Blagojevich cohort won't serve more time for fraud

[December 23, 2011]  CHICAGO (AP) -- An imprisoned former fundraiser for Rod Blagojevich was sentenced Thursday after pleading guilty to a wire fraud scheme unrelated to the former Illinois governor, but will not face additional time behind bars.

Tony Rezko was sentenced to 7 1/2 years in prison for running a scheme that fraudulently netted more than $13 million in business loans. U.S. District Judge James Zagel said the sentence would run at the same time as the 10 1/2-year sentence Rezko already is serving for fraud, money laundering and plotting to squeeze kickbacks from companies doing state business during Blagojevich's tenure.

Rezko pleaded guilty to wire fraud last year. As part of his sentencing agreement, Rezko agreed to drop his appeal in the kickbacks case, in which he went to trial and was convicted in 2008. He already has spent 3 1/2 years in custody.

"Mr. Rezko and his family had decided they wanted to bring closure to this matter and it's time for them to move on with their life," Rezko attorney Joe Duffy said.

The former fast-food entrepreneur and real estate developer was once a well-connected fundraiser for Blagojevich, President Barack Obama and other politicians. On Thursday, a gaunt Rezko stood before Zagel in a green prison shirt and shower shoes, asking for leniency in a sometimes-raspy voice.

"Your Honor, I deeply regret the actions that brought me to be here," Rezko said, apologizing to his family and friends. "I ask God for forgiveness and the court for mercy."

As he left court Thursday, Rezko was greeted by more than a dozen relatives sitting in the audience. Several shouted, "We love you!" and "Merry Christmas." Rezko smiled and waved.

Authorities say Rezko, 56, tried to defraud lender GE Capital by appearing to sell some of his fast-food restaurants, including Papa John's Pizza franchises, to employees.

Rezko needed to pay off existing loans on the pizza restaurants, according to an earlier plea declaration. When told by the lender that he should consider selling off some of his restaurants, Rezko devised a scheme to keep control of the businesses by using his employees as false owners.

"Defendant also assured these individuals that they would not have to put any of their own money at risk and, to the extent that their group of restaurants was profitable, they could expect to receive a bonus from the defendant in the future," the plea declaration said.

Rezko gave GE Capital falsified documents that made the restaurants appear more profitable, while planning to not enforce terms of the sales to his employees. He only told investors in his company that the pizza restaurants had been "refinanced," according to the plea declaration.

Rezko already has made some restitution payments. He was ordered Friday to pay the remaining $4 million.

Zagel briefly noted the "significant damage" Rezko did before sentencing him within the terms of his agreement with prosecutors.

Several of the figures linked to Rezko by federal prosecutors investigating Illinois corruption have since been convicted. Zagel gave Blagojevich a 14-year prison sentence this month, days after Judge Amy St. Eve sentenced Rezko to 10 1/2 years, minus time served.

During his 2008 trial, prosecutors said he raised over $1 million for Blagojevich and got so much clout in return that he could control two powerful state boards. They accused him of trying to squeeze payoffs from money management firms and a $1.5 million bribe from a contractor trying to build a hospital.

Rezko raised money for Obama during his campaigns for Illinois senator, though not for his presidential campaign. Obama has not been accused of wrongdoing in the case.

Rezko's sentence was seen by many legal experts as a baseline for the amount of time Blagojevich would receive. He faced a maximum of 20 years in prison on the wire fraud charge.

[Associated Press; By NOMAAN MERCHANT]

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