UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
UNITED STATES OF AMERICA	)	No.
	)	Violations: Title 18,
v.	)	United States Code, Sections
	)	1341, 1344, 1962(c) and (d),
	)	1963, and 1014, and 2
JOHN SERPICO,	)
MARIA BUSILLO, and	)
GILBERT CATALDO	)
	)

 

                           COUNT ONE

 

The SPECIAL FEBRUARY 1998 GRAND JURY charges:

 

                      General Allegations

 

1.   At times material herein:

 

a.   The Central States Joint Board ("CSJB"), located at 1950 W. Erie, Chicago, Illinois, was a labor organization, as that term is defined in Title 29, United States Code, Section 402(i) and (j).  The CSJB was comprised of the following local labor organizations (“locals”), which also were labor organizations within the meaning of Title 29, United States Code, Section 402(i) and (j) and employee organizations within the meaning of Title 29, United States Code, Section 1002(4), that at times were members of the CSJB:

 

Local 8, Industrial Workers Union, affiliated with the Laborers International Union of North America (“LIUNA”);

 

Local 10, Production Workers Union, affiliated with the International Union of Allied Novelty and Production Workers (“IUANPW”);

 

Local 12, Allied Production Workers Union, affiliated with the IUANPW;

 

Local 16, Metal Processors Union, affiliated with the IUANPW;

 

Local 18, Plastic Workers Union, affiliated with the IUANPW;

 

Local 20, Chemical and Allied Product Workers, affiliated with the IUANPW;

 

Local 24, Manufacturing, Production, and Service Workers Union (at times known as the "Novelty and Allied Workers Union"), affiliated with the IUANPW; and

 

Local 803, Amalgamated Production Workers Union, affiliated with the IUANPW (merged with Local 18, Plastic Workers Union, in or about 1991).

 

b.   The total membership of the locals affiliated with the CSJB varied, but at times was approximately 20,000.

c.   The CSJB provided a wide range of administrative and management services to its member locals and in turn to their members.  Among other things, it hired and supervised business agents and organizers for its member locals, and managed the financial affairs of its member locals, including the establishment and management of banking relationships.  In addition to funds maintained separately for each member local, the CSJB maintained its own funds, derived primarily from fees paid by member locals.

d.   The Central States Joint Board Health & Welfare Plan ("CSJB Health & Welfare Plan") was an employee welfare benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”).  The CSJB Health & Welfare Plan was established and maintained by the CSJB and employers, and received funds contributed by and on behalf of participating members of the CSJB's member locals.  The CSJB Health and Welfare Plan invested and administered these funds to provide health insurance benefits for eligible beneficiaries.

e.   The Midwest Pension Plan was an employee welfare benefit plan subject to Title I of ERISA.  The Midwest Pension Plan was established and maintained by the CSJB and employers, and received funds contributed by employers on behalf of participating members of the CSJB's member locals.  The Midwest Pension Plan invested and administered these funds to provide pension benefits for eligible beneficiaries.

f.   The Central States Joint Board Staff Pension Plan ("CSJB Staff Pension Plan") was an employee pension benefit plan subject to Title I of ERISA.  The CSJB Staff Pension Plan was established and maintained by the CSJB and its member locals, and received funds contributed on behalf of participating employees of the CSJB and its member locals and affiliated benefit plans.  The CSJB Staff Pension Plan invested and administered these funds to provide pension benefits for eligible beneficiaries.

g.   The IUANPW was a labor organization, as that term is defined by Title 29, United States Code, Section 402(i) and (j), and an employee organization within the meaning of Title 29, United States Code, Section 1002(4).  The IUANPW was comprised of member locals and provided various services to these locals and in turn to their members.  The offices of the IUANPW initially were located in Valley Stream, New York, with the exception of the offices of the Secretary-Treasurer, which were located at 1950 W. Erie, Chicago.  In or about 1995, the offices of the IUANPW were consolidated at 1950 W. Erie, Chicago, Illinois.  CSJB employees managed the financial affairs of the IUANPW, including the establishment and management of banking relationships.  The total membership of the IUANPW varied, but at times was approximately 30,000.

h.   Defendant JOHN SERPICO held various offices with the CSJB, its member locals and affiliated benefit plans, and the IUANPW (referred to collectively as “the CSJB entities”), and as such was an officer of and person employed by the following labor organizations; an officer, agent and employee of the following employee organizations whose members were covered by the following employee benefit plans; and an officer, trustee, agent, and custodian of the following employee benefit plans, during or about the following periods:

Central States Joint Board

President, 1975 - April 1994

Vice-President, May 1994 - February 1996

President Emeritus, February 1996 - present

Consultant, February 1996 - present

 

CSJB Health & Welfare Plan

Trustee and Chairman, prior to January 1987 - April 1994

Chairman Emeritus, April 1994 - present

 

Midwest Pension Plan

Trustee and Chairman, prior to January 1985 - April 1994

Chairman Emeritus, April 1994 - present

 

CSJB Staff Pension Plan

Trustee and Chairman, prior to January 1987 - June 1994

Chairman Emeritus, April 1994 - present

 

International Union of Allied Novelty and Production Workers

Secretary-Treasurer, 1975 - January 1985

Consultant, 1985 - present

 

Local 8

President and Business Manager, 1976 - January 1996

 

Local 10

President, 1976 - April 1994

 

i.   Defendant MARIA BUSILLO was a business and personal associate of defendant JOHN SERPICO and held various offices with the CSJB entities, and as such was an officer and person employed by the following labor organizations; an officer, agent and employee of the following employee organizations whose members were covered by the following employee benefit plans; and an officer, trustee, agent, and custodian of the following employee benefit plans, during or about the following periods:

Central States Joint Board

President, April 1994 - present

Member, General Executive Board, 1980 - present

 

CSJB Health & Welfare Plan

Trustee, August 1994 - present

 

Midwest Pension Plan

Trustee, June 1994 - present

 

CSJB Staff Pension Plan

Chairman, June 1994 - present

Trustee, prior to January 1987 - present

 

International Union of Allied Novelty and Production Workers

Secretary-Treasurer, May 1996 - present

Vice President, February 1994 - May 1996

Member, General Executive Board, 1984 - present

Local 8

Secretary-Treasurer, January 1991 - June 1996

Recording Secretary, 1979 - December 1990

 

Local 10

President, June 1994 - present

Secretary-Treasurer, 1976 - June 1994

 

j.   Defendants JOHN SERPICO and MARIA BUSILLO exercised substantial influence over the operations and financial affairs of the CSJB, its member locals and affiliated benefit plans, and the IUANPW (collectively, "the CSJB entities").

k.   The CSJB entities did not regularly hold contested elections.  Defendants JOHN SERPICO and MARIA BUSILLO ordinarily selected or controlled the selection of candidates for offices in the CSJB entities, and those candidates ran unopposed.

l.   Title 29, United States Code, Section 501(a) provided as follows:

The officers, agents, shop stewards, and other representatives of a labor organization occupy positions of trust in relation to such organization and its members as a group.  It is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interests of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization.  A general exculpatory provision in the constitution and bylaws of such a labor organization or a general exculpatory resolution of a governing body purporting to relieve any such person of liability for breach of the duties declared by this section shall be void as against public policy.

 

m.   Defendants JOHN SERPICO and MARIA BUSILLO owed a duty to the CSJB entities, and to the members and beneficiaries of those entities, to carry out their responsibilities regarding the CSJB entities honestly and for the exclusive benefit of the CSJB entities and their members and beneficiaries.

n.   Gladstone-Norwood Trust & Savings Bank (“Gladstone-Norwood Bank”), located at 5200 N. Central Avenue, Chicago, Illinois, was a financial institution whose deposits were insured by the Federal Deposit Insurance Corporation (“FDIC”).

o.   Capitol Bank and Trust (“Capitol Bank”), located at 4801 W. Fullerton Avenue, Chicago, Illinois, and Capitol Bank of Westmont, located at 100 E. Ogden Avenue, Westmont, Illinois were financial institutions owned by CBC Bancorp, Ltd.  The deposits of Capitol Bank and Capitol Bank of Westmont were insured by the FDIC.

p.   Regulations promulgated by the Secretary of the Treasury pursuant to Title 31, United States Code, Section 5313 required financial institutions, including banks and currency exchanges, to file a report with the Internal Revenue Service relating to any cash transaction in the amount of $10,000 or more.  Because such reports have a high degree of usefulness in criminal, tax, and regulatory investigations and proceedings, the regulations required that such reports, prepared by the financial institution, provide the name and address of the customer engaging in the transaction, the identity of any person on whose behalf the customer was engaging in the transaction, and the amount and date of the transaction. 

                        The Enterprise

2.   Defendant JOHN SERPICO, defendant MARIA BUSILLO, the CSJB, its member locals, the CSJB Health and Welfare Plan, the Midwest Pension Plan, the CSJB Staff Pension Plan, and the IUANPW constituted an association-in-fact enterprise (the "CSJB Enterprise") within the meaning of Title 18, United States Code, Section 1961(4).  The CSJB Enterprise engaged in, and its activities affected, interstate commerce.

                       Means and Methods

3.   It was one of the purposes of the enterprise to enable defendants JOHN SERPICO and MARIA BUSILLO to establish and maintain control over the assets and activities of the CSJB Enterprise for the personal benefit of defendants JOHN SERPICO and MARIA BUSILLO, and to conceal the full nature and extent of the personal benefits from the members and beneficiaries of the CSJB entities.

4.   Among the means and methods by which defendants JOHN  SERPICO and MARIA BUSILLO achieved the objects of, and conducted and participated directly and indirectly in the conduct of the affairs of, the CSJB Enterprise were the following:

Receipt of Favorable Personal Loans in Return for Bank Deposits

a.   From not later than in or about May 1979 and continuing until at least in or about December 1990, defendants JOHN SERPICO and MARIA BUSILLO devised, intended to devise, and participated in a scheme to defraud the CSJB entities of money and property, and, as to that portion of the scheme occurring on or after November 18, 1988, the intangible right to the honest services of defendants SERPICO and BUSILLO, by soliciting and receiving from financial institutions personal benefits in the form of a total of at least $5,000,000 in personal and business loans on terms and conditions more favorable than those that the financial institutions ordinarily offered to other borrowers with similar financial qualifications, in return for the actions of defendants SERPICO and BUSILLO in causing the CSJB entities to deposit and maintain at the financial institutions funds belonging to or in the custody of the CSJB entities.  Specific allegations relating to this conduct and constituting violations of Title 18, United States Code, Sections 1341 (mail fraud) and 1954 (unlawful employee benefit plan payments), are set forth in Racketeering Acts 1-13 below.

Receipt of Kickback in Return for Influencing Pension Plan Hotel Loan

b.   From in or about July 1989 until in or about April 1991, defendant JOHN SERPICO devised, intended to devise, and participated in a scheme to defraud the Midwest Pension Plan, the CSJB Staff Pension Plan, and the IUANPW by soliciting and receiving a substantial personal benefit and kickback in exchange for influencing those entities to provide a speculative mortgage loan, initially in the amount of $6,500,000, in connection with the construction of a hotel in Champaign, Illinois.  In or about the summer of 1990, defendant SERPICO caused the delivery of approximately $100,000 of this personal benefit and kickback in the form of cash to defendant MARIA BUSILLO to assist her in the purchase of a $900,000 house at 1871 Wagner Road, Glenview, Illinois.  Specific allegations relating to this conduct and constituting violations of Title 18, United States Code, Sections 1341 (mail fraud) and 1954 (unlawful employee benefit plan payments) are set forth in Racketeering Act 14 below.

  Bank Fraud in Connection With Purchase of 1871 Wagner Road

c.   From in or about August 1990 through in or about December 1990, defendants MARIA BUSILLO and JOHN SERPICO devised and executed a scheme to defraud Capitol Bank, by making materially false statements and omitting the disclosure of material facts for the purpose of influencing Capitol Bank to provide a loan of $800,000 to defendant BUSILLO for the purchase of a house at 1871 Wagner Road, Glenview, Illinois.  It was part of the scheme that defendants BUSILLO and SERPICO falsely represented to Capitol Bank that the full purchase price of the house was $800,000 when, in fact, it was $900,000, and concealed from Capitol Bank that defendant BUSILLO had paid an additional $100,000 toward the purchase price in the form of United States currency which was derived from acts constituting felony violations of Title 18, United States Code, Sections 1341, 1954, and 1957, thereby preventing Capitol Bank from accurately assessing the nature and extent of the risks associated with its loan to defendant BUSILLO.  Specific allegations relating to this conduct and constituting a violation of Title 18, United States Code, Section 1344 (bank fraud) are set forth in Racketeering Act 15 below.

                Unlawful Financial Transactions

d.   At various times as further specified below, defendants JOHN SERPICO and MARIA BUSILLO engaged and attempted to engage in monetary transactions, affecting interstate commerce, in criminally derived property of a value greater than $10,000, such property having been derived from a specified unlawful activity, namely violations of Title 18, United States Code, Sections 1341 and 1954 described above.  Specific allegations relating to this conduct and constituting violations of Title 18, United States Code, Section 1957 (relating to monetary transactions in property derived from specified unlawful activity) are set forth in Racketeering Acts 16, 17, 19, and 20 below.

e.   In addition, on or about May 16 and 17, 1988, defendant JOHN SERPICO knowingly and wilfully structured and assisted in structuring, and attempted to structure and assist in the structuring, of a transaction with domestic financial institutions, namely, by obtaining a total of approximately $68,000 in United States currency through a series of cash withdrawals, split deposits, and negotiations of cashier’s checks for cash, in violation of Title 31, United States Code, Section 5324(3), as further set forth in Racketeering Act 18, below.

                  The Racketeering Violation

5.   From in or about May 1979, and continuing at least until in or about 1991, within the Northern District of Illinois, and elsewhere,

                       JOHN SERPICO and

                        MARIA BUSILLO,

defendants herein, together with others known and unknown to the grand jury, being employed by and associated with the CSJB Enterprise, an enterprise which engaged in and the activities of which affected interstate commerce, unlawfully and knowingly conducted and participated, directly and indirectly, in the conduct of the affairs of that enterprise through a pattern of racketeering activity, that is, through the commission of the racketeering acts set forth below.

             The Pattern of Racketeering Activity

6.   The pattern of racketeering activity as defined in Title 18, United States Code, Sections 1961(1) and 1961(5), consisted of the following acts:

 

Racketeering Acts 1-13: Union and Benefit Plan Deposits for Personal Loans

7.   Beginning in or about May 1979, and continuing until in or about 1991, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

defendants herein, and others known and unknown to the grand jury, devised, intended to devise, and participated in a scheme to defraud the CSJB entities and their members and beneficiaries of:

a.   money and property, including the right to the full and exclusive enjoyment of financial opportunities derived from the use of assets belonging to the CSJB entities; and

b.   as to that part of the scheme occurring on or after November 18, 1988, the intangible right to the honest services of defendants SERPICO and BUSILLO.

8.   It was part of the scheme that defendants JOHN SERPICO and MARIA BUSILLO solicited and received from financial institutions, including Gladstone-Norwood Bank and Capitol Bank, personal benefits in the form of a total of millions of dollars of personal and business loans on terms and conditions more favorable than those that the banks ordinarily offered to other borrowers with similar financial qualifications, in return for the actions of defendants SERPICO and BUSILLO in causing the CSJB entities to deposit and maintain substantial funds at those banks.

9.   It was further part of the scheme that from in or about May 1979 through in or about 1991, defendants JOHN SERPICO and MARIA BUSILLO sought and received a total of more than $5,000,000 in personal and business loans for at least nine different investments and purchases, including the following transactions, among others:

a.   A loan of approximately $210,000 from Gladstone-Norwood Bank to defendant JOHN SERPICO in or about May 1979, in connection with the purchase of a 59-unit apartment building at 3708 N. Sheffield, Chicago, Illinois;

 

b.   A loan of approximately $240,000 from Capitol Bank to defendant MARIA BUSILLO and a relative in or about August 1986, representing 100 percent of the purchase price of a six-unit apartment building at 3158 N. Mobile, Chicago, Illinois;

 

c.   A loan of approximately $125,000 from Capitol Bank of Westmont to defendant MARIA BUSILLO in or about January 1987, to refinance a mortgage on a condominium located on Marco Island, Florida;

 

d.   Loans of approximately $150,000 and $1,800,000 from Capitol Bank for Studio Network, Inc., a business then owned by defendant JOHN SERPICO and Individual A, in or about May 1987 and September 1987, to provide financing relating to a film studio located at 1058 W. Washington, Chicago, Illinois;

 

e.   A loan of approximately $195,000 from Capitol Bank to defendant JOHN SERPICO and Individual B in or about November 1988, to provide financing for the start-up of Protective Service Systems, Inc., including 100 percent of the purchase price of a building to be used to house illegal aliens detained by the United States Immigration and Naturalization Service;

f.   Loans totaling approximately $1,400,000 from Capitol Bank to defendant JOHN SERPICO and two partners, namely Gilbert Cataldo and Individual C, from in or about May 1989 through in or about December 1990, to provide 100 percent financing for the construction of a building at 1101 W. Taylor St., Chicago, Illinois;

 

g.   A loan of approximately $100,000 from Capitol Bank to defendant MARIA BUSILLO and Individual D in or about June 1989, for the purchase of property at 4913-21 S. Racine, Chicago, Illinois that formerly had been used as a bus fueling depot;

 

h.   Loans totaling approximately $540,000 from Capitol Bank to defendant JOHN SERPICO and Individual E from in or about December 1989 through in or about June 1990 for the construction of a nine-unit apartment building at 702 S. Lytle St., Chicago, Illinois; and

 

i.   Loans from Capitol Bank to defendant MARIA BUSILLO from in or about April 1990 through in or about May 1991 in connection with real estate transactions in Glenview, Illinois.

 

10.  It was further part of the scheme that because of and in return for their influence in depositing and maintaining at banks, funds belonging to the CSJB entitles, defendants JOHN SERPICO and MARIA BUSILLO solicited and received loans, including each of the above-described loans, on terms and conditions more favorable than those that the financial institutions making those loans ordinarily offered to other borrowers with similar financial backgrounds, including the following favorable terms and conditions, among others:

a.   loans were made on an unsecured basis;

 

b.   loans were not fully secured in a manner consistent with lending policies;

 

c.   loans were made for which the borrower could not demonstrate adequate cash flow to service the debt, consistent with lending policies, or for which the extent of the borrower's pre-existing debts rendered the borrower ineligible under lending policies;

 

d.   loans were made to finance 100 percent of the purchase price of real estate, or of the start-up costs of a business;

 

e.   interim construction loans were made without permanent financing in place;

 

f.   principal payments were amortized over periods longer than was consistent with lending policies, thereby reducing monthly debt service payments;

 

g.   loans were made to cover interest payments on existing loans;

 

h.   business and real estate development loans were made to principals with little or no expertise in such ventures; and

 

i.   customary charges and fees were reduced and waived.

 

          11.  It was further part of the scheme that from in or about May 1979 through in or about 1991, in order to induce, influenced by, and in return for the personal benefits that they sought and received in the form of favorable loans, defendants JOHN SERPICO and MARIA BUSILLO took the following actions, among others:

a.   represented to bankers from whom they were seeking and intending to seek personal loans that substantial funds belonging to CSJB entities would be deposited in their banks; and

 

b.   caused substantial funds belonging to CSJB entities to be deposited into banks from  which they sought or from which they had received personal loans.  Such deposits took the form of demand deposits, certificates of deposit, and the placement of plan assets under bank management for a fee.  At times these deposits were made on the same day or within days of significant actions taken by the recipient bank on loan requests by defendants SERPICO and BUSILLO.

 

12.  It was further part of the scheme that defendants JOHN SERPICO and MARIA BUSILLO failed to disclose to the CSJB entities the material fact that they were obtaining substantial personal loans from banks at the same time that they were causing substantial funds belonging to the CSJB entities to be deposited into and maintained at those banks.

13.  It was further part of the scheme that defendants JOHN SERPICO and MARIA BUSILLO concealed and hid from the CSJB entities, and caused to be concealed and hidden from the CSJB entities, material facts concerning the existence and purpose of the scheme, and the actions undertaken to carry it out.

14.  The above-described scheme affected financial institutions, specifically including Capitol Bank, Capitol Bank of Westmont, and Gladstone-Norwood Bank, by causing them to make loans and receive deposits that they otherwise would not have made and received under the same terms and conditions.  The above-described scheme further affected Capitol Bank in part by causing Capitol Bank to be convicted in or about November 1996 of conspiracy to commit mail fraud, and bribery in connection with an employee benefit plan, for which offenses it was sentenced to, among other things, pay a fine of $800,000.

Racketeering Act 1: $240,000 Loan for Purchase of 3158 N. Mobile

15. Racketeering Act 1 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 16-17 and 18-19, below, either one of which alone constitutes the commission of Racketeering Act 1.

            Racketeering Act 1(A): 18 U.S.C. § 1954

16. Paragraph 1 above is realleged and incorporated herein by reference.

17. In or about August 1986, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

defendants herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank to defendant BUSILLO and a relative, in the amount of approximately $240,000, relating to the purchase of property at 3158 N. Mobile Avenue, Chicago, Illinois, because of and with intent to be influenced with respect to any of their actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan;

In violation of Title 18, United States Code, Section 1954.

            Racketeering Act 1(B): 18 U.S.C. § 1341

18.  Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

19.  On or about August 25, 1986, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a commitment for title insurance from Heritage Title Co., that envelope being addressed to:

CAPITOL BANK AND TRUST

4801 W. Fullerton Ave.

Chicago, Illinois 60639

 

In violation of Title 18, United States Code, Section 1341.

Racketeering Act 2: $125,000 Loan for Florida Condominium

20. Racketeering Act 2 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 21-22 and 23-24, below, either one of which alone constitutes the commission of Racketeering Act 2.

            Racketeering Act 2(A): 18 U.S.C. § 1954

21. Paragraph 1 above is realleged and incorporated herein by reference.

22. In or about January 1987, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

defendants herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank to defendant MARIA BUSILLO in the amount of approximately $125,000, relating to a condominium on Marco Island, Florida, because of and with intent to be influenced with respect to any of their actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan;

In violation of Title 18, United States Code, Section 1954.

            Racketeering Act 2(B): 18 U.S.C. § 1341

23.  Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

24.  On or about January 15, 1987, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be placed in an authorized depository for mail matter, to be delivered by the United States Postal Service, an envelope containing a letter from Capitol Bank requesting a payoff letter, that envelope being addressed to:

 

 

 

Janice Hedish

Great Western Savings

9451 Corbin Ave.

Northridge, California 91328

 

In violation of Title 18, United States Code, Section 1341.

Racketeering Act 3: $150,000 Loan for Studio Network, Inc.

25. Paragraph 1 above is realleged and incorporated herein by reference.

26. In or about May 1987, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank for Studio Network, Inc., in the amount of $150,000, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan;

In violation of Title 18, United States Code, Section 1954.

Racketeering Act 4: $1,800,000 Loan for Studio Network, Inc.

27. Racketeering Act 4 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 28-29 and 30-31 below, either of which alone constitutes the commission of Racketeering Act 4.

 

            Racketeering Act 4(A): 18 U.S.C. § 1954

28. Paragraph 1 above is realleged and incorporated herein by reference.

29. In or about October 1987, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank relating to Studio Network, Inc., in the amount of $1,800,000, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan;

In violation of Title 18, United States Code, Section 1954.

            Racketeering Act 4(B): 18 U.S.C. § 1341

30.  Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

31.  On or about September 29, 1987, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a commitment for title insurance from Chicago Title Insurance Co., that envelope being addressed to:

Laser, Schostok, Kolman & Frank

189 W. Madison

Chicago, Illinois 60602

 

In violation of Title 18, United States Code, Section 1341.

Racketeering Act 5: $195,000 Loan for Protective Service Systems

32. Racketeering Act 5 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 33-34 and 35-36 below, either one of which alone constitutes the commission of Racketeering Act 5.

  Racketeering Act 5(A): 18 U.S.C. § 1954

33. Paragraph 1 above is realleged and incorporated herein by reference.

34. In or about November 1988, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank to defendant JOHN SERPICO and Individual B, in the amount of $195,000, relating to Protective Service Systems, Inc., because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan;

In violation of Title 18, United States Code, Section 1954.

            Racketeering Act 5(B): 18 U.S.C. § 1341

35.  Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

36.  On or about October 19, 1988, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a commitment for title insurance from Attorneys Title Guaranty Fund, Inc., that envelope being addressed to:

CAPITOL BANK AND TRUST

4801 W. Fullerton Ave.

Chicago, Illinois 60639

 

In violation of Title 18, United States Code, Section 1341.

Racketeering Act 6: $1,000,000 Loan For 1101 W. Taylor

37. Racketeering Act 6 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 38-39 and 40-41 below, either of which alone constitutes the commission of Racketeering Act 6.

            Racketeering Act 6(A): 18 U.S.C. § 1954

38.  Paragraph 1 above is realleged and incorporated herein by reference.

39. In or about June 1989, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank to defendant JOHN SERPICO, GILBERT CATALDO, and a third person, relating to 1101 W. Taylor St., Chicago, Illinois, in the amount of $1,000,000, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and the CSJB Health & Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and CSJB Health & Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

            Racketeering Act 6(B): 18 U.S.C. § 1341

40.  Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

41.  On or about January 12, 1990, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a check in the amount of $19,391 from Near North National Title Corporation, that envelope being addressed to:

Mr. Vince Alesia

Vincent Paul Associates

1934 N. 76th Court

Elmwood Park, IL 60635;

 

In violation of Title 18, United States Code, Section 1341.

 

Racketeering Act 7: First $200,000 Increase in Loan For 1101 W. Taylor

42. Paragraph 1 above is realleged and incorporated herein by reference.

43. In or about February 1990, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically an increase of $200,000 in the amount of an outstanding $1,000,000 loan from Capitol Bank to defendant JOHN SERPICO, Gilbert Cataldo, and Partner A relating to 1101 W. Taylor St., Chicago, Illinois, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

Racketeering Act 8: Second $200,000 Increase In Loan For 1101 W. Taylor                            44   Paragraph 1 above is realleged and incorporated herein by reference.

45   In or about December 1990, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically an increase of $200,000 in the amount of an outstanding $1,200,000 loan from Capitol Bank to defendant JOHN SERPICO, Gilbert Cataldo, and Partner A relating to 1101 W. Taylor St., Chicago, Illinois, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

    Racketeering Act 9: $100,000 Loan for 4913-21 S. Racine

46   Racketeering Act 9 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 47-48 and 49-50 below, either of which alone constitutes the commission of Racketeering Act 9.

            Racketeering Act 9(A): 18 U.S.C. § 1954

47   Paragraph 1 above is realleged and incorporated herein by reference.

48   In or about July 1989, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

defendants herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank to defendant MARIA BUSILLO and Individual D, in the amount of $100,000, relating to 4913-21 S. Racine, Chicago, Illinois, because of and with intent to be influenced with respect to any of their actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and CSJB Health & Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and CSJB Health & Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

            Racketeering Act 9(B): 18 U.S.C. § 1341

49   Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

50   On or about June 14, 1989, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a commitment for title insurance from Intercounty Title Company, that envelope being addressed to:

CAPITOL BANK AND TRUST

4801 W. Fullerton Ave.

Chicago, Illinois 60639

 

In violation of Title 18, United States Code, Section 1341.

Racketeering Act 10: $480,000 Construction Loan for 702 S. Lytle

51   Racketeering Act 10 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 52-53 and 55-55 below, either of which alone constitutes the commission of Racketeering Act 10.

           Racketeering Act 10(A): 18 U.S.C. § 1954

52   Paragraph 1 above is realleged and incorporated herein by reference.

53   In or about December 1989, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a construction loan from Capitol Bank to defendant JOHN SERPICO and Individual E, in the amount of $480,000, relating to 702 S. Lytle St., Chicago, Illinois, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

           Racketeering Act 10(B): 18 U.S.C. § 1341

54   Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

55   On or about January 5, 1990, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

 

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing an executed and recorded deed in trust, sent by the Cook County Recorder of Deeds to:

CAPITOL BANK AND TRUST

4801 W. Fullerton Ave.

Chicago, Illinois 60639

 

In violation of Title 18, United States Code, Section 1341.

 

Racketeering Act 11: $540,000 Mortgage Loan for 702 S. Lytle

56   Paragraph 1 above is realleged and incorporated herein by reference.

57   In or about July 1990, at Chicago and elsewhere in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a mortgage loan from Capitol Bank to defendant JOHN SERPICO and Individual E, in the amount of $540,000, relating to 702 S. Lytle St., Chicago, Illinois, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

Racketeering Act 12: $160,000 Loan For Purchase of Glenview Lot

58   Paragraph 1 above is realleged and incorporated herein by reference.

59   In or about April 1990, in the Northern District of Illinois, Eastern Division,

              JOHN SERPICO and

               MARIA BUSILLO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank to defendant MARIA BUSILLO, in the amount of $160,000, relating to the purchase of a vacant lot at 90 Queens Lane, Glenview, Illinois, because of and with intent to be influenced with respect to any of their actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

Racketeering Act 13: $800,000 Loan For Purchase of Wagner Road House                                  60      Racketeering Act 13 consists of the violations of Title 18, United States Code, Sections 1954 and 1341 set forth respectively in paragraphs 61-62 and 63-64 below, any one of which alone constitutes the commission of Racketeering Act 13.

  Racketeering Act 13(A): 18 U.S.C. § 1954

61   Paragraph 1 above is realleged and incorporated herein by reference.

62   In or about December 1990, at Chicago and elsewhere in the Northern District of Illinois, Eastern Division,

              JOHN SERPICO and

               MARIA BUSILLO,

defendant herein, did knowingly receive and agree to receive and solicit a loan, specifically a loan from Capitol Bank to defendant MARIA BUSILLO, in the amount of $800,000, relating to the purchase of a house at 1871 Wagner Road, Glenview, Illinois, because of and with intent to be influenced with respect to any of their actions, decisions, and other duties relating to questions and matters concerning the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan, namely the deposit and maintenance at Capitol Bank of funds belonging to the CSJB Staff Pension Plan and the CSJB Health and Welfare Plan;

In violation of Title 18, United States Code, Section 1954.

           Racketeering Act 13(B): 18 U.S.C. § 1341

63   Paragraphs 1 and 7 through 14 above are realleged and incorporated herein by reference.

64   On or about September 14, 1990, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a commitment for title insurance from Chicago Title Insurance Company, that envelope being addressed to:

CAPITOL BANK AND TRUST

4801 W. Fullerton Ave.

Chicago, Illinois 60639

 

In violation of Title 18, United States Code, Section 1341.

 

           Racketeering Act 13(C): 18 U.S.C. § 1341

65   Paragraphs 1 and 7 through 14 above are realleged and  incorporated herein by reference.

66   On or about October 2, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be placed into an authorized depository for mail matter, to be delivered by the United States Postal Service, an envelope containing a letter to developers of the house at 1871 Wagner Road  from their attorney, reporting on the status of matters concerning the purchase of that house by MARIA BUSILLO, that envelope being addressed to one of the developers at his residence in the Northern District of Illinois;

In violation of Title 18, United States Code, Section 1341.

  Racketeering Act 14: Hotel Loan Kickback

67   Racketeering Act 14 consists of the violations of Title 18, United States Code, Sections 1341 and 1954 set forth respectively in paragraphs 68-92 and 93-98 below, any one of which alone constitutes the commission of Racketeering Act 14.

           Racketeering Act 14(A): 18 U.S.C. § 1341

68   In addition to those facts set forth in Paragraph 1 of Count One of this indictment above, which is reincorporated herein by reference, at all times material:

a0   Company A was a corporation with offices in Chicago, Illinois.  The business of Company A included the management and development of hotel properties.

b0   Company A entered into partnerships with other persons and entities relating to the development, construction, and operation of a hotel and office complex known as Trade Centre South in Champaign, Illinois.  One of these partnerships was known as 51 Associates Limited Partnership.

c0   One responsibility assumed by Company A in connection with the Trade Centre South project was obtaining financing for the hotel building. 

d0   Company A could not readily obtain financing for construction of the hotel in the Trade Centre South complex without first securing a commitment from a lender to provide a mortgage loan for the hotel that would ensure a source of funds to repay the construction loan upon completion of construction.

e0   Mid-City National Bank of Chicago was a financial institution whose deposits were insured by the FDIC.

f0   Gilbert Cataldo was a long-time associate of defendant JOHN SERPICO, and had participated with defendant JOHN SERPICO in various business ventures.  Gilbert Cataldo at times did business as Taylor West and Company (“Taylor West”), and used bank accounts held in the name of Taylor West for, among other things, payment of expenses relating to a partnership between Gilbert Cataldo and defendant JOHN SERPICO concerning the development of real estate in Cicero, Illinois.  Gilbert Cataldo was the sole employee of Taylor West.

69   From in or about July 1989 and continuing until at least in or about April 1991, in the Northern District of Illinois, and elsewhere,

                         JOHN SERPICO,

defendant herein, together with Gilbert Cataldo and others known and unknown to the grand jury, devised, intended to devise, and participated in a scheme to defraud the Midwest Pension Plan, the CSJB Staff Pension Plan, the IUANPW, and the members and beneficiaries of these entities, of:

a0   money and property, including the right to the full and exclusive enjoyment of financial opportunities derived from the use of assets belonging to the Midwest Pension Plan, the CSJB Staff Pension Plan, and the IUANPW; and

b0   the intangible right to the honest services of defendant JOHN SERPICO.

70   It was part of the scheme that defendant JOHN SERPICO sought and received a substantial personal benefit and kickback in exchange for influencing the Midwest Pension Plan, CSJB Staff Pension Plan, and IUANPW to provide a speculative mortgage loan, initially in the amount of $6,500,000, in connection with a hotel in the Trade Centre South complex in Champaign, Illinois.

71   It was further part of the scheme that in or about late July 1989, after unsuccessfully seeking permanent mortgage financing for the hotel from other sources, Company A solicited defendant JOHN SERPICO to provide permanent financing for the hotel, in the form of a $6,500,000 mortgage loan, through entities affiliated with the CSJB.

72   It was further part of the scheme that defendant JOHN SERPICO influenced and participated in the decisions of the Midwest Pension Plan to be the lead lender for the $6,500,000 mortgage loan, and for the CSJB Staff Pension Plan and IUANPW each to purchase $1,000,000 interests in this mortgage loan.  When these investments were authorized, the total assets of the Midwest Pension Plan were approximately $39,000,000, the total assets of the CSJB Staff Pension Plan were approximately $4,000,000, and the total assets of the IUANPW were approximately $3,000,000.

73   It was further part of the scheme that on or about January 17, 1990, after meetings regarding the financing of the hotel involving, at times, defendant JOHN SERPICO, Gilbert Cataldo, and officers of Company A, the Midwest Pension Plan issued a commitment letter to 51 Associates Limited Partnership promising to provide a $6,500,000 mortgage for the hotel at Trade Centre South.

74   It was further part of the scheme that as a result of the commitment letter from the Midwest Pension Plan, on or about April 2, 1990, Mid-City National Bank entered into a construction loan agreement and related agreements with 51 Associates Limited Partnership and other entities.  Simultaneously, the Midwest Pension Plan entered into a mortgage loan agreement and related agreements with 51 Associates Limited Partnership and other entities, pursuant to which it deposited $6,500,000 at Mid-City National Bank pending the completion of the hotel’s construction.

75   It was further part of the scheme that on or about April 27, 1990, 51 Associates Limited Partnership issued a check in the amount of $133,850, payable to Taylor West.  This check purportedly was in payment of two invoices issued by Taylor West.  One of these invoices was dated April 4, 1990, and sought payment of $66,000 for 320 hours of services purportedly provided from February 1, 1990 to March 31, 1990 for "Coordination of Construction activities, progress meetings with General Partners and review of design changes."  The other invoice was dated June 4, 1990, and sought payment of $67,850 for 329 hours of services purportedly rendered from April 1, 1990 through May 31, 1990 for "Coordination of Construction activities, progress meetings with General Partners and approval of revisions."

76   It was further part of the scheme that neither Taylor West nor Gilbert Cataldo provided the services described on the invoices dated April 4, 1990 and June 4, 1990.

77   It was further part of the scheme that Company A caused the April 27, 1990 check from 51 Associates to Taylor West to be paid with a draw on the construction loan from Mid-City National Bank and charged to a line item for "contingency" expenses.  Company A caused this check to be falsely entered on the books and records of 51 Associates Limited Partnership as an "architectural and engineering" expense.  Neither Taylor West nor Gilbert Cataldo provided architectural or engineering services in relation to this check.

78   It was further part of the scheme that on or about June 11, 1990, 51 Associates Limited Partnership issued a check in the amount of $100,000, payable to Taylor West.  Company A caused this check to be falsely entered on the books and records of 51 Associates Limited Partnership as an "architectural and engineering" expense.  Neither Taylor West nor Gilbert Cataldo provided architectural and engineering services in relation to this check.

79   It was further part of the scheme that Gilbert Cataldo deposited the checks issued on April 27, 1990 and June 11, 1990 into bank accounts held in the name of Taylor West and used in part for the payment of expenses relating to a real estate development venture in Cicero, Illinois in which Gilbert Cataldo and defendant JOHN SERPICO were partners.

80   It was further part of the scheme that from on or about May 9, 1990 through on or about July 24, 1990, Gilbert Cataldo obtained at least $126,000 in cash through withdrawals, all in increments of less than $10,000, from bank accounts that were held in the name of Taylor West or that had received funds transferred from such accounts.

81   It was further part of the scheme that defendant JOHN SERPICO caused approximately $100,000 of this cash to be delivered to Maria Busillo, who used it in or about early August 1990 to make a payment toward the purchase of a house at 1871 Wagner Road in Glenview, Illinois.

82   It was further part of the scheme that defendant JOHN SERPICO, who advised Maria Busillo in connection with her purchase of the house on Wagner Road and assisted her in obtaining financing from Capitol Bank for her purchase of that house, instructed Busillo not to discuss the cash payment.

83   It was further part of the scheme that in order to conceal the existence and source of the $100,000 cash payment, the purchase price of the house at 1871 Wagner Road was represented on the contract and other documents, and to Capitol Bank, as being $800,000, rather than the true price of $900,000.

84   It was further part of the scheme that on or about

April 15, 1991, 51 Associates issued a check in the amount of $100,000, payable to Taylor West.  Company A caused this check to be falsely entered on the books and records of 51 Associates Limited Partnership as an "architectural and consulting" expense.  Neither Taylor West nor Gilbert Cataldo provided architectural and consulting services in relation to this check.

85   It was further part of the scheme that defendant JOHN SERPICO failed to disclose to the Midwest Pension Plan, the CSJB Staff Pension Plan, and the IUANPW the material fact that he had sought and received a substantial personal benefit and kickback in return for influencing those entities to provide a mortgage loan in connection with the hotel in the Trade Centre South complex.

86   It was further part of the scheme that defendant JOHN SERPICO and his co-schemers concealed and hid, and caused to be concealed and hidden, from the Midwest Pension Plan, the CSJB Staff Pension Plan, and the IUANPW material facts concerning the existence and purpose of the scheme, and the actions undertaken to carry it out.

87   The above-described scheme affected a financial institution, specifically Mid-City National Bank, by causing it to make a construction loan in the initial amount of $6,500,000 to 51 Associates Limited Partnership for the construction of the hotel at Trade Centre South in Champaign, Illinois, and to receive substantial deposits from the Midwest Pension Plan.

88   On or about March 5, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                         JOHN SERPICO,

 

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope from Mid-City National Bank containing a commitment letter, that envelope being addressed to:

[Company A]

Chicago, Illinois

 

In violation of Title 18, United States Code, Section 1341.

 

           Racketeering Act 14(B): 18 U.S.C. § 1341

89   Paragraphs 1 and 68 through 87 above are realleged and  incorporated herein by reference.

90   On or about May 2, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                         JOHN SERPICO,

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be placed in an authorized depository for mail matter, to be sent and delivered by the United States Postal Service, an envelope from Mid-City National Bank containing a letter relating to billing on a loan draw by 51 Associates Limited Partnership, that envelope being addressed to:

Mr. Kenneth Richardson

“51" Associates

313 North Mattis Avenue, Suite 209

Champaign, Illinois 61821

In violation of Title 18, United States Code, Section 1341.

           Racketeering Act 14(C): 18 U.S.C. § 1341

91   Paragraphs 1 and 68 through 87 above are realleged and  incorporated herein by reference.

92   On or about June 6, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                         JOHN SERPICO,

 

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be placed into an authorized depository for mail matter, to be sent and delivered by the United States Postal Service, an envelope from Mid-City National Bank containing a letter relating to billing on a loan draw by 51 Associates Limited Partnership, that envelope being addressed to:

Mr. Kenneth Richardson

“51" Associates

313 North Mattis Avenue, Suite 209

Champaign, Illinois 61821

In violation of Title 18, United States Code, Section 1341.

        Racketeering Act 14(D): 18 U.S.C. §§ 1954 and 2

93   Paragraph 68 above is realleged and incorporated herein by reference.

94   On or about April 27, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

               JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a fee, kickback, commission, gift, money, and thing of value, specifically a portion of $133,850 in purported consulting fees paid to Taylor West, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the Midwest Pension Plan and the CSJB Staff Pension Plan, namely the making of loans by those entities relating to a hotel in the Trade Centre South Complex in Champaign, Illinois;

In violation of Title 18, United States Code, Sections 1954 and 2.

        Racketeering Act 14(E): 18 U.S.C. §§ 1954 and 2

95   Paragraph 68 above is realleged and incorporated herein by reference.

96   On or about June 11, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

               JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a fee, kickback, commission, gift, money, and thing of value, specifically $100,000 in purported consulting fees paid to Taylor West, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the Midwest Pension Plan and the CSJB Staff Pension Plan, namely the making of loans by those entities relating to a hotel in the Trade Centre South complex in Champaign, Illinois;

In violation of Title 18, United States Code, Sections 1954 and 2.

        Racketeering Act 14(F): 18 U.S.C. §§ 1954 and 2

97   Paragraph 68 above is realleged and incorporated herein by reference.

98   On or about April 15, 1991, in the Northern District of Illinois, Eastern Division, and elsewhere,

               JOHN SERPICO,

defendant herein, did knowingly receive and agree to receive and solicit a fee, kickback, commission, gift, money, and thing of value, specifically $100,000 in purported consulting fees paid to Taylor West, because of and with intent to be influenced with respect to any of his actions, decisions, and other duties relating to questions and matters concerning the Midwest Pension Plan and the CSJB Staff Pension Plan, namely the making of loans by those entities relating to a hotel in the Trade Centre South complex in Champaign, Illinois;

In violation of Title 18, United States Code, Sections 1954 and 2.

Racketeering Act 15: Bank Fraud in Loan for Purchase of 1871 Wagner Road

99  Paragraphs 1 and 68-96 above, and paragraph 111 below are realleged and incorporated herein by reference.

100  From in or about August 1990 through in or about December 1990, defendants JOHN SERPICO and MARIA BUSILLO knowingly executed and attempted to execute a scheme to defraud Capitol Bank and to obtain money and funds owned by and under the custody and control of Capitol Bank by means of false and fraudulent pretenses and representations.

101  It was part of the scheme that in or about August 1990, defendant MARIA BUSILLO, with the assistance of defendant JOHN SERPICO, negotiated the purchase of a house at 1871 Wagner Road, Glenview, Illinois.  Defendant BUSILLO, with the knowledge of defendant SERPICO, agreed to pay a total of $900,000 for the house, $800,000 of which was to be reflected on the real estate sales contract, and $100,000 of which was not to be disclosed on that contract and was to be paid in the form of United States currency.  Defendant BUSILLO delivered this currency in or about August 1990, with the knowledge of defendant SERPICO.

102  It was further part of the scheme that on or about September 7, 1990, defendant JOHN SERPICO spoke with the president of Capitol Bank on behalf of defendant MARIA BUSILLO and told him that defendant BUSILLO had entered into a contract for the purchase of a new house.  Defendant SERPICO provided Capitol Bank with a copy of the real estate sales contract for the house at 1871 Wagner Road which falsely reflected a purchase price of $800,000, and stated that defendant BUSILLO would need financing for her purchase of this house.

103  It was further part of the scheme that at various times in or about the fall of 1990 defendant MARIA BUSILLO, both directly and through her agents, falsely represented to Capitol Bank that the total purchase price for the house at 1871 Wagner Road was $800,000.

104  It was further part of the scheme to defraud that at no point did defendants MARIA BUSILLO or JOHN SERPICO disclose to Capitol Bank the material facts that defendant BUSILLO had paid $100,000 in United States currency toward the purchase of the house on Wagner Road, which currency was derived from acts constituting felony violations of Title 18, United States Code, Sections 1341, 1954, and 1957.

105  It was further part of the scheme to defraud that by  making the above-described false representations and omissions regarding the true purchase price of the house, and concealing defendant MARIA BUSILLO’s delivery of $100,000 in United States currency in connection with its purchase, defendants BUSILLO and JOHN SERPICO deceived Capitol Bank as to the nature and extent of the risks associated with a loan to defendant BUSILLO for the purchase of this property.  In particular, among other things, they prevented Capitol Bank from making inquiries into the source of the currency, into any potential taxes, debts, and other liabilities associated with the currency and its transfer, and into any implications of the currency transaction for the safety of the bank’s collateral interest in the house and for defendant BUSILLO’s ability to make payments on the loan.  In addition, they caused Capitol Bank to participate in a transaction in which the real estate transfer tax was falsely stated and the sales price of the house was falsely represented to Cook County authorities responsible for the assessment and collection of real estate taxes.

106  It was further part of the scheme that on or about December 10, 1990, as result of the fraudulent representations and omissions by defendants JOHN SERPICO and MARIA BUSILLO, defendant BUSILLO obtained an $800,000 loan for the purchase of the house at 1871 Wagner Road.

In violation of Title 18, United States Code, Sections 1344 and 2.

     Racketeering Acts 16-20: Unlawful Financial Transactions

   Racketeering Act 16: 18 U.S.C. § 1957

107  On or about May 14, 1988, at Chicago, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, knowingly engaged and attempted to engage in a monetary transaction in criminally derived property of a value greater than $10,000, that is the transfer and exchange of $30,000 in funds from SERPICO to MARIA BUSILLO, affecting interstate commerce, by and through a financial institution, namely Midwest Bank & Trust, carried out through SERPICO’s purchase of a monetary instrument from Midwest Bank & Trust in the form of a bank check payable to BUSILLO in the amount of $30,000, and the deposit of that bank check into an account at Midwest Bank & Trust of which BUSILLO was a signatory.  The $30,000 transferred and exchanged in this manner was drawn from proceeds received by defendant JOHN SERPICO from the sale of his interest in Studio Network, Inc., such property having been derived from a specified unlawful activity, that is, the violations of Title 18, United States Code, Sections 1341 and 1954 more fully set forth above in Racketeering Acts 3 and 4, respectively;

In violation of Title 18, United States Code, Section 1957 and 2.

   Racketeering Act 17: 18 U.S.C. § 1957

108  On or about May 14, 1988, at Chicago, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, knowingly engaged and attempted to engage in a monetary transaction, affecting interstate commerce, in criminally derived property of a value greater than $10,000, that is the transfer and exchange of $160,000 in funds from SERPICO to MARIA BUSILLO, affecting interstate commerce, by and through financial institutions, namely Midwest Bank & Trust and First Savings Bank of Glenview, carried out through SERPICO’s purchase of a monetary instrument from Midwest Bank & Trust in the form of a bank check payable to First Savings Glenview in the amount of $160,000, and the negotiation of that check at First Savings Bank of Glenview, including the deposit of $151,000 in funds from that check into an account at First Savings Bank of Glenview of which BUSILLO was a signatory.  The $160,000 transferred and exchanged in this manner was drawn from proceeds received by defendant JOHN SERPICO from the sale of his interest in Studio Network, Inc., such property having been derived from a specified unlawful activity, that is, the violations of Title 18, United States Code, Sections 1341 and 1954 more fully set forth above in Racketeering Acts 3 and 4, respectively;

In violation of Title 18, United States Code, Section 1957.

  Racketeering Act 18: 31 U.S.C. § 5324(3)

109  From on or about May 16, 1988 through May 17, 1988, at Chicago, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, knowingly and wilfully, for the purpose of evading the filing with the Internal Revenue Service of a Currency Transaction Report (IRS Form 4789), as required by Title 31, United States Code, Section 5313(a), structured and assisted in structuring, and attempted to structure and assist in the structuring, of a transaction with domestic financial institutions, namely, by obtaining a total of approximately $68,000 in United States currency through a series of cash withdrawals, split deposits, and negotiations of cashier’s checks for cash, as further described below, at the following domestic financial institutions in the following amounts on or about the following dates:

Date      Amount    Financial Institution   Nature of Transaction

5/16/88   $9,000    Manufacturer’s Bank Split deposit of $50,000 cashier’s check payable to Manufacturer’s Bank and purchased on 5/14/88 from Midwest Bank & Trust. $41,000 deposited; $9,000 withdrawn in cash

 

 

 

 9,000    Capitol Bank and Trust  Split deposit of $50,000 cashier’s check payable to Capitol Bank and purchased on 5/14/88 from Midwest Bank & Trust. $41,000 deposited; $9,000 withdrawn in cash

 

 9,000    Midwest Bank & Trust    Negotiation for cash of $9,000  cashier’s check payable to John Serpico and purchased on 5/14/88 from Midwest Bank

 

5/17/88   8,200    Manufacturer’s Bank Negotiation for cash of $8,200  cashier’s check payable to John Serpico and purchased on 5/14/88 from Midwest Bank

 

 8,200    Capitol Bank and Trust  Negotiation for cash of $8,200  cashier’s check payable to John Serpico and purchased on 5/14/88 from Midwest Bank

 

 8,200    Midwest Bank & Trust    Negotiation for cash of $8,200  cashier’s check payable to John Serpico and purchased on 5/14/88 from Midwest Bank

 

 8,200    Gladstone Norwood Bank  Negotiation for cash of $8,200  cashier’s check payable to John Serpico and purchased on 5/14/88 from Midwest Bank

 

 8,200    Albany Bank             Negotiation for cash of $8,200  cashier’s check payable to John Serpico and purchased on 5/14/88 from Midwest Bank;

 

In violation of Title 31, United States Code, Section 5324(3).

 

             Racketeering Act 19: 18 U.S.C. § 1957

110  In or about August 1990, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, knowingly engaged in a monetary transaction, affecting interstate commerce, in criminally derived property of a value greater than $10,000, that is the transfer to defendant MARIA BUSILLO of cash in the amount of approximately $100,000 used in the purchase of a house located at 1871 Wagner Road, Glenview, Illinois, such property having been derived from a specified unlawful activity, that is, the violations of Title 18, United States Code, Sections 1341 and 1954 more fully set forth above in Racketeering Act 14;

In violation of Title 18, United States Code, Section 1957.

             Racketeering Act 20: 18 U.S.C. § 1957

111  In or about August 1990, in the Northern District of Illinois, Eastern Division,

                        MARIA BUSILLO,

defendant herein, knowingly engaged and attempted to engage in a monetary transaction, affecting interstate commerce, in criminally derived property of a value greater than $10,000, that is the transfer to a developer and a real estate agent of cash in the amount of approximately $100,000 used in the purchase of a house located at 1871 Wagner Road, Glenview, Illinois, such property having been derived from a specified unlawful activity, that is, the violations of Title 18, United States Code, Sections 1341 and 1954 more fully set forth above in Racketeering Act 14;

In violation of Title 18, United States Code, Section 1957.

All in violation of 18 U.S.C. § 1962(c) and 1963.

                           COUNT TWO

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1    Paragraphs 1 through 4 of Count One are realleged and incorporated herein by reference.

2    From not later than in or about May 1979 through in or about 1991, in the Northern District of Illinois, Eastern Division, and elsewhere,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, being persons employed by and associated with the CSJB Enterprise, which enterprise engaged in, and the activities of which affected interstate commerce, did conspire with each other and with others to violate 18 U.S.C. § 1962(c), that is, to conduct and participate, directly and indirectly, in the conduct of the affairs of the CSJB Enterprise, through a pattern of racketeering activity, as that term is defined in Title 18, United States Code, Section 1961(1) and (5), said pattern of racketeering activity consisting of multiple acts indictable under: 18 U.S.C. §§ 1341 (mail fraud), 1344 (bank fraud), 1954 (unlawful employee benefit plan payments), and 1957 (relating to monetary transactions in property derived from specified unlawful activity); and 31 U.S.C. § 5324(3) (structuring currency transaction to avoid reporting requirement).

3    It was part of the conspiracy that each defendant agreed that a conspirator would commit at least two acts of racketeering in the conduct of the affairs of the CSJB Enterprise.

In violation of Title 18, United States Code, Section 1962(d) and 1963.

                          COUNT THREE

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraphs 1 and 7-14 of Count 1 are realleged and incorporated herein by reference, as though fully set forth herein.

2.   On or about January 12, 1990, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a check in the amount of $19,391 from Near North National Title Corporation, that envelope being addressed to:

Mr. Vince Alesia

Vincent Paul Associates

1934 N. 76th Court

Elmwood Park, IL 60635;

 

In violation of Title 18, United States Code, Section 1341.

                          COUNT FOUR

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraphs 1 and 7-14 of Count 1 are realleged and incorporated herein by reference, as though fully set forth herein.

2.   On or about January 5, 1990, in the Northern District of Illinois, Eastern Division,

                         JOHN SERPICO,

 

defendant herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing an executed and recorded deed in trust, sent by the Cook County Recorder of Deeds to:

CAPITOL BANK AND TRUST

4801 W. Fullerton Ave.

Chicago, Illinois 60639

 

In violation of Title 18, United States Code, Section 1341.

 

                          COUNT FIVE

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraphs 1 and 7-14 of Count 1 are realleged and incorporated herein by reference, as though fully set forth herein.

2.   On or about September 14, 1990, in the Northern District of Illinois, Eastern Division,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope containing a commitment for title insurance from Chicago Title Insurance Company, that envelope being addressed to:

CAPITOL BANK AND TRUST

4801 W. Fullerton Ave.

Chicago, Illinois 60639

 

In violation of Title 18, United States Code, Section 1341.

 

                           COUNT SIX

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraphs 1 and 7-14 of Count 1 are realleged and incorporated herein by reference, as though fully set forth herein.

2.   On or about October 2, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be placed into an authorized depository for mail matter, to be sent and delivered by the United States Postal Service, an envelope containing a letter to developers of the house at 1871 Wagner Road  from their attorney, reporting on the status of matters concerning the purchase of that house by MARIA BUSILLO, that envelope being addressed to one of the developers at his residence in the Northern District of Illinois;

In violation of Title 18, United States Code, Section 1341.

                          COUNT SEVEN

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraphs 68 through 87 of Count One are realleged and incorporated herein by reference, as though fully set forth herein, except that they are hereby modified to identify GILBERT CATALDO as a defendant.

2.   On or about March 5, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                       JOHN SERPICO and

                       GILBERT CATALDO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be delivered by the United States Postal Service, according to the directions thereon, an envelope from Mid-City National Bank containing a commitment letter, that envelope being addressed to:

[Company A]

Chicago, Illinois      

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

                          COUNT EIGHT

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraphs 68 through 87 of Count One are realleged and incorporated herein by reference, as though fully set forth herein,  except that they are hereby modified to identify GILBERT CATALDO as a defendant.

2.   On or about May 2, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                       JOHN SERPICO and

                       GILBERT CATALDO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be placed in an authorized depository for mail matter, to be sent and delivered by the United States Postal Service, an envelope from Mid-City National Bank containing a letter relating to billing on a loan draw by 51 Associates Limited Partnership, that envelope being addressed to:

Mr. Kenneth Richardson

“51" Associates

313 North Mattis Avenue, Suite 209

Champaign, Illinois 61821

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

                          COUNT NINE

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraphs 68 through 87 of Count One are realleged and incorporated herein by reference, as though fully set forth herein, except that they are hereby modified to identify GILBERT CATALDO as a defendant.

2.   On or about June 6, 1990, in the Northern District of Illinois, Eastern Division, and elsewhere,

                       JOHN SERPICO and

                       GILBERT CATALDO,

 

defendants herein, for the purpose of executing the above-described scheme, and attempting to do so, knowingly caused to be placed in an authorized depository for mail matter, to be sent and delivered by the United States Postal Service, an envelope from Mid-City National Bank containing a letter relating to billing on a loan draw by 51 Associates Limited Partnership, that envelope being addressed to:

Mr. Kenneth Richardson

“51" Associates

313 North Mattis Avenue, Suite 209

Champaign, Illinois 61821

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

                           COUNT TEN

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

Racketeering Act 15 is realleged and incorporated herein by reference, as though fully set forth herein.

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

                         COUNT ELEVEN

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.   Paragraph 1 of Count One of this indictment is realleged and incorporated herein by reference.

2.   From in or about August 1990 through in or about December 1990, in the Northern District of Illinois,

                       JOHN SERPICO and

                        MARIA BUSILLO,

 

defendants herein, knowingly made and caused to be made false statements to Capitol Bank, the deposits of which were then insured by the Federal Deposit Insurance Corporation, for the purpose of influencing the action of said bank upon an application by and loan to defendant MARIA BUSILLO, in that defendants represented orally and in written documents provided to Capitol Bank that the price of the house being purchased by defendant BUSILLO at 1871 Wagner Road, Glenview, Illinois, was $800,000, when, in truth and fact, as defendants knew, the purchase price for the house was $900,000.

In violation of Title 18, United States Code, Section 1014.

                     FORFEITURE ALLEGATION

The SPECIAL FEBRUARY 1998 GRAND JURY further charges:

1.              The allegations contained in Counts One and Two of this Indictment are realleged and incorporated herein by reference for the purpose of alleging forfeiture pursuant to Title 18, United States Code, Section 1963.

2.              As a result of their violation of Title 18, United States Code, Sections 1962(c) and 1962(d), as alleged in the foregoing Indictment,

                                                             JOHN SERPICO and

                                                               MARIA BUSILLO,              

 

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 defendants have established, operated, controlled, conducted and participated in the conduct of, in violation of Section 1962, which interests, securities, claims, property, 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 1962(a)(3);

3.   The interests of the defendants, jointly and severally,  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 are not limited to:

   (a) approximately $1,200,000;

        (b) real property located at 520 South Collier Blvd.,                  Unit 103, Marco Island, Florida;

 

   (c) real property located at 1871 Wagner Road,

  Glenview, Illinois.       

4.   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 or sold to, or deposited with,

    a third party;

 

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

 

(d) has been commingled with other property which 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 the 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

________________________________________________-

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