Specifically, the ruling could be bad news for Hillary Clinton, who has accepted approximately $165,000 and a corporate jet ride from IPA; Illinois Attorney General Lisa Madigan, who also took IPA money and whose investigation of the firm has mysteriously gone nowhere; and other politicians who have taken significant money from the Buffalo Grove, IL.-based company.
In U.S. District Court in Chicago, federal judge Elaine Bucklo denied IPA's motion to dismiss a massive nationwide 40-plaintiff lawsuit. In doing so, Bucklo agreed with the small business owners/victims that the allegations amounted to a legitimate racketeering case.
The complaint sufficiently alleges mail and wire fraud, and interstate travel, as a part of defendant's schemes and as the predicate acts of racketeering. The complaint alleges that defendants (1) had a scheme, (2) intended to defraud plaintiffs, and (3) used the telephone and sent materials through facsimile and the mails in furtherance of the scheme, and traveled interstate in furtherance of the scheme. These acts are alleged to have been numerous and continuous, both collectively and with respect to each plaintiff, and spanning over a period of years.The bad news for Madigan, if the Illinois media ever wakes up and asks her about it, is that by effectively certifying this as a legitimate nationwide fraud allegation, it makes the first-term Democrat appear extremely weak, or worse. Madigan, as I have pointed out numerous times, has been investigating IPA for more than four years without any result. If the federal judge can see the potential nationwide fraud conspiracy, why can't the Illinois AG?
A more cynical person might say Madigan is less than motivated in investigating a company that helped her conduct political phone banks in 2002, and that has given close to $1 million in campaign donations to Democratic politicians over the last several years.
It is also bad news for other Democratic AGs across the country, who, through their political action committee, took $50,000 in donations from IPA in October 2006 while Madigan was conducting her investigation. If there is a nationwide fraud case, Madigan ought to be bringing other state AGs on board to help investigate. Did the $50,000 stifle the AGs' enthusiasm?
In general, it is a horrible day for IPA. The ruling has energized a very vocal group of small business owners, some of whom can be found celebrating the ruling on message boards at the bottom of stories here and here. This means the case will go forward and the chance for more scrutiny will increase.
At the same time IPA is fighting this case, it also is in federal court defending itself against the most expansive sexual harassment lawsuit ever filed by the Chicago office of the Equal Employment Opportunity Commission.
And, as we've mentioned before, it appears that IPA is heavily dependent on lighting strike, non-repeat business and therefore is deathly afraid of bad Google results, which tend to kill those sales when a small business owner checks out IPA before hiring it. The firm undoubtedly is trying to influence those Google results, but the more bad news that enters the news flow, the more difficult that becomes.
Background on IPA can be found here.