By Monique Garcia, Chicago Tribune reporter June 22, 2013
A onetime aide to former Democratic state Rep. Connie Howard, of Chicago, faces a federal mail fraud charge as prosecutors allege he spent more than $217,000 in AIDS awareness grant money on a house, football game skyboxes and interns who did work for a public official.
Federal prosecutors in Springfield on Friday disclosed the indictment of Lloyd Kelly, who was arrested on May 20 after being first charged under seal nearly a year ago.
Kelly served as executive director of the Let’s Talk, Let’s Test Foundation, a nonprofit he formed in 2003 to help stop the spread of HIV and AIDS in the African-American community, where transmission rates had remained high.
Howard is not named in the indictment, but the document refers to a “Public Official A,” described as an Illinois House member who created the now-defunct foundation with Kelly. The Tribune has reported that Howard, a House member at the time, served as the organization’s board chairwoman.
Lloyd Kelly’s Let’s Talk, Let’s Test Foundation was dedicated to increasing awareness of HIV and AIDS in black communities. (Milbert O. Brown, Chicago Tribune / January 4, 2006)
Howard quietly resigned last July, less than a week before Kelly was indicted under seal and after state records related to Let’s Talk, Let’s Test were subpoenaed by federal authorities in 2009. Howard had held office since 1995 and cited “personal reasons” in her resignation letter.
According to the indictment, the state gave the foundation grants in 2007 totaling $1.2 million to help pay for awareness programs including an annual walk and bike ride, HIV testing sites in black communities and medical and social services for inmates and former inmates.
Prosecutors contend much of that work was never done. Instead, they say, Kelly “fraudulently diverted a substantial amount of the foundation’s grant funds for other purposes, including the personal benefit of defendant Kelly and Public Official A and their associates.”
That includes $50,000 Kelly allegedly pocketed as a “bonus” and an additional $22,500 to pay Social Security and withholding taxes on the funds, prosecutors said. Kelly used an additional $10,000 of the grant money to help buy a home and $3,000 to pay for personal expenses, according to the indictment.
In addition, authorities allege Kelly diverted roughly $56,000 in grant money to a separate private organization. An additional $20,000 was used to pay wages of foundation members who actually worked for Public Official A’s legislative and campaign office, including a driver and personal assistant. An additional $3,000 went to pay rent at the same official’s legislative and campaign office.
The indictment also states that $7,000 was used to buy tickets, skyboxes, food and alcohol for the 2007 Chicago Football Classic, which Kelly, Public Official A and others attended.
Federal public defender Daniel Hillis is representing Kelly and said Friday that he was “unable to comment on the case.” Howard did not immediately respond to messages seeking comment.
The Tribune profiled Kelly in February 2006. Kelly was viewed as passionate but controversial, telling a reporter that “white gay men can’t make effective policy for (blacks) because they don’t live in our community.” Kelly, a former public aid caseworker, briefly pursued acting in the 1980s.
The story also noted that state campaign finance records listed the foundation as giving nearly $7,000 in campaign contributions to Howard that were prohibited because of the foundation’s tax-exempt status. At the time, both Kelly and Howard said the money simply reimbursed Howard for loans to the organization, once housed in her South Side district office, and should not have been documented as contributions. Howard had amended her finance report to reflect that.