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Monday, March 15, 2010

Department of Justice Comments on Rudy Fratto Arrest and Indictment

A west suburban man who allegedly represented himself as a member of the “Chicago Outfit,” was arrested on federal charges accusing him and a co-defendant of engaging in a contract bid-rigging scheme to provide forklift trucks for trade shows at McCormick Place Convention Center. A two-count indictment returned by a federal grand jury yesterday was unsealed following the arrest of Rudolph Carmen Fratto by FBI agents. Fratto and William Anthony Degironemo, were charged with fraud for rigging a 2006 contract awarded by Las Vegas-based trade show general contractor Greyhound Exposition Services (GES), to Degironemo’s business, MidStates Equipment Rentals and Sales, Inc. Degironemo was also charged with lying to federal agents during the investigation, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, and Robert D. Grant, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.

Fratto, 66, of Darien, also known as “The Chin” and “Uncle Rudy,” who was charged with one count of mail fraud, was scheduled to be arraigned before U.S. Magistrate Judge Maria Valdez in U.S. District Court. Degironemo, 66, of Inverness, also known as “Billy D,” who was charged with one count of mail fraud and one count of making false statements, will be arraigned at a later date in Federal Court.

Mr. Fitzgerald and Mr. Grant praised the valuable assistance of agents of the Department of Labor, Office of Inspector General, and the Internal Revenue Service, and noted that GES has cooperated throughout the investigation.

According to the indictment, in 2001, unnamed Individual A started a trade show company in Chicago (identified as “Trade Show Company A”) in which purported members of a Cleveland organized crime family, as well as Individual B, a lawyer in Chicago (“the Investors”) invested approximately $350,000 in 2001 and 2002. In 2003, Trade Show Company A went out of business and the Investors began to re-characterize the investment as a “loan,” which they demanded Individual A repay. Unknown to anyone at the time, Individual A, in January 2004, reported these attempts to collect on the “debt” to law enforcement and began cooperating.

Also in 2001, Individual A began working for GES pursuant to a consulting agreement that precluded Individual A from disclosing confidential information and from negotiating with potential bidders vying for subcontracts with GES. Among GES’s clients who used McCormick Place for trade shows were the International Machine and Tool Show (IMTS) and the National Plastics Exposition (NPE). GES issued requests for proposals each year to potential vendors to submit bids to provide forklifts for one or more shows staged by GES. In his consulting role, Individual A and three GES managers were responsible for deciding which vendors would receive forklift subcontracts for the IMTS and NPE, the indictment states.

Between July 2005 and October 2008, Fratto allegedly made representations to Individual A about Fratto’s standing and association with the Chicago Outfit, and he promised to use his position with the Outfit to intercede on Individual A’s behalf concerning the debt Individual A purportedly owed to the Investors. In return, Individual A was to provide Fratto and Degironemo with non-public bid information concerning bids GES received for the 2006 IMTS and NPE forklift subcontracts and to use his position to help steer those contracts to Fratto and Degironemo. In attempting to obtain those subcontracts, Degironemo made false representations to GES about the ability of Midstates to perform the contracts, the indictment alleges.

More specifically, in July 2005, Fratto allegedly told Individual A, in essence, that if Fratto and Degironemo could get the 2006 forklift subcontract, then Fratto would assist Individual A with his “debt to Cleveland.” As part of the scheme, Fratto and Degironemo agreed to split all profits and proceeds from the subcontract between themselves and Individual A, with each receiving one-third of the proceeds, the charges allege. Fratto allegedly suggested that Individual A could use his share to repay the “debt” he owed. In December 2005, without the knowledge or consent of GES, Fratto and Degironemo allegedly received from Individual A non-public pricing information that they had requested concerning a competitor’s confidential bid. Around Dec. 8, 2005, Fratto and Degironemo discussed with Individual A leaving MidStates’ proposed rate figures blank so that Individual A could fill them in during the course of a GES meeting to decide the winning bid. In January 2006, Fratto and Degironemo allegedly used confidential information that they obtained from Individual A about their competitor’s bid to prepare their own bid for the forklift subcontracts for the 2006 IMTS and NPE. On Jan. 15, 2006, MidStates submitted its proposal to GES with rates lower than its competitors’ bids, according to the indictment.

As part of the scheme, Fratto and Degironemo asked Individual A to support MidStates’ claim that it was a reliable and trustworthy forklift company, and on Jan. 29, 2006, GES awarded MidStates the 2006 IMTS and NPE forklift subcontracts. In April 2006, Degironemo, through Individual B, sought to further bolster MidStates’ qualifications by causing four individuals to write reference letters falsely stating that MidStates had previously provided various forklift services to their full satisfaction when, in fact, no such services were ever provided. At a meeting with GES management, Degironemo provided flyers asserting that MidStates was a “leader in the rental material handling industry for over twenty years,” which “offer[ed] one of the most diverse fleets [of forklifts] in the industry,” when, in fact, MidStates was not actively involved in the forklift business, the indictment alleges.

Degironemo alone was charged with lying to FBI agents on Aug. 18, 2008, when he stated that he “had no idea what MidStates’ competitors’ forklift pricing was prior to submitting the MidStates bid for the IMTS forklift contract,” allegedly knowing that the statement was false.

The government is being represented by Assistant U.S. Attorneys T. Markus Funk and Marny Zimmer.

The mail fraud count carries a maximum penalty of 20 years in prison and a $250,000 fine, and making false statements carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the court would determine a reasonable sentence to impose under the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Multiple Country European Mafia Round Up

Police across Europe arrested 69 suspected members of a Georgian-run mafia, including 24 in Spain, which was leading the investigation, a National Court spokeswoman told CNN Monday.

Other arrests were in Germany, Austria and Switzerland, whose prosecutors worked with their Spanish counterparts on the case. There were also a few arrests in France and Italy, said the spokeswoman, who by custom is not identified.

The suspects, wanted for drug trafficking, extortion and money laundering, and in a few cases for murder plots, were thought to have operated at a level close to the street, controlling local mafia networks, she said -- they are not thought to be high-style mafia kingpins living in mansions and surrounded by luxuries.

Some Spanish media reported the suspects were linked to a Russian mafia, but the court spokeswoman said investigators had told her it was Georgian-run.

In Spain, the national police worked with regional police in Catalonia and the Basque region to make the arrests, mainly in the Barcelona and Valencia areas, she said.

There has long been speculation that mafias were involved in money laundering through Spain's housing and real estate bubble along the Mediterranean coast, where second homes were built for vacationers from Spain and northern Europe.

Tens of thousands of these homes remain unsold or unfinished in the economic downturn.

Numerous local Spanish politicians have been arrested on suspicion of accepting bribes or kickbacks to permit rampant construction that far exceeded demand.

Thanks to Al Goodman

Friday, March 12, 2010

Rudy Fratto Indicted on McCormick Place Bid-Rigging Scheme

Reputed mob lieutenant Rudy Fratto was arrested this morning after being charged with using inside information to rig a bid and win a forklift contract at McCormick Place.

Fratto, 66, was charged along with William Anthony Degironemo, 66, of Inverness, who runs MidStates Equipment Rentals and Sale.

Rudy Fratto Indicted on McCormick Place Bid-Rigging SchemeFratto was taken into custody at about 7:45 a.m. He joked with the Chicago Tribune's John Kass that it was "not too early" and that he was able to have his coffee.

Wearing jeans and a black jacket, he entered a plea of not guilty.

Prosecutors say Fratto and Degironemo were able to squeeze information from a worker at Greyhound Exposition Services (GES) of Las Vegas to win a forklift contract in 2006. The contract covered two shows at McCormick Place.

The worker owed a debt to members of the Cleveland organized crime family and a Chicago lawyer, and Fratto promised to use his "standing and association with the Chicago Outfit" to help him, prosecutors allege. Fratto told the worker he would help with the worker's "debt to Cleveland," authorities said. Fratto, Degironemo and the witness were to split the profits equally, they said.

Using the information, Fratto and Degionemo submitted the lowest bid and landed the contract, according to an indictment handed down Thursday.

Degironemo also had the Chicago lawyer arrange for four people to write reference letters on behalf of MidStates, according to the charges. And Deironemo provided GES with materials claiming his company was a leader in the forklift industry when the company wasn't actively involved in such work, authorities said.

The new charges against Fratto -- a reputed lieutenant in the Elmwood Park street crew of the Chicago Outfit -- comes more than a month after he was sentenced for tax evasion.

Fratto had admitted he failed to report nearly $200,000 in income in 2005. Federal authorities had said Fratto brought in income for several years by directing payments to him to come through a defunct company he ran.

In 2005, an FBI agent said Fratto was one of five high-ranking organized crime figures who met with Rosemont Mayor Donald Stephens to discuss what control the mob would have over contracts at a casino Stephens wanted to build in the town.

Sitting with Stephens at Armand's restaurant in Elmwood Park were Fratto, reputed mob leader Joey "The Clown" Lombardo, John "No Nose" DiFronzo, his brother Peter, and Joe "The Builder" Andriacchi, according to John Mallul, head of the FBI's organized crime unit in Chicago.

Mallul said agents learned of the May 29, 1999, meeting just days after it occurred from a longtime FBI informant who also was there. Stephens denied he had met with the men.

In January, Fratto was asked by a Tribune reporter about his alleged status in the Outfit. He said he was a "reputed good guy" and said he had no prior criminal history.

After the new charges were announced in court today, U.S. Magistrate Judge Maria Valdez ordered Fratto released on $200,000 bond and on home confinement. He is to report to custody April 27 to begin serving time in the tax case.

A lawyer for Fratto, Donald Angelini, asked Valdez to allow Fratto to attend his son's high school hockey games, and the judge agreed.

Thanks to Jeff Coen

Biography of Sam Giancana

Born Gilormo Giancana, upon May 24, 1908, in Chicago, Illinois. Baptized Momo Salvatore Giancana and good well known as Sam, he grew up in a severe area upon the West Side of Chicago, as the son of Sicilian immigrants. As a teenager, Giancana led a travel squad called “The 42s,” who carried out low-level tasks for members of the absolute Chicago Mafia of the 1920s, led by the scandalous mafiosi Al Capone. Giancana got a pursuit as a “wheelman,” or driver, in the Capone organization, and was arrested for the initial time in 1925, for automobile theft. He shortly graduated to “triggerman,” and by the age of twenty had been the budding theme in 3 attempted attempted attempted murder investigations, though was never tried.

In 1933, Giancana tied together Angeline DeTolve; the integrate had 3 daughters. (Their daughter Antoinette published a memoir, Mafia Princess, in 1984.) Giancana climbed the host ranks via the rest of the decade, as the care in Chicago altered with the jailing of Capone in 1931 (he died in 1947). He initial served prison time starting in 1939, for illegally production whiskey. After his recover in the early 1940s, Giancana set out to take over Chicago’s bootleg lottery gambling operations, quite those in the city’s primarily African-American neighborhood. Through a heartless fibre of events, together with beatings, kidnappings, and murder, he and his associates won carry out of the numbers racket, augmenting the Chicago Mob’s annual income by millions of dollars.

A clergyman who interviewed Giancana during his Selective Service earthy hearing during World War II personal the mafiosi as a “constitutional psychopath” who showed “strong eremitic trends.” As a result, Giancana perceived 4-F standing and was unfit from troops service. He profited from the fight upon the homefront, creation a happening production tawdry allotment stamps. By the finish of the war, the Giancana family had changed from the city to a residence in the abundant Chicago suburb of Oak Park.

When Anthony “Tough Tony” Accardo stepped down as the conduct of the Chicago Outfit (as the city’s bend of the Mafia was known) in the mid-1950s, Giancana ascended to the tip spot. By 1955, he tranquil the gambling and harlotry operations, narcotics trafficking, and alternative bootleg industries in his hometown. Under his leadership, the Chicago Mafia grew from a comparatively small-scale pole to a bone-fide rapist organization. He after told an representative for the Federal Bureau of Investigation (FBI) which he “owned” not usually Chicago, though Miami and Los Angeles as well.

In 1959, FBI agents planted a microphone in a room at the Armory Lounge in the suburb of Forest Park, which served as Giancana s headquarters. For the subsequent 6 years, they were means to eavesdrop upon the workings of the Mafia and benefit hold of most rapist activities in Chicago and around the country. Though Giancana s power as Chicago’s preeminent crime trainer was already streamer towards the finish by the tighten of the 1950s, his trail in the 1960s would cranky with dual of America’s most absolute men: Robert and John F. Kennedy.

After Angeline s death in 1954, Giancana became scandalous for his decorated amicable hold up and visit womanizing. He was a crony of the thespian and singer Frank Sinatra, and reportedly used Sinatra as a go-between with Attorney General Robert F. Kennedy, who was alienating the Mafia with his relentless debate opposite orderly crime in America. (The intervention was assumingly unsuccessful, as Robert Kennedy swayed FBI Director J. Edgar Hoover to place Giancana’s home in Oak Park underneath 24-hour notice in 1963.) Giancana’s countless lovers enclosed Phyllis McGuire, of the McGuire Sisters singing group, and Judith Campbell Exner, an singer who would couple Giancana to an even some-more absolute man: President John F. Kennedy, with whom Exner became concerned when she was still saying Giancana.

Giancana’s assorted ties to JFK have prolonged been the theme of speculation. Many historians hold which list seasoned mixture in Chicago (then underneath the carry out of old-school Democrat Mayor Richard Daley) helped safeguard Kennedy’s choosing in 1960. Giancana himself reportedly claimed which he had helped run a vote-stealing fraud in Cook County, Illinois, a district which had been the determining cause in Kennedy’s victory. On the alternative hand, there have been additionally determined rumors of Mafia impasse in JFK’s 1963 assassination, maybe as punish for what they saw as the ingratitude of the Kennedys in the form of RFK’s electioneer opposite orderly crime.

Whatever Giancana’s specific couple to JFK was, the dual group had a nemesis in common: Fidel Castro, whom Mob leaders hated since he had taken over Cuba, with the endless gambling rackets. The Kennedy Administration, obviously, noticed Castro’s Communist system of administration as a hazard to inhabitant security, as evidenced by the barbarous Bay of Pigs advance in Apr 1961. The tie between Giancana and Kennedy would again be the theme of conjecture when report after flush which the Mafia and the Central Intelligence Agency (CIA) had assimilated forces someday in the 1960s to tract Castro’s assassination.

In 1965, Giancana was put upon hearing for refusing to attest prior to a Chicago grand jury questioning orderly crime. He was condemned to a single year in jail. Upon his release, Giancana trafficked to Mexico, where he lived in self-imposed outcast until 1974. He was extradited which year by the Mexican authorities to attest prior to an additional grand jury. He was postulated shield from sovereign charge and appeared prior to which jury 4 times, though supposing small report of use.

Giancana was subsequent called to attest prior to a United States Senate cabinet questioning Mafia impasse in a unsuccessful CIA tract to attempted murder Castro. Before he was scheduled to testify, Giancana flew to Houston, Texas, and underwent gall bladder surgery. He returned to his Oak Park home upon Jun 17, 1975. Two days later, Sam Giancana was shot once in the back of the conduct and multiform some-more times up by the chin with a .22-caliber pistol whilst in progress in his basement. Though theories abounded as to who killed him (rival Mafiosi, CIA operatives shaken about his destiny testimony, a single of most former girlfriends), no a single was ever arrested in tie with the murder.


Thanks to Full Issue

Thursday, March 11, 2010

The Jimmy DeLeo Era Begins

An important Illinois political story took place on Wednesday.

It didn't happen in Springfield or at Chicago's City Hall.

It took place on a quiet street in Oak Park. There were no TV cameras, no press aides. It was a somber ritual marking the transfer of power.

Sam Banks, the longtime political boss of the 36th Ward on the Northwest Side of Chicago, was laid to rest. He passed away after a long bout with cancer. The funeral was held at St. Giles Roman Catholic Church.

One of Sam's pallbearers was his former political apprentice, State Sen. James DeLeo, D-How You Doin'?

Sam was the guy for years. But there's a new guy now, reaching beyond the ward, from Rush Street to Rosemont and beyond:

Jimmy.

The night before, at Salerno's Galewood Chapels on North Harlem Avenue, thousands of clout-heavy people attended the wake in rooms crammed with flower arrangements.

Attendees included trucking barons, asphalt kings, Republican and Democratic officials from across the state, right down to Christy Spina, the former driver for imprisoned Outfit boss Joey "The Clown" Lombardo. And there were plenty of judges, who along with the lawyers, helped form Sam Banks' network.

Criminal defense lawyer Tom Breen delivered the eulogy in church.

"If I were writing a newspaper column about Sam Banks," said Breen, "my newspaper column would be about a man who worked hard all his life, who loved his family, his career. That's the Sam Banks I would write about.

"He was a good person, he was a generous person. And I think we will miss him terribly."

Banks did love his family, and Breen is a fine lawyer. But he's no newspaper columnist. You can't write a column about the 36th Ward without asking some FBI types about the Chicago Outfit.

Almost two decades ago now, the old mobbed-up 1st Ward was scattered to the winds by federal prosecutions. The late Ald. Fred Roti, 1st, was sent to prison. With City Hall's official position that there is no Outfit, the old 1st Ward boundaries were erased on the city political maps.

"Once Roti was out of business, they did have other people to assume the same power and control in the 36th Ward," said Jim Wagner, the former head of the Chicago Crime Commission and longtime chief of the FBI's organized-crime section.

"If you're in organized crime, you're not going to give up the position of influence and authority," Wagner said. "You're going to turn to a replacement. That's what they are thought to have done."

Banks was low-key. He wasn't a showoff, no spaccone, like some. Again, remember, despite federal theories, there have been no Outfit-related charges. Sam was never charged. It's not illegal to know guys who know guys.

"What does that mean, ‘mob-associated?'" said DeLeo years ago, when the Sun-Times asked about political contributions he received from businesses connected to reputed Outfit boss John DiFronzo.

"In the year 2001, is there really a mob in Chicago?" DeLeo asked then, perhaps rhetorically.

Jimmy can be amusing. He's a funny guy.

Shortly after that witty comment, Chicago was treated to the most significant Outfit investigation in history. The "Family Secrets" case led to what amounts to life prison terms for top mob bosses and hit men.

In the "Family Secrets" trial, DeLeo and Sam's son, zoning lawyer and banker James Banks, were named in testimony by Ann Spilotro, widow of slain gangster Michael Spilotro, as the buyers of a business she owned. In other testimony, Sam Banks was named by a convicted burglar as an alleged conduit for protection money to corrupt cops.

Then in 2008, pressure on the 36th Ward organization increased. The Chicago Tribune investigative series "Neighborhoods for Sale" documented how clout influenced the politics of zoning in Chicago. While Sam Banks was strong, the Banks family was the first family of zoning in the city.

His brother William Banks was the alderman. For decades, Billy was chairman of the powerful City Council Committee on Zoning. Back when I covered City Hall, every time James Banks appeared before Uncle Billy's committee with a zoning matter, Uncle Billy would stand up and loudly excuse himself, saying he wanted no conflict of interest.

Then Billy would walk into the back room, perhaps have a sandwich, and wait while the other aldermen approved his nephew's zoning request. They probably didn't want a conflict of interest with Sam.

Recently, things have changed. With the feds interested in the 36th Ward, Billy has retired from the City Council. Jimmy might let him keep the Democratic committeeman's job and play with the precinct captains and pretend he's got power, but that's about it.

In his eulogy Wednesday, Breen said that moments after the family asked him to speak in church, his phone rang. It was the guy. It was Jimmy.

"He (DeLeo) said, ‘Tom, you know there is a time limit and you know that it's in a church, right?'" Breen recalled, getting some laughs. "So the golf jokes were out the window. The dinner jokes were out the window."

Jimmy is now retiring from the state Senate. He'll become a lobbyist. He still has his title insurance company business partner, Senate President John Cullerton, D-DeLeo, running things in Springfield.

Like Sam before him, it's time for Jimmy to go low-key. After all, he's the guy.

Thanks to John Kass

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