from http://www.jg-tc.com

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July 7,2001

Father-daughter defendants plead guilty; Jury selection for remaining defendant, Turner, to begin Monday

BY CARL WALWORTH

City Editor

URBANA - The field of unconvicted defendants in the Omega Trust and Trading case is down to James Turner of Mattoon.

Days before their trial was set to begin Monday, defendants Michael Kodosky and his daughter, Karen Tillquist-Baibus, pleaded guilty on Friday to a role in the Mattoon-based Omega scheme that prosecutors say defrauded more than 10,000 people of more than $20 million.

Kodosky is accused of being one of the primary solicitors for a program in which investors were told to expect $5,100 in return for a $100 investment in about nine months. None of the investors received the promised return. Rather than putting money in an offshore prime bank debenture program, prosecutors say Omega co-conspirators profited by funding businesses, purchasing homes, and lending money to friends and family.

Nineteen people were indicted last August for some role in the Omega fraud. Seventeen have pleaded guilty to one or more charges and another, Arlene Diamond, was found guilty by a jury.

Jury selection is set for Monday for Turner, who is accused of money laundering conspiracy and conducting a monetary transaction with proceeds of illegal activity.

Kodosky pleaded guilty to a count of mail/wire fraud conspiracy and one count of conducting a monetary transaction with proceeds of illegal activity. Tillquist-Baibus pleaded guilty to one count of mail/wire fraud conspiracy. Both Kodosky, 57, and Tillquist-Baibus, 35, live in suburban Chicago. Kodosky faces a maximum prison sentence of 15 years. The maximum sentence for Tillquist-Baibus is five years, though neither is likely to qualify for the maximum once sentencing guidelines are applied.

Kodosky, though, conceded in the plea agreement that he was a manager or supervisor in the Omega program headed by Clyde D. Hood, and that the amount of money involved that was reasonably foreseeable to him totaled between $10 million and $20 million.

Asked by U.S. District Michael McCuskey if he pleaded guilty because he's guilty, Kodosky said, "I understand the evidence. ... I understand a jury would convict me."

In Tillquist-Baibus' plea agreement, prosecutors agree she had a "minor" role in the Omega conspiracy.

Both Kodosky and Tillquist-Baibus were released on bond until their Nov. 30 sentencing provided they meet a series of requirements, including having no contact with any customer or client who may be a potential witness or who may be subject to prosecution; sending a statement to customers/clients stating that Omega no longer operates; and removing the computer and fax machines from their home, with the exception of a computer used by Tillquist-Baibus' son.

Last Monday, prosecutors submitted evidence that Kodosky and Tillquist-Baibus continued to receive money from Omega after their indictments in violation of a court order. McCuskey said he could have proceeded on that motion to have the two taken into custody even after prosecutors asked for a continuance.

On Friday, all agreed that Kodosky and Tillquist-Baibus remain free on bond until sentencing.

The judge, though, had harsh words for the "dozens and dozens" of people from as far away as New Zealand who in the last week sent "inaccurate" and "outrageous" correspondence to the judge related to Kodosky. The correspondence, McCuskey said, included "preposterous" statements such as that the judge is killing Kodosky by demanding the court matters proceed while Kodosky has medical problems. One of the e-mails suggested that McCuskey should receive the same fate as Kodosky. Such statements couldn't be from anyone who is a friend or trying to help Kodosky and Tillquist-Baibus, the judge said.

With the latest developments, prosecutors estimate no more than 10 days of evidence in the Turner case. Opening statements are scheduled for Wednesday.

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