Day 978 U.S. vs Betty Loren-Maltese

By Ellen Warren
Tribune senior correspondent
Published July 19, 2002

Betty’s finally been muzzled

The blunt and bossy president of suburban Cicero has been uncharacteristically subdued for weeks now. Credit the feds for accomplishing what nobody — not Betty Loren-Maltese’s political foes, not all those negative newspaper stories, not even Cicero’s own reputed father-son mob squad — has been able to achieve until now: Repressing the heretofore irrepressible first lady of Cicero.

Betty, we hardly know ya. On trial in a federal courtroom in downtown Chicago for participating in a $10 million rip-off of Cicero taxpayer money, Loren-Maltese’s trademark false eyelashes and mahogany eye shadow are still there. Ditto the creamy lipstick in Bazooka pink. But her bigger-than-life personality and even her lacquered, bouffy hairdo seem somehow deflated.

And remember those getups, the often tight and sometimes tarty clothes she used to favor? For the jury, it’s baggy tunics in forgettable navy and forest green, or demure skirts that flow to midcalf.

A small golden pin of a guardian angel with a stars-and-stripes skirt is perched on her blouse. With ankles demurely crossed, bulging black pocketbook at her feet, she takes notes on a legal pad and hankers for a break in the testimony so she can high-tail it out to the street for a smoke.

It was during one of those cigarette breaks, as she fired up a Carlton 100, that I tried for a chat. Nothing substantive, she warned. Until the trial is over, she can only talk about “girl things.”

It has come to that. This tough, outspoken boss of Cicero, under orders from her top-dollar legal squad, is confined to chick chatter. What a difference an indictment makes.

“It’s her life at stake,” explains one of her attorneys, veteran defense lawyer Terence Gillespie. For Loren-Maltese, he says, “This is a very humbling experience.”

Ten million clams. Give or take a few bucks, Loren-Maltese and two former top town officials are accused of helping the mob loot that much from taxpayers in an insurance scam beginning in 1992.

They and five others are on trial for using a company they were involved with, Specialty Risk Consultants Inc., to administer the group health program for Cicero town employees. The government says that money Cicero workers put into the health program became the defendants’ personal piggybank.

The prosecution is trying to prove that much of the Cicero cash went to an ill-advised scheme to buy and renovate a run-down nine-hole golf course, centerpiece of a grandiose mob plan to create a luxury casino and hotel on an island in the Menominee River in the Wisconsin North Woods. It’s an area so remote that you’re hard pressed to find even the jet ski repair shops and brat-and-cheese stores that dot the Wisconsin vacation landscape.

But that’s not all. The money, the feds say, also went to buy new Cadillac de Villes for some of the scammers — they loved those black Caddys. Also: a “fantasy island” Wisconsin summer home on the Wolf River in Winneconne, Wis., for the family of alleged Cicero mob boss Michael Spano Sr. who, along with his lookalike, namesake son, Michael Jr., also is on trial here.

Another chunk of the purloined Cicero cash, the government charges, went for an Indiana horse farm for two more of the defendants, Spano’s business partner, John LaGiglio, and LaGiglio’s wife, Bonnie. Based on Mr. and Mrs. LaGiglio’s interactions in the courtroom (none) and the looks between them (deep freeze), the stress of their legal woes has not brought the couple closer.

It’s got to be rough, sitting just a few feet from each other at the defense table for the past two months. John LaGiglio’s’s colorful lawyer, Allan Ackerman, who sports black cowboy boots, black Levis and a foppish silk hanky drooping from his breast pocket, has acknowledged as much. He says Bonnie blames John for her troubles — and “I’m not sure she’s wrong.”

To round out this cast of characters — eight defendants in all — there is sharp-eyed Emil Schullo, the former Cicero police chief and public safety director who used to be a Loren-Maltese ally but now can’t stand her; former Cicero town treasurer Joseph DeChicio, who feels the same way about Loren-Maltese, and attorney Charles Schneider.

Two others indicted in the scam have pleaded guilty and testified against their old pals. They are Frank Taylor, who was the former day-to-day manager of the Specialty Risk firm, and Gregory Ross, a former veteran criminal investigator for the IRS, who became a trusted accountant to the mob, the government says.

Confused about who’s who? Add at least one lawyer for each of the eight defendants (Loren-Maltese, Schneider and DeChicio have two attorneys apiece) and you need a scorecard and color-coded nametags to sort it out. “I have trouble keeping them all straight,” Loren-Maltese admits, even though many of the crowd either worked for her, were fired by her — or both.

And “crowd” is the right word. There are so many players on the defense side of the courtroom that the feds have had to bring in four big folding tables to accommodate the overflow of indictees and their legal help.

With so much money changing hands, so many intriguing personalities on display, so much expensive legal know-how on deck, the trial had all the makings of a delicious and salacious soap opera. Alas, it’s not turning out that way.

For some tedious testimony, not a single soul sits in the row reserved for “press.” Hours and hours go by without even a reference to the once-flamboyant Loren-Maltese’s alleged involvement in the conspiracy to fleece her town. But, throughout it all she hangs in there, betraying none of the boredom that afflicts most spectators dropping by in hope of some fireworks. The courthouse regulars who occasionally show up don’t stay long, tiptoeing out the double doors in search of something more entertaining elsewhere in the Dirksen Federal Building. Often there are more people involved in the trial than there are watching it. So much for melodrama. “You would think it would be a lot sexier than it’s turning out,” says Loren-Maltese’s lawyer Gillespie. “After all, it’s a $10 million heist.” (Gillespie, incidentally, says Loren-Maltese is innocent, a hapless dupe who was “in over her head” when she was appointed president of Al Capone’s old stomping grounds in 1993.)

To put it bluntly, the trial has been a snooze. It’s mostly a paper trail, with witnesses explaining arcane accounting details that only an MBA could love.

On the witness stand to detail how one investment with stolen loot made a handsome profit for some of the defendants, a financial expert launched into an eye-glazing explanation of investment vehicles. “Do you want to know the details?” she asked lead prosecutor Mitchell Mars.

“Not too much,” said Assistant U.S. Atty. Mars, to the collective relief of virtually everyone in the room except the IRS agents who helped investigate this mess. Early on, U.S. District Senior Judge John Grady promised one group of potential jurors that the trial would be “an experience you will remember for a lifetime.”

Sure, if your idea of a big day is reading the U.S. tax code.

Contributing to the snore factor was Judge Grady’s early ruling that there could be no mention before the jury of the organized crime aspects of the case. The naughty three-letter M-word is not allowed in front of the jury, a diverse group that has seemed both attentive and long-suffering as the trial has moved slowly, deliberately forward.

Like any event that goes on for a while, this trial, now entering Week 10, has developed its own rhythms and rituals. “Inner workings of the peanut gallery,” is what William Paulin calls them. Paulin is an IRS agent in the criminal investigation unit who sits at the prosecution table every day, along with another IRS agent and two FBI agents. One of the FBI agents, Trish Holt, is a strikingly beautiful young blond who is much-discussed by male press, who find it almost inconceivable that she really works for the FBI.

“That’s the best part,” she says, suggesting that her deceiving appearance makes her especially good at her job.

In terms of court antics, high jinks, even vaguely amusing moments, Paulin can’t think of much. Various defendants who hate one another “do their little stare-down.”

Loren-Maltese is not among the “stare down” crowd. In fact, she’s nearly nondescript during the 9:30 to 5:30 daily courtroom routine, keeping her head down, studying the exhibits on a projection screen, jotting notes, only rarely conferring with her lawyers. As she peers at witnesses through enormous tortoise-shell glasses she looks a lot like a congenial schoolteacher, albeit one with a special fondness for makeup.

By contrast, “Mike’s been kind of fun” to watch, says Paulin, referring to Spano Sr. “He’s a little more relaxed than I would have been. I think he’s resigned to the fact that, `I’m the boss. I’m going to shoulder the responsibility.'”

That’s one interpretation. Most of the time, Spano seems to have a bemused smirk on his face, especially when his former associate Greg Ross was testifying against him.

After court one day, Spano Sr. and this reporter were making small talk when, apropos of nothing he said, “The government uses the bottom of the earth.” I took that to mean that he thinks that those who rat out their friends are the lowest form of human protoplasm.

Though Spano mentioned no names, it seemed pretty obvious he was referring to Ross, the traitorous IRS agent, who had been such a close friend that Spano was best man at Ross’ wedding. A huge color blowup photo of them at the wedding, holding glasses filled with champagne, was entered into evidence.

Could the envelope sticking out of Ross’ left tuxedo pocket in the photo hold the $3,000 wedding check from Specialty Risk Consultants that Ross testified he received as a wedding gift from his best man and two others?

Because he’s in court every day and in the hallway during the breaks, IRS agent Paulin doesn’t miss much. “You heard the allegations about tainted food?” he asked.

That seemed worth looking into. But, the exciting promise of “tainted food” turned out to something akin to a high school spat — over doughnuts.

As part of the daily routine, the Loren-Maltese contingent arrives before court with drinks and doughnuts, sometimes from a pastry emporium, sometimes from the Dunkin’ Donuts on Dearborn Street just south of the courthouse.

Loren-Maltese, her lawyers, her two security guards (she says threats on her life long ago require this protection) and her faithful friend, Cicero precinct captain Lorraine Walsh, then set up shop in a small witness room just across from Judge Grady’s 12th floor courtroom.

As it happens, one of the foes of Loren-Maltese’s Cicero regime shows up every morning to attend the trial and take notes. She’s Cicero resident Nadine Boyle, wife of David Boyle, an attorney, self-styled reformer and Loren-Maltese critic who has been battling her policies for many years.

One recent day both Boyles showed up and (Dave admits it was a little immature) took over the witness room before Loren-Maltese and her entourage arrived, just to get under her skin.

“I’ve watched her for 20 years,” Dave Boyle said later as he recounted the story. “I know her moves.”

“Oh,” he adds, “She hates my guts.”

“We were sitting there, eating our doughnuts. Whatever. Betty comes to the door and . . . I could almost see her wig spinning around! Then she makes an about face and marches down the hallway with her chief of security.”

Later, one of Loren-Maltese’s guards leaves her box of pastries on the table where the Boyles are still encamped and walks away.

Soon afterward, with the Boyles now in the courtroom, the guard confronts Dave Boyle. As Boyle recounts it: “He said, `That was pretty lame of you guys taking a bite out of our doughnut and putting it back.’ We looked at him like he was nuts.” (For the record, the Boyles insist they did not even open the Loren-Maltese pastry box, much less take a doughnut, eat a bite and replace the now-tainted sweet in the box.)

“Then,” Boyle continues, “Betty’s other security guard comes into the courtroom and goes out of his way to bump into my shoulder and sits down next to me in the front row. . . . He said, `What are you doing playing kids’ games with me? You know we set up across the way.'” There ensues a shouting match and, says Boyle and other witnesses, the guard tells him, “I’m making you my personal project” — whatever that means.

This little set-to led to one of the trial’s more dramatic pronouncements from the bench when Grady, getting wind of the dispute, declared that the friction must stop and that nobody can sit in the front row anymore.

Who would have thought that a box of doughnuts would wind up causing a bigger stir in the courtroom than the presence of several of the Chicago area’s alleged top mobsters?

Speaking of the Spanos, their appearance is mundane. Father and son, both with slicked-back hair, are well dressed, low-key, not physically imposing at all — around 5-feet-5 or 5-feet-6, 150 pounds tops.

Spano Sr. sometimes wears oversize aviator glasses that make him appear to be locked in a time warp from the Elvis era. And when he confers in court with his attorney, Alexander Salerno, he puts his hand over his mouth as though he suspects there are government lip readers assigned to figure out what he is saying.

The Spanos and I, and four or five of the defense lawyers, once shared an elevator and the older Spano jokingly asked me if I felt threatened — presumably by these reputed mob kingpins, him and his kid.

When I said, “Who wouldn’t, with all these lawyers around?” he got the joke and roared.

With the trial now entering its 10th week, Loren-Maltese’s lawyer, Gillespie, is optimistic that she will be acquitted. “The case is really very circumstantial against Betty. There’s been no smoking gun.”

The sheer length of the trial, expected to last another two weeks or so, is clearly getting to the defendants. DeChicio, the former town treasurer, sits apart from the other defendants, as close as he can to the spectator section. He seems to have entered a Zen-like state. With his hands folded across his belly in a Buddha pose, he swivels left, swivels right, swivels slowly and constantly as his adult daughter and elderly wife, who walks with a cane, sit silently nearby.

“It’s been hard,” says Loren-Maltese, her eyes filling with tears, when I ask if she gets to see her daughter, Ashleigh, 5, whom she adopted as an infant. The little girl lives with Loren-Maltese’s octogenarian mother, Kitty Loren, in their home in a gated community in Las Vegas.

As the trial drones on, it’s easy to lose sight of what is at stake for Loren-Maltese and the others. If convicted, the defendants face federal prison sentences in the 10- to 15-year range, plus fines and forfeitures of any ill-gotten profits, says the IRS’ Paulin.

“They have good attorneys. They knew when they got involved that this day, so to speak, could come,” Paulin says. “This is the cost of doing business. They, basically, have their whole existence on the line.”