By Mike Robinson
Associated Press Writer
Published June 6, 2002, 4:30 PM CDT

An admitted swindler testified today that Cicero’s town president was installed in her job because she could be kept under control as the suburb was bilked out of millions of dollars.

“Betty was appointed because she was Frank’s wife and Frank could control her,” swindler turned federal witness Frank Taylor testified at the trial of town President Betty Loren-Maltese and seven co-defendants.

Taylor said Cicero employees waited months for payment of their health insurance claims and that the payments were at one point $724,000 behind while the alleged conspirators siphoned out the cash.

Federal prosecutors said $10 million was stolen through a firm known as Specialty Risk Consultants Inc. and that the defendants used the money to buy Cadillacs, a thoroughbred horse farm and a golf resort.

The scale of the alleged corruption is the largest to date in a decades-long saga of vice, graft and political turmoil in Cicero.

Loren-Maltese, 52, was married to Frank Maltese, the town assessor, when she was whisked into office by the town board after the death of longtime President Henry Klosak. Frank Maltese was known as the town’s political powerhouse but was ineligible for the post of president because he had just been convicted in a mob-related gambling case.

Taylor testified, however, that when he signed on as manager of Specialty Risk Consultants, Frank Maltese was among those who assured him that the newly formed, unlicensed company would soon get the suburb’s insurance business.

He testified that he was also told that the newly installed president, Betty Loren-Maltese, would be agreeable to whatever the firm did with the money because Maltese could control his wife.

What happened next did not go quite according to scenario. Maltese died of cancer while waiting to begin serving his prison sentence. And when the town fell $724,000 behind in health insurance claims from its employees, Loren-Maltese wrote a complaining memo and threatened to replace the firm.

Taylor testified, however, that he was assured by John LaGiglio, a trucking company operator also charged in the case, that reputed mob boss Michael Spano "would handle the problem with Betty.” He said that Loren-Maltese never brought up problems with the insurance money again.

Spano is also a defendant in the case.

U.S. District Judge John F. Grady has barred any mention of organized crime in front of the jury. But he is having to work to enforce his stricture. The subject came up indirectly when Taylor was asked how much he made as nominal head of Specialty Risk Consultants.

He testified that he received $5,850 three times a month but had to kick back $2,000 out of each check. He had to pay an additional $1,000 every month, he said. He was asked by Assistant U.S. Attorney Matthew M. Schneider who received the kickbacks.

“I was told that it was Michael Spano Sr. and our friends,” he said. Schneider then asked what he meant by "our friends,” bringing defense attorney Allan A. Ackerman to his feet with an objection.

Once the jury had left the room for lunch, Ackerman protested to Grady that Schneider should never have been allowed to ask about "our friends.”

“Everybody knows Mr. Taylor would have said that which is prohibited,” Ackerman said "They are the only friends we know of.”

Another defense attorney, Thomas Anthony Durkin, quoted grand jury testimony from Taylor to the effect that "our friends” meant individuals with ties to organized crime.

“I thought that was off limits,” Durkin said. Grady has ruled that there is no need to mention the mob to the jury and that prosecutors should stick to the allegations of theft.

But Spano was convicted earlier this year of conspiring to steal $75,000 from the town through a phony detective agency, and at the close of the case prosecutors said that he was the head of the Cicero mob.

Copyright © 2002, The Associated Press