Born to Steal: When the Mafia Hit Wall Street (11 page)

The summer of 1993 was hot, but it wasn’t hot enough—not for Louis it wasn’t. People were making money all around him at Hanover.
Big money. And he wasn’t getting any of it.

When Louis started at Hanover, the best brokers were making about $100,000 a month and it seemed great at the time. But that
was just the beginning. The payouts went up and up: $200,000, $300,000. Half a million. And up. Louis was so frustrated, seeing
other guys make money, that he quietly seethed.

But still, he was making good money for a teenager who had just dropped out of community college. Fifteen hundred a week,
on average, meant that he and Stefanie could go out to nicer restaurants. He could afford cabs. Cabs were awesome. He never
took a cab in Staten Island. But after a few months at Hanover he could afford to take a cab from the ferry to 88 Pine, even
though it was only a five-minute walk away. Some people might call that a nice, brisk walk in the morning. But Louis didn’t
want to take a nice, brisk walk when hundreds of people were having the same nice, brisk walk off the ferry, crowding together,
smelling in the morning like perfume and Right Guard and smelling at night like sweat and ass. The ferry stank, a piss and
gasoline smell, and the bay smelled from dead fish and God knows what.

Louis hated bad smells and he hated crowds and he hated subways. At night he started taking a car service back home. It cost
him fifty bucks a night. He didn’t care. He could afford it.

At Hanover he could order cigarettes from downstairs. Condoms if he wanted them. A guy came by and shined the brokers’ shoes,
maybe the same guy who came to the investment banks and shined the Yalies’ shoes. A shoe is a shoe. Money is money.

To get money, he would have to become a broker.

As he worked at Hanover he saw Chris become famous in the chop house world as half of the team of “Chris and Rocco”—the other
half being Rocco Basile. So why shouldn’t there be a Louis and—whoever? A “Louis and Benny,” maybe?

Benny Salmonese would be a great partner. They had talked about teaming up. It was a bullshit talk, the way guys yammer away
when they’ve had a couple of beers. But it made sense. Benny was no scrub—he worked late too. And Benny’s strengths offset
Louis’s weaknesses, and vice versa. Benny was a few years older, a smooth talker, a deal-maker, a conciliator. Louis was still
a teenager, rough around the edges as No. 3 sandpaper—and he didn’t have a broker license. Louis took the NASD test for the
first time when he was at Hanover. He didn’t study. He got a 40.

License, bullshit. Why shouldn’t he make money? Why shouldn’t he have a client book? He could get clients. It was only fair.

Benny had a license. Perfect. They could both use it. They could both be Benny.

That was the plan. Now they had to execute it. They
had
to execute it.

Benny went to a little brokerage called Robert Todd Financial Corporation in July 1993. Louis had never heard about it but
Massood Gilani, over at the NASD, sure had—just as well as he knew Hanover and just as well as he knew John Lembo, one of
the most complained-about brokers at the most-complained about brokerage. Gilani’s District Management Information System
Cause Examination Examiner Log for District 10 showed that Robert Todd was one of the little firms in Manhattan that was getting
complaints
. January 15, 1993—“unauthorized transaction.” January 20, 1993—“failure to execute sell order.” Red flags, no action. Todd
stayed open. Benny, and soon Louis, would be in no danger of their livelihood being interrupted.

“After Benny got to Robert Todd, I don’t hear from him for a few weeks,” said Louis. “Then one day he calls. ‘Louie, it’s
Benny.’ I didn’t really think he’d call. Once he left Hanover I thought he was gone. He left three weeks, four weeks before
he even called me. He says, ‘What are you doing?’ ‘I’m working, what do you think I’m doing?’ And he says, ‘Can you take lunch?
Can you come up here? I want to talk to you.’ He wasn’t going to talk on the phones at Hanover, because Roy could sometimes
listen in on the calls if he wanted. He could come right into your phone. You’d pick up the phone and Roy would be like, ‘Get
off the phone!’ ”

They worked out a great deal—great for Louis, great for Benny, great for Todd. Todd got 30 percent of the payout—in other
words, 30 percent of the rips Benny and Louis were to generate. Louis and Benny agreed to split the remaining 70 percent.
Louis got 40 percent of their share if he brought in more than $100,000 in rips. Otherwise he got 30 percent.

Robert Todd was in the eastern part of Midtown Manhattan, in a building at 50th Street and Third Avenue grandly named the
Crystal Pavilion. It was one of the newest of the new office towers that were built on Third Avenue since the mid-1950s, when
the Third Avenue El was torn down. The El was a great backdrop for filmmakers, particularly if they were making noir tales
of greed and betrayal—movies such as
Side Street
, which Anthony Mann filmed back in 1950 in a rundown tenement at 850 Third Avenue, right down the street from the Crystal
Pavilion.
Side Street
was about a part-time postman who stole thousands of dollars in a moment of impulsive greed.

Third Avenue was a perfect backdrop for a fifties morality tale. It was run-down but decent, a vivid contrast with the bourgeois
hypocrisy of the era, epitomized by an aerial view of Wall Street that began the film. Years later, filmmakers would have
to look elsewhere to find that kind of melodramatic contrast. Blue-collar Third Avenue was gone, retreating to the outer boroughs
and suburbs in the 1960s and 1970s. When Louis and Benny and the other Todd brokers came to the Crystal Pavilion in September
1993, a bit of blue collar came back to Third Avenue.

A spit throw from the fictional angst of
Side Street
, Louis might have had his own, real-life moral dilemma. A lot of people in his position would have been wracked by guilt.
Here he was, getting thousands of dollars a week in ill-gotten money—money that he needed to break out of his own blue-collar
world, money that he didn’t take on impulse, but was removing with growing skill and calculation, by dint of hard work.

Louis had no angst, no existential crisis. He never gave much thought to the morality of what he was doing. Like not letting
customers sell stock.

“I started realizing that you couldn’t get out, that it was all bullshit,” said Louis. “Even though the price was twenty,
it didn’t matter, you couldn’t get out at twenty. I knew they were lousy companies. But at Hanover I wasn’t sure about anything
yet. Once I got to Robert Todd, that was it. I knew that it was all bullshit. And I just treated it that way. I didn’t give
a shit. I just wanted the money. It didn’t matter to me.”

In the movie that Anthony Mann filmed down the street forty-three years before, the hero wound up back in the arms of his
wife—bloodied and beaten, but with his integrity restored. It was a simple solution to a simple moral problem. But in Wall
Street of the early 1990s, moral dilemmas were never simple. Brokerage and stock exchange executives, men of patrician backgrounds
who held chop house brokers in contempt, turned a blind eye to the insane overhyping of stocks by analysts, and the web of
conflicts of interest that would become a full-blown scandal in 2002. Across town, the rips of the chop houses were also nonissues.
Complaints about rips—the heart and soul of the chop houses—never crossed Massood Gilani’s desk. No reason they would. Customers
didn’t know about the rips. But the rips were not hidden so well that the NASD and SEC wouldn’t have found them if the NASD
and SEC were looking, or if the NASD and SEC had given a damn. “The SEC guy would look at the ticket and say, ‘Oh, he marked
it up an eighth [13 cents a share]. He did it right.’ He didn’t know about the $4 rip that we made,” said Louis.

Louis was in a world where the outer parameters of acceptable behavior were determined not by right or wrong, but by what
the NASD and SEC saw and what they didn’t see or didn’t want to see. The regulators saw the unauthorized trades and no-sales
rules because people complained. They didn’t see, and didn’t want to see, the unregistered brokers and the rips—or at least,
they didn’t see them while the unregistered brokers were working and the rips were being charged.

Sure the regulators acted decisively against the chop houses—after they went out of business. If World War II had been fought
like that, the Allies would have stormed the beaches of Normandy during the Korean War.

Todd was never seriously threatened by regulators during its existence. It nurtured Louis, transforming him from a well-off
kid into a rich adult.

After Louis started pulling down good money at Todd, the first thing he did was buy a brand-new Jeep Wrangler. A beauty. Nick
Pasciuto signed the papers because Louis didn’t have a credit rating.

The second thing he did was move out.

Louis moved to Tottenville, a neighborhood at the tip of Staten Island, where he rented a small apartment in a row house.
The first night was bliss. Silence. No screaming. No criticism. He dropped down onto the bed, after a long day of hard work
at Todd, and slept.

Fran Pasciuto was upset. She was not an overly protective mother, not by any stretch of the imagination. But she worried and
she had a sixth sense, an instinct of sorts that kicked in when Louis was in trouble. She could tell when there was a problem.
Fran’s sixth sense told her that Louis should not move out of the family’s house in Staten Island. He should stay where he
was. At home.

But there was no convincing Louis once he made up his mind. It was enough to make any mother feel as if things were spinning
out of control.

“I couldn’t handle it too well,” said Fran. “I thought he should be home. When he moved out it was a whole different lifestyle.
Whatever he was doing—partying, drinking, going out, having a good time—it was a world that I was never in, never used to,
so for me it was crazy.

“Louis and Stefanie used to come for dinner on Sunday. I used to say, ‘What’s going on?’ He’d say, ‘Ma! Don’t worry about
it. What are you worried about?’ I think Nicky knew more of what was going on than I did. . . . He was gambling, going to
Atlantic City a lot, he’d be betting on football games. And I used to get crazy. I’d say, ‘Where are you getting this from?
Nobody ever gambled in this house. All of a sudden now you become the gambler?’ I said, ‘We never went to Atlantic City. We
never bet on football games. Your father never bet or gambled.’ Where was this coming from? This was like shocking. I didn’t
know where it was coming from. It came out of left field. . . .

“I don’t know if it’s part of the Wall Street thing. All the kids, young guys, I really don’t know. But that used to make
me crazy. All the gambling, Atlantic City. I was shocked. Really shocked. Crazy. Like I said, we never went for that. I can
count on one hand the times I’ve been to Atlantic City. I hate it. I really hate it. I think I’m the only person in the world
who hates it! I used to go as a kid, because of the rides, the boardwalk, the convention center. We used to go for that—for
the rides.”

The Donohues loved Atlantic City, and they took Louis along. It was a typical future-in-law power struggle, and the Donohues
were winning. The trips to Atlantic City were the clincher. “When I got there and I seen it for the first time,” said Louis,
“I was like ‘Holy shit!’ I think we arrived out there at about six o’clock. It was getting dark so you could see the lights.
It was really cool. I says, ‘This place is two hours away from Manhattan?’ I felt like I’d never seen the world, never been
out of the city. I’d been to the Jersey shore, but never to Atlantic City. This was fascinating shit. Those hotels were sick.
The Taj Mahal was insane.“Right away that first time I won five hundred dollars at roulette. So naturally I wanted to go back
again. I left there and I says, ‘We got to go back.’ This is too easy if I could win five hundred every time I come there.
It’s fucking crazy. I was figuring shit out. ‘I can make fifteen hundred a week at Hanover plus five hundred at Atlantic City,
that’s two thousand a week.’ That’s what I was thinking.”

Louis’s lucky streak was running in all parts of his life. He had a new career, a new car, a great girlfriend with a great
family, and even a new pastime that was obviously going to pay dividends in the future.

It wasn’t just the money. It was the fun. The rush he felt when he put his money on the table. And it was great how Atlantic
City was such a short ride away. Soon he started going there by himself. Zooming down the Garden State Parkway in his brand-new
Beemer. He got the BMW right after he moved to the apartment. Having two cars was nice. And Stefanie really liked Beemers.

The wisdom of his move to Todd was confirmed during his first month there, when he took home about $10,000. But after the
initial glow wore off, he realized he and Benny had a problem. A corporate culture issue.

The brokers at Todd were a mixed bag. Aside from Benny there was a powerhouse young broker, Marco Fiore, plus other brokers
who were in it for the right reasons. Louis liked to work with the right people—hungry kids who wanted to make money. But
for the most part, the brokers and cold-callers at Todd had all the energy of a mouse turd on a subway platform.

“When I walked in that first day, the only one I heard on the phone was Benny. Everybody else was on the phone, but they were
sitting down. At Hanover, if you sat in a chair, Roy used to put paper clips in the rubber bands and fold them back, and if
you’re sitting down you get shot in the head,” said Louis.

“When you’re up, when you stand, you project more. My cold-callers never sat down. I’d take the chairs out of the room. You
have to stand up. You can move your hands around, walk around. Used to get my cold-callers twenty-foot cords, and the chairs
that I had were uncomfortable for them. I didn’t want them to sit down. I got wooden folding chairs. When you sit down you
get lazy. When you stand up, you go. It’s a numbers game. Got to keep dialing that phone.”