Ex-Ill. gov.'s fundraiser faces new fraud charges

[February 06, 2009]  CHICAGO (AP) -- Prosecutors filed new charges against former Illinois Gov. Rod Blagojevich's ex-chief fundraiser Thursday, alleging that he used a bid-rigging scheme to get $8.5 million in inflated contracts for roofing work at O'Hare International Airport.

Christopher G. Kelly, 50, and his company, BCI Commercial Roofing Inc., were both charged with 11 counts of mail fraud and six counts of money laundering. Kelly, the former chairman of Blagojevich's campaign fund, had previously pleaded guilty to obstructing federal tax collectors and other charges.

The new charges come as prosecutors prepare to indict Blagojevich, who was accused in a criminal complaint of fraud conspiracy and bribe soliciting. Blagojevich has repeatedly denied wrongdoing.

Chief Judge James F. Holderman of U.S. District Court gave the U.S. attorney's office until April 7 to return an indictment against the impeached governor, though prosecutors might be able to get an extension if they need more time.

Kelly entered his guilty plea to the tax charges last month without making any agreement to cooperate in Blagojevich's case. He will be sentenced April 24 and faces up to eight years in prison on those charges.

According to the new indictment, Kelly used $1.1 million in fraudulently obtained proceeds to pay personal expenses, including $383,000 in gambling debts. It alleges that he entered into a bid-rigging scheme with an unnamed company that provided consulting services to businesses related to roofing.

Between September 1998 and May 2006, Kelly and that company steered roofing work for United Airlines and American Airlines facilities at O'Hare to BCI by providing the airlines with bogus cost estimates and bid rigging, the indictment said.

Kelly then paid $450,000 in kickbacks to the unnamed company, the indictment said.

Kelly defense attorney Michael Monico did not immediately return messages seeking comment.

American spokeswoman Mary Frances Fagan said the airline would have no comment.

United spokeswoman Jean Medina said the airline had "actively participated in the investigation and will continue to do so to ensure the right people are held accountable."

The indictment asks the court to order Kelly to forfeit $1,181,000, the amount involved in the alleged money laundering, as well as more than $1 million from the alleged contract fraud. It also asks the court to order Kelly to forfeit his house.

If convicted of the new charges, Kelly faces a maximum of 20 years in prison and a $250,000 fine.

[Associated Press; By MIKE ROBINSON]

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