Ruling that the jury wrongly found a “pattern” of racketeering activity, the 7th Circuit Court of Appeals recently reduced an award to Illinois casinos from million to million. The lawsuit stems from the corruption scandal that sent former Illinois Governor Rod Blagojevich to federal prison in 2012 on 18 criminal convictions, including extortion and wire fraud. Last year an appellate court vacated five of the convictions. As a result, Blagojevich is seeking a reduced prison sentence that could free him within a year. Re-sentencing is set for August 9.
“The jury did not have legally sufficient evidence to support a verdict finding a conspiracy to engage in a ‘pattern’ of racketeering activity, as required for liability on a RICO conspiracy theory,” the appeals court panel said.
The case began in 2008, when horse racetrack executive John Johnston promised a $100,000 campaign contribution to then-governor Blagojevich in exchange for signing a proposal to tax the state’s largest casinos to directly benefit the state’s horseracing industry. After Blagojevich was arrested in 2008, Empress Casino Joliet and other casinos affected by the tax sued Balmoral Racing Club, Maywood Park Trotting Association and Blagojevich, alleging a conspiracy that violated the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, among other claims.
A federal jury awarded the casinos $25.9 million in damages, which, under RICO, was tripled to $77.8 million, the three-judge panel said. But the appeals court reversed that finding and sided with Johnston and the racetracks.
