CHICAGO—Federal corruption charges were
unveiled today in three separate bribery complaints. Two former local public
officials, former Cook County Commissioner Joseph Mario Moreno and former
Chicago Ald. Ambrosio Medrano, each were charged in two of the three
complaints. Three businessmen who allegedly participated in one bribery scheme,
and two other businessmen who allegedly participated in another, also were
charged.
The three alleged schemes involved:
■an alleged effort by Moreno, Medrano,
and three Chicago area businessmen to use bribery and kickbacks to sell
bandages to public hospitals, including Cook County’s John H. Stroger Hospital;
■an alleged effort by Medrano and two
other businessmen, including James Barta, the owner of a Nebraska-based
provider of prescription drug services that claims 11 million subscribers, to
use bribery and kickbacks to obtain business from an unnamed out-of-state
hospital system; and
■Moreno’s alleged acceptance of $5,000
as part of a bribe to ensure development of a waste transfer station in
suburban Cicero while he sat on a town economic development panel.
“Public officials who solicit and obtain
bribes, and private individuals who pay bribes, undermine trust in honest government.
The defendants in these cases are alleged to have done just that,” said Patrick
J. Fitzgerald, United States Attorney for the Northern District of Illinois.
Moreno, a Cook County commissioner for
16 years until 2010, and Medrano, the former alderman who later worked on
Moreno’s county staff, allegedly agreed to receive kickbacks for using their
influence as county officials to cause Stroger Hospital to purchase bandages
under the brand name “Dermafill” from co-defendants Stanley Wozniak and Gerald
W. Lombardi, who were agents of Chasing Lions, LLC, a disabled veterans-owned
business in west suburban Lisle. The alleged scheme started in 2010 while
Moreno was still a county commissioner and before he sponsored a county
ordinance to benefit disabled veterans-owned businesses, such as Chasing Lions.
In early 2011, while the alleged Cook County scheme was still underway, the FBI
introduced an undercover agent, who was posing as a third-party purchasing
agent for the hospital system of County A, located in another state, to
Medrano, Gerald W. Lombardi, and his son, Jerry A. Lombardi, who was also a
Chasing Lions agent, as part of an alleged scheme by those three to provide
kickbacks to a fictitious official of the County A hospital system in exchange
for Dermafill orders placed by the undercover agent. After allegedly paying a
kickback in connection with that scheme, Medrano introduced the undercover
agent to Barta, the president and owner of Sav-Rx, and Gustavo Buenrostro, an
associate of Barta and a former Sav-Rx employee. Barta, Buenrostro, and Medrano
then allegedly agreed to bribe the undercover agent and fictitious County A
hospital official—with Barta allegedly making a $6,500 payment to the
undercover agent last week— to do business with Sav-Rx, a Fremont, Neb.-based
national provider of managed care prescription medication services.
Moreno, also known as “Mario Moreno,”
59, of Chicago, and Medrano, 58, of Chicago, were charged together in one
criminal complaint along with Wozniak, 49, of Chicago; Gerald W. Lombardi, also
known as “Jerry Lombardi, Sr.,” 59, of Darien; and Jerry A. Lombardi, also
known as “Jerry Lombardi, Jr.,” 33, of Downers Grove. Medrano was charged in a
second criminal complaint together with Barta, 70, of Fremont, Neb., and Buenrostro,
49, of Arlington Heights.
Moreno alone was charged in a third
complaint charging the Cicero waste transfer station bribery.
Medrano, Wozniak, both Lombardis, and
Buenrostro were arrested today and, together with Moreno, appeared this
afternoon before U.S. Magistrate Judge Young Kim in Federal Court in Chicago.
An arrest warrant was issued for Barta.
Mr. Fitzgerald announced the arrests and
charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of
the Federal Bureau of Investigation; and Thomas Jankowski, Acting Special
Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division
in Chicago. The FBI’s Chicago City Public Corruption Task Force led the
investigation with assistance from the Chicago Police Department’s Internal
Affairs Division, a task force member.
Details of the three complaints follow:
United
States v. Moreno, Medrano, Wozniak, Lombardi, and Lombardi
Moreno and Medrano were charged with
soliciting bribes; Wozniak and Gerald W. Lombardi were charged with offering
bribes; and Medrano and the Lombardis were charged with bribery conspiracy in a
three-count criminal complaint. According to the complaint affidavit, Wozniak
and Gerald W. Lombardi communicated with Moreno in June 2010 about benefitting
disabled veterans-owned businesses, and in September 2010, Moreno sponsored a
county ordinance that gave a preference to such businesses. Later in September
2010, the FBI intercepted conversations between Moreno and Medrano about
meeting with Wozniak and Gerald W. Lombardi, including one in which Medrano
told Moreno that Wozniak and Gerald W. Lombardi wanted “to dangle a bigger piece
of the pie in front of you.”
On Sept. 30, Moreno, Medrano, Wozniak
and two other men met a restaurant in Chicago. During that meeting, agents
intercepted a conversation between Moreno and County Hospital Official A, and
from that point on, the defendants engaged in numerous recorded conversations
in which they allegedly plotted to use Moreno’s and Medrano’s influence with
County Hospital Officials A, B, and C to place bulk orders of Dermafill
bandages. In a conversation on Oct. 19, 2010, Wozniak allegedly told Medrano
that Moreno would receive $5 and Medrano would receive $2 for every “patch”
ordered by Cook County. Wozniak explained that $5 a patch worked out to $70 a
box, and that an order of 1,000 boxes would yield $70,000, with $24,000 of that
for Medrano. In another conversation less than an hour later, Medrano told
Wozniak that Moreno was using a calculator to try to determine how much he
would be receiving from Wozniak and Lombardi, Sr. based on an order by Cook
County Hospitals, the affidavit states.
The affidavit details further
conversations in October, November and early December 2010 in which Moreno,
Medrano, Wozniak, and Lombardi, Sr. allegedly persisted in efforts to influence
Cook County Hospitals to purchase Dermafill bandages, but hospital officials
would go no further than to discuss using a small amount of the product in a
clinical trial beginning in January 2011. The defendants allegedly continued to
discuss their efforts after Moreno left office in early December 2010. In
February and March 2011, Lombardi, Sr. and Medrano allegedly appeared to
conclude that although Moreno had done the best he could, Lombardi, Sr. no
longer believed that Moreno had the ability to influence Cook County Hospitals
to purchase the bandages.
At that point, through a cooperating
witness (CW1), the FBI introduced an undercover agent, posing as a third-party
purchasing agent for County A’s hospital system, to Medrano and the Lombardis.
The complaint alleges that Medrano and the Lombardis:
■agreed to provide kickbacks to the
undercover agent and a fictitious official of County A’s hospital system in
exchange for orders placed by the undercover agent on behalf of County A;
■provided the undercover agent with an
invoice for the sale of $9,360 worth of Dermafill bandages to be used by County
A’s hospital system;
■accepted payment from the undercover
agent’s purported company with the understanding they would be providing a 20
percent kickback to the undercover agent and the fictitious County A hospital
official; and
■provided a kickback of 20 percent for
the undercover agent and the fictitious County A hospital official.
After the initial purchase of roughly
$10,000 worth of bandages, the defendants discussed receiving revolving
$100,000 orders from the undercover agent. On March 4, 2011, Medrano allegedly
gave an envelope containing $1,872 to the cooperating witness intending that it
would be passed on to the undercover agent and the fictitious County A hospital
official. In September 2011, conversations showed that Medrano and the
Lombardis were expecting to receive four $100,000 orders a year, under the same
kickback terms, from the undercover agent, according to the complaint.
United
States v. Barta, Buenrostro, and Medrano
Medrano, Barta and Buenrostro were
charged with conspiracy to commit bribery. According to the complaint
affidavit, after paying a kickback in connection with the alleged scheme to
influence the County A hospital system to purchase Dermafill bandages, Medrano
introduced the undercover agent to Barta and Buenrostro. The complaint alleges
that Barta, Buenrostro, and Medrano:
■agreed to provide a bribe to the
undercover agent and the fictitious County A hospital official in exchange for
County A’s hospital system doing business with Barta’s company, Sav-Rx; and
■provided a bribe to the undercover
agent and the fictitious County A hospital official in exchange for a promise
to use Sav-Rx to perform mail-order prescription drug services for County A’s
hospital system.
In November 2011, Medrano allegedly
contacted the cooperating witness to reach out to the undercover agent to set
up a meeting with Medrano and Buenrostro to discuss steering Sav-Rx’s services
to County A’s hospital system. From December 2011 through March 2012, Medrano,
Buenrostro and the cooperating witness continued to discuss the scheme,
resulting in a meeting attended by those three, Barta, and the undercover agent
at a Chicago restaurant on March 21, according to the charges. During the
meeting, Barta discussed Sav-Rx’s business, including a contract with Cook
County that involved using a minority contractor as a pass-through. Medrano
allegedly was recorded stating that the pass-through minority contractor was
used to steer payments to then-Cook County Commissioner Moreno. Medrano
allegedly said that every time the minority contractor “got paid, Mario
[Moreno] got paid.”
The undercover agent explained the 20
percent kickback arrangement — 10 percent for him and 10 percent for the
fictitious hospital official — if they were to succeed in expanding Sav-Rx’s
services into County A’s hospital system. Barta replied that the arrangement
was okay with him. In subsequent conversations, Medrano allegedly assured the
cooperating witness and undercover agent that Barta and Buenrostro wanted to do
a deal with the agent and were willing to provide an initial $10,000 payment in
good faith.
The same group of individuals met again
on May 9 at a Chicago restaurant and allegedly continued discussing steering
Sav-Rx’s services to County A, including using Medrano and Buenrostro to be the
minority participants in a contract, with Barta allegedly endorsing that idea.
Barta directed Buenrostro to do research on County A and paid the lunch bill.
The undercover agent said that the fictitious County A hospital official was
not going to take any action until there was an agreement and the official saw
some money. “We understand that and that’s not a problem,” Barta replied,
according to the affidavit.
Following further conversations and
e-mails, Barta told the undercover agent that Barta was “probably ready to move
forward.” Buenrostro later told the undercover agent that Barta’s concern was
that they would provide the money and not obtain the contract. Buenrostro
stated that Barta wanted a written guarantee that the undercover agent would
repay the $10,000 if they were not to receive the contract.
Last Friday, Barta, Buenrostro, and
Medrano met with the undercover agent at a restaurant in Omaha. Before Barta
arrived, Buenrostro told Medrano and the undercover agent that he had spoken to
Barta and that Buenrostro and Medrano would be 35 percent minority partners
with Barta in the contract they were allegedly scheming to obtain from the
fictitious County A official. Barta then arrived at the restaurant and joined
the others. The undercover agent explained that half of the good faith money
they had been discussing was for his role in brokering the contract and half
was for the fictitious County A official. The undercover agent assured Barta
that the good faith payment would be refunded if Sav-Rx was did not obtain a
contract from County A’s hospital system. After further discussion about the
indirect manner that Barta’s payment would be funneled to the fictitious County
A official, Barta wrote a check on a Sav-Rx operations account payable to the
undercover agent for $6,500 and gave it to the undercover agent.
United
States v. Moreno
Moreno was charged with bribery for
allegedly accepting a $5,000 down payment on a plan to use his appointed
position with the Town of Cicero to approve a waste transfer development in
exchange for a stream of payments. Moreno was appointed in May 2010 to Cicero’s
Local Business Assistance Committee, a panel that was created to attract
businesses to the western suburb.
According to the complaint affidavit,
Moreno used his position and influence with Cicero to assist CW1, who was
cooperating with law enforcement, in the purported development of a waste
transfer station in exchange for payment from CW1 and CW1’s associate.
Moreno allegedly met with CW1 on Sept.
3, 2010 and said he wanted “a little piece” of the proceeds from the waste
transfer station, which was envisioned on vacant land at South 54th Avenue and
Roosevelt Road in Cicero, according to the complaint. The complaint alleges
that Moreno told CW1, “I don’t want to be a hog, I just want to be a pig. Hogs
get slaughtered, pigs get fat.”
Moreno allegedly accepted an envelope
containing $5,000 cash from CW1 in CW1’s car on Dec. 16, 2010, with CW1 assuring
Moreno that CW1’s associate was going to provide an additional $5,000 cash in a
couple of weeks. Moreno allegedly believed that he had an agreement with CW1
and CW1’s associate to receive 10 percent of the revenue of the proposed waste
transfer station on a continuing basis. In exchange for the bribe, Moreno
signed a letter to CW1’s associate assuring his support, as well as that of
Cicero officials, for the purported development, the charges allege.
The bribery scheme allegedly began on
Aug. 5, 2010, when CW1 recorded a meeting with Moreno while they drove around
Cicero in CW1’s car. When they arrived near the site of the proposed waste
transfer station, which CW1 told Moreno his associate was seeking to develop,
CW1 told Moreno that the station was “huge, big money.” Moreno allegedly
responded that he was going to make money from the operation of the station,
saying “we are going for a ride.” Moreno told CW1 that he would talk to
Attorney A, a municipal lawyer for Cicero, to help the project along, the
affidavit states.
CW1 told Moreno that CW1 would buy the
land for the facility, and CW1’s business partner would pay rent. In further
conversation, Moreno allegedly indicated that he knew a real estate broker and
could structure his involvement by receiving kickbacks from the brokers’ fees
to hide his receipt of any money. As Moreno was about to depart CW1’s car, he
placed a call to Attorney A and left a voice-mail message, allowing CW1 to
record Moreno saying that he wanted to discuss a certain type of business, and
“your friend here (Moreno) could make a couple of bucks.”
On Sept. 3, 2010, Moreno allegedly
indicated to CW1 that he believed he was entitled to a significant payment from
CW1’s associate because the waste transfer station would not be developed
without Moreno’s influence in Cicero and his economic development position. On
Sept. 20, 2010, Moreno allegedly told CW1 that Attorney A “said it’s a go,” and
high-ranking Town Official A “is all for it.”
CW1 asked if Moreno would take care of
the zoning, and Moreno allegedly replied that he would “do everything it needs
to get done.” Moreno indicated that he would help CW1 obtain whatever zoning
permits the project would need in exchange for payments spread out over time,
despite any conflicts with his position on the town committee, the charges
allege.
On Oct. 19, 2010, CW1 told Moreno that
CW1’s associate was talking about $5,000 up front and then Moreno taking 10
percent of the profits after the station began operating. Moreno allegedly
asked if the deal could be sweetened, saying he did not “want to be sloppy, and
I don’t want to give it away either,” adding that “thirty-five would be fine.
Fifty would be even better.” In a conversation on Oct. 29, 2010, Moreno
allegedly said that $5,000 was a little low, but added, “I like the 10 percent
going forward, and I like to get a nice pop up front. But I ain’t greedy. I’ll
just be a pig.”
On Dec. 1, 2010, CW1 told Moreno that if
Moreno gave CW1’s associate an official letter of support from Moreno’s town
committee, that CW1’s associate would give Moreno a payment and CW1 would push
for the amount to be greater than the $5,000 they initially discussed. On Dec.
9, 2010, CW1 received an e-mail from Moreno’s e-mail account containing a
letter and Moreno’s electronic signature. The letter, which is quoted verbatim
in the affidavit, assures town support for the purported waste transfer
station. The following day, CW1 requested assurance from Moreno that his
support was being given as head of the town businesses assistance committee,
and Moreno allegedly complied by sending an e-mail addendum providing such
assurance.
When they met on Dec. 16, 2010, to
exchange payment, CW1 gave Moreno a complete letter with the addendum cut and
pasted into the original. Moreno signed the letter in CW1’s presence in
exchange for the envelope containing $5,000. When CW1 said that another $5,000
would be paid in a couple of weeks, Moreno allegedly replied “excellent,” and
CW1 confirmed that his associate had agreed to raise the initial bribe payment
to $10,000 in two installments. As Moreno departed CW1’s car, CW1 made clear
that Moreno understood that the cash was from CW1’s associate and not from CW1.
In all three cases, the government is
represented by Assistant U.S. Attorneys Brandon Fox, Christopher J. Stetler and
Steven Grimes.
Each bribery count carries a maximum
penalty of 10 years in prison and a $250,000 fine, and conspiracy to commit
bribery carries a maximum prison term of five years in prison and a $250,000
fine. If convicted, the Court must impose a reasonable sentence under federal
statutes and the advisory United States Sentencing Guidelines.
The public is reminded that complaints
contain only charges and are not evidence of guilt. The defendants are presumed
innocent and are entitled to a fair trial at which the government has the
burden of proving guilt beyond a reasonable doubt.
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