By the Associated Press

CHICAGO The former head of a Chicago-area Laborers' Local has been indicted on racketeering and fraud charges. The charges include scheming to get a kickback for hotel portion of the Trade Centre South complex in Champaign. John Serpico, 68, of Lincolnwood was named by a federal grand jury Wednesday in an 11-count indictment that also charged two associates.

Serpico and Maria Busillo, 53, of Glenview, also a union official, were charged with a wide pattern of fraud, labor kick-backs, money laundering and camouflaging currency deals starting as far back as 1979.

The two are former officers of Local 8 of the Laborers International Union. Serpico resigned in 1996, as the union was gearing up a nationwide campaign to sweep out mob influence and corruption. Serpico is also the chairman of the Illinois International Port District, an appointed post unrelated to the charges in the indictment, prosecutors said.

The grand jury charges Gilbert Cataldo, 59, a former port district executive director, with scheming with Serpico to get kickbacks in return for making loan commitments from a union pension fund. An attorney for Busillo, Cynthia Giacchetti, said that she had not seen the indictment, which was made public late Wednesday, and would have no immediate comment. Attorneys for Serpico and Cataldo were not reached at their offices Wednesday.

The charges focused mainly on activities of the Central States Joint Board, a little-known Chicago-based labor group that operates two pension funds and a health and welfare fund on behalf of eight locals. Serpico was an officer of the board from 1975 until 1996 and continues to be a board consultant. Busillo is still on the board.

According to federal prosecutors, they were able to control the affairs of the board because the locals that sent members to serve on the board did not hold democratic elections. Besides his posts with the Laborers and the Joint Board, Serpico also was president of Chicago-based Local 10 of the International Union of Allied Novelty and Production Workers from 1976 until 1994. Busillo now serves as Local 10 president.

Several of the loans they received were unsecured and some lightly secured, the indictment said. It said that in some cases loans were made to cover interest payments on other loans. Some loans covered 100 percent of the cost of real estate purchases and business startups, prosecutors said.

The indictment outlined a complex web of corruption involving a number of banks. It said that Serpico and Cataldo plotted to get $333,850 in kickbacks in return for inducing both pension plans and novelty and production workers to promise $6.5 million in financing in connection with a hotel in the Trade Centre South complex in Champaign.

Developers announced plans for the $20 Million, 120,000-square-foot, six-story office complex and 140-unit suites hotel south of Kirby Avenue between State and Neil Streets in 1989. The development was to include a restaurant owned by former Chicago Bears linebacker and University of Illinois alumnus Dick Butkus, although that part of the project was later dropped.

Butkus attended a press conference at the U of I's Levis Faculty Center to announce the project, after local restaurant owners objected to a planned announcement on the 50-yardline at Memorial Stadium. Champaign developers Ken Richardson and Randy Hughes, Dick Butkus Enterprises and the Management Group of Chicago were said to have pulled the project together under the umbrella of 51 Associates Limited Partnership, which was created to build Trade Centre South.

C.A. "Bud" Cataldo, president of the Management Group, attended the press conference with Butkus.

Hughes is the property manager for the office building at Trade Centre South. He said this morning that he was not involved in the original financing of the project and hadn't heard about the indictments. Richardson said there were two separate loans on the original project, with the Chicago-based member of 51 Associates handling the financing for the hotel and local financing obtained for the office building.

Nobody from the Champaign-Urbana area was involved in the financing of the hotel, he said.

Richardson still has an ownership interest on both buildings. He is a partner in 51 Associates, which still owns the hotel. He is also a partner in KDB Enterprises, which owns the office building.

Richardson said he was never suspicious of the hotel financing arrangements made in Chicago, and hadn't heard about the indictments until this morning. "Am I surprised? Yes, I am," he said.

The indictment also said that Busillo got a $125,000 loan to buy a condominium on Marco Island, Fla., in return for a deposit of funds from a pension plan maintained for the Joint Boardís staff. Busillo also bought property in the affluent suburb of Glenview with money provided through the scheme, according to the indictment.