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7th Circ. Slashes Jury Award by Two-Thirds

CHICAGO (CN) — The Seventh Circuit overturned a racketeering verdict involving the bribery of disgraced former Illinois Gov. Rod Blagojevich by a local horseracing executive, reducing the casinos' jury award by two-thirds.

A group of casinos were awarded damages of $25.9 million in 2014, trebled to $77.8 million under RICO laws, for a 3 percent revenue tax that Blagojevich signed into law. The money was deposited into a trust to benefit the horseracing industry.

John Johnston, owner of the Balmoral Racing Club and Maywood Park Trotting Association, had donated $125,000 to Blagojevich's campaign fund after the bill was signed in 2006, and agreed to give the governor $100,000 more for renewing it in 2008, according to court records.

The scheme was uncovered by conversations recorded by federal authorities before Blagojevich was indicted on corruption charges in 2009.

Johnston's companies asked for a new trial, arguing that the casinos didn't prove a RICO conspiracy, that there were several trial errors and that the casinos should not have been able to add state-law claims.

Judge David F. Hamilton wrote in Seventh Circuit's Tuesday opinion that "continuity limits RICO to schemes meant to exist over a period of time, not one-off crimes," ensuring that the RICO law targets only long-term criminal conduct.

The agreement between Johnston and Blagojevich was limited to one donation in return for signing one bill.

"Once Blagojevich signed the bill, the scheme was over," Hamilton wrote.

The panel found that "no specific threat of repetition existed," especially since future gubernatorial elections and the stance of their winners towards the bill could not be predicted.

"The jury did not have a legally sufficient basis in the evidence to allow them to find that there was a pattern of racketeering activity," the Seventh Circuit ruled, reversing the RICO count.

The rest of the original judgment was affirmed and there will be no new trial. The casinos are still entitled to damages of $25.9 million, but not a trebled amount.

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