The Sixth Family (46 page)
Authors: Lee Lamothe
While he was not forthcoming about these other banking “contacts” and “interests,” as he called them, further investigation by Swiss authorities found that account No. 23910, assigned the code name
“MICA” at the Banque Populaire Suisse, was held in Giammarella’s name. After he transferred Cdn$500,000 and 1,100,000 Swiss francs to personal and business accounts controlled by Joe Lagana, a Montreal lawyer who was a close confidant and relative of Vito Rizzuto’s, the account retained a balance that day of Cdn$225,000. Similarly, account No. 61002, assigned the code name “ASPARAGINA” at the Banco di Roma, was also in Giammarella’s name and contained Cdn$1 million and another 1,100,000 Swiss francs, funds that were then blocked by Swiss authorities. All three accounts were opened over two days, on May 24 to 25, 1988.
Large as they were, these figures were just the tip of the iceberg of what was at play in Lugano that day. There were plenty of clues for the Swiss investigators. Clearly, one of the problems of juggling so much money in so many accounts is keeping track of the banking information. Few have the head for so many numbers and so, time and again, authorities found people in incriminating circumstances carrying slips of paper that referred to Lugano bank accounts that the Swiss linked to the Rizzutos. Along with the notes Giammarella had in his hotel room investigators also seized from Libertina her datebook and personal address book, which she was carrying with her when she was taken into custody. Inside, investigators found similar cryptic references to other bank accounts and notations about certain people, Beniamino Zappia and Joe Lagana among them.
When Swiss authorities started sifting through the banking records of the names they now had, they found at least 14 accounts in Lugano alone that could easily be linked to the Rizzutos.
“During the investigation, we discovered another series of Lugano bank accounts belonging to [or] having belonged directly to the Rizzuto family or to other individuals related to the family, notably Giuseppe LoPresti, who died under circumstances that remain unknown, [and] Beniamino Zappia,” as well as other relatives by blood and by marriage of the Rizzutos, says a report by Swiss police on the money trail.
“The Rizzutos have, in the majority of the cases, a proxy on these accounts,” the report concludes.
Meanwhile, Libertina was growing impatient. She wanted to know why police were taking such an interest in her visit to Lugano.
“Because you didn’t simply open an account at the Credit Suisse bank and have the money transferred internally,” Inspector Bianchi told her, referring to the more acceptable form of moving such large sums of money around. It looked to police like someone was trying to hide the source of the money or erase any paper trail linking its withdrawal to its future deposit.
Although walking in with a blue handbag ready to take 820,000 Swiss francs out of a bank did amount to suspicious activity—even in Switzerland—it was not the real reason why Giammarella’s request to withdraw the assets in his account was declined and police were so quickly and quietly called. He and Libertina did not know it, but the day before they arrived at the Credit Suisse branch—just as Libertina was arriving in Lugano, in fact—the accounts were being frozen on the order of Switzerland’s Public Minister, at the request of the Office of the Federal Police. That request, in turn, had come from Canada.
Neither was this the first time the Rizzutos had come to the attention of Swiss authorities. A separate investigation had already been launched by Carla Del Ponte, the chain-smoking public prosecutor from Lugano, who became the country’s attorney-general and, more recently, made headlines as the controversial war crimes prosecutor at The Hague’s International Criminal Tribunal for the Former Yugoslavia, where she led the prosecution against Slobodan Milosevic, the former Yugoslav leader who died in March 2006. Before taking on suspected war criminals, Del Ponte earned the hatred of the Sicilian Mafia in the late 1980s when she worked with Giovanni Falcone to uncover the transit through Switzerland’s banks of cash proceeds from the huge Pizza Connection drug ring. For her efforts, the Mafia not only referred to her spitefully as
la puttana
—“the whore”—but also, in 1988, placed a half ton of explosives in the foundation of her home, which was discovered before its detonation.
la puttana
—“the whore”—but also, in 1988, placed a half ton of explosives in the foundation of her home, which was discovered before its detonation.
Undeterred, Del Ponte crusaded against the infamous secrecy of the Swiss banking establishment, which earned her more hatred, but also brought eventual banking reform—the very changes that allowed authorities to track the money trail of the Rizzutos and block the accounts in Lugano that Libertina and Giammarella were trying to gain access to when they were arrested.
It was in 1990, as part of Del Ponte’s sweeping probe of the massive laundering of drug money by international criminals and the revelations over the movement of cash from the Pizza Connection case, that the prosecutor opened a secret file on the Rizzutos. During her probe she was told by Judge Falcone that in 1986 a Quebec man named Christian Deschênes had been arrested after police seized two truckloads of tightly packed hashish. The hashish, worth an estimated $100 million, had been offloaded from a fishing vessel on the remote shores of Cape Breton, on Canada’s eastern seaboard. It was, police believed, yet another load arriving under the auspices of the Sixth Family. When arrested, Deschênes was carrying a slip of paper on which was written information about a Lugano bank account. That account—No. 650.068, held in the name of Beniamino Zappia at the Union des Banques Suisses—was the same one Libertina had written in her datebook, Swiss authorities say.
A fascinating window was opened on the immense financial end of the Sixth Family empire. The tracing of the accounts by the Swiss authorities seems to have been limited to those held in Lugano with a Rizzuto family member directly listed as the account holder or with authorized access to it, plus those accounts easily found to have money moved into accounts controlled by Joe Lagana. As with any facet of the Sixth Family, it formed a complicated tangle.
The Swiss probe through this financial web, however, started simply enough when a Montreal lawyer paid a visit to a more-than-respectable-looking foreign currency exchange company on one of the busiest corners in Montreal’s business district.
MONTREAL, EARLY SEPTEMBER 1990The convenience of the new foreign currency exchange counter must have seemed a godsend for Joe Lagana when the almost chic-looking retail space opened its doors at the corner of Peel Street and de Maisonneuve Boulevard West in downtown Montreal. The Centre International Monétaire de Montréal (Montreal International Currency Center) was directly across the street from Lagana’s seventh-floor law office. The street-level facility was clean, neat and well staffed. It had obvious security features, including bulletproof windows, and touches of class, such as polished hardwood paneling, brand-new office furniture and reliable money-counting machines.
Far more important to Lagana and two other lawyers employed at his firm, however, was that the facility was willing to accept large piles of small, crumpled bills that were brought in and dumped out of sacks, hockey equipment bags, shoe boxes and shopping bags and, in return, send the client off with easily bankable checks, large denomination U.S. banknotes and successful off-shore wire transfer receipts—all without awkward questions or apparent reports to the authorities. It was just what Lagana was looking for, as it is often difficult to get rid of all the cash generated from large drug sales.
The Centre International Monétaire had been incorporated on August 17, 1990, with fictitious names listed as its management. There were five employees who staffed the counter and handled the cash. They had each been trained by the staff of a prominent Canadian bank just weeks before. The exchange office was then opened to the public early in September. Over the next four years, from that unannounced and unadvertised start, the company would process Cdn$141.5 million in known and suspected drug money from clients walking in off the street. Of that amount, $91 million would come from Lagana and his associates, most of it brought into the exchange office by him directly or by Richard Judd and Vincenzo Vecchio, two other lawyers who worked in Lagana’s law firm. Lagana’s interest, however, started cautiously. He watched the exchange house for almost a year before actually sending any money to it, and even then his first transaction was a small one, just $10,000, as a test.
Over time, Lagana, who was married to another lawyer, became increasingly comfortable with his new business associates at the Centre International Monétaire. Over the course of his visits, he would find that the staff not only did not ask embarrassing questions about where the money came from, but were perfectly accepting of the fact that it was the proceeds from large-scale cocaine deals. The men he worked with at the exchange counter would later, in fact, step in and directly help, not only moving the money, but shipping the actual cocaine.
What went unnoticed during these transactions, however, were some special features of the Centre Internationale Monétaire that would have caused Lagana, and almost all of its customers, considerable concern: hidden video cameras and audio recording equipment had been strategically placed to capture a clear record of the transactions. Even more surprising was the fact that the exchange office was staffed entirely by undercover officers with the RCMP. The Centre Internationale Monétaire, it would later be revealed, was the centerpiece of Operation 90-26C, a police “reverse sting” operation codenamed “Operation Contract.”
It was an innovative scheme designed to uncover the flow of drug money. The idea stemmed from the simple fact that there were just far too many foreign currency exchange facilities in Montreal for all of them to be earning a legal living from servicing tourists and legitimate businessmen. Police knew some of these facilities were aiding drug traffickers by cleaning and moving their dirty money. What they did not know was how immensely popular their own undercover financial services would become once word of it spread through the underworld.
“The money started rolling in. Big hockey bags of cash, bundles of money, some counted, some not counted. We were overwhelmed. We were counting millions every day,” said Michel Michaud, who worked undercover at the exchange for three years, convincing drug traffickers and money launderers he was a crooked businessman rather than a dedicated RCMP constable. “We usually worked at the exchange counter from nine-to-five. Then we started going out for dinner with the bad guys. Lagana would always pick the restaurant. At Milos, on Parc Avenue, I don’t know how many bottles of wine we had but we ended up paying the bill of over $800. Sometimes we spent lots of money in night clubs with them. When we got home we had hours of notes and reports to write. Each meeting and telephone conversation with a bad guy had to be written up ASAP—we could not fall behind in our notes; our notes were going to be crucial,” he said.
Within its four years of operation, the facility would launder drug money on behalf of 25 criminal organizations. Its services were in such demand, however, that the few officers assigned to the investigation were soon in over their heads. Police were understaffed, underfunded and without adequate technical equipment to follow up on the dizzying number of new contacts being made from underworld clients walking in off the street, and so most customers were walking out of the office after their transactions without triggering any further police investigation.
On September 24, 1992, for example, a man entered the Internationale Monétaire at 11:23 a.m. carrying with him $959,720 in Canadian banknotes. After the bills fanned through the money-counting machines, he was issued 16 bank drafts made out to five different names for that amount in the equivalent value of U.S. dollars, minus the company’s processing fee. When the man left, there was no officer available to follow and identify him. It was all too much for at least one officer. Shortly after that mysterious figure left the office with his underworld financial needs having just been satisfied by police agents, Constable Mike Cowley, an RCMP investigator working on the case, wrote a confidential internal memo to his supervisors complaining of the lack of attention being given the important operation: “Without the necessary resources, it seems like our undercover officers are simply offering a money laundering service for drug traffickers,” he wrote on October 16, 1992. His concern seemed justified.
What the investigators did know, however, was that the money they were processing was moving quickly around the globe. The bank drafts they issued and U.S. banknotes they were releasing seemed to be turning up everywhere. A man arrested in Montgomery, Alabama, was found carrying 110 kilograms of cocaine, as well as cash that had been issued by the International Monétaire. Other marked bills were found on drug suspects in Toronto and Vancouver. Bank drafts issued by the company were later deposited into banks in the Bahamas, Panama, Netherlands, Belgium, Florida, New York and Miami. To make the money easier to trace, the officers started convincing as many customers as they could to take checks rather than cash. Most times the crooks did not care in whose name the checks were made out to—as long as it was not their own. The investigators started writing huge checks out in the names of cartoon characters, such as Fred Flintstone and hockey greats, including Bobbie Orr, Larry Robinson and Frank Mahovlich. Even politicians were invoked, although more cautiously: the names “Pierre Mulroney” and “Brian Trudeau” found their way onto checks.
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