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Two Union Leaders Indicted For Defrauding Pension Plan

 

 

By Michael Bologna

Wednesday, August 11, 1999

 

 

CHICAGO (BNA) -- A federal grand jury in Chicago returned an indictment Aug. 4 against two union leaders for engaging in a pattern of criminal activity that included fraud, soliciting kickbacks, money laundering, and illegal currency transactions.

 

Scott Lassar, U.S. attorney for the Northern District of Illinois, said criminal indictments were returned against John Serpico and Maria Busillo, who were executives of the Central States Joint Board. The CSJB is a labor organization that administers pension and health and welfare plans for eight Chicago-based union locals and their 20,000 members. Among others, locals of the Laborers International Union of North America and the International Union of Allied Novelty and Production Workers were affiliated with the CSJB.

 

Serpico was president of the CSJB between 1975 and 1994 and is still a consultant to the organization. Serpico was also an international vice president of LIUNA until he was forced to resign as a component of the Justice Department's effort in 1995 to rid the union of corrupt influences and the control of organized crime. Busillo is the current president of the CSJB and holds officer positions with several of the union locals affiliated with the CSJB.

 

The indictment indicates that Serpico and Busillo exercised near complete control over the CSJB and used their influence for a variety of illegal schemes. Among other things, the indictment accuses the pair of steering CSJB assets to various banks in return for favorable terms on personal and business loans totaling more than $5 million. They were also accused of defrauding CSJB pension plans by soliciting and receiving kickbacks in return for a speculative mortgage loan from the plans for the construction of a hotel in Champaign, Ill.

 

Serpico and Busillo were each charged with one count of racketeering, racketeering conspiracy, bank fraud and making false statements on a bank application. Serpico and Busillo were charged with seven and two counts of mail fraud respectively. A third defendant, Gilbert Cataldo, was charged with three counts of mail fraud. Cataldo was alleged to have conspired with Serpico to obtain various kickbacks.

 

Serpico and Busillo could not be reached for comment on the allegations.


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