Bureau of National Affairs
Former Chicago Laborers Union Leaders Sentenced to Jail on Fraud Conviction
By Michael Bologna
Wednesday, March 20, 2002
CHICAGO--Two former labor leaders in Chicago were sentenced to federal prison March 15 for their roles in a series of frauds that won them favorably priced loans and cash kickbacks for steering union funds to banks and development projects (United States v. Serpico, N.D. Ill., No. 99 CR 570, sentencing 3/15/02).
Judge Blanche Manning of U.S. District Court for the Northern District of Illinois ordered John Serpico, a former international vice president of the Laborers' International Union of North America (LIUNA), and Maria Busillo to serve 30 months and 15 months respectively for abusing their authority as executives of the Central States Joint Board. The board is a labor organization that administers pension and health and welfare plans for eight Chicago-based union locals and their 20,000 members. The union locals are affiliated with the International Union of Allied Novelty and Production Workers but also has provided services to a LIUNA local.
David Glockner, an assistant U.S. attorney, said Serpico was ordered to pay $30,000 in restitution to the CSJB and a $100,000 fine. Busillo also was ordered to pay a $100,000 fine. Serpico was president of the Central States Joint Board between 1975 and 1994 and was a $50,000-per-year consultant to the board after stepping down as president. Busillo, Serpico's longtime mistress, took over as president of the board in 1994.
Glockner, who is chief of the Justice Department's criminal division in Chicago, said Judge Manning also sentenced Gilbert Cataldo, who conspired with Serpico and Busillo, to 21 months in prison and a $5,000 fine.
During a two-month trial last summer, the government alleged that Serpico and Busillo used their influence to steer Central States Joint Board funds to eight Chicago banks. In return, the pair sought and received from those banks favorable terms on 17 different loans totaling $5 million. In addition, Serpico and Cataldo shared $333,850 in kickbacks after they propped up a struggling hotel construction project in Champaign, Ill., with a $6.5 million loan from the CSJB, according to the government.
For his role in the schemes, Serpico was convicted on six counts of mail fraud. Busillo was convicted on two mail fraud counts and one count of making a false statement to a bank. Cataldo was convicted on three mail fraud counts. The government had sought convictions on counts for racketeering, conspiracy, and bank fraud. Those charges, however, were dismissed when Judge Manning determined that the government's case was too weak to go to a jury.
Serpico, 71, once was considered a leading contender for the general presidency of LIUNA and was well known in Illinois political circles. In 1995, however, he was forced to resign from LIUNA as part of the Justice Department's effort to rid the union of corrupt influences and organized crime. In 1985, Serpico testified before the President's Commission on Organized Crime about his close personal friendships with Chicago organized crime figures.
Glockner said Serpico is appealing his conviction. He also requested a delay in his prison term while he undergoes surgery for a back ailment. Glockner said, however, Judge Manning ordered Serpico to surrender to prison authorities on June 28.