From the SJ-R:

Rezko pleads not guilty
Blagojevich fundraiser arrested upon return to U.S.

By MIKE RAMSEY
COPLEY NEWS SERVICE

Published Friday, October 20, 2006

CHICAGO - Antoin "Tony" Rezko, a top political fundraiser for Gov. Rod
Blagojevich, pleaded not guilty to federal fraud charges Thursday and was released on bond after a group of his friends and relatives posted
properties worth about $1.5 million as security.

The 51-year-old Wilmette resident had been taken into custody by the
FBI when he arrived from an overseas trip and surrendered his passport.
Rezko spent the rest of his day at Chicago's federal courthouse, where
his attorneys haggled with prosecutors into the evening over the terms
of his release in two criminal cases before two separate judges.

In a 24-count indictment unsealed last week, Rezko is accused of trying to extort millions of dollars from firms seeking to do business
with state agencies, including the Teachers' Retirement System of Illinois, in tandem with now-indicted Blagojevich appointee Stuart Levine. In a second, unrelated case, Rezko allegedly received fraudulent loans for a pizza business and cheated investors.

Rezko attorney Joseph Duffy entered the not guilty pleas for his client. He disagreed with prosecutors that Rezko is a flight risk, saying the Syrian-born U.S. citizen, a father of three, has virtually all of his family here.

Rezko was on a planned business trip in the Middle East when the indictment was announced and came back via Syria, which has no extradition treaty, Duffy noted. He missed arraignment dates that were
scheduled for last week.

"All of his ties are to Chicago," Duffy told U.S. District Judge Amy
St. Eve as more than two dozen Rezko supporters watched from the courtroom gallery. "He's standing here today. He came back voluntarily."

Assistant U.S. attorney Christopher Niewoehner said Rezko's confidence
may erode once he realizes the mountain of evidence the feds have compiled against him. Charges against Rezko include mail and wire fraud, aiding bribery, attempted extortion and money laundering; if convicted, he faces several years in prison.

"It is a very significant case," Niewoehner said. "Mr. Rezko has no idea what is in store for him."

St. Eve, who is presiding over the kickback case, set bond at $2 million but allowed it to be secured by the roughly $1.5 million in real-estate equity put up by Rezko friends and family members through nine properties. Rezko also put up his own residences in Wilmette and Lake Geneva, Wis., but they may prove to be effectively worthless; creditors have foreclosed on the Wilmette mansion.

Rezko "has a negative cash flow" and may have less than $5,000 in the
bank, Duffy said. Niewoehner said Rezko has made significant wire transfers overseas, including $400,000 to Lebanon in 2004.

St. Eve said Rezko must remain confined at home under an electronic monitoring system, pending a full accounting of his finances to the court. A status hearing was scheduled for Nov. 3. Rezko can go to work
and church but cannot leave the Northern District of Illinois.

A second federal judge, Charles Kocoras, handled Rezko's arraignment
in the loan-fraud case. He said Rezko's return to face the charges was
"a point in his favor," and he indicated he would stay consistent with
the terms of release set by St. Eve.

Rezko and his relatives declined comment as they left the Everett M.
Dirksen U.S. Courthouse.

His indictment broadsided the re-election effort of Blagojevich, a Chicago Democrat who won office in 2002 on a platform promising to clean up corruption in state government. Blagojevich has said he feels
betrayed by Rezko, who helped him raise campaign funds and recommended
state appointees to him.

"Tony Rezko has returned to defend the charges against him," Blagojevich said in a written statement. "Today, with his arrival in court, the legal proceedings have begun. Now it is time for the justice
system to fairly decide his case."

Blagojevich's Republican opponent in the Nov. 7 election, state Treasurer Judy Baar Topinka of Riverside, said the incumbent continues
to benefit from Rezko's fundraising efforts.

"Tony Rezko raised an obscene amount of campaign money for Rod Blagojevich, and now Blagojevich is using the Rezko money against Judy
Baar Topinka in the most negative TV assault in Illinois political history," Topinka spokesman John McGovern said.

Blagojevich said he would donate contributions from Rezko to charity,
but his campaign said it will not part with the money Rezko helped raise indirectly.

The governor has not been accused of wrongdoing, but the indictment involving the Teachers' Retirement System alleges that Rezko and Levine
tried to pressure a firm seeking the pension board's business into paying sham consulting fees or making $1.5 million in campaign donations to "a certain public official" believed to be Blagojevich.

Aiding Rezko in the scheme was a figure dubbed "Individual A," while
an "Individual B" was involved in discussions as the plan fell apart, the indictment said. Sources have identified the unnamed figures, respectively, as Republican powerbroker Bill Cellini of Springfield and
Blagojevich friend and fundraiser Christopher Kelly, a Frankfort roofing contractor.

Rezko allegedly helped win Levine's reappointment on the Teachers' Retirement System board during Blagojevich's first term. Levine, a 60-year-old Highland Park resident, was indicted months before and is cooperating with authorities. He is scheduled to plead guilty Oct. 27.