St. Louis businessman indicted in Stenger campaign donation scandal

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ST. LOUIS, Mo. — Local businessman John Rallo was charged with three counts of honest services mail fraud and bribery. Rallo is in front of the US Magistrate Judge Bodenhausen at the federal courthouse in downtown St. Louis. The indictment alleges the incidents in connection to former St. Louis County Executive Steve Stenger's "pay-to-play" scheme started in October 2014 through December of 2017.

Rallo pled not guilty to the three counts stated in the indictment. He is free on his own recognizance.

According to Stenger's indictment, it was August 2017 when Rallo was documented saying, “(The press) was asking a bunch of questions…” and Sweeney reportedly responded, “Don’t talk if they call you. (Expletive). No, don’t meet him. (They’re) trying to make the Steve and you connection.”

The Department of Justice says in a statement:

"Specifically, the Indictment alleges that Stenger, in exchange for campaign donations and several fundraising events, took official action to insure that John Rallo and his company, Cardinal Insurance, obtained insurance contracts through St. Louis County during 2015 and 2016. Further, the Indictment alleges that Stenger took official action to insure that John Rallo and his company, Cardinal Creative Consulting, obtained a sham 2016 consulting contract through the St. Louis County Port Authority. Additionally, Stenger took official action to insure that John Rallo and his company, Wellston Holdings, LLC, obtained options to purchase two properties in Wellston, Missouri which were held by the Land Clearance for Redevelopment Authority of St. Louis County during 2016 and 2017. The Indictment alleges that Rallo, Stenger, and Sweeney took steps to hide, conceal and cover up the illegal bribery scheme, including making false public statements."

If convicted, Rallo could face a maximum penalty of 20 years in prison, a $250,000 fine, and restitution is also mandatory.

Sheila Sweeney, the former CEO of the St. Louis Economic Development Partnership. She was appointed by Stenger and helped return political favors, according to this indictment. She will also appear in court today.

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