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Loren-Maltese indicted

June 15, 2001


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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