Born to Steal: When the Mafia Hit Wall Street (36 page)

“I always knew they weren’t on the up-and-up and I always used to tell him, ‘Why don’t you get a job at a decent place?’ But
at that point his record was so messed up from all the complaints and everything that he really couldn’t.

“After he got arrested he got less money, and that made it harder to pay our bills, our rent. The landlord was pretty mean.
I guess he had a right to be. Louis was lying all the time. ‘Oh, yes, I paid him.’ I’d get a phone call: ‘Louis was supposed
to come by with the rent. He didn’t come by.’ He’d borrow money from a friend or somebody to pay the rent. We couldn’t afford
the house anymore. It was very stressful financially and emotionally because of all the problems he was having.

“I decided I was going to live at home.”

Louis realized he would never get rid of Guys. He would always have at least one Guy in his life. He developed a kind of Zen
attitude. He would withstand the abuse, the pressure. He would focus on what was important, which was scamming, and try his
best not to be driven off the edge.

Louis arrived at a firm called TYM Securities in Lower Manhattan in July 1997. He was happy even when Charlie No. 2, John
Mergen, forced Louis to get jobs there for him and the other guys from Argent.

In his first week at TYM, Louis made $10,000 and was able to pay back the $5,000 he owed Richie.

He was back. A thief. He felt as if he were reborn. Yes, he could survive, he could make a living. Support his family. He
had earned more money than some brokers did during their entire lives, and worked at three or four times as many firms. He
had earned, and spent, millions already—he never sat down and counted it, much less accounted it for the IRS.

The days of wild living were over, more or less. His life was now a constant quest for money, interspersed with compulsive
gambling, losing, using the few winners to pay for the losers, and scraping together enough cash to keep the bookies and loan
sharks and landlord and Charlie off his back. Sometimes he just liked to disappear, to go away, when the pressure got to be
too much. But he had hope, if not faith, that TYM would make him healthy.

The New York office of TYM Securities was at 2 Rector Street, way downtown. Familiar streets, familiar bars, familiar restaurants.
Familiar people. Dave Lavender, one of his cold-callers from the old days (a year before), had told him about TYM and about
the Guy who made it all possible, whose name was Ralph Torrelli.

As soon as he met Ralph, Louis knew that he was going to like him.

Ralph Daniel Torrelli was thirty-seven when Louis met him. Big and heavy. Very heavy. Tremendi. He was over six feet tall
and weighed in excess of three hundred pounds. But he was soft-spoken. Reasonable. He was the kind of guy Joe Bonanno might
have had in mind when he talked about “men of honor.” Ralph kept his word. He didn’t scream like the other Guys. He kept his
voice low because his credentials preceded him and hollered on his behalf.

Ralph Torrelli was a sweet-dispositioned ex-drug dealer.

In 1989, Ralph was convicted of federal narcotics charges in the bucolic but drug-infested Gulf Coast of Florida. Ralph’s
arrest, trial, and conviction received little attention even in Florida. Some drug dealers from the north had come into town
and gotten arrested. Not big news. This was the era of the War on Drugs, and Ralph was a POW.

“Five people were sentenced in Orlando federal court Monday for their involvement in a drug ring that manufactured speed and
chemicals used to make cocaine,” said the article on the second page of the second section of the
Orlando Sentinel
, March 21, 1989. “U.S. District Judge G. Kendall Sharp sentenced Ralph Torrelli, 29, to 10 years in prison and Glenn Crouse,
32, to six years. Last December, a jury had convicted the two men, both of Levittown, Pa., on drug-conspiracy and distribution
charges.” Ralph emerged from the federal prison system in April 1995 after serving nearly six years of his sentence.

In bygone eras, a Guy like Torrelli would have been able to find employment after prison on the docks, or in construction,
or as a strikebreaker, or in the Fulton Fish Market. But in the 1990s an ex-con with the right connections had his best chances
for getting his act together on Wall Street. Torrelli, sobered by his lengthy incarceration, moved from manufacture and distribution
of controlled substances to manufacture and distribution of equity in companies.

Chop stocks were the crack cocaine of the New Economy, far less risky and almost as profitable, and there was no War on Stock
Fraud when Torrelli set up shop at a brokerage firm called Amerivet. He organized a consulting firm called Effson, whose offices
were in the same Rector Street building as Amerivet. He was now a full-fledged stock promoter, one of the investment bankers
of the chop house world. Like Real Wall Street investment bankers, chop house stock promoters are middlemen between companies
and brokerages. Stock promoters raise money for small companies by introducing them to brokerages, and get product for chop
houses (and legit brokerages too) by introducing them to companies.

By the time Louis arrived, the Amerivet Rector Street branch office had a new sign on the door. It was now the TYM Securities
Rector Street branch office.

Louis didn’t know how Torrelli got into the chop stock business. But it made perfect sense. It was a thing that was being
done at the time by Guys from all of the six families in the New York metro area and, now, Philadelphia. Louis was lucky to
be hooked up with a Guy who was comparatively quiet, nonviolent, and reasonable, a degree of emotional intelligence not common
in that walk of life.

“At TYM things started to get back to normal. Ralph got the OSJ [branch office] for TYM. He had a little office there. Computer,
printer. Nice office. Ralph was in Pennsylvania his whole life, except for the time he was in jail. It seemed to me that what
he was doing here was trying to get his life together. He had a family. Four kids. Ralph was low-key. He never gets in trouble.
He’s fucking hidden.”

Ralph put the stock deals together, and was responsible for paying the brokers. He got the cash from a slick, well-dressed
Russian named Alex, known as “Alex Versace” because of his taste in designer wear and good selection of wristwatches, which
Louis estimated to be in the $70,000 range.

“After a while Alex started to talk about the money so I found out the money from the clients was wired to Israel, and then
this Hassidic guy would come and then bring us the cash. One time I wanted to find out, so I followed Alex downstairs one
payday. I left the office right after him, and I watched him get into this green van with a Hassidic Jew. I was curious where
the kid got the money, because he’d come up with two, three hundred thousand in cash. It’s not that easy. Even for a bank
it’s hard. You’d have to give a bank three, four days’ notice. We would pay six percent off our money to get it in cash. That’s
the way it was. Well worth it.”

Alex was what is popularly referred to as a “money launderer.” A few years later, when terrorists destroyed the World Trade
Center, a lot of attention would be focused on the kind of money laundering that sneaks cash into the U.S. from abroad. But
for years, more complicated forms of money laundering were essential to the chop houses. The mechanics were complex but the
aim was simple—to turn the proceeds from stock scams into untraceable cash. Ironically, considering the later association
of money laundering with Islamic militants, the money laundering networks that benefited the chop house kids and their Guys
were mainly operated by Russian Jewish immigrants and Israelis. Ralph had somehow developed good connections in that world.

Times were good with Ralph. Louis couldn’t believe it. Unless he was missing something, which was possible, he had finally
run into one of those characters he had only seen in the movies—a sympathetic, nice, not completely out-for-himself Guy. Ralph
directly paid Charlie the money due from Louis, and even lied about the money Louis was getting, to cut into Charlie’s share.
“He was on my side,” said Louis. And that was getting to be a rare thing, with Benny gone and Stefanie not around that much
anymore.

Louis finally caught up with the Internet stock mania at TYM. By now, dot.coms, IPOs in particular, were generating crazy
returns despite thin or nonexistent profits—kind of a chop stock pitch come true. TYM was pushing stock in a company called
Internet Holdings. Great name. Great symbol—HTTP—the acronym for the hypertext protocol used on the World Wide Web. All it
needed was a story Louis could sell. Not a business. A story.

HTTP had to get its story out to the public, and that was Ralph’s job too. Like any promoter or investor relations professional
involved in bringing stocks to the attention of investors, Ralph developed and distributed promotional materials that often
were sent out to brokerage firms and to the financial press. After all, a favorable mention in the financial press can really
light a fire under a stock.

In the summer of 1997, a white cardboard folder—somewhat cheaply labeled “Due Diligence Package”—came to
Business Week
from Internet Holdings Incorporated. Dozens if not hundreds of similar stock promotional materials come to
Business Week
each year. Inside the cardboard folder were promotional materials about the company. The material was undated but was apparently
being circulated to the press in August 1997, at about the time Louis, Mergen, and the Argent brokers joined Ralph Torrelli
at TYM. Included in the packet was a letter from a securities lawyer to Elton Johnson, president of Amerivet Securities Incorporated,
listing the states where HTTP could be sold. There was also a handwritten note to Johnson. It was apparently included in this
particular packet by accident. This is what it said:

Effson Consulting Inc.

2 Rector Street

10th Floor

New York, N.Y. 10006

Dear Elton
,

Just wanted to send you this package for your review. Please look it over. Call me
.

Best regards
,

Ralph

Unfortunately for HTTP, the packets weren’t working too well. The company wasn’t getting any publicity, which probably was
because of the contents of that cardboard folder. An SEC filing in the company’s due dilly package said it “presently has
no operations” and “does not currently maintain offices.” The filing did have one bit of good news: “The company believes
its employee relations are good.” There was one employee.

No offices, no operations. Not much of a company, but a great stock! A terrific story! Louis sold $1 million of it to one
of his Whales.

“Name was Henry O’Keefe. I was practically guaranteeing the stock to him. I told him it was an Internet company that had a
patent. Something that the phones needed, and that every phone company in the United States would have to buy over the next
six months, or otherwise they wouldn’t be able to use their phones. Some shit like that. They had a monopoly on this device
and because they’re changing all the lines from analog to digital in the United States, ‘if they don’t buy this device, they
won’t be able to become digital. You won’t be able to use your phone. They got a monopoly!’ Actually they had something to
do with digital but they didn’t have a ‘monopoly.’ They didn’t even have the ‘poly’ in monopoly.”

Somehow or other, Henry O’Keefe found out that HTTP wasn’t all it was cracked up to be. Customers were getting smart—maybe
it was all the press. They knew what to do when they got ripped off by a broker.

“One day I go out to my car and this guy shows up. Name is Steve. He says, ‘I’m here for Henry O’Keefe.’ I went, ‘Who is that?’
He says, ‘You know damn well who that is, kid. You ripped him off for close to a million dollars.’ He says he’s Henry’s ‘friend,’
and he’s there to get the money. But this guy’s a real broken-down valise. He’s in his mid-forties, with an unbuttoned shirt,
really cheap silky unbuttoned shirt with bad-material dress pants and these ugly beige Capezios. So I put him in touch with
Charlie.”

For Charlie, a complaining customer with “Guy connections” meant only one thing: payday. “Charlie goes, ‘I got to get back
to them. They want to meet.’ He says, ‘What do you think? Sooner or later somebody wasn’t going to come over to you? You think
you’re going to get away with robbing people your whole life?’ I say, ‘Charlie, this is what I do for a living. I rob clients.’”
Apparently the thought had never occurred to Charlie.

It sounded fishy to Louis. He suspected that this Steve was sent by somebody other than Henry O’Keefe, though he never bothered
contacting O’Keefe to find out if that was true.

Steve eventually went away. But unbeknownst to Louis, there were other burned HTTP customers. And they were complaining. A
client of one of Mergen’s brokers complained to the regulators. Instead of being ignored, which was the routine in the past,
she got a visit from two FBI agents. One was True Brown, head of the FBI’s stock-scam hunters. The other was an agent named
John Brosnan.

Early in the morning of December 27, 1997—the lucky two-sevens were at work again—Stefanie Donohue Pasciuto gave birth to
Anthony Pasciuto. He had Stefanie’s cherubic face and Louis’s strong will. Louis had mixed feelings about being a father.
The timing wasn’t too great. But he got into the whole expectant-father thing, which made the in-laws and parents happy. He
participated in Lamaze classes. He was supportive, the way expectant fathers are supposed to be nowadays. After Anthony was
born, Stefanie saw Louis actually cry one time. It is an emotional thing having a kid. More than just having another mouth,
or Guy, to feed.

Now that he was a father, Louis tried harder than ever to hold a steady job. TYM could be a steady job. Stefanie had moved
back in with Louis late in her pregnancy. Louis promised that things had changed.
He
had changed. He would change his ways. Stop gambling. Pay off his debts.