Cicero town president will serve 8 years or $12 million scam

CHICAGO -- The strong-willed woman who served for nearly a decade as president of suburban Cicero was sentenced Thursday to more than eight years in prison for a $12 million fraud the judge described as "the outrageous and relentless pillage of the town treasury."

Betty Loren-Maltese, 53, remained outwardly calm as U.S. District Judge John F. Grady said he had searched for some mitigating factor that would justify a less severe sentence and couldn't find "a single one."

"This was a wholesale betrayal of the naive faith of a whole town that trusted her," Grady said while scores of Loren-Maltese supporters who packed the courtroom looked on grim-faced and her longtime critics beamed.

In addition to giving Loren-Maltese the maximum sentence under federal guidelines, Grady fined her $100,000, ordered her to pay $8.4 million in restitution and set April 1 for her to start serving time. She must also forfeit $3,250,000 in assets.

Those convicted of federal felonies, including Loren-Maltese, must ordinarily serve at least 85 percent of their sentences in prison with the remainder of the time off for good behavior. Grady sentenced Loren-Maltese to 97 months in federal prison.

Racketeering scheme

Loren-Maltese was among seven individuals convicted in August -- including a man prosecutors call the boss of the Cicero mob -- of an insurance racketeering scheme that swindled the town out of $12 million.

Cicero, just west of the Chicago city limits, has been known as a haven for corruption since the 1920s when Al Capone made it the hub of his bootlegging empire.

So much money was taken in the insurance scheme that led to Thursday's sentencing that some Cicero town employees were even told that their medical services -- cancer treatments in the case of one woman -- could be halted because insurance payments were not being made.

Prosecutors say $4 million of the stolen money is still unaccounted for.

Despite a decade of controversy, including the wholesale firing of police officers and hints of mob influence, Loren-Maltese has been highly popular with Cicero voters, brushing aside all election challengers.

On the eve of the sentencing, they held a prayer vigil for her, some wearing "Free Betty" T-shirts with an exaggerated pair of eyes and eyelashes -- a reminder of her trademark heavy makeup and flamboyant hair.

Loren-Maltese's attorneys had urged Grady to lighten her sentence so that she could be free to take care of her adopted daughter, Ashleigh, 5.

Grady brushed that aside, saying families always suffer in criminal cases and she knew she was under investigation when she adopted Ashleigh.

He also questioned a claim by Loren-Maltese that she had moved the girl to a home she owns in Las Vegas because of threats against the child in Cicero.

Grady said Loren-Maltese, who according to prosecutors has done a total of $18 million in casino gambling in recent years, may have moved the girl to Las Vegas so that she, herself, could frequent the casinos.

Loren-Maltese appeared upset by references to her daughter. The girl's birth mother, Dawn Weleba, in recent days has complained that Loren-Maltese has made the girl a pawn in the fight with federal prosecutors.

"I have always tried to protect her and keep her out of politics and not let her be used as a pawn," Loren-Maltese said as Weleba looked on.

"I think probably an adoptive parent loves her child even more than a natural parent because they know how lucky they are," Loren-Maltese said.

Loren-Maltese left the courthouse afterward without comment.

About two dozen of her political foes who also were in court, however, were elated by the sentence and even sang, "Hey, hey, goodbye" as she left the building. A persistent critic of government in the corruption-plagued suburb, attorney David Boyle, said: "I got out of Vietnam and the Marine Corps in one trip and this feels even better than that."

U.S. Attorney Patrick Fitzgerald told reporters he was "gratified by today's sentence by Judge Grady."

"Obviously, he sent a message when public officials abuse trust, that's something the courts take very seriously," Fitzgerald said.

"I think he sent a clear message that if people think they can loot a town, and loot a town even single-handedly, and steal money that comes out of the pockets of the citizens' insurance funds, that courts will take this seriously and send a message that you will pay in very real jail time," Fitzgerald added.

Prosecutors asked Grady to bar Loren-Maltese from gambling casinos pending the start of her sentence, saying she could fritter away the remainder of her assets at the slot machines, leaving nothing with which to pay the forfeiture and restitution amounts. But Grady said he was unsure that he had that authority and set a hearing on the subject for next week.

Grady said, "If she wants to gamble a few dollars at the casino, I don't want to prevent that. I don't want her to break the bank."

"Give her some walking around money between now and April 1," he said.

Earlier Thursday, Grady sentenced Loop attorney and accountant Charles Schneider to seven years and three months in federal prison for his role in the scheme. Schneider was convicted of helping to set up the fraud and hiding it from the Internal Revenue Service.

Grady said Schneider was a "decent man" who got "some thrill out of working with a man like Mr. Spano. Maybe he even went further and associated with someone higher up in the so-called organized crime network."