Former East St. Louis Official Sentenced to Prison for Fraud and Bribery Offenses

The former director of Community Development for the city of East St. Louis was sentenced in U.S. District Court to more than three years in federal prison on November 8, 2011, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Arthur M. Johnson, 62, of East St. Louis, was sentenced to 37 months’ imprisonment, $6,000 fine, $300 special assessment, and three years of supervised release following his prison sentence. Johnson was convicted on May 20, 2011, for two counts of aiding and abetting wire fraud and one count of accepting improper benefits in connection with business conducted by his office. These offenses were committed in conjunction with the failed Bowman Estates development project.

“Corruption and fraud in government will not be tolerated. I will use all of my resources so that I can assure the citizens of Southern Illinois that they may have faith in their governmental officials.” said United States Attorney Wigginton.

The Bowman Estates development project was a $5.6 million affordable housing project, intended to provide low income residents in East St. Louis with 56 rental units located between the 1100 and 1300 blocks of Bowman and Exchange Avenues. The project was approved by the East St. Louis city council and was to have been constructed through a combination of more than $3.6 million of private investment and more than $1.9 million of public funding from both the city and federal governments.

Arthur Johnson pled guilty to accepting cash payments and agreeing to accept future employment with Harold Rosen, the project developer. As director, Johnson had approved Rosen to receive $800,000 in federal funds administered by the East St. Louis Community Development office. Johnson also pled guilty to knowingly approving a falsified billing invoice that sought to reimburse Rosen for expenses that were not actually incurred.

Harold Rosen, the Clayton based developer, pled guilty in U.S. District Court on October 27, 2011, to seven counts of wire fraud for attempting to obtain more than $1.9 million of public financing under false pretenses and for actually obtaining more than $60,000 of by fraud. Rosen is scheduled to be sentenced on February 1, 2012.

The investigation was conducted through the Metro East Public Corruption Task Force by agents from the Internal Revenue Service, The U.S. Department of Housing and Urban Development, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.