Intelligence Report: Feds climbing a new corruption ladder in Chicago

July 17, 2012 4:18:05 PM PDT
Authorities on Tuesday charged the one-time campaign treasurer for ex-Illinois State Senator Rickey Hendon with corruption charges.

The ex-campaign treasurer is Dean Nichols, 62, of Oak Park; among seven people named in federal criminal complaints. The others include Cook County sheriff's department employeee, all charged following federal stings in which phony grant money was obtained illegally by public employees.

According to the U.S. Attorney in Chicago, the seven are charged with bribery conspiracy for allegedly paying kickbacks to a purported federal agency official, who did not actually exist, in return for awarding purported $25,000 cash grants from the agency.

Investigators said that the defendants believed they could obtain multiple $25,000 grants from the U.S. Department of Health and Human Services in exchange for returning $5,000 to the fictitious HHS official and others involved in the scheme.

As in several recent FBI cases, there was no corrupt official and no federal agency grants were involved. "Instead, those elements were involved only as part of the scenario of the undercover investigation" stated a press release from the federal prosecutor's office.

Federal authorities say that while working for then-Sen. Hendon's campaign committee, "Nichols allegedly helped steer State of Illinois grants to certain organizations, including a $50,000 grant to an organization operated by Nichols' daughter from 2005 to 2006, and a $190,000 grant in 2007 to an organization operated by Hopkins with the understanding that a portion of the proceeds would go to Nichols and the state senator's nephew."

According to a statement, "Acting at the direction of law enforcement, a Cooperating Witness (CW) informed defendant Dean Nichols that the CW had a friend affiliated with HHS who was willing to provide $25,000 agency grants in exchange for kickbacks. After being offered this opportunity, Nichols allegedly presented CW with several other individuals, including co-defendants Reggi Hopkins, Elliott Kozel, and Anthony Johnson, who were allegedly willing to submit applications to obtain these grants in return for $5,000 kickbacks, which would be divided into $1,250 payments to four individuals: the fictitious HHS official approving the grants; an undercover FBI agent who was purportedly associated with the HHS official; the CW; and Nichols, according to the criminal complaint unsealed today.

Similarly, Kozel, a Cook County corrections officer, allegedly presented several other co-defendants, including his supervisor, Mary Smith, along with Bryant Jessup, and Regina Hollie, who were allegedly also willing to submit applications to obtain these grants in return for $5,000, which would be divided into $1,250 payments to the fictitious HHS official, the undercover agent, the CW and Kozel, the charges allege.

Nichols, 62, of Oak Park, was charged with three counts of bribery conspiracy, and Kozel, 51, Chicago, was charged with four counts. Hopkins, 43, of Chicago; Johnson, 59, of Chicago; Smith, 54, of South Holland; Hollie, 48, of Chicago; and Jessup, 51, of Chicago, were each charged with one count of bribery conspiracy."

Several of the defendants appeared in court on Tuesday afternoon before U.S. Magistrate Judge Jeffrey Cole.

Statement from Cook County Sheriff's Dept. spokesman re arrest of two correctional officers.

"Every organization -- from corporations to small businesses, churches and the government-- has individuals that make unfortunate, disappointing and sometimes criminal decisions in their lives, both professionally and outside of work. This is a case of bad decisions made in the personal lives of two correctional officers. Their illegal activity has no connection whatsoever to their duties within the Cook County Department of Corrections.

Both employees have been suspended and will be de-deputized."

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