Former Illinois Legislative Aide Faces Fraud Charges Related To $1.2 Million Grant
SPRINGFIELD, Ill. – A former legislative aide to an Illinois state representative, Lloyd Kelly, is scheduled to appear in federal court in Springfield next week for an initial pretrial conference related to an indictment that charges Kelly with a single count of mail fraud.
A federal grand jury returned a superseding indictment against Kelly, 52, in September 2012; the initial indictment was returned in July 2012. The indictment had remained sealed pending Kelly’s arrest and court appearance. Kelly was arrested on May 20, 2013, and appeared before Senior U.S. District Judge Richard Mills. At that time, Kelly was ordered released on bond, and trial was scheduled on Jul. 2, 2013.
The superseding indictment charges Kelly with one count of mail fraud related to the alleged fraudulent use of a $1.2 million grant awarded in 2007 by the Illinois Department of Public Health to the Let’s Talk Let’s Test Foundation, a non-profit organization founded by Kelly and a member of the Illinois House of Representatives, referred to in the indictment as Public Official A, in 2003. From June 2007 to February 2009, the indictment alleges that Kelly participated in a scheme to defraud the state of the grant funds.
According to the indictment, the African-American HIV/AIDS Response Act was enacted in Illinois in 2005, co-sponsored by Public Official A, to address the legislative finding that HIV/AIDS in the African-American community was a crisis separate and apart from the issue of HIV/AIDS in other communities. In 2006, the Act established a grant program to fund programs to prevent the transmission of HIV and to create a service delivery system to reduce the disparity between African Americans and other population groups in Illinois.
In or about January 2007, according to the indictment, Public Official A met with the Illinois Department of Public Health and others to determine grant recipients. The state transferred $3 million to the grant program, and the Department selected approximately 50 recipients to receive grants from $25,000 to $50,000. Only one recipient, the Let’s Talk Let’s Test Foundation, received two grant awards totaling $1.2 million, representing 40 percent of the total 2007 funding.
Under the terms of the grant agreements, signed by Kelly, the indictment alleges the Foundation agreed to provide a variety of services and programs, including development of a statewide African-American HIV Prevention Plan and a plan for creating and maintaining at least 17 one-stop shopping HIV/AIDS facilities statewide.
The indictment alleges that Kelly falsely represented that the Foundation would perform the requirements of the grant when he well knew the Foundation was neither capable of performing nor intended to perform the requirements, did not in fact perform a substantial number of the grant requirements, and diverted a substantial amount of the Foundation’s grant funds for other purposes, including Kelly’s personal benefit and that of Public Official A and their associates.
The indictment alleges that Kelly diverted grant funds to himself to pay personal expenses and a bonus payment to himself, toward purchase of his personal residence, and for personal expenses, as well as payments to others, including to an organization that paid wages to individuals for work performed for the Illinois representative, to pay rent for the representative’s legislative and campaign office; and $7,000 to purchase tickets, two skyboxes, food and alcohol for the 2007 Chicago Football Classic, which Kelly attended with the representative and others. The indictment further alleges that Kelly made false statements to Illinois Department of Public Health during its monitoring and auditing of the Foundation’s grants.
Assistant U.S. Attorney Timothy A. Bass is prosecuting the case on behalf of the U.S. Attorney’s Office for the Central District of Illinois. The ongoing investigation is being conducted by participating agencies of the Central District of Illinois’ U.S. Attorney’s Office’s Public Corruption Task Force including the U.S. Postal Inspection Service, Chicago Division; the Internal Revenue Service Criminal Investigations; and, the Illinois Secretary of State Office of Inspector General. The Illinois Department of Public Health is also cooperating in the investigation. Individuals who wish to provide information to law enforcement regarding matters of public corruption are urged to call the U.S. Attorney’s Office at 217-492-4450.
If convicted, the statutory penalty for the offense of mail fraud is up to 20 years in prison and fines of up to $250,000.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.