Chicago Outfit figure gets four months in federal prison in Social Security fraud scheme

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A Chicago mob figure was sentenced Monday to four months in federal prison for participating in a Social Security scam by falsely claiming he’d earned wages from a series of phony or failed businesses.

In this artist sketch, alleged mobsters Joey"the Clown" Lombardo, from left, Frank Calabrese Sr. and James Marcello sit in court on June 19, 2007, as jury selection begins in the city's biggest organized crime trial in years.

“He doesn’t engage in that conduct anymore,” O’Daniel said during the video conference hearing. “He doesn’t talk to those people any more, your honor.”But U.S. District Judge Jorge Alonso said that while the loss amount wasn’t as high as many fraud cases brought in Chicago, that’s only because Marcello got caught relatively quickly.

Marcello was one of the first defendants to plead guilty in the Family Secrets investigation, admitting in a plea agreement with prosecutors that as a member of the Melrose Park crew, he passed information to his incarcerated brother James, who at the time was the reputed head of the Chicago Outfit. Secret FBI recordings made in the waiting room of a Michigan prison in 2003 had captured the Marcello brothers anxiously discussing whether Calabrese had flipped.

According to Marcello’s plea agreement, he agreed to provide his Social Security information to Ruth, who submitted the fraudulent work history on his behalf. Marcello then lied repeatedly about his employment to his regional Social Security Administration office, according to the plea.Chicago Tribune editors' top story picks, delivered to your inbox each afternoon.

 

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