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Wednesday, June 20, 2012

Raghuveer Nayak, Weisner-Blago Campaign Contributor and Owner of Old Copley Hospital in Aurora, Indicted By Grand Jury and Arrested By Feds

Aurora Mayor Tom Weisner, Gerry "Popsicle Boy" Galloway and Raghuveer Nayak

Raghuveer Nayak, one of the key figures in political corruption investigations in Illinois and part of a multi-year special investigation by OpenlineBlog since being brought to Aurora in various deals and campaign contributions with Mayor Tom Weisner, has been arrested by federal authorities in a 19-count indictment that was returned by a federal grand jury.

57 year old Nayak of Oak Brook has been at the epicenter of the Rod Blagojevich corruption scandal, the sale of President Barack Obama's former US Senate seat for the benefit of Jesse Jackson, Jr.

After pouring tens of thousands in campaign contributions to Mayor Tom Weisner, including "coincidentally" having associates bundle donations at the same time, Nayak has acquired various key properties in Aurora, including properties that in the path of developments and then later brought in by Weisner as the new owner of the Old Copley Hospital on the near east side of Aurora, a property that continues to sit as blight.

Weisner's former 2005 campaign manager and first chief of staff, Gerry "Popsicle Boy" Galloway, was one of the key figures involved in the deals with Nayak, Weisner and Aurora.

Nayak's current indictment relates to bribes and kickbacks to physicians for patient referrals and filing false federal income tax returns.

Rod Blagojevich is currently serving prison for corruption.

Aurora Mayor Tom Weisner could not be reached for comment.

To view a copy of the indictment (United States vs. Raghuveer Nayak), click HERE

NOTE:  Stay tuned for additional updates and information to this developing story and see further for a statement by the US Attorney's Office and FBI.

CHICAGO—The owner of multiple area outpatient surgery centers was arrested today on federal fraud and tax charges alleging that he paid bribes and kickbacks to physicians for patient referrals and filed false federal income tax returns that understated his income. The defendant, Raghuveer Nayak, was charged in a 19-count indictment that was returned by a federal grand jury last week and unsealed today following his arrest, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent in Charge of the Chicago Office of Federal Bureau of Investigation; and Thomas Jankowski, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.
Nayak, 57, of Oak Brook, is scheduled to appear at 11:00 a.m. today before Magistrate Judge Maria Valdez in U.S. District Court.
He was charged with 10 counts of mail fraud, five counts of interstate travel in aid of racketeering, and four counts of filing false income tax returns for the years 2005-2008. The indictment seeks forfeiture of at least $1.8 million in alleged fraud proceeds, or substitute assets, including Nayak’s Oak Brook residence, the Rogers Park One Day Surgery Center Inc., located at 7616 North Paulina St., and the Lakeshore Surgery Center LLC, located at 7200 North Western Ave.
In addition to those two facilities, Nayak owned and/or controlled the following health care-related businesses in Illinois and Indiana: Lakeside Surgery Center LLC, Merillville Plaza Surgery Center LLC, Lincoln Park Open MRI, Delaware Place MRI LLC, Paulina Anesthesia Inc., Illiana Anesthesia, Western Touhy Anesthesia Inc., and Division Medical Diagnostics Inc., according to the indictment.
Nayak’s facilities did not accept patients covered public health insurance programs, such as Medicare and Medicaid, and instead accepted patients insured by private health insurers, such as BlueCross BlueShield, or patients who agreed to pay the entire fees themselves. Private insurers treated Nayak’s facilities as “out-of-network” when paying bills submitted for patient services.
Between 2000 and December 2010, Nayak allegedly defrauded patients by paying and arranging to pay bribes and kickbacks in the form of cash and other hidden payments to physicians who would refer their patients to Nayak’s facilities for medical treatment. Nayak paid hundreds of thousands of dollars to different physicians in exchange for patient referrals, the charges allege, adding that the physicians deceived their patients by not disclosing that they were being paid for making referrals to Nayak’s facilities.
At times, the indictment alleges that Nayak paid bribes and kickbacks to physicians to begin referring patients, while at other times he did so to ensure that they continued to refer patients to his facilities. He allegedly offered to pay physicians a set amount of money for each patient referral. Nayak allegedly concealed and attempted to conceal the scheme by making payments in cash, disguising the payments as advertising, or by disguising the true purpose of the payments through fraudulent agreements and contracts, including contracts purporting to pay physicians for performing services that Nayak knew they had not provided.
Between 2002 and December 2008, Nayak allegedly obtained cash to pay bribes and kickbacks by giving Individual A more than $2 million in checks drawn on his facilities’ accounts and, in exchange, at Nayak’s direction, Individual A gave Nayak cash equaling approximately 70 percent of the value of the checks. Nayak allegedly indicated to his tax preparer that the checks to Individual A were for advertising and should be treated as a business expense on tax returns for Nayak and his facilities. After he was interviewed by law enforcement agents in December 2008, Nayak allegedly took additional steps to hide the scheme by executing fraudulent contracts and by warning physicians not to speak with agents about the payments.
The tax counts allege that Nayak caused the preparation of false individual federal income tax returns that understated his true income because he claimed that the checks to Individual A should be treated as advertising expenses when he knew they were not. As a result, Nayak allegedly understated his gross income when he reported the following amounts: $4,643,916 for 2005; $6,471,865 for 2006; $5,791,109 for 2007; and $9,362,647 for 2008.
Each count of mail fraud carries a maximum penalty of 20 years in prison and a maximum fine of $250,000, or an alternate fine totaling twice the loss or twice the gain, whichever is greater, as well as mandatory restitution. Interstate travel in aid of racketeering carries a maximum prison term of five years and a $250,000 fine on each count, and each count of filing a false income tax return carries a three-year maximum prison term and a $250,000 fine. In addition, defendants convicted of tax offenses must pay the costs of prosecution and remain liable for any and all back taxes, as well as a potential civil fraud penalty of 75 percent of the underpayment plus interest. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Carrie Hamilton and Andrianna Kastanek.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.


Anonymous said...

Things are getting interesting

Anonymous said...

Nayak's habit of bribes and schemes with Blago, Jackson got the Feds to look deeply into him, but his deals in Aurora may finally lead to Tom Weisner's house of cards crashing down. Geez, if the feds ever looked into Aurora, they would find out its worse than Chicago.

Anonymous said...

buh-bye tom weisner. if Nayak spills anything about Aurora, you are toast.

Anonymous said...

OLB has been onto this Nayak story since 2006 if I recall. If I were Weisner, I'd be expediting that move to Florida ASAP. And, if I were anyone connected to Weisner, I'd be finding other employment immediately before the world caves in.

Anonymous said...

Problem for Weisner is that this Nayak stuff is just one of many problems. If any one of these cards fall, the rest will scramble to save themselves.

When it comes to corruption, Aurora is truly second to none.

Anonymous said...

I didn't think I'd say this but this may actually end up taking Weisner out and into prison.

Anonymous said...

If Nayak even squeaks a peep about any funny business with Weisner or Aurora, it's going to unleash a can of worms. If any of Weisner's cronies and crooks are reading this, you better go confess to the Feds before they come to you.

Tom Weisner's life is going to be turned upside down. It's not a matter of it, but when.

Anonymous said...

The US Attorney's Office are good at leveraging these things. They will gladly exchange a reduced deal for Nayak on the kickbacks and bribery if he can feed them a bigger fish like Weisner and JJJ.

Unless you live with your head under a rock, corruption is big business in Aurora, so this ain't good for the bearded one and all of those people who made a ton of money since he became mayor.

Anonymous said...

I love it. "Special Investigation". "OLB has been onto this". Openline doesn't do ANY investigating himself. All he does is take stuff that people give him, doesn't do any fact checking (or if he does he twists the facts any way he wants), and then puts it on his blog.

Hey Openline, can you name ANYONE who has resigned after one of your "readers have called for FILL IN THE BLANK to resign"?

Anonymous said...

Since the money Nayak used to help weisner's election campaign was ill-gotten shouldn't Tom have to give that money back.

Anonymous said...

The stench of corruption surrounds Mr Nayak, and those with whom he is known to associate. While his current legal difficulties are more of a business and tax nature, there is no question of his involvement in the attempted sale of a U.S. Senate seat, the bundling of campaign contributions for elected officials of Democratic persuasion, or of his ties to 44 East who was hailing him as a private sector catalyst for community development and revitalization as they gleefully accepted tens of thousands of dollars in campaign contributions.

Anonymous said...

seems to me Openline team has been on target long before the rest of the world on this.

and it also seems to me a lot of the old guard people (including the Beacon) like to bury their head in the sand about what really goes on in this town.

We pay a ton of taxes in Aurora and I'm sick of paying for people to get rich off of me. Nothing personal, but I hope Weisner, Cordogan, Nayak, Wegman, Dan Shomon, Carie Ergo, Bill Wiet and all the dozens and dozens of crooks and cronies that have either profited or participated in these schemes not only get arrested someday soon but go to prison for a very long time.

Anyone who doesn't think corruption is a huge problem in Aurora does not know Aurora.

Anonymous said...

Nayak has also poured money into other corrupt or incompetent elected officials such as Lisa Madigan and Pat Quinn. He was helping Hillary Clinton at one time before eventually jumping ship to Obama.

The indictment is about his bribery, kickbacks and other stuff about his surgery centers, but I guarantee you there's a lot of politicians scared to death right now about what he's going to be asked about and what he will say about them.

Weisner is toast.

Anonymous said...

Nayak's connection to Aurora and Weisner is going to take down a lot of people.

Anonymous said...

Hey 9:06,
You forgot Deleon

Anonymous said...

to the ignorant commenter about how Weisner's name isn't mentioned anywhere in the indictment, of course it isn't. Neither is Blago or Jesse Jackson Jr.

This is a classic indictment. Mail fraud, tax evasion and so on. Nayak's best option is throw Weisner, Galloway, Jackson and anyone else he can under the bus to save himself.

At this point, everyone who is aware of, who has profited from or who has looked the other way on the corruption in Aurora should run FAST to the Feds to expose Weisner and his buddies. Or you could become collateral damage.

It's beautiful. I didn't think all this crap would ever be held accountable. Now, it will.

Anonymous said...

Nayak is just a fraction of the corruption in Aurora.