Businessman Antoin Rezko was indicted Oct. 11 by a federal grand jury in Chicago on 24 counts of fraud in connection with "a scheme to obtain millions of dollars by shaking down" investment management firms doing business with the $36.5 billion Illinois Teachers' Retirement System, according to U.S. Attorney Patrick J. Fitzgerald. Mr. Rezko did not appear at his arraignment Oct. 13; the date has been rescheduled for Oct. 19 at his lawyers' request, confirmed a spokesman for Mr. Fitzgerald.
The indictment also charges former Illinois Teachers system trustee Stuart Levine with the same 24 counts of fraud. Mr. Levine, who was indicted last year on fraud charges and has been cooperating with federal authorities, will plead guilty to the superseding charges at a hearing Oct. 27, according to a statement from Mr. Fitzgerald.
Court documents allege Messrs. Rezko and Levine started an "extensive fraud scheme" in 2003 that continued through at least July 2004, in which they sought to receive all or part of "finders fees" paid by money managers interested in doing business with the Illinois Teachers' plan.
"No TRS assets were used to pay these fees. … In most cases, the schemes were unsuccessful because TRS staff intervened or because the … proposals were not worthy of consideration by the TRS board," Jon Bauman, executive director, said in a statement.