UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA

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v

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No.  01 CR 348

 

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MICHAEL SPANO, SR.,

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Violations:  Title 18,

JOHN LAGIGLIO,

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United States Code,

BETTY LOREN-MALTESE,

)

Sections 2, 371, 1341,

EMIL SCHULLO,

)

1343, 1344, 1956, and

JOSEPH DECHICIO,

)

1962(d); Title 26, United

MICHAEL SPANO, JR.,

)

States Code, Sections

BONNIE LAGIGLIO,

)

7201 and 7206(1)

GREGORY ROSS,

)

 

CHARLES SCHNEIDER, and

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SUPERSEDING INDICTMENT

FRANK TAYLOR

)

 

 

 

COUNT ONE

 

THE SPECIAL JULY 2000-1 GRAND JURY charges:

1. At times material to this indictment:

(a)   The Town of Cicero (the “Town”) was a municipal corporation and a political subdivision of the State of Illinois.  The Town maintained a self-insurance employee health benefit plan and was also self-insured for liability and workers compensation losses.

(b) Until sometime in 1992, Travelers Plan Administrators of Illinois, Inc. (“Travelers”) provided the Town with claims administration services for group health matters.  Travelers was licensed in the State of Illinois to provide administration services for insurance claims. 

 

 


(c) Specialty Risk Consultants, Inc. (“Specialty Risk”) was an Illinois corporation that was incorporated in February 1992.  In April 1992, Specialty Risk became the Town’s insurance program  consultant.  In approximately July 1992, Specialty Risk began to administer the group health program for Town employees.  Between April 1992 and March 1997, the Town paid Specialty Risk approximately $33,200,000 and Specialty Risk spent approximately $18,500,000 on Town insurance expenses.  Specialty Risk was never licensed to provide administration services for health insurance claims in the State of Illinois.  

(d) The group health benefits for Town employees were embodied in the Plan Document and Summary Plan Description for the Town of Cicero (“Plan”) which named the Town as the administrator for the Plan.  During the course of the operation of the Plan, defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO were members of a committee that were responsible for the fair administration of the plan on behalf of the Town and its employees.

(e) The Code of Ordinances of the Town of Cicero provided in relevant part that:

No money shall be paid out by the Treasurer of said Town, unless the same shall have been ordered by the Board, and then only upon a warrant drawn on him by the Clerk, countersigned by the President, specifying what particular fund the same shall be paid out of; and it shall be the duty of the Clerk to keep an account of all such warrants drawn by him. 

 

Part 1, Charter, Paragraph Nine, Code of Ordinances.

 


(f) The Illinois Insurance Code provided in relevant part that:

 

Administrators shall hold in a fiduciary capacity all contributions and premiums received or collected on behalf of a plan sponsor or insurer. Such funds shall not be used as general operating funds of the administrator. 

215 ILCS 5/511.112(a)

 

The administrator shall hold in a fiduciary capacity all moneys which the administrator receives to pay claims and claim adjustment expenses.

 

215 ILCS 5/511.112(b)

(g) Frank Maltese was the Cicero Town Assessor and a member of the Town Board of Trustees until his death on October 19, 1993. 

       The Defendants

(h)     MICHAEL SPANO, SR. was an associate of Frank Maltese. SPANO was also an associate of JOHN LAGIGLIO’s at Specialty Risk and at Piggyback Specialists, Inc. (“Piggyback”), a trucking company in the Town.

(i)  JOHN LAGIGLIO was an executive at Specialty Risk.  He was also an executive at Miscauno Management Company, Inc., a business that operated the Four Seasons golf course, and at Piggyback and Dispatch Services, Inc., a successor company to Piggyback.

 

 

 


(j) BETTY LOREN-MALTESE was an aide to former Cicero Town President Henry Klosak until Klosak’s death on December 28, 1992.  LOREN-MALTESE was also married to Frank Maltese. On January 12, 1993, JOSEPH DECHICIO moved the appointment of LOREN-MALTESE as a Town Trustee and Interim Town President to replace Klosak, which motions were adopted by the Town Board of Trustees.  LOREN-MALTESE has held the position of Town President until the date of this indictment.  She was also the presiding official on the Town insurance committee.

(k) EMIL SCHULLO was appointed to the position of Director of Public Safety for the Town of Cicero on January 26, 1993, by the Town Board of Trustees, upon the recommendation of BETTY LOREN-MALTESE and the motion of JOSEPH DECHICIO.   SCHULLO was also a member of the Town insurance committee.

(l) JOSEPH DECHICIO had been on the Town Board of Trustees since April 1989, and was appointed to the position of Cicero Town Supervisor/Trustee on January 12, 1993 by the Town Board of Trustees, upon the motion of Frank Maltese.  DECHICIO also served as Treasurer of the Town of Cicero.  He was also a member of the Town insurance committee.         

(m)     MICHAEL SPANO, JR., was the son of defendant MICHAEL SPANO, SR., and was controller for Specialty Risk and Specialty Leasing; the President of Specialty Finance, Inc.; and the President of Centrex Research of Illinois, Inc. 


(n)     BONNIE LAGIGLIO was the wife of defendant JOHN LAGIGLIO and was a general partner of Plaza Partners and a general manager of the Four Seasons golf course in Wisconsin.

(o)  GREGORY ROSS was an accountant for defendants JOHN LAGIGLIO and MICHAEL SPANO, SR., and Specialty Risk.  ROSS was the operator of Global International, Co., SRC Holding Company, Inc., and a general partner of Centrum II Associates.  ROSS operated Specialty Risk from approximately August 1995 through March 1996.

(p)  CHARLES SCHNEIDER was an attorney for JOHN LAGIGLIO and MICHAEL SPANO, SR.; a tax preparer for BETTY LOREN-MALTESE; a general manager for Specialty Risk; and a financial consultant for the Town of Cicero.

Organized Crime

(q) Frank Maltese and MICHAEL SPANO, SR. were associated  with organized crime in the Chicago area and used their organized crime relationship to influence the operations of the Cicero Town government.

The Enterprise

2.  Specialty Risk was an “enterprise,” as that term is defined in Title 18, United States Code, Section 1961(4), which was engaged in, and the activities of which affected interstate commerce.

 

 


The Racketeering Conspiracy

3.     Beginning in or about February 1992, and continuing until on or about November 28, 1998, at Cicero, Schaumburg, and elsewhere, in the Northern District of Illinois, Eastern Division,

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, along with Frank Maltese and Frank Taylor, being persons employed by and associated with an enterprise, namely Specialty Risk, which enterprise engaged in, and the activities of which affected, interstate commerce, did conspire together and with other persons known and unknown to the grand jury, to violate Title 18, United States Code, Section 1962(c), that is, to conduct and participate, directly and indirectly, in the conduct of the affairs of the enterprise through a pattern of racketeering activity consisting of multiple acts involving bribery chargeable under the laws of the State of Illinois, namely:

(a)     720 Illinois Compiled Statutes 5/33-1 (bribery); and

(b)     720 Illinois Compiled Statutes 5/33-3 (official misconduct);

And multiple acts indictable under the laws of the United States, namely:


(a)  18 U.S.C. § 1343 (wire fraud);

(b)  18 U.S.C. § 1341 (mail fraud);

(c)  18 U.S.C. § 1344 (bank fraud);

(d)  18 U.S.C. § 2314 (interstate transportation of stolen 

 

property); and

(e)     18 U.S.C. § 1956 (money laundering);

4.     It was part of the conspiracy that the defendants agreed that a conspirator would commit at least two acts of racketeering in the conduct of the affairs of the enterprise.

  Purpose, Method, and Means of the Conspiracy

The form and substance of the conspiracy was as follows:

5.   It was a part of the conspiracy that defendants engaged in a scheme to defraud the Town of Cicero of money and of the honest services of its elected and appointed officials, as more fully described in paragraphs two through fifty-eight of Count Two of this indictment.

6.    It was a further part of the conspiracy that defendants used the United States mails and interstate wire transfers of monies to defraud the Town.

 

 

 

 

 


7.   It was a further part of the conspiracy that the defendants caused money taken from the Town by fraud, in amounts of $5,000 or more, to be sent to locations outside the State of Illinois.

8.     It was a further part of the conspiracy that defendants engaged in financial transactions to conceal and disguise their use of monies taken from the Town, including the use of cashiers checks, the cashing of checks at currency exchanges, writing checks to cash on business accounts created and controlled by the defendants, and wire transfers of money.

9.    It was a further part of the conspiracy that certain defendants provided money and things of value to defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO, with intent to influence the performance of their official acts related to the Town’s insurance program.

10.    It was a further part of the conspiracy that defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO accepted money and things of value from certain defendants, for the performance of official acts related to the Town’s insurance program.

 

 

 

 


11.    It was a further part of the conspiracy that certain defendants executed and attempted to execute a scheme to defraud a financial institution and to obtain a loan by means of materially false representations, as more fully described in Count Eleven of this indictment.

12.    It was a further part of the conspiracy that defendants would and did misrepresent, conceal and hide, and cause to be misrepresented, concealed and hidden the purposes of and acts done in furtherance of the conspiracy.

All in violation of Title 18, United States Code, Section 1962(d).

 

 

 

 

 

 

 

 

 

 

 

 

 


COUNT TWO

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.  Paragraph One of Count One of this indictment is realleged and incorporated as though fully set forth herein.

2.      Beginning in or about February 1992, and continuing until on or about November 28, 1998, at Cicero, Schaumburg, and elsewhere, in the Northern District of Illinois, Eastern Division,

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, along with Frank Maltese and Frank Taylor, did devise, intend to devise, and participate in a scheme to defraud and to obtain money and property from the Town of Cicero, by means of materially false and fraudulent pretenses, representations and promises, and material omissions, and to deprive the Town of Cicero and its citizens of their intangible right to the honest services of their elected and appointed officials, which scheme is described below.


3.  It was a part of the scheme to defraud that the defendants caused the Town of Cicero to divert millions of dollars to Specialty Risk under the guise of ensuring the payment of health care claims of Town employees and other insurance expenses, when in fact a substantial amount of money went to the personal benefit of the defendants.  By and through defendants’ scheme, defendants enriched themselves at the expense of the Town of Cicero and its citizens, and deprived the Town and its citizens of the honest services of their elected and appointed officials. 

4.  It was a further part of the scheme that defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and BETTY LOREN-MALTESE, and Frank Maltese and Frank Taylor, caused the Town of Cicero to drop Travelers, its former health claims administrator, in favor of retaining Specialty Risk, which was controlled by MICHAEL SPANO, SR., at a time when Specialty Risk had just been incorporated and was not a licensed third-party administrator with the Illinois Department of Insurance.

5.     It was a further part of the scheme that defendants caused Specialty Risk to be substituted for and continue as the Town’s insurance program administrator without a Specialty Risk proposal or contract being submitted for approval by the Town Board.


6.  It was a further part of the scheme that, after  former Cicero Town President Henry Klosak’s death, defendant EMIL SCHULLO caused Klosak’s signature stamp to be placed on the Specialty Risk health claims administration proposal to be given to accountants working for the Town in order to provide the appearance of legitimacy to the manner in which Specialty Risk obtained the Town’s claims administration business.

 7.  It was a further part of the scheme that the defendants sought to keep defendants MICHAEL SPANO, SR.’s and JOHN LAGIGLIO’s interests in Specialty Risk hidden.

 8.  It was a further part of the scheme that defendant JOHN LAGIGLIO hired Frank Taylor to manage Specialty Risk and to serve as nominee for defendants MICHAEL SPANO, SR. and JOHN LAGIGLIO at Specialty Risk and in other business ventures. As a result of his being hired at Specialty Risk, Taylor was required to kickback a portion of the salary he received from Specialty Risk to defendant SPANO, SR.  Frank Taylor served as manager of Specialty Risk from 1992 to Spring 1995.        

 9.  It was a further part of the scheme that, at times between July 1994 and March 1997, defendant CHARLES SCHNEIDER operated Specialty Risk for defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR.

10. It was a further part of the scheme that, between approximately August 1995 and March 1996, defendant GREGORY ROSS operated Specialty Risk pursuant to an agreement with defendants MICHAEL SPANO, SR. and JOHN LAGIGLIO.


11.  It was a further part of the scheme that defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO would and did authorize and approve the payment of approximately $28,000,000 to Specialty Risk knowing that the documents provided to the Town by Specialty Risk did not support or justify the full scope of the Town’s payments and without seeking and obtaining approval from the Town Board.

12.     It was a further part of the scheme that defendants BETTY LOREN-MALTESE, EMIL SCHULLO, JOSEPH DECHICIO, and later CHARLES SCHNEIDER, authorized the weekly wire transfers of monies from the Town of Cicero to Specialty Risk that were not tied to specific amounts for reimbursement of claims.

13.   It was a further part of the scheme that defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO would and did authorize and approve the Specialty Risk payments knowing that millions of dollars in Town funds paid to Specialty Risk were used for the benefit of the defendants and not for the Town’s insurance expenses.

14.  It was a further part of the scheme that defendants  caused over $10,000,000 of Town funds paid to Specialty Risk to be used for the benefit of the defendants and not for the Town’s insurance expenses. 


15.  It was a further part of the scheme that, from January 1993 through June 1995, defendants MICHAEL SPANO, SR., BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO, and Frank Taylor, caused in excess of $750,000 to be paid by the Town to Specialty Risk under the guise of a workplace “safety program,” without requiring a bid, proposal or contract to be submitted by Specialty Risk, and without Town Board approval.  Payments made to Specialty Risk under the “safety program” bore little or no relation to services provided by Specialty Risk under this program.

16.  It was a further part of the scheme that in 1995, defendant JOSEPH DECHICIO endorsed two checks payable to the Town totaling $385,519.73, representing excess insurance payments to the Town from Transamerica Insurance Company, that were deposited in an account held in the name of Specialty Claims Management, Inc.

17.  It was a further part of the scheme that defendants JOHN LAGIGLIO, MICHAEL SPANO, JR., GREGORY ROSS, CHARLES SCHNEIDER, and Frank Taylor failed to maintain the Town’s insurance funds in fiduciary accounts as required by the Illinois Insurance Code.

18.  It was a further part of the scheme that defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO and would and did transfer or fire Cicero employees who questioned the Town’s overpayments to Specialty Risk.         

19. It was a further part of the scheme that, beginning on or about December 14, 1993 and continuing until approximately November 1996, defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO took no action in regard to the Town auditor’s formal recommendations that the Town obtain detailed transaction and financial activity statements from Specialty Risk on a regular basis.

 


20.  It was a further part of the scheme that, in January 1994, as a result of the excessive payments to Specialty Risk and Specialty Risk’s failure to make timely payments of the Town’s claims, defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO caused Town employees to accept payroll deductions to defray unmet health care costs.

     21.  It was a further part of the scheme that, between January 1993 and February 1997, defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO caused Specialty Risk to reimburse their personal health claims at 100 per cent, in excess of the benefits covered by the Town’s health plan, and to provide life insurance coverage free of charge.

22.  It was a further part of the scheme that, between approximately January 1993 and November 1996, certain defendants provided money and things of value to defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO, to influence them to facilitate Specialty Risk’s fraudulently obtaining the Town’s insurance funds.   

23. It was a further part of the scheme that, between approximately January 1993 and November 1996, defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO received money and things of value from Specialty Risk through certain defendants, knowing that these payments were for the purpose of influencing them to continue the Town’s overpayments to Specialty Risk.


24.   It was a further part of the scheme that, in or about December 1993, defendant BETTY LOREN-MALTESE caused the Town to apply for and receive a $3,000,000 line of credit to borrow money to provide to Specialty Risk for the payment of health claims.  Defendants LOREN-MALTESE and JOSEPH DECHICIO caused the Town to  transfer funds from this line of credit to Specialty Risk at a time when the Town had already forwarded to Specialty Risk more than $8,000,000 in 1993.

25.  It was a further part of the scheme that defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., BONNIE LAGIGLIO, GREGORY ROSS, and CHARLES SCHNEIDER and Frank Taylor established and operated related companies, including:     

 

a.   Plaza Partners,

b.   Specialty Finance, Inc.,

c.   Specialty Leasing, Inc.,

d.   Specialty Claims Management, Inc.,

e.   Specialty Personnel Leasing, Inc.,

f.   Global International, Co.,

g.   Crown Point Farms,

h.   Miscauno Management Company, Inc.,

i.   Centrex Research of Illinois, Inc.,

j.   SRC Holding Company, Inc., and

k.  S R C Holdings, Inc.

 

that would be predominantly funded by the transfer of millions of dollars of the Town’s insurance funds to these companies through Specialty Risk.


26.  It was a further part of the scheme that the defendants would utilize the business entities identified in the previous paragraph to conceal the investment and expenditure of monies that the defendants acquired from the Town ostensibly to be used by Specialty Risk in the payment of healthcare claims for Town employees and other Town insurance expenses.

27.  It was a further part of the scheme that certain defendants, including MICHAEL SPANO, JR. and CHARLES SCHNEIDER, would cause the creation of fraudulent records and invoices that misrepresented to the Town’s auditors expenditures made by Specialty Risk of the Town’s money.   

28.  It was a further part of the scheme that defendant BONNIE LAGIGLIO would serve as a nominee for her husband, defendant JOHN LAGIGLIO, and would also conduct business transactions that would conceal the manner in which defendants used the monies acquired from the Town by the scheme to defraud.

29.   It was a further part of the scheme that, between July 2, 1992 and December 28, 1995, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR. caused Specialty Risk to transfer $1,849,944 of money it had received from the Town to Specialty Finance, or to other entities on behalf of Specialty Finance.

30.     It was a further part of the scheme that, between October 29, 1992  and August 26, 1996, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR., caused Specialty Finance to loan in excess of $917,000 to their friends and associates, including MICHAEL SPANO, SR.’s son-in-law.

 


31.     It was a further part of the scheme that, between August 18, 1993 and November 22, 1994, that defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR., caused Specialty Finance to pay approximately $324,505 for the construction of a home for the Spano family on the Wolf River in Winneconne, Wisconsin.     

32.   It was a further part of the scheme that, between February 12, 1993 and March 25, 1993, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., BONNIE LAGIGLIO, and GREGORY ROSS caused Specialty Risk to issue five checks to Global International, Co., totaling $183,050 for GREGORY ROSS.

33.    It was a further part of the scheme that, between April 19, 1993 and October 14, 1993, defendant GREGORY ROSS returned the funds identified in the previous paragraph to defendant JOHN LAGIGLIO by purchasing and causing to be purchased the following cashier’s checks: (A) a cashier’s check drawn on the American National Bank payable to JOHN LAGIGLIO in the amount of $29,500; (B) a cashier’s check drawn on the Dupage Valley State Bank payable to defendant BONNIE LAGIGLIO in the amount of $75,000; and (C) a cashier’s check drawn on the Dupage Valley State Bank payable to Plaza Partners in the amount of $95,000.


34.  It was a further part of the scheme that, between February 23, 1993 and May 4, 1993, defendants MICHAEL SPANO, SR., and JOHN LAGIGLIO, deposited and caused to be deposited several Specialty Risk and Specialty Finance checks payable to Piggyback Specialists, Inc. totaling $200,000 in Piggyback’s account at the Mid-City National Bank.

35.   It was further part of the scheme that, in 1993, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR., caused Specialty Risk to pay over $133,000 for new Cadillac DeVilles for MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., and Frank Taylor.

36.     It was a further part of the scheme that, on or about January 19, 1994, defendants BETTY LOREN-MALTESE, EMIL SCHULLO, and JOSEPH DECHICIO caused the Town of Cicero to wire transfer $1,600,000 from the Town’s line of credit at Comerica Bank to Specialty Risk without seeking approval of the Town Board, which funds were used by defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR., and Frank Taylor for the purchase of a bond for approximately $1,000,000 held by Specialty Finance.

37.     It was further part of the scheme that, on or about January 20, 1994, defendant BETTY LOREN-MALTESE deposited and caused to be deposited Specialty Risk check # 1023 payable to “Committee to Elect BETTY LOREN-MALTESE” in the amount of $3,000 in an account at the Pinnacle Bank.


38.  It was a further part of the scheme that, between 1992 and 1996, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR., caused Specialty Risk to transfer at least $598,149 of money it had received from the Town to Specialty Leasing to purchase vehicles to lease to defendant’s friends and associates on favorable terms.

39.  It was a further part of the scheme that, on or about April 18, 1994, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR., caused Specialty Risk to pay $36,584 for a 1994 Cadillac DeVille, which Specialty Leasing leased to defendant EMIL SCHULLO for sixty months on favorable terms.   

40.   It was a further part of the scheme that, on or about April 18, 1994, defendant EMIL SCHULLO gave defendant JOHN LAGIGLIO a 1992 Ford Explorer that belonged to the Town of Cicero in return for the new Cadillac from Specialty Leasing.  Defendant SCHULLO caused the Town to transfer the title to this Explorer to defendant BONNIE LAGIGLIO without requiring payment for the vehicle.

41.  It was a further part of the scheme that, between approximately October 13, 1992 and July 26, 1995, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., and BONNIE LAGIGLIO caused Specialty Risk to wire transfer approximately $3,000,000 of funds it had received from the Town to Plaza Partners.


42.  It was a further part of the scheme that, between approximately January 8, 1993 and May 12, 1994, defendants MICHAEL SPANO SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., and BONNIE LAGIGLIO caused Plaza Partners to issue weekly checks in the amount of $5,850 to BONNIE LAGIGLIO and Frank Taylor’s spouse totaling $813,150 to conceal income to JOHN LAGIGLIO and Frank Taylor and to provide funds for JOHN LAGIGLIO and Frank Taylor to make regular kickback payments to MICHAEL SPANO, SR. 

43.    It was a further part of the scheme that, in December 1993, certain defendants caused Specialty Risk to give auditors working for the Town a phony Plaza Partners’ invoice in the amount of $16,500 for professional services never rendered for Specialty Risk.

44.   It was a further part of the scheme that, between approximately October 23, 1992 and January 13, 1995, defendants JOHN LAGIGLIO and BONNIE LAGIGLIO caused Plaza Partners to issue approximately $346,608 in checks payable to cash, including more than $281,220 in checks which were cashed at the Broadway-Berwyn and Taylor-Ogden currency exchanges.

45.     It was a further part of the scheme that, between approximately August 1993 and January 1996, defendants including JOHN LAGIGLIO and BONNIE LAGIGLIO paid for and renovated the Four Seasons golf course and club house in Pembine, Wisconsin with Town funds, with the plan of developing a casino gambling resort on the premises.


46.   It was a further part of the scheme that, between November 3, 1993 and January 3, 1994, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., and BONNIE LAGIGLIO caused Plaza Partners to make interstate wire transfers totaling $185,000 to Miscauno Management’s bank account in Michigan.

47.    It was a further part of the scheme that, between March 9, 1994 and October 24, 1996, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., and BONNIE LAGIGLIO caused Specialty Risk to make interstate wire transfers totaling  approximately $724,265 which it had received from the Town to Miscauno Management bank accounts in Michigan and Wisconsin.

48.     It was a further part of the scheme that, between July 12, 1994 and September 2, 1994, defendant BETTY LOREN-MALTESE gave defendant JOHN LAGIGLIO three $100,000 checks written on her political fund payable to JOHN LAGIGLIO to invest in the Four Seasons golf course.

49.   It was a further part of the scheme that, on or about July 12, 1994, defendant BETTY LOREN-MALTESE deposited and caused to be deposited Specialty Risk check # 1205 payable to “BETTY LOREN-MALTESE Committeeman” in the amount of $5,000 in an account at the Pinnacle Bank.

50.   It was a further part of the scheme that the defendants gave preferential treatment to defendant BETTY LOREN-MALTESE on her investment in the golf course, and in doing so, caused Specialty Risk to pay her over $270,000 as a return on her investment in 1996.  

 

 


51.  It was a further part of the scheme that, on or about January 5, 1996, defendants BETTY LOREN-MALTESE and JOSEPH DECHICIO caused the Town to wire transfer $400,000 to Specialty Risk, and on that same date, defendant MICHAEL SPANO, JR. caused Specialty Risk to issue a check in the amount of $150,000 payable to Betty Loren-Maltese as a partial return on her investment in the golf course.

52.   It was a further part of the scheme that, between January 1, 1995 and December 31, 1996, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR. caused approximately $184,000 in Specialty Risk checks payable to Miscauno Management to be cashed predominantly at the Taylor-Odgen currency exchange in Chicago and the Laramie & 25th currency exchange in Cicero.

53.    It was a further part of the scheme that, from on or about December 29, 1993 to approximately September 18, 1998, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., and BONNIE LAGIGLIO, caused Plaza Partners and Specialty Risk to pay for and maintain the Crown Point Farms horse ranch in northern Indiana with Town insurance monies.

54.   It was a further part of the scheme that, at certain times between 1994 and 1998, defendants MICHAEL SPANO, SR., and JOHN LAGIGLIO kept their thoroughbred race horses at Crown Point Farms.


55.  It was a further part of the scheme that, in 1996, defendants MICHAEL SPANO, JR., JOHN LAGIGLIO, and BONNIE LAGIGLIO caused Specialty Personnel Leasing to issue payroll checks totaling approximately $77,400 to BONNIE LAGIGLIO when she did no work for Specialty Risk or Specialty Claims Management in that year. 

56.   It was a further part of the scheme that, between September 29, 1993 and January 10, 1995, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR., and Frank Taylor, caused Specialty Risk to transfer $161,795 to Centrex Research Corporation to finance a worker’s compensation insurance venture unrelated to the Town of Cicero.

57.    It was a further part of the scheme that, between December 6, 1995 and August 2, 1996, defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, MICHAEL SPANO, JR., and GREGORY ROSS, caused Specialty Risk to transfer $232,500 in checks to defendant GREGORY ROSS through Centrum II Associates and SRC Holding Company, Inc.

58.     It was a further part of the scheme that, on or about November 23, 1998, defendant GREGORY ROSS filed a foreclosure lawsuit against the Four Seasons golf course in Marinette County, Wisconsin wherein ROSS falsely claimed that neither he nor Centrum II Associates had received any payments from Plaza Partners or Specialty Risk.


59.     It was further part of the scheme that defendants did conceal, misrepresent, and hide, and caused to be concealed misrepresented and hidden, the existence of the scheme, the purpose of the scheme and the acts done in furtherance of the scheme. 

60.     On or about July 10, 1996, in the Northern District of Illinois, Eastern Division,

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, for the purpose of executing such scheme, knowingly caused to be transmitted in interstate commerce from the Chicago metropolitan area to Iron Mountain, Michigan, by means of wire and radio communication, certain signs, signals and sounds, namely a wire transmission from Royal American Bank in Inverness, Illinois to the MFC First National Bank of Iron Mountain, Michigan, in order to effect the transfer of funds in the amount of $5,000 from the bank account of Specialty Risk Consultants at Royal American Bank in Inverness, Illinois, to the bank account of Miscauno Management at MFC First National Bank, Iron Mountain, Michigan;

In violation of Title 18, United States Code, Sections 1343, 1346 and 2.

 

 


 

     COUNT THREE

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   The Grand Jury incorporates paragraphs one through fifty-nine of Count Two of this indictment as though fully set forth herein.

2.     On or about August 7, 1996, in the Northern District of Illinois, Eastern Division,

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, for the purpose of executing the aforesaid  scheme, knowingly caused to be transmitted in interstate commerce from the Chicago metropolitan area to Iron Mountain, Michigan, by means of wire and radio communication, certain signs, signals and sounds, namely a wire transmission from Royal American Bank in Inverness, Illinois to the MFC First National Bank of Iron Mountain, Michigan, in order to effect the transfer of funds in the amount of $5,000 from the bank account of Specialty Risk Consultants at Royal American Bank in Inverness, Illinois, to the

 

 


bank account of Miscauno Management at MFC First National Bank, Iron Mountain, Michigan;

In violation of Title 18, United States Code, Sections 1343, 1346, and 2.


 

COUNT FOUR

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   The Grand Jury incorporates paragraphs one through fifty-nine of Count Two of this indictment as though fully set forth herein.

2.     On or about September 12, 1996, in the Northern District of Illinois, Eastern Division,

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, for the purpose of executing the aforesaid  scheme, knowingly caused to be transmitted in interstate commerce from the Chicago metropolitan area to Iron Mountain, Michigan, by means of wire and radio communication, certain signs, signals and sounds, namely a wire transmission from Royal American Bank in Inverness, Illinois to the MFC First National Bank of Iron Mountain, Michigan, in order to effect the transfer of funds in the amount of $2,500 from the bank account of Specialty Risk Consultants at Royal American Bank in Inverness, Illinois, to the

 

 

 


bank account of Miscauno Management at MFC First National Bank, Iron Mountain, Michigan;

In violation of Title 18, United States Code, Sections 1343, 1346, and 2.

 


COUNT FIVE

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   The Grand Jury incorporates paragraphs one through fifty-nine of Count Two of this indictment as though fully set forth herein.

2.     On or about October 18, 1996, in the Northern District of Illinois, Eastern Division,

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, for the purpose of executing the aforesaid  scheme, knowingly caused to be transmitted in interstate commerce from the Chicago metropolitan area to Iron Mountain, Michigan, by means of wire and radio communication, certain signs, signals and sounds, namely a wire transmission from Royal American Bank in Inverness, Illinois to the MFC First National Bank of Iron Mountain, Michigan, in order to effect the transfer of funds in the amount of $2,500 from the bank account of Specialty Risk Consultants at Royal American Bank in Inverness, Illinois, to the

 

 

 


bank account of Miscauno Management at MFC First National Bank, Iron Mountain, Michigan;

In violation of Title 18, United States Code, Sections 1343, 1346, and 2.


 

COUNT SIX

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   The Grand Jury incorporates paragraphs one through fifty-nine of Count Two of this indictment as though fully set forth herein.

2.     On or about June 25, 1996, in the Northern District of Illinois, Eastern Division,

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, for the purpose of executing the aforesaid  scheme and attempting to do so, knowingly caused an envelope, containing a real estate tax bill for the Four Seasons golf course properties, to be delivered by the United States Postal Service according to directions thereon to: 

Specialty Risk Consultants, Inc.

1111 Plaza Dr

Ste 705

Schaumburg, Illinois 60173

 

In violation of Title 18, United States Code, Sections 1341, 1346, and 2.

 

 

 


     COUNT SEVEN

 

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

 

1.   The Grand Jury incorporates paragraphs one through fifty-

 

nine of Count Two of this indictment as though fully set forth

 

herein.

 

2.     On or about May 3, 1997, in the Northern District of

 

Illinois, Eastern Division,

 

      JOHN LAGIGLIO,

 

defendant herein, for the purpose of executing the aforesaid scheme and attempting to do so, knowingly caused to be placed in an authorized repository for mail matter an envelope, containing a check payable to Citibank in the amount of $1,272.94 drawn on Specialty Finance’s bank account at the Lakeside Bank, such envelope being addressed to: 

Citibank,

P. O. Box 6704,

Sioux Falls, SD USA

57188-6704

 

In violation of Title 18, United States Code, Sections 1341,

 

1346, and 2.

 

 


     COUNT EIGHT

 

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   The Grand Jury incorporates paragraphs one, two, four, eight, fifteen, thirty-five, forty-two, and fifty-six of Count Two of this indictment as though fully set forth herein.

2.     On or about January 10, 1995, in the Northern District of Illinois, Eastern Division,

     FRANK TAYLOR,

defendant herein, for the purpose of executing the aforesaid  scheme and attempting to do so, knowingly caused to be placed in an authorized repository for mail matter an envelope, containing a check payable to Centrex Research Corporation in the amount of $6,924.00 drawn on Specialty Risk’s bank account #300-205-2 at the Royal American Bank, such envelope being addressed to:

Alexander Bloj

   Centrex Research Corp.

150 North Meramec Avenue

Suite 400

St. Louis, Missouri 63105                                            

In violation of Title 18, United States Code, Sections 1341, 1346, and 2.


COUNT NINE

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   The Grand Jury incorporates paragraphs one through fifty-nine of Count Two of this indictment as though fully set forth herein.       

2.     On or about, June 21, 1996 in the Northern District of Illinois, Eastern Division,

JOHN LAGIGLIO, and

BONNIE LAGIGLIO,

 

defendants herein, knowingly conducted and attempted to conduct a financial transaction affecting interstate commerce, when defendants caused Miscauno Management’s check drawn on the MFC First National Bank of Iron Mountain in the amount of $3,171.42 made payable to cash to be cashed at the Laramie and 25th Street Currency Exchange, which financial transaction involved the proceeds of a specified unlawful activity  namely, wire fraud  in violation of Title 18, United States Code, Section 1343, knowing that the financial transaction was designed in whole or in part to conceal and disguise the nature, source, ownership, and control of the proceeds of said specified unlawful activity, and that while conducting and attempting to conduct such financial transaction, knew that the property involved in the financial transaction represented the proceeds of some form of unlawful activity;

In violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 2.


COUNT TEN

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   The Grand Jury incorporates paragraphs one through fifty-nine of Count Two of this indictment as though fully set forth herein.       

2. On or about, July 31, 1996 in the Northern District of Illinois, Eastern Division,

JOHN LAGIGLIO, and

BONNIE LAGIGLIO,

 

defendants herein, knowingly conducted and attempted to conduct a financial transaction affecting interstate commerce, when defendants caused Miscauno Management’s check drawn on the MFC First National Bank of Iron Mountain in the amount of $1,200 made payable to cash to be cashed at the Laramie and 25th Street Currency Exchange, which financial transaction involved the proceeds of a specified unlawful activity  namely, wire fraud  in violation of Title 18, United States Code, Section 1343, knowing that the financial transaction was designed in whole or in part to conceal and disguise the nature, source, ownership, and control of the proceeds of said specified unlawful activity, and that while conducting and attempting to conduct such financial transaction, knew that the property involved in the financial transaction represented the proceeds of some form of unlawful activity;

In violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i) and 2.


     COUNT ELEVEN

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.   Between July 23, 1997 and approximately September 30,  1997, in the Northern District of Illinois, Eastern Division,

  MICHAEL SPANO, JR. and

  JOHN LAGIGLIO,

 

defendants herein, knowingly executed and attempted to execute a scheme and artifice to defraud a financial institution and to obtain moneys, funds, and assets, under the custody and control of that financial institution, that is, the Old Kent Mortgage Company, a wholly-owned subsidiary of the Old Kent Financial Corporation, by means of materially false and fraudulent pretenses, representations, and promises, which scheme is described as follows.

2.   It was part of the scheme that defendants JOHN LAGIGLIO and MICHAEL SPANO, JR. caused Specialty Finance to pay approximately $324,505 for the construction of a home for the Spano family on the Wolf River in Winneconne, Wisconsin.

3.   It was further part of the scheme that defendants JOHN LAGIGLIO and MICHAEL SPANO, SR. caused the amounts paid for the construction of the Winneconne home to be carried on the Specialty Finance books as a loan to shareholder.

4.   It was further part of the scheme that defendant MICHAEL SPANO, JR. never made any payments on the principal amount owed to Specialty Finance on the alleged loan.


5.   It was further part of the scheme that defendant MICHAEL SPANO, JR. made a residential loan application in the amount of  $351,000 through Westwind Mortgage Brokers to the Old Kent Mortgage Company to refinance the alleged loan on the Winneconne property.

6.      It was further part of the scheme that defendant MICHAEL SPANO, JR. represented to the Old Kent Mortgage Company that he earned $18,660 a month as President of Specialty Claims Management, when in fact he knew that his salary was much less than this figure.

7.  It was further part of the scheme that defendant MICHAEL SPANO, JR. represented to the Old Kent Mortgage Company that he was paying Specialty Finance $2,353 a month, when in fact he knew that he had not made monthly payments to Specialty Finance.

8.  It was further part of the scheme that defendant JOHN LAGIGLIO represented to the Old Kent Mortgage Company that MICHAEL SPANO, JR. was current in his monthly payments of $2,353 to Specialty Finance, when in fact he knew that MICHAEL SPANO, JR. had not made monthly payments to Specialty Finance.

9.  It was further part of the scheme that on approximately August 22, 1997, defendants MICHAEL SPANO, JR. and JOHN LAGIGLIO caused the Chicago Title and Trust Company, escrow agent for the transaction, to issue check # 9501006037 payable to Specialty Finance in the amount of $342,868, and a check payable to MICHAEL SPANO, JR.  in the amount of $5,566.

 

 


10.   It was further part of the scheme that defendant JOHN LAGIGLIO and MICHAEL SPANO, JR. caused the proceeds of the checks identified in the previous paragraph to be used for personal and business expenditures unrelated to the alleged loan received from Specialty Finance.

In violation of Title 18, United States Code, Section 1344.

 

 


     COUNT TWELVE

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

On or about September 3, 1997, in the Northern District of

Illinois, Eastern Division,

      JOHN LAGIGLIO,

defendant herein, a resident of Bloomingdale, Illinois, did willfully and knowingly make and subscribe, and cause to be made and subscribed, a United States Income Tax Return (Form 1040X) and accompanying Schedules for the calendar year 1993 which return was verified by a written declaration that it was made under the penalties of perjury and was filed with the Internal Revenue Service, which return he did not believe to be true and correct as to every material matter, in that it was stated falsely on said return that his adjusted gross income was $40,828. In fact, as defendant then and there well knew and believed, defendant’s total income during the year 1993 was an amount in excess of $40,828, defendant having derived additional income, in part, through  Specialty Risk payments to Plaza Partners for his salary, which was paid by Plaza Partners’ checks to Bonnie LaGiglio;

In violation of Title 26, United States Code, Section 7206(1).

 


     COUNT THIRTEEN

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

On or about October 10, 1995, in the Northern District of Illinois, Eastern Division,

     BETTY LOREN-MALTESE,

defendant herein, a resident of Cicero, Illinois, did willfully and knowingly make and subscribe, and cause to be made and subscribed, a United States Joint Income Tax Return (Form 1040) and accompanying Schedules for the calendar year 1994 which return was verified by a written declaration that it was made under the penalties of perjury and was filed with the Internal Revenue Service, which return she did not believe to be true and correct as to every material matter, in that it was stated falsely in Line 31 of said return that her adjusted gross income was $97,276. In fact, as defendant then and there well knew and believed, defendant’s total income during the year 1994 was an amount in excess of $97,276, defendant having derived additional income, in part, from her personal use of political funds in the Betty Loren-Maltese Committeeman Fund;

In violation of Title 26, United States Code, Section 7206(1).

 


     COUNT FOURTEEN

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

On or about September 3, 1997, in the Northern District of

 

Illinois, Eastern Division,

 

      JOHN LAGIGLIO,

 

defendant herein, a resident of Bloomingdale, Illinois, did willfully and knowingly make and subscribe, and cause to be made and subscribed, a United States Income Tax Return (Form 1040) and accompanying Schedules for the calendar year 1994 which return was verified by a written declaration that it was made under the penalties of perjury and was filed with the Internal Revenue Service, which return he did not believe to be true and correct as to every material matter, in that it was stated falsely on said return that his adjusted gross income was negative $20,397. In fact, as defendant then and there well knew and believed, defendant’s total income during the year 1994 was an amount in excess of a negative $20,397, defendant having derived additional income, in part, through Specialty Risk payments to Plaza Partners for his salary, which was paid by  Plaza Partners’ checks to Bonnie LaGiglio;

In violation of Title 26, United States Code, Section 7206(1).

 

 

 

 

 


     COUNT FIFTEEN

THE SPECIAL JULY 2000-1 GRAND JURY charges:

On or about April 13, 1995, in the Northern District of

Illinois, Eastern Division,

MICHAEL B. SPANO, SR.,

defendant herein, a resident of Berwyn, Illinois, did willfully and knowingly make and subscribe, and cause to be made and subscribed, a United States Joint Income Tax Return (Form 1040) and accompanying Schedules for the calendar year 1994 which return was verified by a written declaration that it was made under the penalties of perjury and was filed with the Internal Revenue Service, which return he did not believe to be true and correct as to every material matter, in that it was stated falsely in Line 31 of said return that his adjusted gross income was $92,454. In fact, as defendant then and there well knew and believed, defendant’s total income during the year 1994 was an amount in excess of $92,454, defendant having derived additional income, in part, from kickback payments made to him from Specialty Risk Consultants, Inc., and approximately $314,000 in payments made by Specialty Finance on his behalf for the construction of a vacation home in Winneconne, Wisconsin;

In violation of Title 26, United States Code, Section 7206(1).

 

 


     COUNT SIXTEEN

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.     During the calendar year 1994, defendant FRANK W. TAYLOR,  a resident of Kildeer, Illinois, received gross income of at least $153,037 and taxable income of at least $149,862 from his employment at Specialty Risk Consultants (“Specialty Risk”).

2.     Upon this income, defendant FRANK W. TAYLOR owed to the United States of America income tax of at least $41,961.  

3.     By reason of this income, defendant FRANK W. TAYLOR was required by law, following the close of the calendar year 1994 and on or before April 15, 1995, to make an income tax return to the Internal Revenue Service and to pay the income tax due and owing thereon.

4.     From on or about January 1, 1994 to at least January  1999, in the Northern District of Illinois, Eastern Division, and elsewhere,

     FRANK TAYLOR,

defendant herein, well knowing all of the foregoing facts, willfully did attempt to evade and defeat the substantial income tax due and owing by him to the United States of America for the calendar year 1994 by:

(a)   Causing the creation of the business entity of Plaza Partners with the intention of using that business to conceal the receipt of income to him from the Internal Revenue Service;


(b)   Causing Specialty Risk to transfer funds to Plaza Partners to conceal income paid by Specialty Risk to defendant;

          (c)    Causing Plaza Partners to issue checks on a weekly basis payable to defendant’s spouse to conceal his true ownership of those funds;

(d)   Causing these Plaza Partners’ checks to be deposited in other bank accounts for defendant’s use to further conceal his true ownership of those funds;

(e)  Intentionally and willfully failing to file a federal income tax return for calendar year 1994 identifying all sources of income received during that calendar year; and

(f)   Otherwise concealing from all proper officials of the United States of America and the Internal Revenue Service his true and correct income;

In violation of Title 26, United States Code, Section 7201.

 

 


COUNT SEVENTEEN

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.  The Grand Jury incorporates paragraphs one through fifty-nine of Count Two of this indictment as though fully set forth herein.

2.  Beginning on or about October 1, 1989 and continuing

 

through September 30, 1998 in the Northern District of Illinois, 

 

Eastern Division,

   

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein, did knowingly combine, conspire, confederate and  agree with each other and with Frank Taylor and others known and unknown to the grand jury, to defraud the United States by impeding, impairing, obstructing and defeating the lawful functions of the Internal Revenue Service in the correct determination, assessment and collection of revenue and employment and income taxes. 

3.  It was part of the conspiracy that defendants would and did agree to conceal from the Internal Revenue Service income received by Specialty Risk Consultants, Inc. (“Specialty Risk”)  from the Town of Cicero for tax years 1992 through 1996.


4.  It was further part of the conspiracy that defendants would and did agree to evade the payment of employment taxes and employees’ federal income withholding taxes for Rail Cartage, Inc., Piggyback Specialists, Inc., Dispatch Services, Inc., Miscauno Management Company, Inc., and SRC Management, Inc.

5.   It was further part of the conspiracy that defendants created and dissolved corporations to evade the payment of employment and withholding taxes. 

6.   It was further part of the conspiracy that certain defendants would and did file false individual income tax returns that did not correctly identify the source of income that each defendant received in those years from Specialty Risk and its related companies.

7.    It was further part of the conspiracy that defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, BONNIE LAGIGLIO, GREGORY ROSS, and Frank Taylor formed and caused to be formed Plaza Partners as a means to pay salary to JOHN LAGIGLIO and Frank Taylor without the knowledge of the Internal Revenue Service.

8.   It was further part of the conspiracy that defendants MICHAEL SPANO, JR., GREGORY ROSS and CHARLES SCHNEIDER, caused Specialty Risk to falsely record payments to Plaza Partners and Miscauno Management Company, Inc. as professional fees and management fees incurred by Specialty Risk.

 

 

 


OVERT ACTS

9.  In furtherance of the conspiracy and to effect its unlawful objectives, the defendants committed and caused to be committed the following overt acts:

a.   It was part of the conspiracy that, on or about February 25, 1992,  defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and CHARLES SCHNEIDER caused articles of incorporation to be filed for Specialty Risk Consultants, Inc., in the State of Illinois.

b.   It was further part of the conspiracy that defendant JOHN LAGIGLIO listed his parents as shareholders of Specialty Risk to conceal his own involvement with the firm.

c.  It was further part of the conspiracy that, on or about November 17, 1994, defendants MICHAEL SPANO, JR. and GREGORY ROSS filed and caused to be filed a 1992 corporate income tax return (Form 1120) with accompanying schedules for Specialty Risk that falsely reported that JOHN LAGIGLIO’s parents owned Specialty Risk and that Specialty Risk had incurred an expense relating to the payment of $129,500 in professional fees on behalf of the Town of Cicero.


d.    It was further part of the conspiracy that, between approximately October 13, 1992 and July 26, 1995,  defendants MICHAEL SPANO, SR., JOHN LAGIGLIO, and MICHAEL SPANO, JR. caused Specialty Risk to transfer funds to Plaza Partners to provide concealed salary payments to JOHN LAGIGLIO and Frank Taylor through Plaza Partners’ checks payable to BONNIE LAGIGLIO and Frank Taylor’s spouse.

e.    It was further part of the conspiracy that, between  approximately October 1, 1989 and December 31, 1990, defendant JOHN LAGIGLIO operated a trucking business named Rail Cartage, Inc. and incurred a liability of approximately $636,817 for unpaid federal employment tax and federal income tax withheld from employees’ wages.

f.    It was further part of the conspiracy that, on or about May 26, 1989, defendant JOHN LAGIGLIO formed Piggyback Specialists, Inc. to replace Rail Cartage, Inc. without paying Rail Cartage’s employment and other taxes.

g.    It was further part of the conspiracy that, between  approximately January 1, 1991 and December 31, 1993, defendants MICHAEL SPANO, SR. and JOHN LAGIGLIO operated Piggyback Specialists, Inc. at 1505 S. Laramie in Cicero and incurred a liability of approximately $597,405 for unpaid federal employment tax and federal income tax withheld from employees’ wages.

h.    It was further part of the conspiracy that, on or about August 4, 1993, defendant CHARLES SCHNEIDER incorporated Dispatch Services, Inc. for defendants MICHAEL SPANO, SR. and JOHN LAGIGLIO to replace Piggyback Specialists, Inc. without paying Piggyback Specialists’ employment and other taxes.


i.    It was further part of the conspiracy that, between  approximately January 1, 1994 and December 31, 1996, defendants MICHAEL SPANO, SR. and JOHN LAGIGLIO operated Dispatch Services, Inc. at 1505 S. Laramie in Cicero and incurred a liability of approximately $834,324 for unpaid federal employment tax and federal income tax withheld from employees’ wages.

j.    It was further part of the conspiracy that, between  approximately December 1, 1993 and December 31, 1997, defendants MICHAEL SPANO, SR. and JOHN LAGIGLIO cashed and caused to be cashed over $3,000,000 in checks payable to Dispatch Services, Inc., at the Broadway-Berwyn, Taylor-Ogden, and 25th and Laramie Currency Exchanges in Chicago and Cicero.

k.   It was a further part of the scheme that, between approximately October 23, 1992 and January 13, 1995, defendants JOHN LAGIGLIO and BONNIE LAGIGLIO caused Plaza Partners to issue approximately $346,608 in checks payable to cash, including more than $281,220 in checks which were cashed at the Broadway-Berwyn and Taylor-Ogden currency exchanges.

l.    It was further part of the conspiracy that, on or about April 13, 1995, defendant MICHAEL SPANO, SR., willfully filed a false income tax return for the year 1994, in which he failed to report income that he had received from kickback payments made to him by JOHN LAGIGLIO and Frank Taylor, and approximately $314,000 in payments made by Specialty Finance on his behalf for the construction of a vacation home in Winneconne, Wisconsin.


m.    It was further part of the conspiracy that, between  approximately January 1, 1994 and December 31, 1996, defendants JOHN LAGIGLIO and BONNIE LAGIGLIO operated Miscauno Management Company., Inc. in Pembine, Wisconsin, a business that managed the Four Seasons golf course and incurred a liability of approximately $227,278 for unpaid federal employment tax and federal income tax withheld from employees’ wages.  

n.  It was further part of the conspiracy that, on or about December 7, 1995, defendants JOHN LAGIGLIO and GREGORY ROSS falsely represented to an Internal Revenue Service Revenue Officer seeking to collect Miscauno Management’s unpaid employment and unemployment taxes: that LAGIGLIO had filed his 1993 federal income tax return; and that Miscauno Management leased the Four Seasons golf course from Specialty Risk.    

o.  It was further part of the conspiracy that, on or about February 8, 1996, defendant BONNIE LAGIGLIO falsely stated to an Internal Revenue Service Special Agent: that she and Frank Taylor’s spouse purchased the Four Seasons golf course; that Specialty Risk was owned by her father-in-law; that she had transferred her ownership of the golf course to her father-in-law; and that MICHAEL SPANO, SR., had no interest in the golf course. 


p.  It was further part of the conspiracy that, on or about July 24, 1996, defendants MICHAEL SPANO, JR. and CHARLES SCHNEIDER, caused Specialty Risk to transfer $10,000 of funds that Specialty Risk had received from the Town of Cicero insurance program to the Internal Revenue Service Revenue Officer to prevent closure of the golf course.

q.    It was further part of the conspiracy that, on  or about October 15, 1996,  defendants JOHN LAGIGLIO, CHARLES SCHNEIDER and BONNIE LAGIGLIO, willfully filed and caused to be filed a false United States Partnership Tax Return (Form 1065) and accompanying Schedules for the calendar year 1995 for the Crown Point Farms partnership, in which it was reported that BONNIE LAGIGLIO was a general partner of the Crown Point Farms horse farm with a fifty per-cent ownership of capital, when in fact, defendants knew that JOHN LAGIGLIO owned the Crown Point horse farm.         

r.   It was further part of the conspiracy that, on  or about November 5, 1996, defendant CHARLES SCHNEIDER falsely stated to an Internal Revenue Service Revenue Officer that JOHN LAGIGLIO’S  parents owned Specialty Risk and that Specialty Risk leased the Four Seasons golf course to Miscauno Management. 

s.   It was further part of the conspiracy that, on or about February 3, 1997, defendant JOHN LAGIGLIO caused SRC Management, Inc. to be incorporated to replace Miscauno Management Company, Inc. without paying Miscauno Management’s employment and other taxes.

 


t.    It was further part of the conspiracy that, between  approximately January 1, 1997 and September 30, 1998, defendants JOHN LAGIGLIO and BONNIE LAGIGLIO operated SRC Management in Pembine, Wisconsin and incurred a liability of approximately $52,925 for unpaid federal employment tax and federal income tax withheld from employees’ wages. 

u.   It was further part of the conspiracy that, on  or about April 21, 1997, defendant JOHN LAGIGLIO falsely stated to an Internal Revenue Service Revenue Officer that his father had taken back the golf course and other assets that Miscauno Management had leased from Specialty Risk; that his father was now leasing these assets to JOHN’s son and BONNIE LAGIGLIO through a new entity; and that JOHN LAGIGLIO had no involvement with the new entity.

v.   It was further part of the conspiracy that, on or about June 27, 1997,  defendants JOHN LAGIGLIO, CHARLES SCHNEIDER and BONNIE LAGIGLIO willfully filed and caused to be filed a false United States Partnership Tax Return (Form 1065) and accompanying Schedules for the calendar year 1996 for the Crown Point Farms partnership, in which it was reported that BONNIE LAGIGLIO was a general partner of the Crown Point Farms horse farm with a fifty per-cent ownership of capital, when in fact, defendants knew that JOHN LAGIGLIO owned the Crown Point horse farm.         

 

 


w.    It was further part of the conspiracy that, on  or about July 22, 1997, defendant BONNIE LAGIGLIO willfully filed false income tax returns for the years 1993, 1994, and 1995, in which she reported that she had received income from Plaza Partners, when in fact, she knew that Specialty Risk’s payments to Plaza Partners and Plaza’s checks to her represented income to JOHN LAGIGLIO.

x.   It was further part of the conspiracy that, on or about July 24, 1997, defendant BONNIE LAGIGLIO willfully filed a false income tax return for the year 1996, in which she reported that she had received income from Specialty Personnel Leasing, when in fact, she knew that Specialty Personnel Leasing’s payments to her represented income to JOHN LAGIGLIO.

y.     It was further part of the conspiracy that, on or about September 3,  1997, defendants JOHN LAGIGLIO and GREGORY ROSS willfully caused JOHN LAGIGLIO’s false income tax return for the year 1993 to be filed with the Internal Revenue Service.  In this return, LAGIGLIO failed to report income that he had received in 1993 through Specialty Risk payments to Plaza Partners for his salary, which he received through checks written to BONNIE LAGIGLIO by Plaza Partners.

 

 

 


z.    It was further part of the conspiracy that, on or about September 3,  1997, defendants JOHN LAGIGLIO and GREGORY ROSS willfully caused JOHN LAGIGLIO’s false income tax return for the year 1994 to be filed with the Internal Revenue Service.  In this return, LAGIGLIO failed to report income that he had received in 1994 through Specialty Risk payments to Plaza Partners for his salary, which he received through checks written to BONNIE LAGIGLIO by Plaza Partners.

All in violation of Title 18, United States Code, Section 371.

 


FORFEITURE ALLEGATION

THE SPECIAL JULY 2000-1 GRAND JURY further charges:

1.     The allegations contained in Count One of this indictment are hereby realleged and incorporated by reference for the purpose of alleging forfeiture pursuant to the provisions of Title 18, United States Code, Section 1963.

2.     As a result of their violation of Title 18, United States Code, Section 1962(d),

MICHAEL SPANO, SR.,

JOHN LAGIGLIO,

BETTY LOREN-MALTESE,

EMIL SCHULLO,

JOSEPH DECHICIO,

MICHAEL SPANO, JR.,

BONNIE LAGIGLIO,

GREGORY ROSS, and

CHARLES SCHNEIDER,

 

defendants herein:

(a) have acquired and maintained interests in violation

of Title 18, United States Code, Section 1962, which interests are subject to forfeiture to the United States pursuant to Title 18, United States Code, Section 1963(a)(1);


(b) have an interest in, security of, claims against, and property and contractual rights which afford a source of influence over the enterprise named and described herein which they established, operated, controlled, conducted, and participated in the conduct of, in violation of Title 18, United States Code, Section 1962, which interests, securities, claims, and rights are subject to forfeiture to the United States, pursuant to Title 18, United States Code, Section, 1963(a)(2);

(c) have property constituting and derived from proceeds which the defendants obtained, directly and indirectly, from racketeering activity in violation of Title 18, United States Code, Section 1962, which property is subject to forfeiture to the United States pursuant to Title 18, United States Code, Section 1963(a)(3).

3. The interests of the defendants subject to forfeiture to the United States pursuant to Title 18, United States Code, Section  1963 (a)(1), (a)(2), and (a)(3) include, but is not limited to at least $10,000,000, and interests and proceeds traceable thereto including but not limited to:

(a) parcels of real property on or near Miscauno Island in northern Wisconsin, including the property commonly known as the Four Seasons golf course in Pembine, Wisconsin, and nearby parcels, which are more particularly described as:               

Parcel A

 

Government Lot 3 of Section 23; Government Lot 5 of Section 24; Government Lot 4 of Section 25; and Government Lot 3 of Section 26;  Lots 1 and 2 of Certified Survey Map # 277 filed in Volume 2 of Certified Survey Maps as document #412642, being a part of Government Lot 5 of Section 24; Outlot 1 (private road) of Miscauno Shores Subdivision including White Pine Lane and Shore Line Drive;  all being in Township 36 North, Range 21 East; subject to easements  pertaining thereto.

 

 

 

 


BUT EXCEPTING THEREFROM THOSE PARTS THEREOF DESCRIBED AS:

 

EXCEPTION BI#1

That part of the premises lying below an elevation of 157 feet, White Rapids Datum, established pursuant to an Agreement recorded in Vol. 119 of Deeds, pages 164-170, #133022.

 

EXCEPTION BI#2

Lots Numbered 1 to 22 inclusive of the Miscauno Shores Subdivision, according to the plat thereof as recorded in Plat Cabinet B, Sheet #91, as document #391841, said plat being a part of Government Lot 3 of Section 23, Government Lot 5 Section 24, Government Lot 4 Section 25 and Government Lot 3 Section 26, Township 36 North, Range 21 East.

 

EXCEPTION BI#3              

Lots 1, 2 and 3 of Certified Survey Map #151 as filed in Vol. 1 of Certified Survey Maps page 151, and bearing document #389946, said CSM being located in Government Lot 3 of Section 26.

 

EXCEPTION BI#4

Certified Survey Map #152 as filed in Vol. 1 of Certified Survey Maps page 152, and bearing document #391023, said CSM being located in Government Lot 3 of Section 23, and Government Lot 5 of Section 24.

 

EXCEPTION BI#5

That part of Government Lot 3 of Section 26, Township 36 North, Range 21 East, described as: Beginning at the most Westerly corner of Lot 13 of Miscauno Shores Subdivision; thence South 81° 46' 30" West, 120.99 feet; thence North 45° 27' 08" West, along a meanderline of the Menominee River, 50 feet; thence North 81° 46' 30" East, 181.49 feet; thence South 29° West, along the West line of said Lot 13, a distance of 50 feet, to the point of beginning; together with all land lying between the meander line and the shore of the Menominee River at low water level, bounded on the North and South by the above described property lines extended to the shore.

 

EXCEPTION BI#6

That part of Government Lot 3 of Section 26, Township 36 North of Range 21 East, described as: Beginning at the most Northerly corner of Lot 14 of Miscauno Shores Subdivision; thence South 29° West, on the West line of said lot, 100 feet; thence North 45° 27' 08" West, along a meanderline of the Menominee River, 100 feet; thence North 81° 46' 30" East, 120.99 feet, to the point of beginning; together with all along lying between the meanderline and the shore of the Menominee River at low water level, bounded on the North and South by the above described property lines extended to the shore.


EXCEPTION BI #7

That part of Government Lot 5 of Section 24, Township 36 North, Range 21 East, described as: That parcel of land upon which the steel bridge rests, this being the East bridge (that connects Page 3 Large Miscauno Island to Small Miscauno Island and the Michigan shore of the Menominee River) together with all land lying within 25 feet in all directions from all parts of the concrete abutment upon which the West end of said bridge rests.

 

Parcel B

 

Government Lot 2 of Section 23, that lies South of Short Cut Road and Government Lot 1 of Section 26; all being in Township 36 North, Range 21 East.

 

               AND

 

Parcel C 

 

That part of Government Lot 2 of Section 26, Township 36 North, Range 21 East, described as: Beginning at the Northwest corner of said Government Lot 2; thence South, on the West line thereof, 129 feet, to the Northerly line of River Road; thence South 67° 30' East, on said Northerly road line, 119.2 feet; thence South 58° 50' East, on said road line, 243.5 feet; thence East, parallel with the South line of Government Lot 2, a distance of 320.2 feet, more or less, to the waters of the Menominee River; thence Northwesterly, along said waters, to the North line of Government Lot 2; thence West, on said North line, to the point of beginning.

 

               AND

 

Parcel D

 

The North-East Quarter of the South-West Quarter (NE1/4 SW1/4), and the South-East Quarter of the South-West Quarter (SE1/4 SW1/4), all being in Section 23, Township 36 North, Range 21 East.

 

BUT EXCEPTING FROM THE ABOVE DESCRIBED PARCELS THOSE PARTS THEREOF DESCRIBED AS:

 

EXCEPTION OI#1

Government Lot 2 of Section 23 and Government Lots 1 and 2 of Section 26 that abut the Menominee River and which lie below an elevation of 157 feet, White Rapids Datum, established pursuant to an Agreement recorded in Vol. 119 Deeds pages 164-170, #133022.

 

 


EXCEPTION OI#2

That part of Government Lot 2, also referred to a part of the South-West Quarter of the South-East Quarter (SWl/4-SE1/4) of Section 23, Township 36 North, Range 21 East, Marinette County Wisconsin, more particularly described as follows, to-wit: Commencing at the Quarter corner marking Sections 23 and 26; thence Northerly to and across Park Road, along the East Right Page 4 Away Line of Sand Road to a point on the South Right Away line of Short Cut Road; thence Easterly along the South Right Away line of Short Cut Road 990' to a steel stake marking the place of beginning of the property hereinafter described; thence continue Easterly along the Right Away of Short Cut Road for a distance of 160 feet to a steel stake; thence South to the waters edge of the Menominee River; thence Westerly along the waters edge to a point directly South of the point of beginning; thence North to the point of beginning;

 

EXCEPTION OI#3

Part of Government Lot 2 of Section 23, Township 36 North of Range 21 East. Point of Beginning being a point in center line of Right of Way Road 5 feet West of Steel Bridge across Menominee River to the Miscauno Islands. Thence, southerly perpendicular to the center line of Right of Way Road a distance of 33 feet; thence Westerly parallel with the centerline of Right of Way Road to the East line of River Road; thence Northerly along East line of River Road a distance of 66 feet to the North line of Right of Way Road; thence Easterly, parallel with the center line of Right of Way Road to a point being 90° angle to point of beginning; thence Southerly 33 feet to the point of beginning.

 

EXCEPTION OI#4

The West ½ of Government Lot 1 of Section 23; and that part of Government Lot 2 of said Section 23, described as: Beginning at the Southwest corner of Government Lot 1 of said section, and thence South on the West line of Government Lot 1 extended, to the North shore line of the Menominee River at low water line, and thence Northeast on said North shore line to the North line of Government Lot 2, and thence West to the point of beginning;

 

EXCEPTION OI#5

One acre in the Northwest corner of Government Lot 2 of Section 23, Township 36 North, Range 23 East, deeded to the Town of Beecher by deed recorded October 08, 1952 in Vol. 209 Deeds page 311, Document #269423 MCR;

 

 

 

 


EXCEPTION OI#6

That part of the North-East Quarter of the South-West Quarter (NE1/4 of SW1/4) and of the South-East Quarter of the South-West Quarter (SE1/4 of SW1/4) of Section 23, Township 36 North of Range 21 East, that lies East of Sand Road Description.

 

Parcel #008-00958.000

Parcel #008-00961.000

Parcel #008-00962.000

Parcel #008-00965.000

Parcel #008-00967.000

Parcel #008-00967.001

Parcel #008-01008.000

Parcel #008-01008.002

Parcel #008-01021.000

Parcel #008-01027.000

Parcel #008-01028.000

Parcel #008-01042.000

Parcel #008-01506.000

 

Parcel E

 

# 008-01493.000

 

Lot 10 of Miscauno Shores Subdivision, Town of Beecher, Marinette County, Wisconsin.

 

Parcel F

 

008-01489.000

 

Lot 6 of Miscauno Shores Subdivision, according to the recorded plat thereof.

 

Parcel G

 

008-01490.000

 

Lot 7 of Miscauno Shores Subdivision, Town of Beecher, Marinette County, Wisconsin.

 

Parcel H

 

008-01487.000

 

Lot 4 of the Miscauno Shore Subdivision, Town of Beecher, Marinette County, Wisconsin.

 


Parcel I

 

008-01485.000

 

Lot 2 of Miscauno Shores Subdivision, according to the plat thereof as recorded in Plat Cabinet B, Sheet #91, as Document #391841, said plat being a part of Government Lot 3, Section 23.  Government Lot 3, Section 26, Government Lot 4, Section 25, Government Lot 5, Section 24, Township 36 North, Range 21 East, Town of Beecher, Marinette County, Wisconsin.

 

Parcel J

 

008-01484.000

 

Lot 1 of Miscauno Shores Subdivision, according to the plat thereof as recorded in Plat Cabinet B, Sheet #91, as Document #391841, said plat being a part of Government Lot 3, Section 23, Government Lot 3, Sheet 26, Government Lot 4, Section 25, Government Lot 5, Section 24, Township 36, North, Range 21 East, Town of Beecher, Marinette County, Wisconsin.

 

Parcel K

 

008-01494.000

 

Lot 11 of Miscauno Shores Subdivision, Town of Beecher, Marinette County, Wisconsin.

 

Parcel L

 

008-01486.000

 

Lot 3 of the Miscauno Shore Subdivision, Town of Beecher, Marinette County, Wisconsin.

 

Parcel M

 

008-01009.000

 

Government Lot 6, Section 24, Township 36 North, Range 21 East (commonly known as “Small Miscauno Island”), including the two bridges attached thereto and appurtenant thereto, one which leads eastward and is attached at its other end to Government Lot 2, Section 25.  Township 37 North, Range 29 West, Menominee County, Michigan, and the other of which leads westward and is attached at its other end to Government Lot 5, Section 24, Township 36 North,

 


Range 21 East, Marinette County, Wisconsin (commonly known as “Large Miscauno Island”).

 

Parcel N

 

008-00969.000

 

That part of Government Lot 3 of Section 23 and of Government Lot 5 of Section 24 of Township 36 North, Range 21 East, described as follows: Commencing at the Southwest corner of said Section 24; thence West 24.5 feet; thence North 00° 53' East, 172.08 feet to the POINT OF BEGINNING; thence continuing North 00° 53' East, 69 feet; thence South 89° 06' 56" East, 86.99 feet, to the East line of Certified Survey Map #152; thence South 17° 06' 47" East, on said East line, 72.55 feet; thence North 89° 06' 56" West, 109.40 feet to the point of beginning; being a part of said Certified Survey Map #152, and situate in the Town of Beecher, Marinette County, Wisconsin.

 

(b) Real property commonly known as 307 First Street, Winneconne, Wisconsin, which is more particularly described as:

The North One Hundred (100) feet of the South Two Hundred Sixty (260) feet of that part of FRACTIONAL LOT FIVE (5) of Section Twenty-One (21) Township Nineteen (19) North, of Range Fifteen (15) East, in the Village of Winneconne, lying east of the East line of Water Street, and north of the North Line of Block Fourteen (14) in plat of Williamsport.

 

4. Defendants JOHN LAGIGLIO, MICHAEL SPANO, SR., BETTY LOREN-MALTESE, EMIL SCHULLO, JOSEPH DECHICIO, MICHAEL SPANO, JR., BONNIE LAGIGLIO, GREGORY ROSS and CHARLES SCHNEIDER are thereby jointly and severally liable to the United States for approximately $10,000,000.

5.  To the extent that the property described above as being subject to forfeiture pursuant to Title 18, United States Code, Section 1963, as a result of any act or omission of the defendants:

 


(a) cannot be located upon the exercise of due diligence;

(b) has been transferred to, sold to, or deposited with a third person;

(c) has been placed beyond the jurisdiction of the court;

(d) has been substantially diminished in value, or

(e) has been commingled with other property that cannot be subdivided without difficulty;

it is the intent of the United States, pursuant to Title 18, United States Code, Section 1963(m) to seek forfeiture of any other property of said defendants up to the value of the property described above as being subject to forfeiture.

All pursuant to Title 18, United States Code, Section 1963.

 

A TRUE BILL:

 

___________________
FOREPERSON

 

 

___________________________
United States Attorney