Abdelhamid Chaib sentenced, Rezko coschemer, Obama contributor, Nadhmi Auchi, Citizen Wells open thread, October 20, 2010
Abdelhamid Chaib sentenced, Rezko coschemer, Obama contributor, Nadhmi Auchi
From the Chicago Tribune October 19, 2010.
“A former business partner of convicted influence-peddler Antoin “Tony” Rezko was sentenced to three years of probation Tuesday for his role in a bank fraud scheme over the sale of Rezko’s pizza restaurants.
Abdelhamid “Al” Chaib had pleaded guilty to a single count of obstructing the Internal Revenue Service for his role in securing a $2.6 million loan from GE Capital Corp. to finance his bogus purchase of Rezko’s string of Papa John’s pizza franchises. The loan was in fact a scheme to obtain loan money to prop up Rezko’s businesses while Chaib would have no meaningful ownership of the pizzerias.”
Now for the rest of the story. Once again I would like to thank Evelyn Pringle for the fine work that she did early on to expose the truth about Obama. The highlighting is mine.
As you read the following, remember that it was written in mid 2008.
“Curtain Time for Barack Obama – Part 4 (Mansion Deal)”
“The solution to the problems arising from the unsuccessful attempts to shut down Operation Board Games would be for Sen. Barack Obama (D-Ill.) to become president and issue a bipartisan pardon to all members of the “Combine” who funded his seat in the US Senate. The scam worked when Scooter Libby took the fall for the Bush administration.”
“Rezko-Obama Real Estate Deal
When Obama started setting up the purchase of the $2 million mansion with Tony Rezko in December 2004, he did not know he would be the presidential candidate in 2008. He therefore did not think about the repercussions in a presidential campaign. The Combine’s plan was for Illinois Governor Rod Blagojevich to be the candidate at that point. Operation Board Games put an end to that plan.
Mike McIntire and Christopher Drew tracked Rezko’s “financial maneuverings” during the year that Rezko and Obama were entering into the real estate deals through an examination of lawsuits, documents in the Board Games cases, and land records, for a report in the March 8, 2008 New York Times.
They discovered that Rezko was fighting off lenders and investors trying to collect on defaulted loans and failed ventures the whole time. “But he side-stepped that financial dragnet by arranging for the land to be bought in his wife’s name, making it the only property she owned by herself,” they report.
As a result, when the Obamas bought part of the lot in January 2006, “the money they paid was beyond the reach of Mr. Rezko’s creditors, including one conducting a court-ordered hunt for his assets to recover a $3.5 million debt,” the Times notes.
Obama claims he had no idea Rezko was broke. During his March 14, 2008 Sun-Times interview, he said: “I was shocked – as I think a lot of people in Chicago were shocked – to find out the difficult financial straits he was in because I don’t think anybody suspected that at the time.”
Obama told the Tribune on November 1, 2006, that the lot next door had to be sold separately because, “It was already a stretch to buy the house.” However, affidavits filed in the Rezko case in November 2006, show the Rezkos had no money. Rita’s only income was a $37,000-a-year job when she paid $125,000 in cash and obtained a half a million dollar mortgage at the Mutual Bank to buy the $625,000 lot.
When documents unsealed in the case revealed a $3.5 million loan made to Rezko a month before the real estate deal, the money transfer raised “the question of whether funds from Nadhmi Auchi helped Mr Obama buy his mock Georgian mansion in Chicago,” a February 26, 2008 report by James Bone and Dominic Kennedy in the Times of London noted.
Obama claims he got the money because he pulled off a marketing coup for book sales with his speech at the July, 2004 Democratic National Convention and got elected.
“Because of the attention I received during Senate campaign and the convention, my book sold well,” he told Sun-Times in an interview on March 14, 2008. “I came into a sizeable amount of money that allowed us to move,” he said.
The way Obama set up the deal, the mansion and the strip of land were placed in a Land Trust with the Northern Trust Corporation. The price of the mansion was $1.65 million, and Obama came up $330,000 to obtain a $1.32 million mortgage at Northern Trust Bank.
Cook County land records show the deed for the lot to Rita was recorded on June 20, 2005 and she conveyed the land to Northern Trust Company Land Trust #10209, on January 11, 2006. According to a web site for Marquette Bank’s Trust Services, a Land Trust provides shared ownership protection when real estate is owned by more than two people, and divorce, legal disability or the death of one can hinder the sale of the property.
With the establishment of a Land Trust, a judgment against one beneficiary cannot create a lien on real estate held in trust and ordinary legal proceedings against one will not cloud the title, according to Marquette site.
The investigation by the New York Times found that between November 2002 and January 2005, at least 12 lawsuits were filed against Rezko and his businesses, including one by the General Electric Commercial Finance Corp.
In fact, GE obtained a $3.5 million judgment in November 2004, but put off collection in the first half of 2005, while negotiating for payments with Rezko, the Times reports. The lawsuit involves loans Rezko obtained for the sale of Papa John’s pizza parlors.
Papa John’s cancelled its franchise agreement with Rezko in 2004 because he was behind in payments. Rezko then transferred the pizza chains to companies owned by “personal friend(s) and long-time business associate(s),” to operate under trade names such as Papa Tony’s and Pizzeria Zia, according to a lawsuit filed in 2005 by Papa John’s.
Papa John’s alleges Rezko controlled the chains and the associates were running “front” companies. The companies in the lawsuit include AR Pizza, Chaib Investments, Newco Pizza and LayaZia. AR Pizza, Newco Pizza and LayaZia have their principal places of business at the same location as Rezko Enterprises.
Auchi’a firm, General Mediterranean Holding, owns 50% of AR Pizza and Rezko owns 50%. Auchi’’s lawyer told the Times of London the $3.5 million loan to Rezko in May 2005 was to “assist the financial position” of AR Pizza.
His attorney told the New York Times that Rezko was supposed to use the money for his pizza business, and said, “as far as my client is aware, Mr. Rezko used the loan for its intended purpose and not for any other purpose.”
However, the Times review showed Rezko only made a $1 million payment to GE months after he received the loan. GE finally obtained a court order in October 2005 and began seizing even the smallest assets. As the Times explains:
“The company’s lawyers filed a claim against the Rezkos’ home and began issuing subpoenas to banks where Mr. Rezko had accounts, finding very little cash.
“Court records show that G.E. was due to be in court on Jan. 5, 2006, for example, obtaining an order to seize $1,297.39 from one … checking accounts.”
“Less than a week later,” the Times wrote, “Mrs. Rezko sold a 10-foot-wide strip of the empty lot to Mr. Obama, for $104,500.”
Now Obama claims he never knew the lot was in Rita Rezko’s name until he read about it in the media. During his March 14, 2008 interview, the Tribune asked him: “When Tony sold the garden lot in his wife’s name, didn’t that strike you as odd?”
“You know,” he said, “I have no idea why he did it. I don’t think he was intending to hide something, because if he was then, you know, using your wife’s name, Rita Rezko, probably wouldn’t have been the best way to do it.””
“Did he ever explain to you what he was doing?” the Tribune asked.
“No,” Obama replied, “I didn’t discover it until the issue of him purchasing this lot broke through, uh, through you.”
Next trial will focus on pizza parlor schemes
Rezko’s next trial will focus on the fraudulent financial transactions with GE and the mystery of what happened to the missing $3.5 million from the loan made to Rezko the month before the mansion deal may be resolved.
The corruption in this case involves the Illinois Finance Authority. The IFA was established, “to support the Governor of Illinois’ economic development agenda,” and “IFA approves about $3 billion in project financing each year,” according to its web site.
Co-schemer Ali Ata was appointed to lead the IFA. He made a $5,000 donation to Obama on June 30, 2003.
Talat Othman was appointed to the IFA Board, and he donated $1,000 to Obama on June 30, 2003.
David Gustman was made chairman, and his wife, Lisa, also gave Obama $1,000 on June 30.
Co-schemer Abdelhamid Chaib is the former the director of Rezko Concessions. Chaib’s wife was appointed to the Department of Employment Security Review Board. Obama received $5,000 from Chaib on June 30, 2003.
This indictment alleges that Rezko fraudulently caused GE to extend more than $10 million in loans to finance what Rezko portrayed as sales of two different groups of Papa John’’s pizza restaurants in the Chicago and Milwaukee areas.
After closing on the loan for the Chicago stores, the loan became delinquent, and Rezko caused additional false financial information to be submitted to GE in asking for forebearance on the default, the indictment says. It also alleges that Rezko defrauded investors by concealing that he was transferring the company’s assets to himself and a straw purchaser.
As part of the scheme, Ata signed a letter on Finance Authority letterhead that falsely made it appear that Dr Paul Ray had applied for financing with the IFA for acquisition of the pizza restaurants. The letter stated that Ray’s financing would be recommended for approval by the IFA Board on March 15, 2004, and that the IFA would guarantee 50% of the total $16 million.
Ray contributed $3,000 to Obama on June 30, 2003. Ray also gave Obama $2,000 on October 2003, on top of a donation of $1,000 on December 31, 2002. Ray was an investor in Riverside Park.
During the Rezko trial, Ata testified that he told Rezko that IFA board members were worried over the approval of financing for the Papa John’s deal because there could be negative publicity due to Rezko’s association with the pizza businesses
But Ata said Rezko scoffed at the concerns. “He said as far as the publicity, he will get the governor’s office to approve the transaction, and as far as the board,” Ata told the jury, Rezko said, “We put them there.”
Rezko eventually called Ata and dictated the language of a letter that said IFA was guaranteeing half of the purchase price. But before the deal could go through, Ata brought the chairman, David Gustman, and the board’s financial advisers to Rezko’s office to tell him they did not believe the financing was good for IFA. Ata said Rezko seemed to agree, but he never gave back the letter Ata wrote on Ray’s behalf.
More Combine members throw in the towel
Testimony in the first trial opened the door to evidence in other Board Game cases and more Combine members threw in the towel. Ali Ata entered into a plea agreement in the GE case a week before the trial was set to end and he was the last witness to testify.
Ata pled guilty to charges that included tax fraud, and lying to the FBI in saying he received nothing in return for $50,000 in contributions to Blagojevich when according to the plea agreement, he did “receive something for those contributions, specifically employment with a state agency … with an annual salary of approximately $127,000.”
According to court filings, Ata also lied when he “intentionally concealed that he paid Rezko approximately $125,000 in cash … during 2003 and 2004 so that he could obtain a state appointment and then ensure its continuation.”
On his last day on the stand, Ata told the jury he finally agreed to cooperate with the Feds after a person delivered a threat to him. He told prosecutors he lied to the FBI because he was encouraged to be a “team player” by people acting on Rezko’’s behalf and when he received a grand jury subpoena in late 2005, people contacted him in an effort to stop him from cooperating.
Ata testified he gave Rezko the money because he wanted to keep his job. He told the jury he used to drop by Rezko’s office and would see other top officials waiting to see Rezko and in order to keep their jobs people had to follow orders and become a team player.
For instance, Ata said, he often saw Kelly King Dibble, a former Rezmar employee, who became director of the Illinois Housing Authority. But when Dibble balked at hiring a Rezko relative, Ata said, Rezko passed a message to Dibble “congratulating her on her new assignment,” and the new assignment was unemployment.
“It emphasized that you need to be a team player and follow the rules if you’re going to be a part of the administration,” Ata told the jury on May 1, 2008.
Dibble donated $250 to Obama on June 30, 2003, $250 on January 23, 2004, and $250 on April 25, 2007. She is now an attorney with the Northern Trust, Obama’s Land Trust holder. On September 30, 2007, Dribble donated $1,000 to Obama presidential campaign.
Ata testified that he and Rezko once delivered $50,000 in cash to the home of co-schemer Christopher Kelly and left it in the car while they went inside. Ata said Rezko told him, “there’s somebody from Downstate that’s coming to pick up the money.”
Ata said he delivered another $25,000 to Rezko in early 2004, because Rezko said it was needed to pay contractors to stop them from filing a lien on Blagojevich’s home.
Ata also explained that Rezko made a problem with a state lease disappear in exchange for a 25% ownership in a real estate partnership. When Rezko’s attorney pressed for details about how that worked, Ata said Rezko had gone to Michael Rumman to get the matter resolved, the head of the Department of Central Management Services.
Ata says that after he met with the Feds for the first time, he got a voice-mail from Rumman saying Rumman was traveling with “our friend,” meaning Rezko, asking Ata to delay the meeting with investigators.
The other person who pressured Ata was Orlando Jones, the godson and former chief of staff to the deceased former Cook County Board President, John Stroger. Jones was a former vice president of Rezmar development company and an investor in Riverside Park.
Prosecutors say Jones also wanted Ata to lean on another Rezko associate to get him to stop cooperating. Ata told prosecutors that Jones reassured him that Rezko was working to kill the Board Games investigation by getting the Bush administration to fire Fitzgerald. “Don’t worry, the plan is still in place,” Jones told Ata.
Jones committed suicide in September 2007, after news of a pending indictment in a pay-to-play scheme reaching all the way to Las Vegas hit the media. “The discovery of Jones’ body came just two days after FBI agents approached Jones,” FBI spokesman Frank Bochte told the Sun-Times. Jones “cordially declined” to speak with Chicago agents.
The scheme in Las Vegas involved a company called Crystal Communications, lead by Martello Pollock. On June 30, 2003, Pollock donated $1,000 to Obama.
According to the Sun-Times, Jones had been interviewed by federal authorities a while before his death about fees he received from pension fund deals approved by the Illinois Board of Investments.
Allison Davis, Rezko’s real estate partner, and Obama’s former boss at the Davis, Minor & Barnhill law firm, was appointed to serve on the Board of Investment. Davis is president of the Davis Group. On January 29, 2003, the group donated $2,000 to Obama and on June 30, 2003, it made a contribution of $6,000. Obama also received donations from the group of $2,000 on July 7, 2004, $2,000 on January 29, 2007, and $2,300 on June 30, 2007.
Prosecutors allege that another member of this pension Board, Joe Carriatore made a deal with Rezko where his brother would get a seat on the Board for a $50,000 contribution to Blagojevich. He donated $1,000 to Obama on June 30, 2003. Carriatore was an original investor with Rezko in Riverside Park.
Velma Butler was recommended for this Board, but did not get the job. She gave Obama $1,000 on June 30, 2003, and donated $25,000 to Blagojevich three weeks later on July 25, 2003. Butler was also an investor in Riverside Park.
Combine members of Middle Eastern Descent
Ata is a former president of the Chicago Chapter of the American Arab Anti-Discrimination Committee. He represents “a deeper corruption” in the Arab American community, “an aspect of the story that has not received much attention,” according to a May 2, 2008 report by Ray Hanania in the Southwest News-Herald.
Hanania points out that many in the Arab community are calling Ata a “rat.” But he’s not alone, Hanania says:
“The real rats are those who used their positions as “leaders” to rape and pillage their own community. The real rats are the so-called ““leaders” who worked to benefit themselves pretending they were doing it for the benefit of the community.”
In his report, Hanania explains how Ata and others would help organize political dinners attended by Arab Americans from the suburbs at which politicians where “honored.”
“These Arab community “leaders,” he says, “would tell the community that if they bought tickets to their “candidate’s nights,” their organization fundraisers or donated through them to local politicians, these politicians would respond by giving the Arab American community empowerment.”
“In truth,” Hanania says, “these political leaders lied.”
“They did get jobs, contracts and clout,” he notes, “but the people who benefited were not members of the community but rather the relatives, children, friends and business associates of these leaders.”
Ata has done well as a member of the Combine. In 2004, his net worth was $12 million, according to the Tribune. In one state deal, Ata and partners, Faysal Mohamed, Fuad Mohamed and Refat Zayed, “took in more than $3.2 million from taxpayers by leasing a West Side office building to the state over 10 years,” the June 6, 2005 Sun-Times notes.
Rumman is also of Middle Eastern descent. He left his $120,900-a-year job in April 2005, after “Auditor General William Holland accused CMS of wasting taxpayer money, skirting state purchasing laws and failing to document hundreds of millions of dollars in alleged savings the agency attributed to its hiring of high-priced consultants,” the March 11, 2007 Sun-Times reported.
Rumman went on to become a major investor with the Iraqi-born Auchi and Syrian-born Rezko in Riverside Park and Rumman was the point man on a now canceled $200 million power plant contract in Iraq.”
From a wiretap of Rod Blagojevich.
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