Betty Loren-Maltese Indictment

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA	)
	)
v	)	No. 01 CR 348
	)
MICHAEL SPANO, SR.,	)	Violations: Title 18,
JOHN LAGIGLIO,	)	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	)	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);

(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 & 25^th 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

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 25^th 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 25^th 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.

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).