Bureau Of National Affairs
Two Chicago Labor Leaders Convicted By Jury on Charges of Mail Fraud
By Michael Bologna
Wednesday, July 18, 2001
CHICAGO--Two Chicago labor leaders, including a former vice president of the Laborers International Union of North America, were convicted July 16 of steering union funds to banks and a development project in return for favorably priced personal loans and cash kickbacks (U.S. v. Serpico, N.D. Ill., No. 99 cr 570, 7/16/010).
A federal jury agreed that John Serpico and Maria Busillo had used their executive positions with the Central States Joint Board to direct union pension and benefit funds to banks that later provided the pair with personal loans. The joint 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 CSJB has also provided services to a local of LIUNA.
Serpico, who was president of the joint board between 1975 and 1994 and currently is a $50,000-per-year consultant to the board, was convicted of six mail fraud counts associated with the scheme. Busillo, who is the current CSJB president, was convicted of two mail fraud counts and one count of making a false statement to a bank.
Serpico was a former international vice president of LIUNA until he was forced to resign as a component of the Justice Department's 1995 effort to rid the union of corrupt influences and organized crime. Serpico testified before the President's Commission on Organized Crime in 1985 about his close friendships with Chicago's most notorious organized crime figures. Busillo, who is Serpico's long-time girlfriend, is also secretary-treasurer of the IUANPW.
A third defendant in the litigation, Gilbert Cataldo, was convicted on three mail fraud counts. Cataldo is a business associate of Serpico and is the former executive director of the Illinois International Port District.
Assistant U.S. Attorney David Glockner said the government would push for prison sentences for all three defendants. A sentencing hearing was scheduled for Nov. 1.
Glockner noted that between 1978 and 1990 Serpico and Busillo used their influence to steer CSJB funds to eight Chicago banks. In return, the pair received favorable terms on 17 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 the joint board.
Glockner noted that the government had sought convictions on counts for racketeering, conspiracy, and bank fraud. During the waning days of the two-month trail, however, U.S. District Court Judge Blanche Manning dismissed the charges, contending that the government's case was too weak to go to a jury. All the same, Glockner said, the government is pleased the defendants were convicted and will likely do time in prison for their misdeeds.
"We argued strenuously that the judge not dismiss these counts, but it was her call, and we will live with the results," Glockner said. "At the same time, we're very pleased with the jury's ultimate decision."
Mathias Lydon, who represented Serpico, could not be reached for comment on the conviction. Lydon, of the Chicago firm of Winston & Strawn, has said he would seek to overturn the jury's decision.
Copyright © 2001 by The Bureau of National Affairs, Inc., Washington D.C.