Businessman John Rallo indicted on same federal corruption charges as Stenger

Pictured above: Former St. Louis County Executive Steve Stenger exits the Thomas F. Eagleton U.S. Courthouse in downtown St. Louis Friday after pleading guilty to three charges of theft of honest services/bribery and mail fraud. Stenger initially pleaded not guilty to the charges at an arraignment Monday, April 29, after an April 25 indictment was unsealed that morning, prompting Stenger to resign as county executive minutes later. Photo by Erin Achenbach.

The businessman who urged former County Executive Steve Stenger to give him lucrative county contracts in exchange for campaign donations has been indicted for the same crimes as Stenger.

John Rallo, 53, formerly of St. Louis County, was charged with three separate counts of theft of honest services, mail fraud and bribery. 

Rallo was set to appear before U.S. Magistrate Judge John Bodenhausen for his initial appearance and arraignment on the indictment at 9:30 a.m. Friday. 

The 37-page indictment handed down by a federal grand jury for Rallo is nearly identical to the 44-page one for Stenger.  

St. Louis Economic Development Partnership CEO Sheila Sweeney will plead guilty at 3:30 p.m. Friday on undisclosed charges after also being indicted. 

The indictment charging John Rallo alleges that beginning in October 2014 and continuing through Dec. 31, 2017, Stenger “schemed to defraud and deprive the citizens of St. Louis County of their right to his honest and faithful services, and the honest and faithful services of Sweeney, through bribery and the concealment of material information,” according to a news release from the U.S. Attorney’s Office for the Eastern District of Missouri.

“The purpose of the scheme was for Stenger to secretly use his official position to enrich himself through soliciting and accepting campaign contributions from Rallo and other individuals in exchange for favorable official action, and for Rallo and other individuals to enrich themselves and their companies by secretly obtaining favorable action for themselves and for their companies, through corrupt means,” the office added.

Specifically, the indictment alleges that Stenger, in exchange for campaign donations and several fundraising events, took official action to ensure that Rallo and his company, Cardinal Insurance, obtained insurance contracts through St. Louis County during 2015 and 2016. 

When that plan failed, the indictment alleges that Stenger took official action to insure that Rallo and his company, Cardinal Creative Consulting, obtained a sham 2016 consulting contract through the St. Louis County Port Authority. 

Additionally, Stenger and Sweeney took official action to rig bids and ensure that Rallo and his company Wellston Holdings LLC bought two county properties in Wellston which were held by the Land Clearance for Redevelopment Authority of St. Louis County during 2016 and 2017. 

“It’s good to have friends;-),” Rallo texted to Stenger May 9, 2015, after meeting with one of Stenger’s staffers May 6 to talk about getting a contract.

It was a relationship of mutual admiration. On Jan. 18, 2017, Stenger texted Rallo, “U r a beautiful man” after Rallo said he had recruited his business partner as a Stenger donor.

Rallo’s indictment alleges that Rallo, Stenger and Sweeney took steps to hide, conceal and cover up the illegal bribery scheme, including making false public statements.  

After Post-Dispatch reporter Jacob Barker submitted Sunshine Law requests last year for information on the Wellston land deal, Stenger was caught on audio — possibly Rallo wearing a wire — saying, “You can’t talk to the f—ing press. I bent over f—ing backwards for you, and I asked you one simple f—ing thing, don’t talk to the f—ing press. And I’m telling you, you’re gonna f—ing kill yourself, all right, you’re gonna kill yourself with this s—.” 

If convicted, Rallo faces a maximum penalty of 20 years in prison and a $250,000 fine for each charge.  Restitution is also mandatory. 

In determining the actual sentences, a judge is required to consider the U.S. federal sentencing guidelines, which provide recommended sentencing ranges. 

The Federal Bureau of Investigation and the Postal Inspection Service are investigating this case with the assistance of the Internal Revenue Service Criminal Investigations.  Assistant U.S. Attorney Hal Goldsmith is handling the case for the U.S. Attorney’s Office.

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