Raghuveer Nayak, an influential Chicago businessman who figured in the downfalls of former Gov. Rod Blagojevich and ex-U.S. Rep. Jesse Jackson Jr., pleaded guilty today in his own criminal case to federal fraud charges related to a string of surgery centers he owns.
Nayak, a major fundraiser for Blagojevich and Jackson, was never charged for his central role in the Blagojevich corruption saga. But prosecutors accused him of bribing doctors to send patients to his surgical centers in Illinois and Indiana and he faced multiple counts of fraud and filing false tax returns in a trial scheduled for October.
He pleaded guilty today to one count of impeding the IRS and one count of mail fraud, under the controversial “honest services” provision in federal criminal law. Nayak reserved the right to appeal the mail fraud count if another federal court upholds a challenge to the “honest services” provision in a separate case.
Nayak is seeking as little as 18 months in prison while prosecutors want up to five years and three months. A sentencing hearing was scheduled for Jan. 22-23.
Before entering his plea, Nayak told the judge “I’m fighting for my life.”
The plea closes another chapter in the Blagojevich saga. Federal authorities alleged Nayak offered to raise up to $6 million in campaign cash for Blagojevich if he used his power to name Jackson as President Barack Obama’s replacement in the U.S. Senate after the 2008 election.
Nayak cooperated with authorities in a bid for leniency. Blagojevich was convicted and sent to prison. Jackson was never charged in that case, but federal prosecutors in Washington, D.C. later charged Jackson and his wife, former Ald. Sandi Jackson, with misusing campaign funds. Both pleaded guilty earlier this year.
Nayak made millions of dollars from his surgery centers – private facilities where doctors perform outpatient procedures, from plastic surgery to orthopedics. The work allowed him to purchase a mansion in suburban Oak Brook and open several more surgery centers on Chicago’s North Side and northwest Indiana.
While he got rich, Nayak also became a go-to political fundraiser in Chicago’s Indian community. He hosted fundraisers and often contributed himself.
While giving mostly to Democrats, he also donated to some Republicans. By 2008, he and his wife had spread more $750,000 to several politicians, including Blagojevich, Obama, Illinois Attorney General Lisa Madigan and Gov. Pat Quinn.
During his rise, he also became a close friend of the Jackson family, including Rev. Jesse Jackson and his son, the congressman.
When voters in 2008 elected Obama president, his allegiances to both Blagojevich and Jesse Jackson Jr. came to a head.
With Blagojevich holding the sole authority to appoint a replacement for Obama’s vacant U.S. Senate seat, Nayak and an associate who worked for Blagojevich’s administration, Rajinder Bedi, organized a fundraising effort to get the governor to select Jackson for the post, federal prosecutors alleged.
But federal authorities were listening to Blagojevich’s phone calls and no deal was ever consummated. Nayak later told investigators that Jackson asked him to raise campaign money for Blagojevich, sources familiar with the investigation have told the Tribune. A House Ethics Committee released a 2009 report by congressional investigators who said there was “probable cause” to believe Jackson directed Nayak's efforts or at least knew that Nayak would try to trade cash for the Senate pick.
Jackson denied the allegations and was never charged. But he was later charged and pleaded guilty, along with his wife, former Chicago Ald. Sandi Jackson, to misusing more than $750,000 in campaign cash. The former congressman was sentenced to 30 months in federal prison while his wife received a sentence of one year in prison.Copyright © 2015, The Baltimore Sun