SWINDLER SPARKED FBI PROBE

An FBI undercover investigation into Chicago`s government began in 1984, when a well-known securities swindler arrested in Tennessee on gun charges offered to lead federal officials to corrupt politicians here, according to a source familiar with the case.

Federal investigators decided to set up a sting operation with swindler Michael Raymond as the point man because Raymond told them he had done business in Chicago and knew of politicians who would take bribes, the source said.

For more than a year following his arrest in Nashville, Raymond, posing as a corrupt businessman, wore a body microphone seven days a week, the source said, and tape-recorded discussions with Chicago politicians and businessmen.

As a result of Raymond`s work, federal investigators believe they can make criminal cases against at least 12 Chicago officials and businessmen, including at least 1 alderman, a city department head and a deputy department head, according to the source.

At this point, the investigation is limited to Chicago and centers on a handful of aldermen and top-ranking city bureaucrats, according to sources familiar with the case. Evidence soon will be presented to a grand jury, and indictments are expected.

The sources identified one subject of the inquiry as Michael Lambesis, chief investigator for the Clerk of the Circuit Court of Cook County. Lambesis` role in the operation was not clear.

Contacted Thursday, Lambesis, a former Chicago police sergeant, said:

”It`s a mess. I`m waiting to see my attorney.” He would not discuss the case.

The sources, who asked not to be identified, would not name other subjects of the inquiry, although one source said they include lawyers and at least one businessman.

U.S. Attorney Anton Valukas and the Chicago FBI Special-Agent-in-Charge Edward Hegarty declined to comment on the investigation.

The investigation could prove politically embarrassing to the Washington administration.

Aldermen who have acknowledged being courted by Raymond are political allies of the mayor. Additionally, before his role as an undercover operative became known, Raymond told a reporter that he had given money to Clarence McClain, a business consultant who is one of the mayor`s closest friends. McClain has said he does not recall ever meeting Raymond.

Washington said Thursday that he has asked the city`s Office of Municipal Investigations to conduct its own inquiry into Raymond`s efforts to win city work.

During the undercover investigation into Chicago contracting, Raymond used the name Michael Burnett. He posed as a representative of Systematic Recovery Service Inc., a New York firm trying to win city contracts for the collection of fees and fines, according to the sources.

Beginning in 1984, Systematic Recovery tried to win lucrative Chicago contracts involving the collection of late water bills and other delinquent city fees, the sources said.

The company won the city`s water bill collection contract in July or August, 1985. It has also tried to win the contract to collect delinquent parking fines.

Systematic Recovery, which is run from a suite of offices on the 11th floor of a New York City office building, appears to be a legitimate company with bill collection contracts with governments elsewhere in the country. In most highly publicized undercover operations, including Abscam and Brilab, the FBI set up phony companies to make cases against corrupt politicians.

Abscam led to the convictions of six U.S. representatives and a U.S. senator. Brilab ended with the convictions of a top aide to the governor of Louisiana and the reputed Mafia boss of the Mississippi Gulf Coast.

Bernard Sandow, president of Systematic Recovery, said he was unaware of Raymond`s role as an undercover operative. He declined to discuss Raymond`s relationship with the company, but on at least one occasion he accompanied Raymond to a meeting with Tribune reporters in Chicago.

Investigators portrayed Raymond as a professional con man whose victims have ranged from a Florida citrus grower to Wall Street brokerage houses. One Florida magazine, Miami/South Florida, reported this week that Raymond is a suspect in the disappearances of two Broward County women and a Palm Beach man.

Though Raymond has often worked as a government informer, his work in Chicago began on July 11, 1984, when Nashville police, acting on a tip, stopped him and another man as the two allegedly sat in a van plotting to burglarize the home of a wealthy businessman.

At the time, Raymond and Allen Varley were armed with a loaded machine gun and silencer, two clips of ammuniton, and a .25 caliber automatic pistol, according to a newspaper account of the arrest. Police were quoted as saying the van also contained two rolls of rope which they suspected was to be used to bind anyone in the house the men planned to burglarize.

When he was arrested, Raymond identified himself as Michael Burnett of Chicago.

On Oct. 22, 1984, Raymond and Varney pleaded guilty to a federal charge of unlawful possession of an unregistered firearm.

During the court case, an FBI agent said that Burnett had been under surveillance since the spring of 1984. He did not spell out why the FBI had been keeping tabs on him.

More Top Picks Best Fitbit Alternatives With Ecg

At some point during this case, Raymond began working with investigators in Chicago, one source said.

In August, Varley was sentenced to two years in prison. Raymond`s sentencing is scheduled for Feb. 28, 1986.

It is not clear when Raymond first began meeting with Chicago officials, or which politicians are subjects of the inquiry.

But three aldermen–Wallace Davis (27th), Clifford Kelley (20th) and Perry Hutchinson (9th)–have said FBI agents interviewed them this week about the city contract to collect delinquent parking fees.

Davis, who said he met with Raymond, whom he knew as Burnett, as recently as last week, said he accepted $1,500 from him as a campaign contribution. Ald. Marian Humes (8th) said she believes she is a target of the

investigation, but declined to discuss it.

Ald. Eugene Sawyer (6th) said he also met with Raymond. Sawyer said he had lunch with Raymond last month.

Datacom Systems Corp., also of New York, has the parking ticket collection contract.

Earlier this year, however, a group of aldermen, led by Humes and Hutchinson, raised questons about Datacom`s contract. The aldermen introduced a resolution before the Chicago City Council Finance Committee calling for an investigation into the way the company has collected delinquent fines.

Charles Sawyer, who as commissioner of the city`s revenue department must sign off on fee collection contracts, said he also met with Raymond.

”I`ve had lunch with him on many occasions,” Sawyer said.

The Chicago operation was first disclosed sometime last year, when a reporter for Miami/South Florida began checking into the background of Raymond, who has lived in Florida, the sources said.