Loren-Maltese Attorneys Hand Over $225,000 to Feds

Friends of mine: Betty Loren-Maltese

Defense attorneys have agreed to hand over to the federal government $225,000 they received from the imprisoned former town president of suburban Cicero for the appeal of her racketeering sentence.

The attorneys will keep $400,000 that Betty Loren-Maltese paid them four years ago as she sought to overturn her conviction on charges of engineering a fraud scheme that swindled Cicero out of $12 million. The agreement between the federal government and the attorneys was outlined in court papers made public Monday.

U.S. District Judge John F. Grady in January 2003 sentenced Loren-Maltese to eight years in prison for her part in the insurance scam. Loren-Maltese was one of seven defendants convicted in the scheme to siphon money out of the town treasury in the small, blue-collar suburb west of Chicago that has been troubled by mob influence for decades. Grady also fined Loren-Maltese $100,000 and ordered those convicted at trial to forfeit $3,250,000 and pay $84 million in restitution.

In her effort to overturn the conviction, Loren-Maltese hired nationally prominent defense attorney Alan Dershowitz for the appeal. She paid Dershowitz $625,000, according to court papers. They said that Dershowitz then transferred $270,000 to his brother's New York law firm of Dershowitz, Eiger and Adelson, which also worked on the appeal.

Under the settlement, the attorneys will pay $225,000 to the federal government to help satisfy the forfeiture amount. These funds were described in a court document as "unearned fees."

A spokesman for the U.S. attorney's office, Randall Samborn, declined to comment on the settlement, referring a reporter to the court papers. But Dershowitz's brother, Nathan Z. Dershowitz, said in a brief telephone interview that some of the $625,000 that Loren-Maltese paid was for expenses and some a retainer against future fees. Nathan Dershowitz declined to say how much of the $225,000 his firm would pay and how much would be paid by his brother.

Loren-Maltese remains in federal prison and is still asking the 7th U.S. Circuit Court of Appeals to overturn her conviction.

Thanks to Mike Robinson