Ex-Union Boss Serpico Guilty In Deposits-For-Loans Scheme
By Matt O'Connor
Tribune staff reporter
July 16, 2001
A federal jury today found former union boss John Serpico guilty of six of seven counts of mail fraud, stemming from a scheme to deposit union funds in a Chicago bank in exchange for loans on favorable terms.
The jury of five men and seven women returned their guilty verdict against Serpico, 70, and two co-defendants after three days of deliberations in U.S. District Court in Chicago.
The defendants showed no reaction as U.S. District Judge Blanche Manning read the verdict. Manning set a sentencing date of Nov. 1. Prosecutors have said they will seek prison terms for the defendants, but haven't specified how much jail time each could face.
In closing arguments last Wednesday, federal prosecutors said Serpico deposited millions of dollars in union funds in a small Northwest Side bank so he and associates could obtain $5 million in personal loans from the bank.
Serpico's lawyer, Matthias Lydon, called the loans competitive and said Capitol Bank and Trust did his client no favors.
Serpico formerly headed Central States Joint Board, a Chicago-based umbrella organization of labor unions. He was appointed to the Illinois International Port District board in 1979 by then-Gov. James Thompson and was chairman of that board when he and his co-defendants were indicted in August 1999. Serpico is no longer on the board.
He was tried with two longtime associates, Maria Busillo, 55, and Gilbert Cataldo, 61. The jury found Busillo guilty of two counts of mail fraud and one count of lying on bank loan documents; and Cataldo guilty of three counts of mail fraud.
The three defendants remain free on bond until their sentencings.
Among the charges against him, Serpico was accused of taking kickbacks in return for lining up a $6.5 million union loan for a hotel project in Champaign, and using the proceeds of another loan to start a business housing illegal immigrants.
Last week, Manning dealt a blow to the government's case when she acquitted Serpico of four of 11 counts against him, calling the prosecution evidence too weak to go to the jury for a verdict. The ruling in effect dismissed racketeering, conspiracy, bank fraud and false statement charges.