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Illinois businessman, an Obama contributor, is jailed

Prosecutors say Antoin Rezko feigned poverty but got millions from an Iraqi billionaire.

January 29, 2008|From the Associated Press

CHICAGO — An indicted businessman who poured thousands of dollars into the campaigns of Sen. Barack Obama and other politicians was jailed Monday after prosecutors disclosed that he had received $3.5 million from an Iraqi billionaire while claiming to be broke.

Real estate developer and fast-food entrepreneur Antoin "Tony" Rezko was arrested at his home in Wilmette, Ill., and held after his lawyers failed to dissuade Judge Amy J. St. Eve from revoking his $2-million bond. "This defendant has played a shell game and, I think, misled the court about what his assets are," federal prosecutor Reid J. Schar said.

Rezko is charged with scheming to pressure companies seeking state business for kickbacks and campaign contributions.

His name has surfaced in the Democratic presidential race because of his ties to Obama, who ended up donating to charity thousands of dollars in campaign contributions connected to Rezko. During a South Carolina debate, Sen. Hillary Rodham Clinton accused Obama of representing Rezko "in his slum landlord business" when Obama was a young Chicago lawyer.

Obama represented partners of Rezko's company in government-subsidized apartment rehabilitation projects, not Rezko himself. Obama said he did no more than five or six hours' work for the partners.

Rezko has contributed thousands of dollars to the campaigns of Obama and Illinois Gov. Rod R. Blagojevich -- neither of whom is accused of any wrongdoing.

Rezko's trial is set to start Feb. 25 on charges of mail fraud, wire fraud, money laundering and attempted extortion. He is also charged with swindling the General Electric Capital Corp. out of $10 million.

Obama's name has not come up in connection with any of the charges swirling around Rezko. Prosecutors indicate that the source of Rezko's clout was somewhere within Blagojevich's administration.

Federal prosecutors say Rezko was deceptive in leading St. Eve to allow various relatives and friends to post their property to secure his bond while claiming he was broke and living off relatives' generosity.

An FBI affidavit said Rezko actually received $3.5 million from a Lebanon-based bank account of General Mediterranean Holdings, a Luxembourg company owned by London-based Iraqi billionaire Adhmi Auchi. Rezko's lawyer said Rezko had had business dealings with Auchi.

Forbes magazine listed Auchi in 2007 as the world's 279th richest man. He has been convicted of fraud in France, the government said in a court filing seeking the warrant to arrest Rezko.

Prosecutors said in their filing that $3.5 million was wired into a fund maintained at a Chicago bank by lawyers handling Rezko's tangled finances.

Some was transferred directly to Rezko, some to a company he owned, some to his wife, Rita, and some to friends and relatives who had posted their homes to secure his bond, according to the filings. Rezko's legal bills also were paid with a portion of the money, they said.

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