by Lamothe, Lee
The substantial balance in two of Giammarella’s accounts was then slowly siphoned off through repeated transfers into accounts connected to Joe Lagana, the Montreal lawyer who was handling the Rizzuto organization’s drug money in Canada. On December 23, 1992, Cdn$500,000 was moved into account No. 001124870, code named “PINO” at the Banque Cantrade in Lausanne, Switzerland, which was in Lagana’s name. The following year, on November 29, 1993, 500,000 Swiss francs were transferred to the same account. On April 28, 1994, another 600,000 Swiss francs were sent to a Banque Cantrade business account in the name of Biolight S.A., a firm that belonged to Lagana. Similarly, on February 20, 1992, 500,000 Swiss francs were moved from the Credit Suisse to an account at the Banca Commerciale Italiana in Geneva. The holder of this account was Shield Enterprises, S.A., a company the Swiss said “seemingly belonged” to Lagana.
“It is important to emphasize the transfers from Giammarella’s accounts to Giuseppe [Joe] Lagana’s accounts, for a total of approximately 2,500,000 Swiss francs,” a report by the Swiss prosecutor’s office says. “According to the arguments presented by Mrs. Rizzuto’s legal counsel, Lagana would have immediately returned most of this amount to the Rizzutos. They have, therefore, admitted to a business relationship between the Rizzutos and Lagana.” With Lagana now a charged and soon-to-be-convicted launderer of drug money in Canada, that was a precarious relationship to have.
When Libertina and Giammarella were stopped at the Credit Suisse, apparently trying to drain the account, Swiss police believe it was another move in the Sixth Family’s money dance.
“It seems clear that at the moment of their arrest, Mrs. Libertina Rizzuto intended to open a fourth phase, after the closing of the Giammarella accounts,” the Swiss authorities concluded.
Switzerland and its neighbor to the east, the tiny principality of Liechtenstein, were awash in Sixth Family money. Switzerland was the early global leader in the secret money field, having offered financial services to European aristocrats for centuries. Bank secrecy was a Swiss law in the 1930s, making it an offense to disclose any information about an account, even to the government. The two nations, which have a Customs and monetary union, expanded their international reputation as havens for cash and other assets during the Second World War when both remained neutral. Postwar, they built on that trade by offering easy business incorporation, low taxes and limited banking regulatory oversight. It spawned outstanding growth in the financial sector, but brought condemnation from the international community for facilitating massive laundering of criminal proceeds. The crackdown in Switzerland that had been urged on by Carla Del Ponte was later matched in Liechtenstein, which implemented new anti-money-laundering legislation and, more recently, concluded a Mutual Legal Assistance Treaty with the United States. The changes mean that those who wish to hide vast capital must be more imaginative and engage in far greater subterfuge—or avoid the Old World financial centers altogether, seeking out fringe nations who seek to replicate the unlikely economic prosperity of Liechtenstein, which has wealth beyond anything that could be expected from a doubly landlocked nation of just 62 square miles with little in the way of natural resources.
From the 1970s through to the late 1990s, however, the two European states were Sixth Family favorites. Alfonso Caruana had been stopped by Swiss Customs officials in November 1978 and fined for a currency violation relating to the US$600,000 he was carrying. The Caruana-Cuntreras, who were establishing a heroin and cocaine pipeline in Europe, based largely in Germany and England, were also building a money pipeline to Switzerland and Liechtenstein as a corollary enterprise to handle the profits. The arrangements were frequently handled by Giuseppe Cuffaro, the mafioso who emigrated to Montreal just before the Rizzutos and forged an early alliance between their clans.
Like their friends, the Rizzutos, the Caruana-Cuntrera clan used extended family members, hastily arranged businesses and corporate accounts to shuffle their money between North America, Europe and South America. In 1996, as Alfonso Caruana was being investigated by police in several countries, he continued to use an effective combination of Canadian-based companies and U.S.-based banks to get his drug money where he needed it.
“Information recently has surfaced which indicates that several millions of dollars originating from cocaine trafficking which [Alfonso] Caruana is a part of, has been forwarded to the City Bank of New York,” says a secured diplomatic transmission, sent in April 1996 from the RCMP’s liaison officer at Canada’s embassy in Rome, to police in Toronto, who were probing Caruana’s activities. The New York account was in the name of Bedford House International Ltd., with an address in Etobicoke, a district in the west end of Toronto. Similarly, money transfers linked to Caruana’s cocaine sales in Italy were tracked by Italian and Dutch authorities through a Holland-based company called Marshall Compton, S.A., to an account at the Schweizerische Bankverein in Zurich, held by Experta Trustee Comp. Ltd., according to another diplomatic note from that year. A Swiss investigation showed Experta Trustee to be a firm operating a Zurich bank account on behalf of other companies, including Hifalia Inc., formed in Montreal.
The Swiss were keenly aware of the possible implications of the types of suspicious financial activities they found occurring under the Rizzuto name: the large cash transactions; the seemingly dubious explanations of the funds’ origins; the involvement of known drug traffickers such as Joe LoPresti and Christian Deschênes; the involvement of accused money launderers such as Joe Lagana; connections between the primary account holders and confirmed drug seizures; the allegations in several countries of the Mafia interests and drug-trafficking role of the Rizzutos; their close association with the Caruana-Cuntrera and the Mafia clans investigated in the Pizza Connection case. There was an inescapable suspicion for Swiss authorities that the bank balances they were tracking represented the proceeds of crime, likely from international drug trafficking. And now they had a principal holder of the original phase-one accounts—Libertina Rizzuto—in their custody. They were as intent on seizing the Rizzuto assets as the Montreal officers running the currency exchange had been on laying charges against Libertina’s son.
“According to the information provided by the Italian authorities to Mrs. Del Ponte, Guiseppe (Joe) LoPresti was connected to organized crime in the United States and in Canada, notably in regards to individuals such as Nick Rizzuto, husband of Libertina Rizzuto, and Gerlando Sciascia, all of which come from Cattolica Eraclea in Sicily,” notes a Swiss government report on the Rizzuto financial dealings. “It is also obvious that the owners of these funds did everything possible to prevent being discovered (accounts in the names of third parties, periodic changes of account) and to cover the trace of the money (deposits and withdrawals in cash),” the report says.
There was one crucial piece of the puzzle missing before the Swiss could thunder down on the jailed Rizzuto matriarch—evidence of drugs. Or, for that matter, evidence of any other crime.
“As far as the charge of participating or supporting organized crime, concrete evidence would have to be found proving that the Rizzuto family makes up a criminal organization or belongs to a criminal organization,” the Swiss prosecutor’s office concluded. “It obviously remains to be proven that the funds in question, particularly those deposited into the three bank accounts held by Luca Giammarella, are the result of illicit activities, notably narcotics trafficking.”
Because it was money, not drugs, that investigators found moving freely through Switzerland, evidence of a narcotics conspiracy would have to come from somewhere else. The Swiss authorities turned to Canada. Just as Canada had requested judicial assistance from the Swiss, leading to Libertina’s arrest in Lugano, the Swiss authorities formally issued their own “request for urgent judicial assistance” to Canadian officials, seeking their help in finishing the job that the undercover RCMP officers at the currency exchange office had started.
On December 16, 1994, with Libertina and Giammarella still in custody, Fabrizio Eg
genschwiler, the assigned public prosecutor with the Public Ministry of the canton of Tessin in Switzerland, asked the Canadian government to tell them what they could about the Rizzutos. Eggenschwiler sought “anything that would demonstrate that the members of the Rizzuto family are a criminal organization or belong to such an organization,” as well as evidence of the criminal origin of the money. Details of the evidence gathered by investigators against Joe Lagana, particularly information on “all the possible connections between this procedure and the Rizzuto family,” would also be helpful.
“The assigned public prosecutor emphasizes the urgent nature of this request due to the present custody of Libertina Rizzuto and Luca Giammarella,” Eggenschwiler concluded. The Rizzutos once again turned to Jean Salois. His mandate was to gain the pair’s freedom. He was unimpressed with the materials the RCMP were feeding to the Swiss.
“Canadian authorities were impressed upon to transmit everything that concerned the Rizzutos in their files, as well as various documents and various information that were often equivocal, based on the opinions or the conclusions of the police or simply suspicions that would never be admissible in a court,” according to Salois. When he complained of this to the RCMP, officials were aghast that the Swiss had shared the Canadian submissions with the lawyer for the accused. Salois feels the RCMP were trying to take advantage of the different rules of the European judicial process to admit evidence that would not be acceptable in Canada.
“Canadian authorities were caught out at their own game,” Salois said.
MONTREAL, MARCH 1995
The Swiss case against a Rizzuto—this time Libertina—like so many others mounted against the family, quickly fizzled. Libertina and Giammarella were released not long afterward. About six months after their arrest, Libertina and Giammarella were granted bail and allowed to return to Canada. The Rizzuto matriarch was met in Montreal by a relieved and welcoming family. It was an emotional greeting. The situation was sorted out in time to allow Libertina to be present, in a black dress and big jewelry, at the wedding of her grandson, Nick.
Her release, however, did not go without suspicion and controversy. In March 1995, Michel Bellehumeur, a member of Parliament with the Bloc Québécois party, rose in Canada’s Parliament and publicly questioned the government’s inability or unwillingness to help the Swiss.
“It seems their release came as a result of the half-hearted assistance the RCMP gave Swiss police authorities. Could the prime minister explain why the RCMP failed to give the Swiss authorities their full cooperation when they refused to provide information crucial to legal proceedings in Switzerland?” Bellehumeur asked. “What explanation does the prime minister have for the fact that the only officer familiar with the case involving Mrs. Rizzuto and Mr. Giammarella was on holiday when the Swiss authorities had to release these two individuals?” The government promised to look into the matter. Two weeks later, Bellehumeur asked for an update. Herb Gray, a venerable government defender who was Canada’s solicitor general, said the Bloc MP was “mistaken.”
“I have been informed that the Swiss authorities are quite satisfied with the support they received from the RCMP,” Gray assured the country. Almost three years after the arrests, on July 11, 1997, the Swiss officially ended their interest in the case, according to Salois.
The treatment accorded Vito’s mother—having been held in jail for months in a foreign country—was distressing and upsetting for Vito, said Oreste Pagano, who, at the time of Libertina’s troubles, said he was working on the deal with Vito that went afoul in Puerto Cabello. For his mother, who had given Vito his height, his high cheekbones and downcast eyes, Vito would spare no expense in obtaining legal counsel abroad to protect her rights, argue for her innocence and push for her release. His mother’s incarceration was a constant distraction for Vito, and the Montreal boss bemoaned the situation personally to Pagano.
“At that moment he was having difficulties, that his mother was also in prison in Switzerland,” Pagano said.
Pagano also said that there was much more money at stake than the Swiss investigators, diligent as they were, discovered.
“She had gone to withdraw money from a bank in Switzerland, where there was, I believe, around $5 million, and there she was stopped and she ended up in prison in Switzerland.” And even that amount was a mere pittance compared to the $91 million that the officers laundered in Montreal at a single currency-exchange office—money, investigators say, that was from the Rizzuto organization.
Both Libertina’s visit to Switzerland and the covert Montreal operation—just two snapshots of a specific time and place—hint at the tremendous wealth and financial resources the Rizzutos have had at their disposal, offering compelling proof that they formed a sophisticated, successful and multinational organization.
What’s more, their money remained largely untouched.
If police only ever catch an estimated one-tenth of the supply of illegal drugs, surely their record on finding dirty money is even worse. If this was the supply of cash uncovered in a single probe, imagine the size of the whole pot at the Sixth Family’s command.
The few failed franchise efforts made by Manno, Ragusa, Sciortino and Zbikowski were clearly not debilitating to the organization as a whole. Even with these colleagues charged by police and their drug networks exposed, police believe there was ample product for the Sixth Family to wield. In 1997, police surveillance teams watched Nick Rizzuto meet with Gerlando Caruana, Agostino Cuntrera and Joe Renda, according to police reports. Investigators believed the meeting was called by Nick to regulate the price of cocaine. Such an ability would be one of the key advantages of owning the franchise rights. As the Sixth Family expanded its range of activities—with the flood of hashish coming into Canada along the East Coast, with heroin and cocaine coming in from South America, Florida, Texas and Italy and with its money searching for sanctuary abroad—the organization was growing beyond recognition.
It was growing beyond New York.
CHAPTER 30
QUEENS, JUNE 1991
Philip “Rusty” Rastelli did not look particularly healthy even before he was ravaged by cancer, so it was a surprise to no one when the Bonanno Family rank and file received orders to show up for the wake and funeral of their boss. Over three days, starting on June 25, 1991, New York gangsters of all stripes filed through to pay their respects to the emaciated corpse of the dead Bonanno boss as he lay at a funeral home not far from Sal Vitale’s Grand Avenue social club. Cadillacs and Lincolns clogged the roadway and a stream of gangsters, almost all of them wearing white shirts, ties and dark suits, wandered into the funeral home, chatted with each other, greeted Rastelli’s family and then crept outside for a cigarette.
It was a significant sign of respect, although much of it duplicitously given by gangsters who had long been begging for the boss to move aside so that Joe Massino could salvage the sagging fortunes of the family.
“Everyone showed up,” Vitale said. Everyone also knew that Rastelli had been a mere figurehead within the family for years, and there was little question over who would replace him. After the murder of Carmine Galante and the purge of the three captains, Rastelli’s power was only as secure as Massino wanted it to be. While Rastelli was in jail, Massino ran the show, Vitale said. Even members of Rastelli’s own administration took a back seat to Massino. Nicholas “Nicky Glasses” Marangello was the underboss and Stefano “Stevie Beef” Cannone was the consigliere, but neither stood up to Massino.
“I don’t think Nicky Glasses and Stevie Beef really wanted the position. They didn’t want to butt heads with a strong captain, a strong individual, like Joe Massino. Anything that Joe wanted to do, Joe could do,” Vitale said. “Phil Rastelli wanted to step down the day he got home,” Vitale said of Rastelli’s release from prison in 1983. “When he got out of jail, he really wanted to retire. He wanted to give everything to Mr. Massino. He just wanted to live his life out peacefully.” The signs of Rastelli’s impotence
were everywhere.
“If Mr. Rastelli would have given me an order, I would have checked it with Joe Massino before I accepted,” Vitale said. Massino was in no hurry to have the boss stand down. There was little reason for him to move against Rastelli so long as he maintained his favored status in the family; he enjoyed the insulation it afforded him from federal agents. Massino knew a family’s boss was always the government’s top target.
When Rastelli’s death was imminent, however, Massino did not leave his succession to chance. The position, while bringing huge risks, also brought immense profit. Before Rastelli died, he mapped out exactly what was to happen.
“When Phil dies, make Anthony Spero call a meeting. Elect me boss. Have someone second the motion, whether it be you, Big Louie, whoever, make me boss,” Massino said to Vitale. It happened precisely as he ordered. After the burial of Rastelli, Spero called to order a meeting of Bonanno captains at a Staten Island home.
“Regretfully, Phil Rastelli has died. But it’s now time that we elect a new boss,” Spero said to the gathering.
“Why don’t we make Joe Massino [boss]?” one of the captains said, as if it were a spur-of-the-moment idea. There was no dissent. A new era in the Bonanno Family history had begun.
