The Sixth Family (55 page)

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Authors: Lee Lamothe

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“We started visiting these establishments and seizing the video gambling machines and saying to [the club and bar owners] as we left each one: ‘Tell Vito it’s because of Pizza Hut’,” said a former police officer in Montreal.
“After about 30 or 40 of these visits, we phoned up Jean Salois [Vito’s long-time lawyer] and say we would like to speak with Vito. Jean Salois comes in with Vito Rizzuto to the police station and Vito—through his lawyer—says he only came to assure us that he had no involvement in any of it. We said: ‘We understand that you have no involvement, but we want it to end.’
“And it did,” the former officer said. (Salois, it should be noted, says he was never contacted by police on this matter and he and Vito did not meet with officers about it: “Never, during all the years that I have represented Mr. Rizzuto, have I gone with him to a police station or elsewhere to meet with them,” he said. “It is a blatant lie.”)
That first Pizza Hut outlet would eventually open and meet with success, both in Saint-Léonard and across Montreal. By the spring of 1991, PepsiCo announced it was expanding its franchise deals into other areas of Quebec and, by September 1991, the Montreal franchisee had four outlets open, three more scheduled to open before the end of the year and another 15 planned for 1992. There seemed to be an odd hunger for the distinctive pizzas that Pizza Hut was offering; Montreal, despite its robust Italian population, generally seems to have trouble producing great pizza. In 2005, Pizza Hut was popular enough to be voted the second-best pizza in the city by the readers of the
Mirror
, a tabloid newspaper. That was a drop from the top spot, a rank it held in the poll’s previous four years. The Pizza Hut case was a rare victory over the powerful Mafia on its own turf, although it came at a high emotional price.
“It was very difficult,” said the man who was the Pizza Hut franchise owner at the time. (It has since changed hands more than once.) “I just know the repercussions; I don’t know anything leading up to it,” he said. He dismisses the notion that he is a brave figure who set an example of how honest citizenry can defeat the mob.
“I would look at it another way—incredibly stupid. You have to look at it both ways. If something would have happened, then it was incredibly stupid. Really, the heroes in this are the police. The heroes are the anti-gang squad and the heroes are the arson squad. That’s it. That’s it. There are no other heroes.”
The moves against Pizza Hut show the duality of the organization that the Sixth Family had become as it moved into the 1990s. It had wrested control over a traditional mob city in order to gain a prominent foothold in the international drug trade, which it ran with a modern corporate sensibility, but at the same time it could not ignore its traditional roots as a village Mafia clan. It had an overarching mandate to move drugs, but various arms and cells of the organization reached out to take care of business in all its many forms. While the Bonanno Family in New York suffered from repeated federal indictments of its leadership, as well as deadly wars and assassinations among factions, the Sixth Family maintained a policy of growth, diversification and a careful avoidance of such messy affairs.
As it had with its drug schemes—cooperating with bikers, Asian and Colombian gangs, cornering the hashish market and moving into cocaine—the Sixth Family expanded into other criminal frontiers. From stock market swindles in Western Canada to petty extortion in Montreal; from a colossal counterfeiting operation producing U.S. currency to trying to recover the hidden gold of a deposed Asian dictator, the Sixth Family seemed to have a hand in every imaginable nook and cranny of global crime.
TORONTO, APRIL 1993
In the age of Enron, WorldCom and Martha Stewart, Penway Explorer Ltd. is a relatively minor flimflam, one of those periodic stories of charlatans squeezing an undeserved profit out of the stock market.
In the investment community, they call it “wash trading,” when traders simultaneously buy and sell shares in the same company. It unfairly makes it look like there is interest in a company’s stock when in fact the sales are a wash—no additional investment is made. Another scheme is called the “pump-and-dump,” whereby unscrupulous salesmen convince unsophisticated investors to buy an unworthy stock to boost its price and then, when the price reaches a prearranged target, those in the know suddenly sell their shares. It was a combination of these schemes that was planned for Penway Explorers, an obscure mining company being traded on the Alberta Stock Exchange. Penway held mining claims in Northern Ontario in the late 1980s. Worth only pennies a share under normal conditions, large blocks of the stock were bought cheaply and parked while co-conspirators artificially inflated the stock’s value, pumping it up to $6 a share.
A key salesman of Penway stocks was Arthur Sherman, who worked for McDermid St. Lawrence Securities Ltd., a Toronto brokerage firm. That Sherman was a problem trader was no secret. His supervisor, John Shemilt, described him as being “up to no good” from the moment he was hired. On May 8, 1988, Sherman vanished. Twelve days later, he telephoned his boss and said he was in Aruba and would return at the end of the month. When Sherman failed to show up, he was fired. The fact that Sherman was missing left several of his clients checking their accounts. Many found their Penway stock was missing, totaling 530,400 shares. Sherman, it was found, had sold them before vanishing, presumably with the money. He appears to have dumped the stock before the conspirators had planned, beating them to the punch. His sudden purge of so much Penway stock sank the share value to around 30 cents. The investors figured they had been cheated out of $3.5 million by Sherman and took the missing broker and his former brokerage firm to court. Lawyers for the firm, however, took issue with the investors—a seedy bunch, including a disbarred lawyer and a shady stock promoter from Montreal who dealt in stolen securities. The brokerage argued that the investors were not the “sole and exclusive beneficial owners” of the stock. Something was fishy with Penway beyond Sherman’s disappearance.
All of this would have been of little interest outside the investment community if it were not for revelations at a civil trial that the actual owners of the shares seemed unwilling to come forward. The investors who launched the lawsuit, lawyers for the brokerage claimed, were fronts for other people described as a “shadowy” Montreal group. Suddenly, a petty fraud case took on the trappings of a mystery novel. During 45 days of hearings, held sporadically between April 1992 and April 1993, Judge George Adams heard that the Penway swindle was where the markets and the Mafia met.
The dirty nature of Penway’s transactions seemed obvious to Lise Ledesma, a receptionist at the brokerage firm. She was the poor soul people had to go through to reach Arthur Sherman before he disappeared. Ledesma said she received rude and demanding telephone calls from two people using the name Rizzuto who wanted to talk to Sherman. One of the calls was a long-distance connection placed by a Spanish-speaking operator—this was at a time when Nick Rizzuto was under arrest in Venezuela on the cocaine charge and, apparently, in need of cash to pay his legal fees. Vito then came to the offices of McDermid St. Lawrence in Toronto to see Sherman. Ledesma said he was accompanied by “two very large and frightening thugs.” The visit and the calls were not well received. Sherman became “visibly anxious and nervous when it came to Mr. Rizzuto,” she said.
The Penway transactions all led back to the Montreal Mafia. Robert Campbell, a disbarred lawyer and convicted forger, had bought his Penway shares through a firm in Toronto called Mercore Securities Inc., which seemed to trade nothing but Penway stock. Campbell was purchasing shares for Vito, who held meetings over the scheme in Montreal and Toronto, the court heard. Campbell had “the full confidence” of Vito and there was a large cash loan made from Vito, or his associate Dino Messina, court heard. The checks being exchanged throughout the stock deals also came from people linked to the Rizzutos. One of them, for $80,000, was made out to Rocco Sollecito, whom police had frequently seen meeting with Vito and other members of the Sixth Family.
Checks, however, were the least of the problems at Penway. Staff at a brokerage in Montreal reported their irritation with $40,000 to $50,000 payments for the stock being made in $10 and $20 bills. Gennaro Scaletta, who was arrested with Nick Rizzuto in Venezuela on cocaine charges in 1988, showed up in deposit records, along with Messina, Sollecito and Libertina Rizzuto, Vito’s mother. Even these people were declared to be yet another layer of insulation around the real owner, the judge ruled: “On the evidence, I find the only person acting as a true owner was Vito Rizzuto.” The transactions were subject to “the aggressive scrutiny of Roméo Bucci and the presence of Frank Campoli,” the judge said. At that time, Bucci was a name from the mob’s past and Campoli from its future. Bucci was the mobster who had previously been sent to New York by Paolo Violi to register Montreal’s vote in the Bonanno Family leadership selection; Frank Campoli, described at the trial as “Vito’s man in Toronto,” married into the Cammalleri family and would surface years later in a probe into Vito’s involvement in another controversial company.
Judge Adams dismissed the lawsuit. Unconvinced that Sherman had absconded with the Penway money, he suggested another possibility: that Sherman’s disappearance was the result of “the wrath of Mr. Rizzuto.”
The bad publicity for Vito from the Penway trouble was not over. By 1995, officials at Revenue Canada—the federal tax department—had pored over evidence from the proceedings. The question they had was that if Vito had been the beneficiary of all those stock purchases, why had none of this money been claimed on his tax returns? The taxman wanted his share of the $1.4 million in revenue that was traced to Vito through the stock transactions and issued a tax judgment against him. In addition to the unpaid taxes and a hefty interest payment, the government sought a $127,000 fine. Vito appealed the decision to the Tax Court of Canada. The department then threw itself into the case with surprising zeal. It appeared almost personal. The government’s lawyers planned to introduce into evidence the school records of Vito’s three children, evidence from Nick’s arrest in Venezuela at the time of the swindle and records from Vito’s arrests in the hashish cases. Also to be entered was a document titled “Associations of Vito Rizzuto with the Criminal Element in Canada and Elsewhere,” and the criminal records for Vito and 28 of his associates, a collection of drug traffickers, money launderers, killers—and Maurice “Mom” Boucher, a leader of the Hells Angels Motorcycle Club, who qualified as all three. Also entered into the record was a statement of facts that included this line: “The applicant is known as ‘the Godfather’ of the Italian Mafia in Montreal.” From then on, the designation would be repeated in the media whenever Vito found his way into news stories. The aggressive tactics seemed to take Vito and his lawyers by surprise.
Vito, always publicity shy, was suddenly reluctant to fight the tax bill and, after a frenzy of private meetings in August 2001, between his lawyer and government attorneys, an out-of-court settlement was reached just days before the hearings were scheduled to start.
“We felt like we had a strong case, but we wanted to avoid the media circus that was sure to happen,” said Paul Ryan, Vito’s tax lawyer, who said the government’s emphasis on Vito’s criminal connections was unusual. The terms of the settlement were not released.
According to government sources, Vito agreed to pay $400,000 to settle his case behind closed doors and avoid further public scrutiny, a sum that Vito himself has since confirmed. The suddenness and secretiveness of the settlement caused some alarm. John Williams, chairman of the government’s Public Accounts Committee, filed a motion in Parliament demanding “copies of all agreements and related documents and/or correspondence, including reports, minutes of meetings, notes, e-mail, memos and correspondence, entered into between the government and Mr. Vito Rizzuto.” Somebody seemed to think it was fishy. The government responded that tax matters were private and declined to make any information public. The payment of the fine was likewise done in private. The $400,000 settlement appears to have been a communal effort by the Rizzuto family, with several members sending large sums of money over the course of a year to Jean Salois, who set up an account to handle the inter-family loans. The flow started on January 21, 2002, with a $50,000 deposit by Vito’s wife, Giovanna. She matched that deposit five months later and added another $75,000 in September. Vito’s son, Nick, rose to the occasion with a $125,000 deposit into the account on May 15, and another $95,000 a month later. Vito’s daughter, Bettina, kicked in $50,000 on February 5, leaving Vito needing to add only $5,000 of his own to the kitty. It was a communal approach that had been used by the family before. In a legal account apparently established to fund the fight against the government’s tax case, $93,000 was accumulated through various deposits from Vito, his mother, his wife and his son Leonardo, according to accounting documents prepared by Salois, Vito’s lawyer.

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