"The Cicero candy store is closed," said Kathleen McChesney, agent in charge of the Chicago office of the FBI.

Among those indicted in what federal prosecutors said was a mob-connected corruption scheme were Betty Loren-Maltese, who as town president is equivalent to mayor, and former Police Chief Emil Schullo.

Loren-Maltese, a Republican, has been enormously popular with voters in the gritty, blue-collar town of 70,000 outside Chicago.

She was re-elected in a landslide in April, watched by federal observers brought in after the town board tried to change residency requirements in a way that would have made her opponent ineligible.

The defendants were arrested on charges of racketeering conspiracy, money laundering, fraud and tax offenses. U.S. Magistrate Judge Geraldine Soat Brown set a $100,000 bond for Loren-Maltese, which is to be secured by her house in Cicero.

Loren-Maltese left the federal building without speaking to reporters, but her attorney said that she actually had been working to expose the scandal she was accused of helping orchestrate.

"To suggest she is somehow involved in a conspiracy she's worked so hard over the last few years to uncover is sad," said Terry Gillespie.

Seven other defendants were freed on bond and two others are to appear in court later.

According to the 17-count racketeering conspiracy indictment, they stole $10 million from the town's health insurance fund and used some of the money to buy a golf course, The Four Seasons, near Pembine, Wis., that Loren-Maltese and others hoped would be converted into a casino.

The money was also used to buy a horse farm near Crown Point, Ind., and a vacation home for the family of trucking executive Michael Spano Sr., prosecutors said.

They said the scheme was hatched by Spano and Loren-Maltese's husband, Frank "Baldy" Maltese, a one-time town clerk who died in 1993 before he could start a federal prison term on a gambling conviction.

U.S. Attorney Scott Lassar declined to say precisely how organized crime fit into the scheme. But he said that Frank Maltese and Spano were involved with the mob and that its influence helped drive the operation.

Municipal employees had to pay into the insurance fund that was stolen from, and some who complained were demoted or fired, Lassar said.

According to the indictment, the money was laundered at the company that managed the health insurance fund, Specialty Risk Consultants Inc., and a group of spinoff companies.

Corruption has plagued Cicero since the 1920s, when Capone set up headquarters there during Prohibition.

The indictments come one month after a federal jury awarded $1.7 million to former Cicero Police Chief David Niebur and another man who said they were fired by Loren-Maltese in 1998 for working with the FBI to fight corruption in Cicero.

On learning of the charges Friday, Niebur said he was "overjoyed." He called Cicero "a cesspool of corruption."

The indictments were also greeted warmly by Loren-Maltese's opponent in the April election, Cook County Commissioner Joseph Moreno.

During the campaign, Moreno was arrested by Cicero police on drunken driving charges that were later dropped for lack of evidence. Loren-Maltese supporters then accused Moreno of being a wife beater and adulterer, citing court documents that turned out to involve a different Joseph Moreno.

"This administration has disgraced the town of Cicero," Moreno said. He called on Loren-Maltese to resign and said a special election should be held. He said he would run again.

Some people on the street in Cicero seemed stunned.

"She was doing everything correct, and now they say there's some corruption," said Gerardo Lopez, 37, a Spanish teacher who voted for Loren-Maltese.

"She was always helping the seniors and the children," said Barbara Kielmanski, a service station clerk.

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