CHICAGO A federal judge yesterday set Nov. 3 as the trial date for former Bear, Stearns & Co. public finance banker P. Nicholas Hurtgen on charges that he participated in an extortion scheme involving a Chicago-area hospital as it sought state regulatory approval to build a new hospital.
The case against Hurtgen stems from a larger probe of state government corruption known as Operation Board Games that is being pursued by U.S. attorney Patrick Fitzgerald's office in Chicago. The trial is expected to last between three to four weeks, according to assistant U.S. attorney Kaarina Salovaara.
U.S. District Court Senior Judge John F. Grady indicated his wish to move forward with a trial more quickly but Salovaara has another upcoming corruption trial and was not available until fall. Hurtgen's defense team had sought to delay the trial until March of next year because of lead attorney Ronald Safer's duties at Schiff Hardin LLP where he is the managing partner. Grady said March was far off. "This case has been pending a long time," Grady said during a court hearing yesterday.
A key witness for the prosecution is expected to be Stuart Levine, who orchestrated the alleged scheme to force Edward Hospital in Naperville to hire Kiferbaum Construction Co. to build the new hospital in exchange for the Illinois Health Facilities Planning Board's approval of a certificate of need for the project. Levine was the main witness in the government's successful prosecution of Antoin Rezko, a prominent fundraiser and former adviser to Gov. Rod Blagojevich, on charges that he traded state investment business and regulatory approval for kickbacks for his own personal gain and to funnel to campaign coffers.
At the time when the hospital shakedown took place in late 2003 and 2004, Levine served as the vice chairman of the planning board. Jacob Kiferbaum, owner of the construction company, was expected to provide kickbacks to Levine. Kiferbaum and Levine have pleaded guilty and are cooperating with prosecutors. Hurtgen allegedly participated in the scheme to ensure that his firm would win the underwriting business for the $90 million project and another $23 million office building.
The federal government first brought the charges against Hurtgen in May 2005 but Grady dismissed the case in March 2007 agreeing with the defense that argued in a motion to dismiss that the prosecution had failed to specifically allege in its indictments that Hurtgen was aware that Levine was to receive kickbacks.
Hurtgen was re-indicted last December and prosecutors made more clear their contention that Hurtgen had full knowledge of the alleged kickbacks and provided new details most likely obtained from Levine who by then was cooperating. The re-indictment alleges that Hurtgen promised Edward Hospital that the planning board would approve the projects if it hired Kiferbaum and that it would deny them if they refused.
Hurtgen's lawyers again filed a motion to dismiss, but Grady denied it in a ruling last week, finding that the prosecution's revised case met the legal burden to bring the seven counts, including six counts of aiding and abetting mail and wire fraud and one count of extortion. Each count carries a maximum sentence of 20 years in prison.
Hurtgen resigned from Bear Stearns under pressure in the summer of 2004, after it was disclosed that hospital officials had filed a sealed federal whistleblower's case exposing the extortion scheme. Hurtgen is a Wisconsin native who served as a top aid to former Wisconsin Gov. Tommy Thompson before joining Bear Stearns in Chicago in 1995.
The case against Levine was dropped last year after he entered a guilty plea to charges that he peddled his influence as a member of both the planning board and the state teachers' pension fund to enrich himself. Levine's credibility came under attack during the Rezko trial because of his long history of corrupt business activities and history of drug use.
A late witness in that case Ali Ata, the former head of the Illinois Finance Authority testified that he was hired for that position as a reward for at least $50,000 in contributions to the governor. The governor has not been charged with any wrongdoing. Rezko also was a friend and contributor to Democratic presidential contender Barack Obama.
