance and ethics program designed to prevent and detect corrupt sales practices.

Lawson will fund a $30 million escrow account in three installments of $10 million payable now, in a year and in two years.

Those payments will fund an agreed civil forfeiture judgment of $29,177,639 that Lawson will not contest, as well as $822,370 in restitution payments.

The restitution will be paid to Lawson’s customers that

1. employed individuals who received more than $10,000 in Winners Choice checks;
2. employed individuals who have been or later are convicted of mail fraud as a result of receiving Winners Choice checks; and
3. purchased Lawson’s merchandise from sales agents who have been or later are convicted of mail fraud for providing Winners Choice checks to the customers’ employees.

Upon successful completion of the terms of the agreement, the Government will dismiss the criminal charges in three years.

In Chicago, the government is being represented by Assistant U.S. Attorneys Brandon Fox, Nancy Miller and Kruti Trivedi.

Details of the cases against the three new individual defendants follow. All three will be arraigned later in U.S. District Court. If convicted, restitution is mandatory and the Court would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines. The statutory maximum penalties are provided with each case.

The public is reminded that criminal charges contain only allegations and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Lawrence Keogh, 79, of Lake Forest, was charged with aiding and abetting a tax evasion and tax fraud conspiracy. Keogh allegedly knew that Lawson Products did not issue or file any IRS Form 1099s to individuals who received more than $600 in a year in income from Winners Choice checks. Keogh also allegedly knew that Lawson improperly deducted the cost of the Winners Choice program as business expenses on its federal tax returns. If convicted, the charge carries a maximum penalty of 5 years in prison and a $250,000 fine.

Roger Cannon, Jr., also known as “RJ Cannon,” 38, of Palatine, who was a Drummond American sales agent, district manager and regional manager in succession between 1995 and January 2006, responsible for selling Drummond products to customers in the Chicago area, was charged with mail fraud. Cannon allegedly directed Winners Choice kickback rewards ranging from $650 to $3,550 to each of six employees of his customers. These included four employees of

• Illinois School District U-46, which encompasses Bartlett, Elgin, South Elgin, Streamwood, Hanover Park, Carol Stream and Wayne, as well as an employee of the
• Village of Rosemont and an employee of the
• City of Elgin.

Cannon received commissions totaling $54,302 on sales to these public bodies and the charges seek forfeiture of that amount. If convicted, the charge carries a maximum penalty of 20 years in prison and a $250,000 fine.

Leroy Wittle, 65, of Alexandria, Va., who was a Lawson district manager responsible for selling products to customers in the Washington, D.C., area, was charged with bribery for allegedly providing a $300 gift card to an unnamed public employee of a federal executive branch agency in return for the employee’s decision to purchase merchandise from Wittle and Lawson on behalf of the unnamed federal agency. If convicted, the charge carries a maximum penalty of 2 years in prison and a $250,000 fine.

Every think that U.S. Attorney doesn’t get out of Chicago enough?

Don’t we suburbanites have crime that deserves prosecution?

Apparently there was enough in the Bolingbrook public works department to interest the FBI and United States Attorney Patrick Fitzgerald.

Here’s the press release about an alleged $400,000 billing scam issued this afternoon:

TWO FORMER BOLINGBROOK OFFICIALS AND FIVE SMALL BUSINESS OWNERS CHARGED IN ALLEGED $400,000 FRAUDULENT BILLING SCHEME

CHICAGO – Two former Public Works Department officials in the Village of Bolingbrook and five owners of four small businesses were charged today with allegedly engaging in a $400,000 fraud scheme in which the public employees obtained cash, gifts and services in return for approving false and inflated invoices to the village from the businesses.

The seven defendants were charged in a 12-count criminal information charging fraud and federal income tax offenses, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division.

The charges resulted from an investigation that was begun by the Bolingbrook Police Department and the Will County State’s Attorney’s Office, both of which later brought the investigation to the federal agencies, the federal officials said.

The two former village officials served consecutively as superintendent of the Building and Fleet Division in Bolingbrook’s Public Works Department. Donald Ralls, 62, of Aurora, was superintendent for approximately a decade until he retired in 2001, and John Schwab, 43, of Sandwich, was acting superintendent or superintendent from 2001 to March 2006. Both men had authority in their official capacities to approve invoices for purchases made by the Building and Fleet Division for payment by the village.

According to the charges, between the late 1990s and April 2006, the defendants defrauded Bolingbrook of money and property and of Ralls’ and Schwab’s honest services. Ralls and Schwab allegedly asked certain business owners who did business with the village to give them items, money, gifts and services for their personal benefit.

The business owners acceded to the requests and, at times, either included these personal items, added fictitious purchases or inflated prices in invoices they submitted for payment by the village, which allowed them to recoup the cost of the corrupt benefits and also to gain additional, unearned money for themselves and their businesses, the charges state. Ralls and Schwab allegedly knew that they were approving false and inflated invoices from the businesses.

Schwab was charged with two counts of mail fraud and three counts of filing false federal income tax returns for allegedly under-reporting his total income in 2003, 2004 and 2005. Ralls was charged with two counts of filing false tax returns for allegedly under-reporting his income in 2000 and 2001.

Alan Guzzino, 59, of Bolingbrook, at the time an owner of South Harlem Auto Supply, Inc., which sold parts and supplies for trucks and autos, was charged with one count of mail fraud. He allegedly made personal purchases for Ralls and Schwab; allowed them to use his business credit card for personal purchases, including personal vacations and airline tickets; provided them with merchandise from his business; and occasionally gave each of them cash.

Guzzino also allegedly kept about 25 to 35 percent of the funds he received from false and inflated invoices paid by Bolingbrook and put about 65 to 75 percent of the proceeds in a “line of credit” for Ralls and Schwab, which Guzzino used to provide them with cash and other benefits.

David Donaldson, 54, of Hanover Park, at the time owner of Merchant Midwest, Inc., which distributed cleaning supplies and other janitorial and paper products, was charged with one count of mail fraud. He allegedly gave Ralls and Schwab merchandise for their personal use; made personal purchases for Ralls; and paid cash to Schwab. He allegedly kept about 60 percent of the funds he received from fraudulent village payments for himself.

Gary Lindesmith, 48, of Lowell, Ind., at the time owner of Lindco Equipment Sales, Inc., which sold equipment for trucks, was charged with one count of wire fraud. He allegedly gave Schwab merchandise for his personal use and paid for meals and entertainment for Schwab. He allegedly obtained fraudulent payments from Bolingbrook based on false and inflated invoices he created to cover the cost of the merchandise and entertainment, and also to cover the cost of financial contributions to political campaigns and charities that were solicited by village officials.

Murteza Gazaferi, 37, of Lemont, and Ahmet Rusid, 57, of Morris, at the time co-owners of Auto Tech & Tire Complete Auto Service, which repaired autos and sold auto parts, were each charged with two counts of mail fraud. They allegedly performed automotive maintenance service at no cost for Schwab and made cash payments to him. They allegedly kept about 80 percent of the fraudulent payments they received from the village for themselves.

The charges also seek forfeiture of $404,000 from six defendants, excluding Ralls. All seven defendants will be ordered to appear later for arraignment in U.S. District Court.

The government is being represented by Assistant U.S. Attorneys Laurie Barsella and Faris Hussein.

If convicted, each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. The tax fraud counts against Schwab and Ralls each carry a maximum penalty of 3 years in prison and $250,000 fine. The Court may impose an alternative maximum fine of twice the gross loss or gross gain, whichever is greater. Restitution is mandatory. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that an information contains only allegations and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Every think that U.S. Attorney doesn’t get out of Chicago enough?

Don’t we suburbanites have crime that deserves prosecution?

Apparently there was enough in the Bolingbrook public works department to interest the FBI and United States Attorney Patrick Fitzgerald.

Here’s the press release about an alleged $400,000 billing scam issued this afternoon:

TWO FORMER BOLINGBROOK OFFICIALS AND FIVE SMALL BUSINESS OWNERS CHARGED IN ALLEGED $400,000 FRAUDULENT BILLING SCHEME

CHICAGO – Two former Public Works Department officials in the Village of Bolingbrook and five owners of four small businesses were charged today with allegedly engaging in a $400,000 fraud scheme in which the public employees obtained cash, gifts and services in return for approving false and inflated invoices to the village from the businesses.

The seven defendants were charged in a 12-count criminal information charging fraud and federal income tax offenses, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division.

The charges resulted from an investigation that was begun by the Bolingbrook Police Department and the Will County State’s Attorney’s Office, both of which later brought the investigation to the federal agencies, the federal officials said.

The two former village officials served consecutively as superintendent of the Building and Fleet Division in Bolingbrook’s Public Works Department. Donald Ralls, 62, of Aurora, was superintendent for approximately a decade until he retired in 2001, and John Schwab, 43, of Sandwich, was acting superintendent or superintendent from 2001 to March 2006. Both men had authority in their official capacities to approve invoices for purchases made by the Building and Fleet Division for payment by the village.

According to the charges, between the late 1990s and April 2006, the defendants defrauded Bolingbrook of money and property and of Ralls’ and Schwab’s honest services. Ralls and Schwab allegedly asked certain business owners who did business with the village to give them items, money, gifts and services for their personal benefit.

The business owners acceded to the requests and, at times, either included these personal items, added fictitious purchases or inflated prices in invoices they submitted for payment by the village, which allowed them to recoup the cost of the corrupt benefits and also to gain additional, unearned money for themselves and their businesses, the charges state. Ralls and Schwab allegedly knew that they were approving false and inflated invoices from the businesses.

Schwab was charged with two counts of mail fraud and three counts of filing false federal income tax returns for allegedly under-reporting his total income in 2003, 2004 and 2005. Ralls was charged with two counts of filing false tax returns for allegedly under-reporting his income in 2000 and 2001.

Alan Guzzino, 59, of Bolingbrook, at the time an owner of South Harlem Auto Supply, Inc., which sold parts and supplies for trucks and autos, was charged with one count of mail fraud. He allegedly made personal purchases for Ralls and Schwab; allowed them to use his business credit card for personal purchases, including personal vacations and airline tickets; provided them with merchandise from his business; and occasionally gave each of them cash.

Guzzino also allegedly kept about 25 to 35 percent of the funds he received from false and inflated invoices paid by Bolingbrook and put about 65 to 75 percent of the proceeds in a “line of credit” for Ralls and Schwab, which Guzzino used to provide them with cash and other benefits.

David Donaldson, 54, of Hanover Park, at the time owner of Merchant Midwest, Inc., which distributed cleaning supplies and other janitorial and paper products, was charged with one count of mail fraud. He allegedly gave Ralls and Schwab merchandise for their personal use; made personal purchases for Ralls; and paid cash to Schwab. He allegedly kept about 60 percent of the funds he received from fraudulent village payments for himself.

Gary Lindesmith, 48, of Lowell, Ind., at the time owner of Lindco Equipment Sales, Inc., which sold equipment for trucks, was charged with one count of wire fraud. He allegedly gave Schwab merchandise for his personal use and paid for meals and entertainment for Schwab. He allegedly obtained fraudulent payments from Bolingbrook based on false and inflated invoices he created to cover the cost of the merchandise and entertainment, and also to cover the cost of financial contributions to political campaigns and charities that were solicited by village officials.

Murteza Gazaferi, 37, of Lemont, and Ahmet Rusid, 57, of Morris, at the time co-owners of Auto Tech & Tire Complete Auto Service, which repaired autos and sold auto parts, were each charged with two counts of mail fraud. They allegedly performed automotive maintenance service at no cost for Schwab and made cash payments to him. They allegedly kept about 80 percent of the fraudulent payments they received from the village for themselves.

The charges also seek forfeiture of $404,000 from six defendants, excluding Ralls. All seven defendants will be ordered to appear later for arraignment in U.S. District Court.

The government is being represented by Assistant U.S. Attorneys Laurie Barsella and Faris Hussein.

If convicted, each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. The tax fraud counts against Schwab and Ralls each carry a maximum penalty of 3 years in prison and $250,000 fine. The Court may impose an alternative maximum fine of twice the gross loss or gross gain, whichever is greater. Restitution is mandatory. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that an information contains only allegations and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

First a disclaimer: I worked closely with Don Synder, a former county sheriff, when he was Director of the Department of Corrections under former Governor George Ryan. He was the most responsive Director that I worked with on the Prison Reform Committee. One of the men charged along with Synder is John J. Robinson of Barrington Hills.

What follows is the press release from U.S. Attorney Patrick Fitzgerald:

CHICAGO – A former Director of the Illinois Department of Corrections (IDOC), who allegedly received approximately $50,000 in illegal kickbacks, and two lobbyists accused of paying him the kickbacks while representing vendors that had multi-million-dollar contracts with the state prison agency, were indicted today on federal charges. The defendants, Donald N. Snyder, Jr., who was IDOC director from 1999 until early 2003, and lobbyists John J. Robinson, a former Undersheriff of Cook County, and Larry E. Sims were charged in a six-count indictment returned by a federal grand jury, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

Snyder, 52, of downstate Pittsfield, Il., allegedly received the kickbacks while he served in the state cabinet during the administration of former Gov. George Ryan. Today’s indictment stems from an investigation that grew out of the Operation Safe Road probe of corruption during Ryan’s terms as Governor and, earlier, Secretary of State. Snyder, who was appointed by Ryan, had approval authority over the award of millions of dollars in contracts to vendors, including health care providers, who provided inmate health care services in IDOC institutions.

Robinson, 59, of Barrington Hills, who was Undersheriff of Cook County from 1991 until 2001, also worked between 1996 and 2003 as a paid consultant/ lobbyist for several vendors and/or institutions seeking to promote and develop their business with IDOC. Robinson formed J. Patrick Noll (JPN), which developed and promoted correctional business on behalf of clients, including Vendor A, an Illinois health care company that was awarded millions of dollars in contracts to provide health care services at Illinois prisons during Snyder’s tenure at IDOC. Under a 1996 contract with Vendor A, JPN was initially paid $2,500 a month, plus five percent of Vendor A’s income from Illinois corrections contracts, with a provision that the monthly retainer would rise to $4,500 a month when Vendor A’s Illinois prisons contracts exceeded $4 million, the indictment states.

Sims, 58, of Pleasant Plains, Il., near Springfield, was a lobbyist for several vendors, including Vendor B, a Pennsylvania health care company that was trying to promote and develop its corrections business and was awarded millions of dollars in contracts to provide healthcare services to IDOC inmates during Snyder’s tenure.

Snyder and Robinson were each charged with five counts of mail fraud, and Sims was charged with one count of perjury for allegedly lying to a grand jury during the investigation. The indictment also seeks forfeiture of $50,000 from Snyder. All three defendants will be arraigned at a later date in U.S. District Court in Chicago.

“As a top state official, Mr. Snyder was bound by various rules governing his acceptance of gifts or favors of any kind. He was forbidden from receiving cash kickbacks from anyone, much less from lobbyists representing companies doing millions of dollars in business with IDOC,” Mr. Fitzgerald said. “The indictment alleges that he brazenly violated the duty he owed to the state and its citizens to perform his job honestly.”

Mr. Fitzgerald announced the charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Thomas P. Brady, Postal Inspector-in-Charge of the U.S. Postal Inspection Service; Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division; and Michelle McVicker, Special Agent-in-Charge of the U.S. Department of Transportation, Office of Inspector General, all in Chicago.

According to the indictment, Robinson and Sims were involved in separate kickback deals with Snyder, but in both instances – in consideration for the cash payments – Snyder allegedly gave each of them information and assistance on issues and concerns they raised on behalf of their various vendor clients. To conceal the scheme, Snyder allegedly filed false Statements of Economic Interest with the state, failing to disclose the cash payments he received from Robinson and Sims, and Sims allegedly filed false lobbyist registration statements, failing to disclose any of the money he paid to Snyder. All three allegedly lied to federal agents investigating whether Robinson and Sims had given anything of value to Snyder.

Regarding the payments by Sims to Snyder, the indictment alleges that in late 1999 or early 2000, Snyder and Sims discussed the compensation that Sims received from Vendor B, and Sims agreed to pay Snyder a portion of the monthly fee that Sims received from that client. Beginning in early 2000 and continuing until approximately the end of 2002, Sims gave cash to Snyder each month, totaling approximately $30,000, after Sims received his monthly fee from Vendor B.

Regarding the payments by Robinson to Snyder, the indictment alleges that in late 1999 or early 2000, Snyder agreed to accept cash derived from the consulting or lobbying fees that Robinson earned from their representation of one or more vendors doing business with IDOC. From early 2000 until December 2002, Robinson allegedly paid kickbacks to Snyder totaling approximately $20,000, which amounted to about one-fourth of the monthly fees that Robinson’s company, JPN, received from Vendor A. Robinson paid Snyder periodically when they met at various corrections-related meetings or events, the indictment alleges.

The perjury count against Sims alleges that on May 5, 2005, he lied when he testified before a grand jury that he never gave Snyder any cash gifts, and that he could not remember if he ever gave Snyder any gifts at all other than a Green Bay Packers sweatshirt on one occasion. Sims, in fact, had given Snyder cash kickbacks derived from lobbying fees that Sims received from Vendor B.

The government is being represented by Assistant U.S. Attorneys Joel Levin and Laurie Barsella.

If convicted, Snyder and Robinson each face a maximum penalty of five years in prison on one count of mail fraud and 20 years in prison on each of the other four counts of mail fraud, and Sims faces a maximum penalty of five years in prison if convicted of perjury. All three defendants also face a maximum fine of $250,000 on each count. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

First a disclaimer: I worked closely with Don Synder, a former county sheriff, when he was Director of the Department of Corrections under former Governor George Ryan. He was the most responsive Director that I worked with on the Prison Reform Committee. One of the men charged along with Synder is John J. Robinson of Barrington Hills.

What follows is the press release from U.S. Attorney Patrick Fitzgerald:

CHICAGO – A former Director of the Illinois Department of Corrections (IDOC), who allegedly received approximately $50,000 in illegal kickbacks, and two lobbyists accused of paying him the kickbacks while representing vendors that had multi-million-dollar contracts with the state prison agency, were indicted today on federal charges. The defendants, Donald N. Snyder, Jr., who was IDOC director from 1999 until early 2003, and lobbyists John J. Robinson, a former Undersheriff of Cook County, and Larry E. Sims were charged in a six-count indictment returned by a federal grand jury, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.

Snyder, 52, of downstate Pittsfield, Il., allegedly received the kickbacks while he served in the state cabinet during the administration of former Gov. George Ryan. Today’s indictment stems from an investigation that grew out of the Operation Safe Road probe of corruption during Ryan’s terms as Governor and, earlier, Secretary of State. Snyder, who was appointed by Ryan, had approval authority over the award of millions of dollars in contracts to vendors, including health care providers, who provided inmate health care services in IDOC institutions.

Robinson, 59, of Barrington Hills, who was Undersheriff of Cook County from 1991 until 2001, also worked between 1996 and 2003 as a paid consultant/ lobbyist for several vendors and/or institutions seeking to promote and develop their business with IDOC. Robinson formed J. Patrick Noll (JPN), which developed and promoted correctional business on behalf of clients, including Vendor A, an Illinois health care company that was awarded millions of dollars in contracts to provide health care services at Illinois prisons during Snyder’s tenure at IDOC. Under a 1996 contract with Vendor A, JPN was initially paid $2,500 a month, plus five percent of Vendor A’s income from Illinois corrections contracts, with a provision that the monthly retainer would rise to $4,500 a month when Vendor A’s Illinois prisons contracts exceeded $4 million, the indictment states.

Sims, 58, of Pleasant Plains, Il., near Springfield, was a lobbyist for several vendors, including Vendor B, a Pennsylvania health care company that was trying to promote and develop its corrections business and was awarded millions of dollars in contracts to provide healthcare services to IDOC inmates during Snyder’s tenure.

Snyder and Robinson were each charged with five counts of mail fraud, and Sims was charged with one count of perjury for allegedly lying to a grand jury during the investigation. The indictment also seeks forfeiture of $50,000 from Snyder. All three defendants will be arraigned at a later date in U.S. District Court in Chicago.

“As a top state official, Mr. Snyder was bound by various rules governing his acceptance of gifts or favors of any kind. He was forbidden from receiving cash kickbacks from anyone, much less from lobbyists representing companies doing millions of dollars in business with IDOC,” Mr. Fitzgerald said. “The indictment alleges that he brazenly violated the duty he owed to the state and its citizens to perform his job honestly.”

Mr. Fitzgerald announced the charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Thomas P. Brady, Postal Inspector-in-Charge of the U.S. Postal Inspection Service; Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division; and Michelle McVicker, Special Agent-in-Charge of the U.S. Department of Transportation, Office of Inspector General, all in Chicago.

According to the indictment, Robinson and Sims were involved in separate kickback deals with Snyder, but in both instances – in consideration for the cash payments – Snyder allegedly gave each of them information and assistance on issues and concerns they raised on behalf of their various vendor clients. To conceal the scheme, Snyder allegedly filed false Statements of Economic Interest with the state, failing to disclose the cash payments he received from Robinson and Sims, and Sims allegedly filed false lobbyist registration statements, failing to disclose any of the money he paid to Snyder. All three allegedly lied to federal agents investigating whether Robinson and Sims had given anything of value to Snyder.

Regarding the payments by Sims to Snyder, the indictment alleges that in late 1999 or early 2000, Snyder and Sims discussed the compensation that Sims received from Vendor B, and Sims agreed to pay Snyder a portion of the monthly fee that Sims received from that client. Beginning in early 2000 and continuing until approximately the end of 2002, Sims gave cash to Snyder each month, totaling approximately $30,000, after Sims received his monthly fee from Vendor B.

Regarding the payments by Robinson to Snyder, the indictment alleges that in late 1999 or early 2000, Snyder agreed to accept cash derived from the consulting or lobbying fees that Robinson earned from their representation of one or more vendors doing business with IDOC. From early 2000 until December 2002, Robinson allegedly paid kickbacks to Snyder totaling approximately $20,000, which amounted to about one-fourth of the monthly fees that Robinson’s company, JPN, received from Vendor A. Robinson paid Snyder periodically when they met at various corrections-related meetings or events, the indictment alleges.

The perjury count against Sims alleges that on May 5, 2005, he lied when he testified before a grand jury that he never gave Snyder any cash gifts, and that he could not remember if he ever gave Snyder any gifts at all other than a Green Bay Packers sweatshirt on one occasion. Sims, in fact, had given Snyder cash kickbacks derived from lobbying fees that Sims received from Vendor B.

The government is being represented by Assistant U.S. Attorneys Joel Levin and Laurie Barsella.

If convicted, Snyder and Robinson each face a maximum penalty of five years in prison on one count of mail fraud and 20 years in prison on each of the other four counts of mail fraud, and Sims faces a maximum penalty of five years in prison if convicted of perjury. All three defendants also face a maximum fine of $250,000 on each count. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.