BY CAM SIMPSON FEDERAL COURT REPORTER
August 16, 1999
The former U.S. Marshal for Chicago teamed
with a union boss tied to organized crime in a company bankrolled
with a loan that led to a federal racketeering charge this month,
the Chicago Sun-Times has learned.
The deal involved former marshal Peter J.
Wilkes and John Serpico, the head of the Illinois International
Port Authority who was indicted for allegedly using his union
muscle to get a series of illegal bank loans. It's the first known connection between Wilkes
and Serpico, and the Chicago Crime Commission called their association
an "utter outrage."
Most troubling to the law enforcement community
is that the U.S. Marshals Service runs the ultra-secretive federal
witness protection program, where mob turncoats cooperating with
the government hide from their old pals. Mobsters who turn on their associates are
relocated for their safety--often with their extended families--and
given new identities, jobs, cash and even bodyguards. U.S. marshals
also transport jailed mobsters who are secretly cooperating with
Wilkes is not charged in the racketeering
Serpico is a longtime associate of Chicago's
top crime bosses, according to a federal racketeering lawsuit
filed last week. The government said the mob was involved in an
umbrella group for several unions Serpico controlled and his decisions for another union "were influenced
by organized crime." Insiders are also amazed that one of their
clients was the federal government--running a detention center
for illegal aliens for the U.S. Immigration and Naturalization
Service. INS is a branch of the Justice Department.
Wilkes formed the company--Protective Service
Systems, Inc.--two months after he resigned as U.S. Marshal on
Sept. 12, 1986, state records show. At the time, he was being investigated for
entertaining a girlfriend on government money, basing personnel
decisions on sexual favors, and misuse of confiscated property.
He was not charged and denied any wrongdoing. It's unclear when they became business partners,
but the indictment alleges the startup cash for the company came
from an illegal loan secured by Serpico.
The timing of their partnership raises questions
about what, if any, connections the men had while Wilkes was still
one of the area's top law enforcement officials, said Wayne Johnson,
chief investigator for the Chicago Crime Commission. Even if the men's ties were made after Wilkes
stepped down, it's "a connection that would lead the Chicago
Crime Commission to a feeling of utter outrage," Johnson
said. The indictment names the company, but not
Wilkes, who is referred to only as "Individual B."
Serpico, 68, of Lincolnwood, was indicted
for steering union funds to favored banks in return for sweet
deals on personal and business loans that normal customers couldn't
get, the indictment charges. Many were totally unsecured. Some
had easy payment plans.
The key bank involved, Capitol Bank &
Trust, pleaded guilty for its role in the scheme and paid an
$800,000 fine. One of the nine loans cited in the indictment,
for $195,000 from Capitol, was used by Wilkes' company to buy
a building at 4842-44 W. Fullerton, according to the indictment,
corporate records and sources familiar with the case.
The indictment says the building was used
to hold illegals for INS. The agency refused to answer questions
about the deal, even the value and length of the contract. Law
enforcement sources, however, said the arrangement was short-lived.
The deal came after Serpico admitted his
ties to a string of top mobsters at a well-publicized 1985 appearance
before the President's Commission on Organized Crime. Serpico
testified he was only a friend of the mobsters, not a business
According to land records and sources, the
men bought the building, the former headquarters of a Polish-American
fraternal club, on Nov. 16, 1988. They made their purchase through
a trust set up by Capitol Bank, which allowed them to keep their
names out of ownership records normally open to the public. The
building was sold June 30, 1990, apparently after the deal with
the immigration agency ended.
Wilkes refused last week to answer questions
about his relationship with Serpico. "I don't have any comment
about that," he said by phone. His company provides building
security for landlords. Serpico and his lawyers have not commented
on his indictment and did not return phone calls last week. His
chair of the authority, the sprawling South Side industrial harbor,
has expired. Gov. Ryan is weighing his reappointment.