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Loren-Maltese indicted

June 15, 2001

BY ABDON M. PALLASCH LEGAL AFFAIRS REPORTER 

After years of indicting people closer and closer to her, federal officials Friday finally moved in and arrested Cicero Town President Betty Loren-Maltese, charging her with using the town as a personal piggy bank.

"This was a scheme from the beginning to loot the town," said Scott Lassar, U.S. Attorney for the Northern District of Illinois.

"As a result of this investigation, the Cicero Candy Store is closed," added Kathleen McChesney, special agent in charge of the FBI in Chicago.

Loren-Maltese and nine associates funnelled $33 million in town money to an insurance company they had created.

About $18 million actually was used legitimately to pay insurance claims.

But most of the rest--at least $10 million--was used to enrich Loren-Maltese and her cronies, the indictments unsealed Friday reveal.

"This is the largest amount of money that has ever been alleged in any organized crime case," Lassar said.

Loren-Maltese's late husband, Frank Maltese, and Michael Spano Sr., one of the co-defentants, "were associated with organized crime and used their organized crime relationship to influence the operations of the Cicero Town government," the indictment states.

Rank-and-file town workers paid the price. Loren-Maltese made town employees accept payroll deductions to cover the excessive town money being funnelled into the insurance company, Lassar said.

Loren-Maltese and her co-defendants used the money for personal income, and to buy a Wisconsin golf course they hoped to turn into a casino and to buy a horse farm near Loren-Maltese' summer home in Crown Point, Indiana, where she was arrested early Friday.

Loren-Maltese's former police chief, Emil Schullo, who fought a bitter primary election fight with Loren-Maltese earlier this year, is also a co-defendant. Lassar said the indictment had not been delayed past Loren-Maltese's April victory over Copunty Comissioner Joseph Mario Moreno.

After former Town President Henry Klosak died, Schullo allegedly used the dead man's name-stamp to posthomously approve the one and only document giving the town's business to Specialty Risk Consultants, Inc., the indictment alleges.

In addition to Loren-Maltese, Schullo, Spano and his son, Michael Jr., others arrested Friday morning include: John LaGiglio, Joseph DiChicio, Bonnie LaGiglio, Gregory Ross, Charles Schneider and Frank Taylor.

"It's a good day for the citizens of Cicero," said Chicago Crime Commission Executive Director Tom Kirkpatrick. "It has been part of a tradition in Cicero since the days of Al Capone. Organized crime cannot flourish unless they have the cooperation of our public officials."

 

 

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