By the Associated Press
The former head of a Chicago-area Laborers' Local has been indicted
on racketeering and fraud charges. The charges include scheming
to get a kickback for hotel portion of the Trade Centre South
complex in Champaign. John Serpico, 68, of Lincolnwood was named
by a federal grand jury Wednesday in an 11-count indictment that
also charged two associates.
Serpico and Maria Busillo, 53, of Glenview,
also a union official, were charged with a wide pattern of fraud,
labor kick-backs, money laundering and camouflaging currency deals
starting as far back as 1979.
The two are former officers of Local 8 of
the Laborers International Union. Serpico resigned in 1996, as
the union was gearing up a nationwide campaign to sweep out mob
influence and corruption. Serpico is also the chairman of the Illinois
International Port District, an appointed post unrelated to the
charges in the indictment, prosecutors said.
The grand jury charges Gilbert Cataldo, 59,
a former port district executive director, with scheming with
Serpico to get kickbacks in return for making loan commitments
from a union pension fund. An attorney for Busillo, Cynthia Giacchetti,
said that she had not seen the indictment, which was made public
late Wednesday, and would have no immediate comment. Attorneys
for Serpico and Cataldo were not reached at their offices Wednesday.
The charges focused mainly on activities
of the Central States Joint Board, a little-known Chicago-based
labor group that operates two pension funds and a health and welfare
fund on behalf of eight locals. Serpico was an officer of the board from
1975 until 1996 and continues to be a board consultant. Busillo
is still on the board.
According to federal prosecutors, they were
able to control the affairs of the board because the locals that
sent members to serve on the board did not hold democratic elections.
Besides his posts with the Laborers and the
Joint Board, Serpico also was president of Chicago-based Local
10 of the International Union of Allied Novelty and Production
Workers from 1976 until 1994. Busillo now serves as Local 10
Several of the loans they received were unsecured
and some lightly secured, the indictment said. It said that in
some cases loans were made to cover interest payments on other
loans. Some loans covered 100 percent of the cost of real estate
purchases and business startups, prosecutors said.
The indictment outlined a complex web of
corruption involving a number of banks. It said that Serpico and Cataldo plotted
to get $333,850 in kickbacks in return for inducing both pension
plans and novelty and production workers to promise $6.5 million
in financing in connection with a hotel in the Trade Centre South
complex in Champaign.
Developers announced plans for the $20 Million,
120,000-square-foot, six-story office complex and 140-unit suites
hotel south of Kirby Avenue between State and Neil Streets in
1989. The development was to include a restaurant
owned by former Chicago Bears linebacker and University of Illinois
alumnus Dick Butkus, although that part of the project was later
Butkus attended a press conference at the
U of I's Levis Faculty Center to announce the project, after local
restaurant owners objected to a planned announcement on the 50-yardline
at Memorial Stadium. Champaign developers Ken Richardson and Randy
Hughes, Dick Butkus Enterprises and the Management Group of Chicago
were said to have pulled the project together under the umbrella
of 51 Associates Limited Partnership, which was created to build
Trade Centre South.
C.A. "Bud" Cataldo, president of
the Management Group, attended the press conference with Butkus.
Hughes is the property manager for the office
building at Trade Centre South. He said this morning that he
was not involved in the original financing of the project and
hadn't heard about the indictments. Richardson said there were two separate loans
on the original project, with the Chicago-based member of 51 Associates
handling the financing for the hotel and local financing obtained
for the office building.
Nobody from the Champaign-Urbana area was
involved in the financing of the hotel, he said.
Richardson still has an ownership interest
on both buildings. He is a partner in 51 Associates, which still
owns the hotel. He is also a partner in KDB Enterprises, which
owns the office building.
Richardson said he was never suspicious of
the hotel financing arrangements made in Chicago, and hadn't heard
about the indictments until this morning. "Am I surprised? Yes, I am," he
The indictment also said that Busillo got
a $125,000 loan to buy a condominium on Marco Island, Fla., in
return for a deposit of funds from a pension plan maintained for
the Joint Boardís staff. Busillo also bought property in the affluent
suburb of Glenview with money provided through the scheme, according
to the indictment.