New Mob Hierarchy Takes Over Cicero

AnchorIllinois Police & Sheriff’s News
New Mob Hierarchy
Takes Over Cicero

IPSN Newspaper, March March 26, 1997
Ernest Rocco Infelise was certain of two things when he entered the federal penitentiary: he would get a hot meal every day; and money would continue to flow into the hands of his Cicero cronies under the protection of the Town’s powerful Republican leaders.

When the FBI brought Infelise and 10 of his associates down, he was in charge of one of the most ruthless of Chicago’s Organized Crime Street Crews, protecting the mob’s Chicago street gambling interests and operating out of Flash Interstate Delivery Systems (Flash Trucking) at 1505 S. Laramie Avenue.

But his real contribution to Chicago’s mob family was not just his heavy-handed oversight of gambling collections and a stable of bookies that stretched from Indiana through Northern Illinois, but his control of the notoriously mafia-friendly suburb, Cicero.

It may have belonged to Al Capone back in the late twenties, but in 1990, Cicero was owned by Infelise and everybody knew it.

The Demise of Infelise

In the early 90s, Infelise, a prot�g� of the late Joseph Ferriola and the heir apparent to succeed Joey Auippa, personally approved the appointments of candidates to elective office in Cicero. Infelise controlled Cicero’s government and its hefty $50 million budget through a small time bookie and a member of his Street Crew, Frank J. “Baldy” Maltese.

Ferriola’s death gave Infelise more power, and absolute control of Cicero. Auippa’s incarceration gave him the independence he sought. He was already head of the enforcement division of the powerful and mob connected Teamsters Local 714.

With the backing of a now more powerful Infelise, Maltese was elected to office and quickly became the chief confidant of Town President Henry Klosak.

Frank had been married three times, and all three of his wives’ names were “Betty.

His third wife, Betty Loren, was a tough barroom gal who he had met at a Cicero bar. With his help, Betty landed a job working in the Liquor Control Commission office at Town Hall, and later, after she married Frank, was made the chief administrative aide to Klosak.

That gave Loren-Maltese power because Klosak came to work late and left before noon, leaving his Town Hall “President’s Office” under Betty’s and Frank’s control.

When Klosak died in December 1992, Betty was named his successor as Acting President. She was elected Town President in April, 1993.

The convictions of the Infelise Street Crew in 1991 and 1992 had threatened his organization’s survival. Infelise was sentenced to a hefty 68 year prison term. The mild-mannered and portly “Baldy” Maltese was fighting off an indictment on racketeering charges and anticipated following in Infelise’s footsteps.

It was Maltese, some believe, who came up with the scheme to control the Town’s insurance payment system, and that redirected profits to Infelise cronies. To insure that the plan would continue, even after “Baldy” Maltese was to go to jail, they agreed to put the town in the hands of Frank’s new wife, Betty Loren.

The Town folklore has it that Frank married Betty to prevent her from being forced to testify against him. Whether that was true or not, Frank also knew that Betty had enough experience to run Klosak’s administration and to protect a system that could funnel funds into the Infelise family.

“Baldy” Maltese had come up with a simple plan that could allow money to be skimmed from the Town’s $50 million a year budget with little notice.

Cicero is a self-insured town. The town’s 650 employees bring their medical bills to a town bureaucrat who reviews the bills and then authorizes payments. The payments were not made directly to the doctors or to the hospitals, however, but to an insurance management firm.

In 1992, that insurance management firm was Travelers.

Under the Maltese scheme, a new firm was created for the sole purpose of managing Cicero’s insurance program. That new firm was Specialty Risk Management, and it was owned in a partnership headed by John LaGiglio, an Infelise associate linked to Flash Trucking.

Several other Infelise associates also were a part of the Specialty Risk Management team that would come to Town Hall and meet behind closed doors with Frank Maltese, including Frank Taylor, and the nephew of Infelise associate Paul Spano.

LaGiglio’s company was hired in 1992 to work as a “student” with the Town’s regular insurance management firm, until they could learn the system.

In late 1993, Specialty Risk Management took over complete management of the insurance program. Specialty Risk received an exorbitant 30 percent commission on billings it processed, plus a $7,000 a month administration fee.

“Baldy” Maltese, who was the Town’s Assessor, was named as the insurance liaison who supervised the system. Knowing he would be going to jail eventually, “Baldy” Maltese believed he had enough time to solidify the arrangement. He died in October, 1993 of pancreatic cancer.

Handpicked by Infelise and her husband to run Cicero, Betty Loren-Maltese then named one of her top Town Republican Organization precinct workers and longtime Town Hall administrator, Bob Balsitis, to succeed “Baldy” Maltese and oversee the insurance program.

But when Balsitis saw that the payments the Town was making to Specialty Risk were thousands of dollars higher than the actual billings, he complained to Loren-Maltese. And Loren-Maltese fired him.

And, she fired his successor, Eugene Berkes. Finally, she put the job of administering the payments in the hands of an elderly lady and precinct worker who knew enough not to question the goings on in Cicero.

From Silver Shovel to OC 1

When Balsitis was first contacted by the FBI after his firing, Cicero was a top priority of the feds. FBI mole John Christopher had spread out money all over Chicago and even tried to use his friendships in Cicero to make some hooks.

But what began as a spin off of Chicago’s Silver Shovel probe in 1994, quickly turned into a new and separate federal probe of corruption in Cicero, focussing in on the Loren-Maltese administration.

In 1996, the FBI created a special Organized Crime Task Force to investigate Loren-Maltese called Special Unit OC-1.

Loren-Maltese was notorious for hosting lucrative fundraisers.

Cicero’s annual Golf Outing generated more than $400,000 in donations each year.

Loren-Maltese began a drive to consolidate political power, pushing aside political rivals. She forced an ally, Cook County Commissioner Allan C. Carr, to abruptly step down as Cicero Township Republican Committeeman in 1994, giving herself absolute control over the 200-member Town of Cicero Republican Organization that included many of the Infelise Street Crew and their families and even a distant relative of the late Anthony “Big Tuna” Accardo who controlled the Town’s Building Department. She appointed herself to take Carr’s place.

In 1996, she renamed the golf-outing in her own honor, and published a 500 page Campaign Ad book that added $200,000 to her growing Committeeman’s fund.

It was Betty’s ouster of Carr that opened the door to a new avenue of funds for her.

As a Republican Committeeman, Betty was permitted by law to raise money without having to disclose it publicly, as other elective officials are required to do twice each year.

In less than a year, her secret Committeeman Fund had risen from nothing to more than $1 million in receipts with $987,000 in the bank.

LaGiglio had escorted the widowed Loren-Maltese at the 1994 Golf Outing. It was at that time that LaGiglio, who was a well known friend of her late husband, detailed an investment his company had in a Northern Wisconsin property long known as a favorite summer hangout for the Capone gang back in the Twenties.

At that time, her campaign fund dealings were secret and she was not required to detail her fund’s activity. Loren-Maltese wrote three checks totaling $300,000 to a Specialty Risk Management sister firm, Plaza Partners. Both were officed in the same building in Schaumburg.

Loren-Maltese claimed she did not know that LaGiglio’s firm was associated with Plaza Partners, even though the deal she signed was with LaGiglio’s wife, Bonnie.

The details and legality of the investment are now the subject of an intense FBI probe of her administration. An original copy of the loan agreement never surfaced, but a draft copy listed the loan at $500,000.

Infelise Must Hate Politicians

Things might have continued to remain a secret had it not been for political developments beyond their control that Loren-Maltese continued to aggravate with headline grabbing controversies.

In 1995, suburban and downstate Republican leaders targeting Cook County’s Democratic party bosses passed a law in the Illinois General Assembly that required all committeemen in Cook County to fully disclose their funds. And in November 1995, Loren-Maltese quietly filed her paperwork disclosing the sweltering war chest in the offices of the Cook County Clerk.

By 1996, it had become the largest campaign war chest in Cook County, and had already drawn the attention of the Justice Department which was trying to trace funds that had been donated but that had allegedly not been disclosed.

Loren-Maltese, by now, was a political loose cannon.

She had named the Town’s Public Safety Building after her husband, drawing intense media criticism for naming a police building after a convicted felon.

News of her secret war chest had reached her eight elected colleagues on the Town Board in the summer of 1996.

Betrayed, several of the board’s members confronted her and asked her for an explanation.

Loren-Maltese reacted by firing her chief adviser, Public Safety Director Emil Schullo, a controversial but popular figure who was close friends with “Baldy” Maltese. With Schullo out of the way, Loren-Maltese began a purge of the Cicero Police Department, demoting and punishing those officers who were not loyal to her administration.

She then moved to dump three of her critics from the Town Republican Organization slate. The insurgents mounted a challenge to her re-election in the February 25 Republican Primary and lost.

Whoz daBoss?

After his incarceration, the Infelise Cicero Street Crew was brought under the control of Mike Spano whose brother Paul was among those sentenced with Infelise. Spano, also a cousin of Maltese, reports directly to two well known organization figures, Johnny “Apes” Monteleone and James Marcello.

Neither of them could control Loren-Maltese who privately boasted about her friendships with the known crime family leaders, and also of her independence and power.

During the heated battle against her former colleagues, Loren-Maltese reportedly met several times with Spano to work out a compromise by leaning on her challengers.

At the same time, her relationship with LaGiglio, which at one time was described as “friendly,” had soured quickly. No doubt her ties to Spano soured too, although he continued to work at Johnny “Apes” direction to “calm things down” in the Western suburb.

Loren-Maltese’s best defense was to blame the overpayments on LaGiglio, a Spano underling which she quickly did, and demanded that the money be repaid to the Town.

LaGiglio halted all processing of claims by the Town and told investigators that Cicero had a “$4.5 million credit,” which they would never recover.

But while Loren-Maltese had turned away from Spano, she had turned to a connected political powerhouse, Ed Vrdolyak for guidance out of her federal troubles.

Vrdolyak, who has fought hard over the years to distance himself from public associations with mob figures, was forced to surface during Loren-Maltese’s re-election campaign as her chief political adviser and strategist.

Vrdolyak had a major interest in Cicero, drawing legal consulting fees in excess of $1.19 million. It was a Vrdolyak pal responsible for the multi-million development along Cicero Avenue.

He personally directed the Loren-Maltese re-election campaign, selecting her political consultants, Dave Donahue and Lee Harris, and organized her street operation.

And, Vrdolyak assisted in directing the meetings of her massive precinct captain’s organization.

Whether Vrdolyak or Spano wields more influence over Loren-Maltese is yet to be determined. The FBI probe into her actions could lead to her certain indictment.

It could end mob control over Cicero, but more than likely, it will just open another chapter.