Born to Steal: When the Mafia Hit Wall Street Page 11

  “My clients, I used to tease them. I’d call them up and I’d say to them, ‘I got eye-pee-ohhhhhhhh!’ And they’d say, ‘I’m in.’ These idiots, they thought this was the best thing since sliced bread. So they would send money and most of them would get five hundred shares, and they’d have to buy more in the aftermarket [after the company went public]. That’s ‘prepackaging a deal.’” Prepackaging a deal is mighty good for the brokerage selling the stock, as it keeps the share price up after the company goes public. But it screws anyone who happens to buy the stock, by artificially inflating the price. Or at least it is supposed to artificially inflate the price, when everything goes right.

  Everything didn’t go right with TOON. It never had much of a post-IPO run-up, despite the prepackaging, because Todd brokers just didn’t have the buying power. The stock closed the first day of trading at $5.25, and after that it imitated a wet rag. By the end of 1994, TOON was eating dirt.

  It was sad, and if Louis had noticed an item on TOON in the papers he might have read it. If he cared. Which he didn’t.

  CHAPTER FOURTEEN

  DAH DAH—DAH DAH DAH—DAH DAH—DAH DAH DAH! DAH DAH—DAH DAH DAH—DAH DAH DAH DAH DAH! DAH DAH DAH DAH DAH DAH DAH DAH DAH DAH DAH DAH DAH DAH!!!!!!!

  Louis started every day with the soundtrack from Rocky. Three times a day, like antibiotics. BANG. The kids, the cold-callers, would BANG their fists, in rhythm with the music. BANG. BANG. BANG.

  It was that way at Robert Todd. And when Louis and Benny left Robert Todd in July 1994, it was that way at their next firm, A. T Brod. It would be that way every day and at every firm where they had cold-callers.

  Louis would turn up the volume on the CD player and blast the first cut from the Rocky CD, the one at the beginning of the movie, every day starting at seven, when the cold-callers started work. In the middle of the day he would play the training song. And then at the end—the victory song. Louis would hold up the hand of the cold-caller who opened the most accounts and make him stand up. The champ. It was a good thing for everybody to see.

  Playing that music got the cold-callers pumped up. Movies too. Louis would play them every chance he got on the VCR in his office. But not just any movies. They had to be special. Wall Street pumped up the brokers. Glengarry Glen Ross did not. Some guy in a car begging for leads. Who’d want to be like that guy?

  Louis got steamed when his cold-callers complained about the leads. They’d ask him for the “good leads.” The “Glengarry leads.” Sally Leads used to ask for them. He was fascinated with that movie. It made Louis hate Glengarry even more. The movie didn’t understand salesmen.

  “Guys don’t get motivated by you talking to them about selling stock,” said Louis. “I used to not motivate them like that. Motivating my guys was taking them to the bar at lunchtime and getting everybody fucked up. Wrecked. That was motivating my guys. Taking them to a strip joint and getting them all blow jobs. That motivated my guys. Playing the Rocky song in the morning, that would motivate my guys.

  “That’s how Roy did it. He’d come into the room and people would be psyched to see him. It would be good. Just his persona. A sick guy spending a lot of money. He’s the motivator. ‘Fuck, he’s nuts!’ You get psyched about that. You look at him and he’s awesome. He don’t give a fuck. He’s making a million dollars a month, he’s smacking people around, he’s wearing pink suits. He’s fucking nuts. He’s out every night. He’s got a limo driver waiting downstairs for him. That’s motivating. That’ll motivate you, in that type of business.

  “Michael Milken—he ain’t motivating to me. Bill Gates ain’t motivating. I don’t care he’s the richest man in the world. He’s not motivating. It’s not fun to be Bill Gates because he don’t live it up the way Roy does. In the chop houses you had kids from the streets. Their fathers probably sat at home and smoked cigars and had their feet up and fell asleep at nine o’clock. These kids meet guys who are going out, going to strip joints having crazy times, and making money, spending it, doing awesome things, going away. The cold-callers say, ‘I want to do that. I want to be that guy.’”

  Louis played the Rocky songs for the cold-callers but he could have been playing them for himself and for Benny. They were the Rockys of Wall Street. They were the lower-class bums who took on the Apollo Creeds of Wall Street and were beating them. Never mind that Rocky lost in the end. Benny and Louis were winning. They were mastering their craft, going to places like Scores where important people hung out. Making friends, establishing contacts, working hard. Raking it in.

  Louis was pulling in over $100,000 a month. Not bad for a brokerage firm “assistant” who dropped out of community college. And that was still small potatoes compared to what some chop house brokers were getting.

  At Brod the split wasn’t 60-40 anymore. They were equal partners. They were back downtown now, just across the street from Battery Park at the tip of Manhattan. An old-fart building, but downstairs was the only amenity that really mattered—a bank where they could cash their checks.

  At Brod, the checks came from a guy by the name of Jugal Kishore Taneja. “Jay” Taneja was fifty years old, of medium height, and stocky. He was a Cleveland financial exec with a clean record, a former engineer with a varied background. When he bought the firm in June 1993, in conjunction with a local brokerage firm official, it was noted with approval in Crain’s Cleveland Business. “Mr. Taneja owns Bancapital Corp., a holding company in Independence for operations that range from a small intrastate brokerage house to oil and gas exploration companies,” Crain’s reported. The newspaper went on to say that the firm’s Manhattan office will continue operating, “but its focus will grow to include the sale of stock to retail investors. … At present, A. T Brod specializes in selling securities to institutional clients. Broadening its scope in New York will mean hiring more brokers there.”

  Louis and Benny flew out to Cleveland to meet their new boss.

  “He took us out to dinner. It was nice, like in Pretty Woman, with the couch seats. Elegant. We didn’t pay. He had a 500-class Mercedes, a huge house. We were psyched, ’cause we were going to work with somebody who had more money than us. Fallah might have had more money but he didn’t spend it. This guy had a nice ring, nice watch. He was like a flashy little guy,” said Louis. *

  The Crain’s story was on the mark. Brod was hiring brokers, and the firm’s interest in the retail trade was amply borne out by the generosity of the deal with Louis and Benny. In a letter agreement with Benny, A. T Brod—“Advisors to the Prudent Investor”—put the terms in writing, including a provision that “you are ‘Team Players’ and will do all in your power to comply with the regulations of the Firm, the NASD and the SEC, as well as the New York Stock Exchange.”

  Of course. Real team players. Particularly that unlicensed “Team Player,” a twenty-year-old guy who wasn’t old enough to sit at the bar of the private club upstairs from the Brod offices.

  “We were the circle,” said Louis. “We created our own circle. There were no other brokers there. We were the only guys. We went out there and took over the whole fucking place. It was awesome.”

  Comfortable too. They started out in cramped quarters on the twenty-first floor of the old-fart building, but after a few months Brod took over the entire twenty-sixth floor. Louis and Benny had the choicest real estate, a huge corner office looking to the west. They could see the bay out the window, the Statue of Liberty and Staten Island in the distance. “It was a slick office,” said Louis. “We had the biggest office there. I remember Al Palagonia, the superbroker from D. H. Blair—he was a friend of Benny—he came up to Brod and said, ‘Holy shit! This is what they gave you?’ It was huge. It had a couch and a love seat and a fucking thirty-six-inch TV with Sega, CNN, and cable. Two big monster black desks, with chairs in front of them, big black leather chairs in back. Then there was a glass window behind the couch that looked over all our cold-callers. It was awesome.”

  What a firm. Members of the New York Stock E
xchange since 1958. Brod’s founder could hold his head high anywhere on Wall Street. Albert T Brod was eighty-one years old. He put his name on the door with pride, and stayed at the firm even though Taneja owned it now. Brod had a clean regulatory history. Not squeaky-clean, maybe—nobody’s perfect—but pretty good overall for a firm that concentrated on investment banking for small companies.

  Even its building was old Wall Street. Brod was at 17 Battery Place, the Whitehall Building, a carved-stone building of the kind more likely to be found in Chicago than in New York. It was in every postcard view of Lower Manhattan, just to the right of Battery Park City and smack in front of the World Trade Center.

  Brod was the epitome of the Real Wall Street, the Wall Street of Brooks Brothers suits and private incomes and private clubs. Clubs like the Whitehall Lunch Club on the top floor. Al Brod was a member of the Whitehall Lunch Club. His record was unblemished. NASD records said he had even lived at the same address on Park Avenue since his birth in October 1913.

  A. T Brod was a class act. Old money. Tradition. Great reputation. All of the things Louis hated. But such things didn’t matter. Old money could be taken. Tradition could be defied. Reputations destroyed.

  Louis hated class. He liked cars. So he bought a Mercedes. He hated old stone buildings. He liked gleaming new ones. So at about the time Brod moved to the twenty-sixth floor, he moved from Staten Island to 200 Rector Place, due southwest of the proud and glorious Twin Towers. Not since Battery Park City was built on a mound of World Trade Center construction debris, back in the 1970s, had such a humongous and high-class building been erected there. Louis’s new home was forty-six stories high. Louis was on the thirty-fourth floor, in the corner apartment facing southeast. On a clear day, with binoculars, he could look out of his office at Brod and see Sally Leads in his apartment.

  Life was good and getting better. There was much to share. Louis was sharing with Stefanie, with Stefanie’s parents, and with his own parents. Their trips to Atlantic City were becoming more frequent, more enjoyable. Louis loved playing blackjack. Sometimes he would go to Atlantic City with Sally Leads, or with Stefanie, or alone. He enjoyed it so much that sometimes he would come down from his hotel room in the middle of the night, back to the blackjack table. But even if he lost, it just meant sharing money, meaningless money, fuck-you money, with the casino. He could afford it. It was no problem. The money was coming in endlessly. Louis had the best job on the planet.

  His job was great because his leads were awesome. Great selling required great leads. Glengarry leads. In the movie, the old man broke into the office and got caught. That’s where the movie got it wrong. Nobody ever got caught. Not on Wall Street.

  CHAPTER FIFTEEN

  “They made it so easy for you to rob money. It was incredible. How could you not rob and steal? You want a broker license? Three grand. You need some leads to call, some people willing to get stolen from? Two grand. It was the easiest thing in the world.

  “We had a guy, Ivan, who would go into the places and rob the leads for us. He was a black guy. He knew one of the guys who ran a crew at Brod. That’s how we got the hook. Ivan was this nigger from Harlem, and he would just rob places. You know how many places used to get robbed on Wall Street? This guy would go in at night, break in, and rob the place.

  “Ivan used to go to whatever the hottest place was at the time. For example, if First Hanover just did an IPO, this guy would come and say, ‘I’m gonna go to First Hanover and rob the leads. You want first crack at them?’ We paid a lot of money for leads. Sometimes nine, ten thousand for a few thousand leads. We’d pay sometimes two dollars a lead.

  “Ivan broke into First Hanover while we were at A. T Brod. He broke into A. S. Goldmen. This tough guy was running that place—we were afraid to use them right away. We waited a couple of months. At Brod we spent maybe twenty-five thousand dollars on leads. Ivan used to come to us first. We were paying enough money that we would get the originals. He ran one copy for himself, one for us, and one for another broker. He was honest about that. He’d come to us after a year and say, ‘Are you done beating up on those leads? I’ll sell them to somebody else.’

  “He would steal the client books. People would come in the next day, and the books were missing. Or he would copy them. He would actually spend time in the place copying them. Once he went to this place in New Jersey with one of my friends. They went in and stayed there for hours, copying leads. Then they put everything back. Ivan was smart. He made friends with the security guards—fellow black guys—and offered them money. He’d give them five hundred out of his pocket, go upstairs, break the window, go in, copy the leads, then leave.

  “That happened to us once at Brod. Somebody came in and copied our book. We found out because people were calling our clients. We knew it was Ivan. One of my clients said he got called by somebody at some other firm.

  “It was very funny, actually. He was a real project nigger. At first he acts like he’s going to shake us down. ‘That’s what I do. I took the book.’ Benny knew how to deal with them, because he used to sell blow to them. He’s like, ‘You got to be kidding me. You’re gonna be dead.’ Benny later tells me Ivan said he only sold it to two people, and he apologized. He was afraid somebody would kill him. Our crew was crazy. Everybody was a street guy, and they were fucking lunatics. They’d have beat this kid senseless.”

  CHAPTER SIXTEEN

  It was a ritual now. A privilege of rank and earning power. Louis and Benny’s office was in the power position at the far end of the twenty-sixth floor, farthest from the entrance. Every day Louis would saunter in at ten o’clock or later, stroll in with sunglasses on and hat down to his nose, past whatever sales meetings they might be having, past all of the kids working the phones, over to his corner office. The kids would stare at him, with his Rolex on his wrist and his custom-made shirt hanging out of his custom-tailored pants, and be envious. Which was okay.

  He knew he was being watched. He used to be one of them. He used to watch as Chris Wolf slouched in late at Hanover. Chris Wolf, the Ferrari-driving rich guy. Now Louis was the rich guy, the Chris Wolf. It was a great feeling. And motivating to the kids, just as he was motivated watching Chris Wolf.

  The money-disposal problem was worsening as summer gave way to fall of 1994 and A. T Brod started to pay off for Louis, Benny, and their cold-callers. With $100,000 to $125,000 coming in every month, an ugly possibility reared its head. Louis might have to save some of it.

  No way. His father used to save, and Louis did not want to be like his father, at least when it came to money. Louis’s father worked and saved and struggled. If he were his father he might have put away some money for a rainy day. But he didn’t know the meaning of a rainy day. Louis didn’t even know what a cloud was. There were no clouds, let alone rain, in his life. If one appeared overhead, and it started raining, he might have thought someone had spilled a glass of water out of a window. He wasn’t interested in buying a house or even a condo. What was he going to do with a house? You can live in a house, and a house like Roy’s place in Richmondtown can be awesome, but houses aren’t fun. All you do is live there.

  The money was regular now. At Todd the money would come in as spurts—eighty or ninety grand one month, and next month maybe thirty. At Brod it was a hundred grand at least, every month. “The next month would come, we’d still have like seventy grand left over,” said Louis. “It just started adding up and adding up. What to do with this money? It was ridiculous. George Donohue used to tell me, ‘You know, it doesn’t always come this easy.’ But I thought it was never-ending, a never-ending saga. Because every month, we’d get sometimes three hundred grand. It was crazy. Twenty years old. I didn’t know what to do with myself.”

  It was at about this time that Louis started getting manila envelopes from the IRS. He would throw them out without even opening them. Nick Pasciuto used to tell him that he would have to pay taxes someday. Bullshit. Louis was not ever paying taxes. “Once I had fo
ur or five hundred thousand dollars sitting in a fucking bank, and my accountant said, ‘Send them a hundred thirty grand.’ And I said, ‘You don’t understand. I’m not sending them any money. I’ll get the cash out of the bank right now,’” said Louis. And he wasn’t joking. He didn’t like having his money in the bank. It was just sitting there, getting rat-shit interest, and all he would get for his cash would be receipts and account statements. Pieces of paper—just as he was taking money from his clients and giving them pieces of paper.

  Louis was no fool. This paper-for-money shit would have to end. “I used to get paranoid to have it in the bank,” said Louis. “Somebody’s going to get it. I used to go to the bank, withdraw twenty, thirty thousand even though I didn’t need it. I just didn’t want it in there. I just felt not safe with it in the bank. I liked having it in my house—‘Ah, there it is!’ Ain’t nobody taking it but me now.

  “Used to take them an hour to count it up. I got so good at Marine Midland that I used to call the lady there in the morning and say, ‘I’m coming at two o’clock. I’ll need fifty thousand.’ I’d go there, go to the back room, count the money, leave. I got it in hundreds. A couple of times I got twenty grand in twenties. It was tremendous.

  ‘I put a safe in my apartment, in my walk-in closet, bolted to the floor. It was about three feet high, big, but I still didn’t have room for all my shit. Me and Sally Leads were the only ones that had the combination. I used to have stacks of money in there—twenties, hundreds. I remember one time Frankie Balls [a cold-caller] asked me for like eight thousand and he thought I’d have to go to the bank and get it. I said, ‘Nah, I’ll give it to you. Come to the house.’ I remember I looked in my safe and I said, ‘I’ll give it to him.’ It didn’t affect my stacks. I had like stacks of money. I didn’t care about the eight thousand. I was just thinking about how I’d have to—I had a name for it—‘load up.’ I’d have to go load up again from the bank.”