Witness- Taxpayers footed bill for travel, suits, golf

Label hed: Fraud trial

By Mike Robinson ~ The Associated Press

CHICAGO -- The former manager of an insurance firm testified Friday that he and two other men used thousands of dollars from suburban Cicero's insurance fund to pay for trips to Russia and Kazakstan.

Frank Taylor also told jurors in the $10 million fraud trial of Cicero town President Betty Loren-Maltese and seven co-defendants that he treated himself to $10,000 worth of suits, a Florida vacation, golf clubs and other items with money earmarked for insurance claims.

A man federal prosecutors call the boss of the Cicero mob told him how much of the insurance money to contribute to Loren-Maltese's campaign fund -- a total of $10,000 over three years, Taylor testified.

Taylor, one of two key government witnesses, wrapped up two days on the witness stand, answering questions from Assistant U.S. Attorney Matthew M. Schneider about corruption in the long-troubled western suburb of Chicago.

He gave jurors a detailed account of how he headed Specialty Risk Consultants Inc., an insurance firm that prosecutors say was secretly owned by defendant and reputed Cicero mob boss Michael Spano Sr.

Taylor said it was Spano who told him how much to contribute to the Loren-Maltese campaign fund and Spano who approved trips to Russia and Kazakstan to drum up private business using Specialty Risk money.

That money had been paid to Specialty Risk by the town of Cicero to pay medical insurance claims by town employees, many of which went unpaid for months while the defendants helped themselves, he testified.

Specialty Risk also paid for trips to Nevada in a futile attempt to buy a bank and Minnesota to visit Richard Gravatt, whom Taylor had met while visiting his father in prison.

Taylor said Gravatt left prison promising to take care of him and followed through by tutoring him in high-risk financial investments.

"He was more or less my mentor in these programs," Taylor said.

Federal prosecutors are hoping that Taylor's testimony, which he is giving in hope of getting a lighter sentence, will help convince jurors that Loren-Maltese, Spano and others conspired to bilk Cicero.

Defense attorneys have been eager to pounce on Taylor's checkered past -- including admitted perjury -- on cross-examination to discredit him.

Before they could get started, though, U.S. District Judge John F. Grady ruled out any mention of information developed by FBI agents that Taylor might have used a prostitute's services as a payoff to a suburban mayor who was hoping to land a riverboat gambling casino in his town.

Grady also ruled out mention in FBI files of a similar bribe being provided to a banker with whom the witness was hoping to do business.

Once prosecutors finished with Taylor, veteran criminal defense attorney David Stetler settled down to the business of attempting to demolish the witness's credibility.

"You are by your own admission a perjurer, are you not?" asked Stetler, whose client is defendant Charles Schneider, a Chicago attorney who represented both the town of Cicero and Specialty Risk Consultants.

"Yes, sir," Taylor said.

Stetler got Taylor to tell how he and Gravatt had been indicted in a Minnesota investment scam and that his own friends and neighbors had been swindled out of some $200,000.

Taylor had admitted earlier that he had turned Gravatt in to FBI agents when the man had been hiding out and trying to raise funds to flee the country. Stetler reminded Taylor that he also got a deal from the prosecutors by turning government witness in the case.

"All you had to do was testify against the former mentor who had promised your dad he would take care of you?" the attorney asked.

"Yes, sir," Taylor said.

Then Taylor admitted that he had lied on the witness stand in that case by playing dumb when defense attorneys asked about Cicero.

"Your perjured testimony was part of the evidence that convicted your mentor?" Stetler asked.

"Yes, sir," Taylor said.