PORT CHIEF INDICTED IN ILLEGAL LOAN DEALS FRAUD
PORT CHIEF INDICTED IN ILLEGAL LOAN DEALS
A longtime powerful labor leader who is chairman of the Illinois International Port District was indicted Wednesday, along with an associate, on charges that they received large, unsecured loans and other favorable treatment from a Northwest Side bank in return for depositing union funds there.
John Serpico, ousted four years ago from his position with the Laborers International Union as part of a move to purge the union of mob influence, was charged with using his authority over millions of dollars in pension funds managed by Capitol Bank and Trust to secure the loans.
The 11-count indictment against Serpico of Lincolnwood, once the highest-paid union official in the country and Maria Busillo of Glenview, described in the indictment as Serpico’s “business and personal associate,” alleges that the two received at least $5 million in personal and business loans, principally from Capitol, on terms that were far more favorable than those offered to other customers.
Prosecutors said the loans allowed Busillo to buy a $900,000 home in Glenview and a condominium on Marco Island, Fla. They said Serpico and two partners received loans totaling $1.4 million from Capitol that were used to finance the construction of a building on Taylor Street on the Near West Side.
The indictment charges the two with mail fraud, bank fraud, labor kickbacks, money laundering and illegal structuring of currency transactions to avoid reporting requirements.
Serpico, 68, and Busillo, 53, are both officials of the Central States Joint Board, an umbrella organization of labor unions whose locals represent some 20,000 members.
Serpico is a past president and currently a consultant to Central States. Busillo is its president.
According to prosecutors, Serpico and Busillo were able to obtain favorable treatment because Central States kept more than $3 million in deposits at the bank, which also managed $16 million in union pension assets.
Also indicted Wednesday was Gilbert Cataldo, 59, an aide to Cook County Commissioner Al Carr and a former city housing commissioner and former executive director of the port district, a state-chartered agency established to encourage shipping through Chicago ports. He is charged with engaging in a scheme with Serpico to obtain more than $300,000 in kickbacks.
According to the charges, Serpico also used his influence over labor pension funds to secure a loan from them for a hotel complex in Champaign, but part of the money was used to pay the kickback to Cataldo.
Attorneys representing the three didn’t return calls for comment.
Serpico, a onetime city truck driver, is infamous in labor circles.
In testimony before the President’s Commission on Organized Crime in 1985, Serpico acknowledged that he was a friend of virtually every important organized crime leader in Chicago. But he also once said that those friendships were the result of the fact that they all grew up in the same neighborhood and that he had never engaged in any criminal activities.
In order to stave off a takeover by the government of the Laborers International, the union ousted him from office.
Since 1996, according to the U.S. attorney’s office, Serpico has served as a consultant to the Central States Joint Board. He also serves as chairman emeritus of three union pension or health plans.
In addition, Serpico has been a member of the Illinois International Port District since 1979, when he was appointed by then-Gov. James Thompson.
A spokesman for Gov. George Ryan said the terms of all four of the gubernatorial appointees to the board expired June 1, though they continue to serve. A Ryan spokesman said the governor has made no decision on whom he will name to the board.
Asked about what bearing the indictment would have on Serpico’s position on the board, a Ryan spokesman said “I am sure it will be considered.”
Many of the allegations against Busillo and Serpico revolve around the financing and construction of a hotel complex in Champaign known as Trade Centre South.
In 1990, according to the indictment, Busillo and Serpico used their influence to get two union pension plans, as well as the International Union of Allied and Novelty Production Workers, to lend money to the developers of the complex.
The three allegedly agreed to lend $6.5 million to the developers, who included a group of investors known as 51 Associates Limited Partnership.
At the time, Cataldo, a friend of Serpico’s, operated a business called Taylor West and Co., according to the charges. Prosecutors allege that 51 Associates paid Taylor West more than $300,000 for coordinating construction activities and providing architectural and engineering services.
But, the government said, Taylor West never provided those services, instead directing $100,000 of the money to Busillo. Prosecutors also allege that some of the $300,000 was funneled to Serpico.
The government is seeking the forfeiture of Busillo’s homes in Glenview and Marco Island and $1.2 million in cash from her and Serpico.
In 1996, Capitol Bank was sentenced to pay a fine of $800,000 after the bank pleaded guilty to conspiracy to commit mail fraud and bribery.