"Nothing But Money" - How the Mob Infiltrated Wall Street

Over the years, Wall Street has seen its share of miscreants, from Jay Gould to Bernie Madoff. During the high-tech bubble of the late 1990s, New York's five Mafia families realized they could steal just as easily from investors as they could from the carting industry or the Fulton Fish Market. Utilizing a time-honored "pump and dump" scam, the mob came to Wall Street and walked away with millions. In "Nothing But Money," Daily News I-Team editor Greg B. Smith (author of "Made Men (Seven Brothers)" and "Mob Cops") takes us inside DMN Securities, a mob front that was 100% scam. Here informant Jeffrey Pokross talks with corrupt stock promoter Cary Cimino about eliminating a broker named Warrington Gillet 3rd. Cimino was arrested; the hit never took place.

August 3, 1999

At 4:20 p.m. Jeffrey Pokross stepped out of a yellow cab into the summer heat of midtown Manhattan. From there he crossed the most famous piece of sidewalk in the city and entered the air-conditioned bar of Sparks Steakhouse, a restaurant known the world over for the gangster who'd died where Jeffrey had just tread.

Pokross was supposed to be meeting Cary Cimino, and Cary had picked the locale. He certainly had a crude sense of humor. Nearly 14 years earlier, around Christmas 1985, the then-boss of the Gambino crime family, Paul Castellano, had had a dinner reservation at Sparks. He didn't quite make it. On the sidewalk in front, four men wearing white long coats and black Russian hats shot down Big Paulie and his driver while shoppers with bags of Christmas gifts in hand dove for cover. There lay Big Paulie on the cold ground in his expensive winter coat, blood oozing, his reign finished and Sparks' reputation sealed. Guides on tourist buses pointed it out. Effete restaurant guides described it as a "macho bastion" with "too much testosterone," but Cary loved the place. It was real New York, not Tribeca or SoHo or all those other precious neighborhoods where people like his former best friend, Francis Warrington Gillet 3rd, hung out. This was where real men ate red meat and drank red wine and reveled in the success they had achieved on their own terms - not because Daddy gave them a trust fund.

Pokross was vaguely aware of his mission. Cary had asked for the meeting because of certain concerns he had about being arrested at any minute. As usual, all the concerns involved Francis Warrington Gillet 3rd. Cary was convinced that Warrington was a cooperating witness. Cary barely spoke on the phone anymore and never to Warrington. He had recently become convinced somebody was following him on the street. After Cary requested the meeting, the FBI wired up Pokross and tasked him with exploring Cary's Warrington-phobia.

At the Sparks bar, Pokross ordered Absolut on the rocks with a twist of lime. This was a Tuesday in August and Manhattan wasn't its usual bustling self. The people who could afford to were already out in the Hamptons. The rest were waiting for the weekend to do the same. Still the bar was unusually crowded and Cary was late. Pokross chatted with the bartender and checked his cell phone voice mail. There he discovered a message from Cary saying he was sitting at the bar at Sparks. Pokross looked down the bar.

"Hey, Cary," he said, pushing his way through the crowd to the other end of the bar.

"How long you been sitting there?" Cary asked, startled.

"Five minutes," Pokross said. "You got to be kidding. You were sitting over there?"

They both laughed, and Cary lied about how he was turning 39 in a month. Pokross sipped his vodka and asked Cary what he was up to.

Cary said, "Disappearing to L.A. for six months, then I'm going to move off to London, then I'll disappear into an Eastern European country like Prague or Hungary for a year or two, let it all blow over. I'm not fleeing the law because I'm not under indictment. There's no warrant for my arrest, so if I'm in a different country, I'm not on the lam."

"What do you expect a problem from?" Jeffrey asked.

Cary replied, "Anything we've done in the past. It's going to come up and bite us in the ass."

Pokross asked Cary if he'd approached any of his friends to see if they'd been questioned.

"What do you mean?" Cary asked.

"Well Warrington has vanished," Jeffrey said. "Where's Warrington? Down at his folks' farm?"

"Yeah. Why don't you call him?"

"Why don't you call him?"

"I don't speak with him anymore," Cary said. "We had a huge fight."

Jeffrey knew all about Cary and Warrington. He'd heard the original tape, which he'd turned over to the FBI, and he also suspected (but did not know for sure) that Warrington was, like him, cooperating. He'd heard all kinds of things. Warrington had fled New York after his arrest, even while his case was still pending. He'd moved back to his mother's horse farm in Maryland, and despite his rich upbringing, he was actually desperate for money. Pokross pointed to his glass and ordered another Absolut, this time with tonic. Cary ordered a Diet Coke.

"Do you think it's better to let sleeping dogs lie with him or what do you wanna do?" Jeffrey asked.

"Why don't you call him?"

"And ask him what?"

"Has he been approached by the feds? He got arrested. It was sealed."

Pokross: "What happens when something gets sealed?"

Cimino leaned forward and answered, "'Cause he's cooperating."

"Then why would you want to call him?"

"Right."

Pokross handed Cary two recent news releases from the Dow Jones newswire, about two stock promoters who'd been convicted of securities fraud in the Spaceplex deal. They discussed what Pokross called "our mutual exposure points." This was another name for anybody involved in their schemes who might now be talking to the FBI. Warrington was a "mutual exposure point."

"Let's go over Warrington for a minute."

"There's nothing to go over," Cary said. "He's about to turn state's evidence. He's untouchable. Unless you want to whack him."

"I think you broached that issue at one point before," Jeffrey said, recalling Cary's reference to a "dirt lunch" some months before. "I really don't think that's the way to do it."

"Why?" Cary persisted. "If you whack him, you, um, his testimony is no good in court. Because you can't cross-examine the witness."

Jeffrey couldn't resist: "As they say, dead men tell no tales."

"Right. So the bottom line is..."

"What do you suppose I do with him?" Jeffrey asked. This appeared to be a carefully worded question. He was not suggesting that he himself should do anything regarding Warrington. He was just exploring what Cary might think to do with the guy.

"Have Jimmy take care of him," Cary said, obligingly. "I don't care how it's done, just take care of him. He's not married anymore," he added, as if this might seal the case. "His wife left him."

"She did?"

"She lives in New York now."

"Who lives in New York?"

"She does," Cary said. "He can't even feed his family. He's been living in the same cottage without electricity. Go down there, have them put a gun in his mouth."

"No," Jeffrey said. "You never pull a gun unless you're willing to use it."

"No, no, no," Cary said. "You miss the point."

"What's the point?"

"Put the gun in his hand, put the gun in his mouth, pull the trigger, make it look like suicide. It's not hard to believe he committed suicide, he's so down and out."

"Oh, I mean, I think that's a little involved, don't you?"

"What's it going to cost us, ten Gs?" Cary asked. "You got to get rid of him."

"Why don't you put the whole ten grand up? I don't want any part of it."

"What, are you afraid to kill someone now?"

"It's not the first thing on my wish list, no."

"But you don't want to go to jail. What would you rather have, five years in jail or whack Warrington? They are going to use the majority of his testimony against us. Do you want to destroy the case against us?"

Jeffrey asked, "Do you think he's a credible witness?"

"Yeah."

"You do?"

"He has checks," Cary said.

"Did you ever give him checks?"

"No," Cary said. He paused. "Yes. As a matter of fact, I did. He cashed a check that had a fictitious name, but it doesn't matter. He's a credible witness. The core of the case against you is Warrington. The core of the case against us requires testimony. If you eliminate the testimony, you eliminate the case."

When they finished, Pokross left Sparks and walked around the corner. He got into a leased car parked on the street, pulled up his shirt and pulled off the wires taped to his chest. He handed the wires and the tiny recorder tucked in his waistband to Special Agent Kevin Barrows of the FBI. Jeffrey Pokross, after all, was a reliable cooperating informant, skilled at coaxing out culpability. With Cary Cimino, they were learning, you didn't need much coaxing.

Thanks to Greg B. Smith

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International Organized Crime Intelligence and Operations Center Created

Attorney General Eric Holder announced a new International Organized Crime Intelligence and Operations Center (IOC-2) that will marshal the resources and information of nine U.S. law enforcement agencies, as well as federal prosecutors, to collectively combat the threats posed by international criminal organizations to domestic safety and security. Attorney General Holder made the announcement today in Rome at the G8 Justice and Home Affairs Ministerial.

The new IOC-2 Center will allow partner agencies to join together in a task force setting, combine data, and produce actionable leads for investigators and prosecutors working nationwide to combat international organized crime, and to coordinate the resulting multi-jurisdictional investigations and prosecutions. Understanding that international criminal organizations are profit-driven, IOC-2 will also work with investigators and prosecutors to target the criminal proceeds and assets of international criminal organizations.

"The globalization of criminal networks and advances in technology have made international criminal organizations a significant threat to the safety and security of our nation," said Attorney General Holder. "But we are answering that threat by developing a 21st century organized crime program that will be nimble and sophisticated enough to combat the danger posed by these criminals for years to come. IOC-2 gives us the capacity to collect, synthesize and disseminate information and intelligence from multiple sources to enable federal law enforcement to prioritize and target the individuals and organizations that pose the greatest international organized crime threat to the United States."

As part of this strategy, IOC-2 will establish a team of financial experts to serve as consultants and identify opportunities and strategies to employ forfeiture as a means of disrupting targeted criminal organizations. The team will coordinate multi-jurisdictional forfeiture strategies and assist agents in the field in obtaining the necessary resources, such as financial auditors, investigators and forfeiture attorneys, to employ the strategy.

The members participating in IOC-2 will include: the FBI; U.S. Immigration and Customs Enforcement (ICE); the Drug Enforcement Administration (DEA); U.S. Internal Revenue Service (IRS); the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); U.S. Secret Service; U.S. Postal Inspection Service (USPIS); U.S. Department of State, Bureau of Diplomatic Security; U.S. Department of Labor, Office of the Inspector General; and the U.S. Department of Justice, Criminal Division. IOC-2 will also partner with the 94 U.S. Attorneys' Offices and the U.S. Department of the Treasury, Office of Terrorism and Financial Intelligence.

In recognition of the demonstrated interrelationship between criminal organizations that engage in illicit drug trafficking and those that engage in international organized crime involving a broader variety of criminal activity, IOC-2 will also work in close partnership with the Organized Crime Drug Enforcement Task Force (OCDETF) Fusion Center and DEA's Special Operations Division to ensure these interrelationships are identified and coordinated across federal law enforcement.

From the G8 meeting, Attorney General Holder also emphasized the importance of continued cooperation with foreign law enforcement through existing police-to-police and mutual legal assistance mechanisms. He noted that the creation of IOC-2 demonstrates the United States' commitment to addressing international organized crime issues and will make the United States a more effective partner for joint investigations and prosecutions.

"International organized crime threatens our safety, disrupts our communities, and subverts our economy," said U.S. Department of Homeland Security Secretary Janet Napolitano. "Our success targeting these criminals relies upon effective partnerships across the federal law enforcement community. The new IOC-2 Center will foster collaboration and strengthen our ability to crack down on international criminal organizations."

According to the U.S. Law Enforcement Strategy to Combat International Organized Crime (IOC Strategy) released in April 2008 by the Department of Justice, international organized crime has considerably expanded in presence, sophistication and significance in recent years and it now threatens many aspects of how Americans live, work and do business. These threats include criminal penetration of global energy and strategic material markets that are vital to American national security interests; logistical and other support to terrorists and foreign intelligence services; the use of cyberspace to target U.S. persons and infrastructure; and the manipulation of securities markets and financial institutions. International criminal organization are also jeopardizing our border security; endangering public health through the trafficking of humans and counterfeit pharmaceuticals; and corrupting public officials in the United States and abroad.

The Attorney General's Organized Crime Council (AGOCC) is chaired by the Deputy Attorney General and consists of the Assistant Attorney General for the Criminal Division, the chair of the Attorney General's Advisory Committee and the leaders of nine participating federal law enforcement agencies, which include: the FBI; ICE; DEA; IRS; ATF; U.S. Secret Service; USPIS; U.S. Department of State, Bureau of Diplomatic Security; and U.S. Department of Labor, Office of the Inspector General.

The AGOCC is an outgrowth of an executive order, issued by President Lyndon B. Johnson in 1968, that placed the Attorney General in charge of coordinating all federal law enforcement activity against organized crime. At the time, the enforcement efforts were primarily focused on La Cosa Nostra. In 2008, the AGOCC began to consider the threat from international organized crime, rather than the Italian-American mafia, to be the primary organized crime threat facing the United States.

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Illnois General Assembly Scholarships Have Mob Association Now

If the Tribune's series on political clout influencing University of Illinois admissions hasn't made you angry enough, try this one:

Kurt Berger is a corrupt former Chicago Buildings Department supervisor now in federal prison for taking bribes. A couple of years ago, he had a problem. It wasn't just the FBI.

In 2007, Berger's son was a student at a state school, as Berger was facing time in the federal pen. The feds shut down his bribe operation, and he needed some extra cash for the tuition. But he didn't have enough. So he gladly accepted the gift of your cash. That's right, yours. And who helped him to your cash?

Why, none other than state Sen. James DeLeo (D-How You Doin?), the eminent philanthropist.

Under a little publicized program called the Illinois General Assembly Scholarships, DeLeo provided a year's free tuition for the son of the bribe-taker at Northern Illinois University.

The program is available to all Illinois legislators. Each lawmaker receives the equivalent of two four-year scholarships (actually tuition waivers) for state schools every year. Legislators may parcel these out in any way they wish.

State records show that in 2008, DeLeo handed out eight one-year scholarships, including the one to the Bergers.

Other recipients were the son of Chicago Fire Department Battalion Chief Edward Doherty, whose son attends the University of Illinois at Chicago. Chief Doherty is the brother of Far Northwest Side Ald. Brian Doherty (41st).

Another DeLeo waiver went to the son of James McKay, the chief of death penalty prosecutions at the Cook County state's attorney's office.

Berger doesn't have much of an income in prison. But Chief Doherty makes $120,000 a year, city records show. The county lists McKay's salary at $150,000 a year.

McKay said that he hardly knew DeLeo and that his position had nothing to do with it. He said his son, whom he described as an A student, applied on his own. "I don't have any clout," McKay said. "He's not the son of some politically connected person."

Doherty said his son has received the tuition waiver from DeLeo for the last two years. The chief has known DeLeo for years, and Doherty's wife, Gina, is an aide to state Rep. Michael McAuliffe (R-Chicago). "My son's achievements got him the scholarship. He excels," Doherty said. "It's open to anybody who lives in the district and it's up to DeLeo. Were we happy? Absolutely."

The political tuition program has been around for decades, dispensing millions of dollars each year. Those who receive the tuition waivers are eager young people who want to go to college. But some are also clout kids.

The Tribune investigative series "Clout Goes to College" -- by reporters Jodi Cohen, Tara Malone, Stacy St. Clair and Robert Becker -- has been detailing a different aspect of political influence in higher education. Politicians, lobbyists and university trustees frequently use clout to win admission to the U. of I. for students who wouldn't otherwise qualify. But what of high school seniors with top grades and exceptional ACT scores who aren't accepted at U. of I. because somebody's somebody who doesn't belong got their spot? DeLeo and his obedient sidekick, state Rep. Angelo "Skip" Saviano (R-Jimmy), are big players in the admissions game. Sunday's "Clout Goes to College" installment shows that in the last five years alone, the two have backed at least 50 students who ended up on the admissions clout list.

That list is called "Category I." But the one I'm writing about today -- the money part -- also needs a cool name. How about we call it the "We Don't Want Nobody Nobody Sent Scholarship Fund?"

I figure that, for some clout kids, the two lists intersect.

It's nothing new for DeLeo. A few years ago, he helped the daughter of one of the Chicago Outfit's favorite law enforcement officers, corrupt former Cook County Undersheriff James "The Bohemian" Dvorak. With Dvorak in prison, DeLeo waived tuition for Dvorak's daughter at Eastern Illinois University, though she didn't live in Jimmy's district.

Records show that in the past, DeLeo has accepted campaign donations from mob-controlled businesses. In 2001, the Sun-Times asked him if this meant he was connected.

"What does that mean, mob-associated?" he said. "In the year 2001 is there really a mob in Chicago?"

That was years before DeLeo was mentioned in the recent Family Secrets trial of Outfit chiefs, when mob widow Annie Spilotro testified that DeLeo and zoning lawyer James Banks purchased her husband Michael's restaurant, in a building owned by mob boss Joey "the Clown" Lombardo.

On Friday, we called DeLeo. But not at the casino in Aruba. Instead, we called his Springfield office to ask about both of the clout lists. But no word from Jimmy. And Kurt Berger? He'll spend the summer in Duluth, Minn., as inmate No. 19350-424, and is scheduled for release in September.

That's an exciting time, when students are eager to buy new school supplies, the crisp notebooks, pencil sharpeners, snazzy book bags. And school begins anew, the Chicago Way.

Thanks to John Kass

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Do Chicago Alderman Have the Highest Felony Conviction Rate of Any Profession in America?

A local expert acknowledges that Chicago City Government is—in some ways—designed to cultivate the kind of abuses that 29th Ward Ald. Ike Carothers is accused of committing.

Carothers was indicted for bribery involving a zoning change that favored a developer.

UIC Political Science Department head Dick Simpson is the first to acknowledge that Aldermanic privilege that allows Aldermen to veto or approve projects in their wards can be a recipe for corruption.

Developers of high stakes projects could feel the so-called Chicago way of doing business means they may need to offer bribes to get their way. Simpson says there have been 31 Aldermen who've apparently succumbed in the last 36 years. They were indicted for corruption. That's nearly one a year, he says.

And Simpson—a former Alderman himself—says that’s a high crime rate. There are only 50 City Council seats, and only about 150 individuals have been there since he served. But, Simpson does not recommend taking power away from the Aldermen, just giving more to the communities.

Thanks to WBBM

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Top Outfit Member and Current Cicero Police Officer Face Racketeering Indictment

Racketeering indictments have been handed up against a top Outfit member and a current Cicero police officer on charges that include armed robbery, arson and illegal gambling.

The case grew from a 2003 bombing of a gaming house in Berwyn that was allegedly ordered by the mob and carried out by members of a violent motorcycle gang.

The lead defendant is Mike Sarno, a career hoodlum who as a rising mob figure was known as "Fat Boy" due to his bulging, 350 pound waistline. Now, as a 51-year old boss Sarno is known in Outfit circles as "The Large Guy."

Sarno's home was among six locations that were the subject of search warrants last summer.

Sarno has already served time in prison for his involvement in organized crime.

The word "mob" is no where to be seen in Thursday's rackets indictments and federal prosecutors declined to speak the words "outfit" or "underworld." But they didn't have to.

Mike Sarno, the lead man charged, is already a convicted mob boss who investigators say has worked his way up through syndicate ranks during the past three decades.

When the I-Team last saw Mike Sarno, it was outside his home in suburban Westchester. On Thursday night, eight months later, Mr. Sarno was named in a federal grand jury indictment.

Sarno is charged with leading an eight year crime spree that featured lucrative jewel heists and forging an alliance with the outlaws motorcycle gang. Their partnership punctuated by a bombing in west suburban Berwyn, intended to take down a video poker machine company that was competing with the mob's own illegal gambling business.

"Our allegations in the indictment are that people broke the law; and that they broke it in a number of ways. Some having to do with illegal gambling, some having to do with robbery and theft and arson," said Patrick Fitzgerald, United States attorney.

Sarno, newly charged on Thursday, aka Big Mike, Mikey, Large and the Large Guy, allegedly oversaw enterprise gambling and that bomb attack.

From the time Sarno was known as "Fat Boy" and went to prison as a mob soldier 15 years ago, Outfit experts say he was destined to lead a street crew. That is just what he did with the Enterprise, according to authorities who say the headquarters was a jewelry store in Cicero used to fence stolen goods.

The store, owned by outlaw biker Mark Polchan who was previously charged along with 85-year-old Samuel Volpendesto of Oak Brook and Kyle Knight who has pleaded guilty and is cooperating.

Four other men are charged with the robberies and jewel thefts including Volpendesto's son as well as James Formato, a former Berwyn policeman, and Dino Vitalo, an 18-year Cicero policeman who is still on the job. "He was sent home on administrative pay leave. That's where he is now. He is off the streets. Town president immediately indicated that if these charges prove to be true they are sickening and there is no room in the Cicero Police Department," said Elio Montenegro, Cicero spokesman

There are no court dates yet in this case.

Cicero officials say at some point Officer Vitalo will be placed on unpaid leave.

Feds are allowing him to turn himself in at the time of arraignment; same for the ex-Berwyn cop. And, curiously, the same consideration is being given to Mike Sarno, the ex-con crime syndicate boss. Sarno was not one of those arrested on Thursday. The U.S. attorney offered little explanation except to suggest that they do things for a reason.

Here are details provided by the United States Attorney in Chicago:

Five new defendants, together with two others who were initially charged last year with using a pipe bomb to damage a Berwyn video and vending machine business in 2003, were indicted on sweeping racketeering conspiracy charges alleging eight years of criminal activity, federal law enforcement officials announced today. The charges encompass at least nine armed robberies and thefts, arson, illegal gambling and obstruction justice, including by current and former suburban police officers who are among the seven defendants. New defendant, Michael Sarno, allegedly oversaw, directed and guided certain of the group's illegal activities, including causing previously-charged defendants Mark Polchan and Samuel Volpendesto, to bomb C & S Coin Operated Amusements, a video gaming device business in Berwyn, to eliminate competition and to protect and enhance the group's own business relationships, according to the indictment.

The indictment alleges that the seven defendants were associated in a criminal enterprise that existed since at least 2001 to generate income for its members through illegal activities, including: committing armed robberies and thefts from jewelry stores, businesses and private residences; transporting stolen goods across state lines; committing thefts and obtaining stolen items from interstate shipments of goods; purchasing, possessing and selling stolen goods; using threats, violence and intimidation to advance the enterprise's illegal activities; committing arson; operating and facilitating illegal gambling businesses, including the use of video gambling machines; obstructing justice and criminal investigations by tampering with and intimidating witnesses; obstructing justice and criminal investigations by gathering information about the existence and extent of ongoing federal criminal investigations from sources including corrupt local law enforcement officers and law enforcement databases; and traveling in interstate commerce to further the goals of the criminal enterprise.

The indictment seeks forfeiture of at least $1,878,172 from six of the seven defendants as proceeds of the alleged racketeering activity.

Law enforcement agents yesterday executed federal search warrants at more than two dozen suburban locations, including bars and restaurants, in connection with the ongoing investigation.

The 12-count superseding indictment was returned on May 21 and unsealed today, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Andrew L. Traver, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

All seven defendants, including four currently in custody, will be arraigned at later dates in U.S. District Court.

Sarno, 51, of Westchester, also known as "Big Mike," "Mikey," "Large," and "the Large Guy," allegedly oversaw the group's illegal gambling ventures and received a share of the illegal profits from Polchan, 41, formerly of Justice, who also occupied a leadership role. The indictment alleges that Polchan identified targets for robbery and used his business, a sole proprietorship operating under the names "M. Goldberg Jewelers," and "Goldberg Jewelers," located at 1203 South Cicero Ave., in Cicero, to conduct meetings with criminal associates, as well as to obtain, store, and sell stolen goods that were either transported across state lines, obtained through robbery or thefts from interstate shipments, or obtained through the fraudulent use of access devices, such as credit cards.

Polchan also used Goldberg Jewelers to plan the group's illegal gambling activities with Sarno, and to temporarily house video gambling devices prior to distributing them to various locations, including clubhouses operated by the Outlaws Motorcycle Club, of which Polchan was a member.

Polchan and Volpendesto, 85, of Oak Brook, remain in federal custody since they were arrested and charged last summer with participating in the bombing of C & S Coin Operated Amusements. On Feb. 25, 2003, a pipe bomb was detonated outside a building at 6508 West 16th St., in Berwyn, that housed several businesses, including C & S, which at the time leased coin-operated vending and video machines. The explosion outside the storefront entrance to C & S caused broken windows and damage to the interior ceiling and wood frame above the doorway to the business. No one was injured in the explosion, which occurred at night. The new indictment contains the same three counts  conspiracy to use, and actual use of, an explosive device to damage property, and use of a pipe bomb  that were pending against them previously. Polchan and Volpendesto have both pleaded not guilty to those charges.

Also indicted were:

James Formato, 42, a former Berwyn police officer who allegedly acted as an interstate courier for stolen money; conducted physical surveillance of potential targets of illegal activity under the guise of carrying out his duties as a police officer; participated in an attempted armed robbery; and provided information concerning ongoing law enforcement investigation into illegal enterprise activity, including the bombing of C & S Coin Operated Amusements;

Mark Hay, 52, who allegedly participated in robberies of jewelry stores; identified potential targets for robbery; participated in the surveillance of robbery targets; and acquired stolen vehicles for use in robberies;

Anthony Volpendesto, 46, Samuel Volpendesto's son, who also allegedly participated in robberies of jewelry stores; identified potential robbery targets; and participated in the interstate transportation of stolen goods; and

Dino Vitalo, 40, a Cicero police officer since 1991, who allegedly caused law enforcement databases to be used to provide information about potential targets of illegal activity and ongoing federal law enforcement investigations; provided advice on possible federal law enforcement activity; searched the area surrounding Goldberg Jewelers for electronic surveillance equipment used by federal law enforcement; and filed a false police report in order to provide a false alibi for other members of the conspiracy.

As part of the racketeering conspiracy, the indictment alleges that one or more of the defendants participated in robberies, some armed, of jewelry stores and commercial businesses in Illinois, Indiana and Wisconsin, and in some instances caused stolen jewelry to be transported across state lines. The robberies included the:

May 23, 2002, robbery of items valued at approximately $60,000 from Jacqueline's Jewelry in Valparaiso, Ind.;
June 6, 2002, robbery of items valued at approximately $48,000 from Husar's House of Fine Diamonds in West Bend, Wis.;
July 9, 2003, armed robbery of items valued at approximately $78,221 from Uffenbeck Jewelers in Fond du Lac, Wis.;
July 24, 2003, armed robbery of items valued at approximately $236,902 from LD Jewelers, in Hickory Hills, Ill.;
April 26, 2001, robbery of The Gold Mine Jewelry Store, in St. Charles, Illinois, the stolen items having a total value of approximately $29,780;
May 1, 2002, robbery of items valued at $239,752 from Lenna Jewelers in Hinsdale;
March 2003 attempted armed robbery of an individual who resided in Berwyn; and the
Aug. 25, 2003, armed robbery of items valued at approximately $645,517 from Marry Me Jewelry Store in LaGrange Park.

And one or more defendants allegedly participated in the 2002 residential burglary of a home on Rockwell Street in Chicago, stealing approximately $540,000, of which at least $150,000 was later transported to Florida.

In addition to the racketeering conspiracy against all seven defendants, Sarno and Polchan were charged with operating an illegal gambling business between 2002 and at least July 2008.

Formato alone was charged with one count of conspiracy to obstruct of justice, while Polchan and Vitalo were charged together in a separate count with conspiracy to obstruct justice. Polchan alone was also charged with one count of possession of stolen goods from interstate shipments; three counts of filing false individual federal income tax returns; and one count of failing to file a federal income tax return.

An earlier defendant in this investigation, Kyle C. Knight, 45, formerly of Merrillville, Ind., who was charged in 2007, has pleaded guilty to supplying explosives used in the C & S bombing and a series of robberies, and he is cooperating while awaiting sentencing.

Federal officials said the investigation is continuing, and they commended the assistance of the Berwyn Police Department. The government is being represented by Assistant U.S. Attorneys T. Markus Funk and Amarjeet S. Bhachu.

If convicted, the charges in the indictment carry the following maximum terms of incarceration: racketeering conspiracy  20 years; conspiracy to use an explosive device to damage property and using an explosive device to damage property  a mandatory minimum of 5 years and a maximum of 20 years; using a pipe bomb  a mandatory consecutive sentence of at least 30 years and a maximum of life; obstruction of justice  20 years; operating an illegal gambling business  5 years; possession of goods stolen from interstate shipments  10 years; filing false tax returns  3 years; and failing to file a tax return  1 year. In addition, each count carries a maximum fine of $250,000, except the failing to file count, which is a misdemeanor and carries a maximum fine of $100,000. Defendants convicted of tax offenses must be assessed mandatory costs of prosecution and remain liable for any back taxes, interest and penalties owed. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.

Thanks to Chuck Goudie

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