CHICAGO, Feb 25 (Reuters) – A former municipal banker at
Bear, Stearns & Co, pleaded guilty on Wednesday to fraud
involving hospital financing that is part of a wide-ranging
probe of government corruption in Illinois.
P. Nicholas Hurtgen, who had been set to go on trial in
U.S. District Court next month, pleaded guilty to one count of
aiding and abetting a scheme to defraud Illinois’ health
facilities planning board, which was weighing a proposal to
expand a Chicago-area hospital.
The case is part of a corruption investigation by U.S.
Attorney Patrick Fitzgerald in Chicago dubbed “Operation Board
Games.” It culminated in the arrest in December of
then-Governor Rod Blagojevich.
According to a plea agreement released by the U.S.
Attorney’s office, Hurtgen admitted being part of a scheme to
pressure officials of Edward Hospital in Naperville to use a
construction firm run by Jacob Kiferbaum for the expansion.
Hospital officials were told they had to use the
construction firm or the state’s health board might decline to
approve the project, according to the plea agreement.
Kiferbaum and health board member Stuart Levine have
pleaded guilty and cooperated with prosecutors.
Hurtgen also wanted the hospital to use Bear Stearns for
the project’s financing, the plea agreement said. Bear Stearns
has since been absorbed by JPMorgan Chase & Co (JPM.N:
,
,
).
A key figure in the corruption scheme was Antoin “Tony”
Rezko, a one-time fund-raiser for Blagojevich and President
Barack Obama. Rezko was convicted by a jury in June.
Blagojevich, a Democrat, was arrested in December on
suspicion of trying to elicit campaign contributions and other
favors for official acts, including trying to sell his power to
appoint someone to fill Obama’s vacant U.S. Senate seat.