Subscribe for 99¢

ST. LOUIS — John G. Rallo, one of disgraced former St. Louis County Executive Steve Stenger’s earliest campaign donors, pleaded guilty Tuesday in federal court to three honest services fraud charges.

Rallo, 54, admitted donating tens of thousands of dollars to Stenger with the expectation that he would receive county business or contracts in return.

Assistant U.S. Attorney Hal Goldsmith said that when Stenger and Rallo met in October 2014, Stenger promised to award Rallo county contracts in exchange for political donations. Rallo made “numerous donations,” recruited other donors and held fundraisers, Goldsmith said.

Stenger and his co-conspirators in 2016 directed the award of a “sham” $130,000 marketing contract to Rallo’s Cardinal Creative Consulting. In 2017, Rallo and his business partners were allowed to buy two county-owned industrial parks in Wellston for well below their appraised price.

On three occasions, Rallo sent three $5,000 checks from Cardinal Creative to a man identified in the indictment only by the initials “JC” to reward him for get-out-the-vote efforts in 2014, Goldsmith said. The Post-Dispatch has identified JC as John Cross.

Asked by U.S. District Judge E. Richard Webber if he disagreed with anything Goldsmith said, Rallo responded, “No, I do not, your honor.”

Rallo, who lives in the Salt Lake City suburbs, could face 21 to 27 months in prison Oct. 15 under the advisory sentencing guidelines. He will also be ordered to pay restitution, although the amount is not clear. In his plea, he admitted that his actions caused a loss of between $250,000 and $550,000, which can include bribes, the cost of contracts either awarded or sought through corruption, as well as the cost to taxpayers of insider real estate deals.

Goldsmith and Rallo’s lawyer, John Rogers, declined to comment after the hearing.

The claims in Rallo’s plea mirror those of other defendants in the case. He is the fourth person, including Stenger, to plead guilty in an ongoing investigation by the FBI, IRS and U.S. Postal Inspection Service.

Stenger, a Democrat, pleaded guilty May 3 to three counts of honest services fraud. He admitted directing county contracts to Rallo and other political donors. At his sentencing, scheduled for Aug. 9, he could face three to four years in prison and will be ordered to pay restitution.

Stenger’s former chief of staff, Bill Miller, pleaded guilty to one count of the same crime and is scheduled to be sentenced Sept. 6.

Sheila Sweeney, the former CEO of the St. Louis Economic Development Partnership, pleaded guilty to misprision of a felony May 10 and also admitted aiding Stenger’s schemes. She is scheduled to be sentenced Aug. 16.

Rallo also faces other accusations of fraud. Last month, he was ordered to repay investors $1.2 million and pay a $30,000 civil penalty. He was also banned from selling unregistered securities, transacting business as an unregistered agent or broker-dealer, or employing an unregistered agent.

Missouri’s Commissioner of Securities had accused Rallo of defrauding five investors in the St. Louis area and one in Utah. Rallo, they say, had claimed that their investment would go to a company that was purportedly going to supply coconut powder to large retailers, but the money actually went to Rallo’s other businesses. Rallo did not respond to or contest the allegations.


Editor's note: This replaces an earlier version of the story that did not include a full reference to Sheila Sweeney in the 12th paragraph.

St. Louis County Executive Steve Stenger pleaded guilty to pay-for-play charges: Some background reading

Here's a collection of Post-Dispatch stories looking at some of the controversies surrounding the St. Louis County Executive.

Robert Patrick is a reporter for the St. Louis Post-Dispatch.