Caravetta's friend Photo gallery Cicero corruption trial: The players Timeline Cicero's history of corruption Stories Cicero mayor's trial begins May 24, 2002 Court told of ties to Cicero mob March 19, 2002 3 convicted of bilking Cicero March 29, 2002 Cicero mayor got a warning, 2 say March 5, 2002 Report backs Cicero boss August 2, 2001 Feds trace origins of Cicero plot June 17, 2001 Cicero mayor indicted June 16, 2001

And a lawyer for Schullo accused Loren-Maltese in his opening statement of shredding evidence, a charge prosecutors didn't even level. The attorney, Frank Lipuma, then alleged there was only one real power in the town--Loren-Maltese, saying she "ruled her Cicero empire to her financial benefit and to her financial gain."

But Loren-Maltese's attorney contended that the scheme was well under way when she was appointed town president in 1993 and that she was politically inexperienced and didn't catch onto the fraud for several years.

With jurors outside the courtroom, Loren-Maltese's lawyers sought a mistrial, saying Schullo's allegations against Loren-Maltese wouldn't have been brought up had she been tried separately. They also asked that Loren-Maltese's trial be severed from those of the other defendants.

But U.S. District Senior Judge John Grady refused the request. "Mr. Schullo has a right to present a defense that is antagonistic," the judge said.

Assistant U.S. Atty. Mitchell Mars told jurors that in 1992, Loren-Maltese's husband, Frank Maltese, then a powerful political figure in Cicero, helped boot out the town's insurance administrator, installing in its place Specialty Risk Consultants, which at the time had been in existence for only four months. Frank Maltese died in 1993.

In court papers, prosecutors have alleged Loren-Maltese, Schullo and DeChicio allowed Specialty Risk--secretly controlled by defendants Michael Spano Sr., a reputed Cicero mob boss, and his business partner John LaGiglio--to steal $10 million by charging inflated fees and imposing bogus charges.

Mars alleged that about $5 million in stolen funds went to buy and renovate a golf course and clubhouse on a Wisconsin island, dubbed "Fantasy Island" by the prosecutor.

Loren-Maltese's lawyer, Terence Gillespie, said thievery took place on Loren-Maltese's watch but noted the fraud was going on for several months before she was elevated to town president in early 1993.

Gillespie contended Loren-Maltese was duped by the insurance scam.

"Betty doesn't like to hear this," he said, "but she was over her head."

Gillespie maintained that the powers in Cicero appointed her town president because of her political inexperience and "that she could be fooled."

"And she was," he said.

In Loren-Maltese's defense, Gillespie said even the town's auditors didn't catch onto the fraud scheme.

When Loren-Maltese learned of the fraud in 1996, Gillespie said she notified the state's attorney, hired a "blue-ribbon" ex-prosecutor and outside accountants to investigate and sued Specialty Risk.

"If you're under investigation, you hide," Gillespie said. "You don't start investigations, and that's what she did."

But Lipuma, Schullo's lawyer, quickly blamed Loren-Maltese, saying, "Nothing could be done in Cicero without Betty Loren-Maltese's knowledge and approval."

Lipuma also alleged that following Schullo's firing, Loren-Maltese had undisclosed documents removed from his office and shredded the papers "to conceal the truth."

Lipuma said Schullo, a career police official, wasn't educated on insurance matters and relied on the judgment of town lawyers and accountants. Prosecutors say Loren-Maltese, Schullo and DeChicio sat on a town panel that oversaw the insurance program.

Thomas Anthony Durkin, DeChicio's lawyer, accused prosecutors of trying to lump the three accused town officials together. Durkin maintained DeChicio didn't know the treasurer's duties were among his responsibilities when he was appointed to the town board.

"Who really was part of the inner circle in Cicero?" he asked. "The one thing I'm sure of is it wasn't Joe DeChicio."

Mars said the fraud scheme bled the insurance fund dry, leading to backlogs of as much as $800,000 on claims and forcing the town to borrow money and hit up town workers for payroll deductions. A doctor for one employee threatened to cut off treatment for cancer because the town wasn't paying its bills, Mars said.

Mars alleged one town financial employee repeatedly warned Loren-Maltese of the excessive insurance payments but she fired him "to get him out of the way."

Mars charged that Loren-Maltese's claims of going after Specialty Risk after learning of the fraud were nothing more than a continuation of the scheme's cover-up attempts. Also on trial are Spano's son, Michael Jr.; LaGiglio's wife, Bonnie; and attorney Charles Schneider.

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