Born to Steal: When the Mafia Hit Wall Street Read online

  He could not leave. That was okay. Louis didn’t want to leave. Most of the inmates were very upset about being there, which they demonstrated in various ways, but Louis was different. He was a volunteer.

  Mike Basile was there. It was great having a friend in prison. Well, Mike Basile wasn’t a friend, exactly, and if Louis had contemplated the subject much he might even blame Mike for the whole check fiasco. But Mike was facing even more time at HCCC than Louis. He had just begun serving a five-year prison term for his role in the check nightmare. Mike had been to prison before. He read a lot. One nice thing about prison, if you like to read, is that you can catch up on your reading. Louis didn’t like to read.

  Mike and Louis—and a young car thief named Nick—were pretty much the only Italians, and the only white people, in all of HCCC. Or at least the only ones visible—and they were very visible—in C500 (Block C, Tier 500).

  There was no “Mafia Row.” There were no special privileges for these guys, no bribed guards, no steaks sizzling on hot plates. Unlike federal penitentiaries, which have large numbers of prisoners who had engaged in criminal activity requiring intelligence and finesse, the HCCC was less a place of punishment or “correction” than it was a solid waste facility—a receptacle for Hudson County’s garbage, its muggers and burglars and street trash and bad-check-passers. Louis came to realize that he was now at the bottom. This time for real. He was in the can—the trash can.

  Still, it was restful not having the beeper go off. Prison was the ultimate escape. He had finally escaped from Wall Street. Escaped to prison.

  He thought a bit about the future now. He plotted ways of clearing up his license. Some weeks earlier he got a printout of his record from the NASD, which should have included any criminal charges, and the check arrest wasn’t on it. But he figured it would show up there eventually. * He thought about getting a legit Wall Street job with a fourth-tier but clean firm like J. W Charles or a J. B. Oxford, where a college degree wasn’t required.

  But Stefanie wanted him to quit the Street. He did not blame her. His way of life was coming to an end. Just a few months before, the first trial of a chop house exec was concluded in New York State Supreme Court in Manhattan, when the mousy-looking controller of a chop house called A. R. Baron was tried for something called “enterprise corruption.” That is the New York State equivalent of the federal racketeering laws. John McAndris, a middle-aged, soft-looking accountant, was sentenced to five to fifteen years in a state prison where he’d be lunch and breakfast for the hoods there, if not isolated in protective custody.

  The feds were a more imminent threat than the Manhattan DA. In 1997, federal prosecutors began to get indictments of Street-linked Guys, among them the ones behind a cash deal Louis remembered very fondly—HealthTech International. He had done some HealthTech a few chop houses ago.

  State regulators were showing a lot of moxie too. It was a bandwagon, people were climbing on it—and it was barreling down on Louis and the chop house kids.

  All these things were hurting business and making it hard to make money, but Louis never expected that any of this stuff would ever adversely affect him personally. Neither the feds nor the regulators had ever charged him or named him in any indictment. And it wasn’t as if they hadn’t known where to look. The SEC had conducted an investigation of Nationwide after it closed, and he gave off-the-record testimony that pretty much laid out what had happened (except for the Guy involvement). But the SEC never followed up, as far as he could see. And the NASD had done nothing to Louis in his nearly six years on the Street—except give him a license to sell stocks.

  Sitting in prison gave him a chance to think about all this stuff. And after about a week, almost magically, he got a visit—from the FBI.

  The agents wanted to talk with him, again, about the stock certificates they had found in his briefcase at the time of his arrest. It was good timing.

  He never made a conscious decision to cooperate with the authorities. It was simply the most obvious and natural thing to do. He had hit the lowest point of his life. His misery was real, and so was his guilt. So he didn’t blow off the FBI agents this time. He didn’t refer them to his lawyer. He didn’t give them any bullshit about the certificates belonging to customers.

  This time he told them the shares were in his briefcase because he was being paid to sell stock. A cash deal.

  “There were three agents. One guy was supposedly a Mafia expert. They start questioning about the certificates. I said to myself, you know what? It’s time. I was done. I can just end it all here. I told them—these are my exact words—‘You have no idea of my value in helping you with any type of crime on Wall Street.’ I basically told them if they want my help I’ll give it to them. I kind of hinted I would go back on Wall Street and work there and be like an inside guy,” said Louis.

  The agents did not seem very interested, but said they would get back to him. Louis went back to his cell at HCCC and resumed his thinking. He waited for the agents to call. He had nothing to do in prison, so he waited, and waited. They never returned. “It was amazing. I could have worked for them for the next five years. Nobody would have had any idea, because I wasn’t arrested on stocks, I was arrested on the checks. They were so goddamn dumb,” said Louis. *

  With his career as an informant going nowhere, Louis started thinking about the next event in his life—his sentencing, which was coming up in a few weeks. The offer of a three-year sentence was still on the table. A good deal, considering the gravity of the offenses—passing a bad check, carrying a firearm with a defaced serial number. Louis would have to get used to the idea of spending at least a year in prison, even with the most possible time off for good behavior. It was the best he could do.

  Like hell it was. Louis wrote a letter to the judge.

  It was a dumb move. Defendants rarely can get anywhere by writing letters begging for mercy, pleading to get cut loose. But that was exactly the letter that Louis wrote. His new lawyer—he had the public defender now that his previous lawyer had quit over nonpayment—would have advised against it. But he didn’t ask. He just wrote the letter.

  When Louis appeared before Judge Kenny for sentencing on July 24, 1998, his letter was in front of her. Fran was in the courtroom and so was Stefanie. And so was Anthony, seven months old.

  “It was a sincere letter. I told her I got involved with the wrong people, that I was sorry, that I wouldn’t do it again. She took it to heart. The judge, Judge Kenny, was very sympathetic. The prosecutor could hardly believe it. The judge said, ‘I don’t believe he deserves state prison. He wrote me a beautiful letter, and I trust that he’s sincere.’ That’s what the judge said, ‘I trust that he’s sincere.’ In the courtroom. My mother and Stefanie were in the courtroom, and they couldn’t believe what they saw.

  “The judge said, ‘Do you have anything to say before I pronounce sentence?’ And I got choked up and I cried a little bit, because my son was in the courtroom. I was really upset. I wasn’t going to see him. I hadn’t seen him for two months now. I wasn’t going to see him for his first birthday. I got choked up, and she actually told me, ‘Please.’ Like she got choked up, this woman. My mother said, ‘I can’t believe you had that effect on this lady.’ She let me go. She let me out of jail. She did not want to send me to state prison.

  “But I meant what I said. When I went home I wanted to do the right thing.”

  In imposing a sentence of three years probation, Judge Camille M. Kenny recorded the following four “Mitigating Factors” in his case file:

  1. The defendant has no history of prior delinquency or criminal activity and has led a law-abiding life for a substantial period of time before the commission of the present offense.

  2. The defendant’s conduct was the result of circumstances unlikely to recur.

  3. The character and attitude of the defendant indicate that he/she is unlikely to commit another offense.

  4. The defendant is particularly likely to respo
nd affirmatively to probationary treatment.

  Louis was released.

  “I wanted Louis to get a good job,” said Stefanie. “I told him, ‘You need a job where you get paid every week.’ I told him we need money, and we need to know it’s coming every week, so we know how much money we have to spend. We have to know how much rent we can pay. And we’ll budget our money. And if we have to spend every night in the house, eating pasta or whatever, that’s what we’ll have to do. It’s no big deal. Everybody has to start at the bottom, and work their way up. I said, ‘So what? You started at the top, come back down to reality and start where everybody else starts. At the bottom. And hopefully in ten years you’ll be better off. That’s how most people do it.”

  For eight years Stefanie worked part-time at a Kids “R” Us in a Staten Island shopping mall. She was paid peanuts. But she liked to work. It was something people did. It was how she was brought up. Even when she was spending weekends in Miami, she would drive to the Kids “R” Us in the Beemer. Then she got a job as a brokerage house assistant through an employment agency. By coincidence—small world that Wall Street is—Stefanie was placed at a firm called William Scott, a chop house run by a scary-looking Colombo family associate named Frank Persico. Stefanie quit Scott after a few months. * She later found work as an elementary school teacher in Brooklyn.

  Louis was willing to try anything, at least for a while. After coming out of prison, he went to bartender school for a few days. Naah. Got a lead on a job selling cars in New Jersey. Went for an interview. Naah. Then he got a real opportunity. A good job. A job a lot of young people would kill for—an opportunity to learn a trade that had made a lot of enterprising, hardworking guys rich. If he kept at it, it was a job that could mean a comfortable, even luxurious lifestyle.

  Louis was becoming a plumber.

  CHAPTER FORTY-FOUR

  An old Pasciuto family friend, Leo, did construction jobs—“roughing the building,” putting in the cast-iron pipes. It was hard physical labor, carrying eight-inch pipes. Hard labor but honest, clean. The kind of work the Pasciutos and Surrobbos had done since they came off the boat from Sicily nearly a century earlier. It was the kind of hard work the Donohues had always embraced.

  Louis didn’t like to work. But Stefanie was pushing him, so he took a job with Leo as an assistant plumber, working off the books.

  For a month or so, Louis led a normal life. Most of his neighbors on Staten Island lived that kind of life, and Louis was amazed when he found out how absolutely shitty it was. You get up early, so early that the sun isn’t out even in the summer. You ride out to a miserable, filthy, disgusting work site somewhere. Even the worst shithole of a chop house was no comparison to a muddy slime pit of a construction site, even when it was right smack on Park Avenue. Didn’t matter where it was. You got a shovel from some slimy, unshaven turd and you had to dig and carry heavy iron pipes. Louis was in great shape but at the end of the day his muscles were aching and he was dead tired. This is what most people did, and most people did this all their lives.

  Louis was different. He was better than that. He proved that to himself when talking to his landlord one weekend. His landlord noticed that Louis was being picked up every morning at an ungodly hour by a guy in a pickup truck, so he asked Louis what he was doing for a living.

  Louis didn’t hesitate a moment. He instinctively knew what to say. In a millisecond his brain was active and the old Louis was back.

  “I said, ‘I do renovating. We do kitchens, bathrooms.’

  “He said, ‘I want to redo my bathroom. Think you can do it?’ I said, ‘I been doing it nine years.’ My whole fucking life I been a plumber. I gave him a price. He said, ‘I could get it done for a couple hundred less.’ And I said, ‘If you want to get it done for a couple hundred dollars less, it’s not going to be professional. I’m going to come in there and do a professional job.’ I sold the guy.”

  So Louis became a plumber. He cut out a few steps—such as the several years required to learn the trade—but that was okay because the money was great. He knew how much plumbers could earn from renovation work. That was really the only information he needed.

  “I went up there and I didn’t know where to start. So I just started ripping tile down. But I did it. Took me like a month, but I did it. Had to gut the bathroom, rip out the toilet and sink. Had to retile the walls, new toilet, new sink, new bathtub. Caulk the shower stall. New tile floor. It came out looking awesome, though. I had to rig things a little. I figure by now the shower door fell off. I knew I didn’t put it on right. If he just leaned on the shower door, it’s falling down. Because I leaned on it and it fell out. I put in some more glue and figured it would stay at least a month.

  “I read instructions! That’s how I did it. When I had to put in the sink I couldn’t find no instructions, so I went to Home Depot and asked the guy. He drew me a little diagram. I had no tools. None of the proper tools. Instead of using a monkey wrench for the pipes I’m using pliers. Leo thought it was ridiculous. I told him I was doing a side job, and he said ‘Get the fuck outta here.’ He said, ‘You’re gonna get sued.’ But he was nice about it. Helped me take a pipe out. One of the pipes was rusted, and I spent hours trying to take it out. Hammering it, trying to hack-saw it off. Nothing worked. Leo came over and took it off in like seven seconds. He took the monkey wrench and went kwitcccch! Came off. Felt like an idiot. Me and my friend Glenn were standing on the wrench, trying to turn it. We were probably turning it the wrong way.”

  Louis might have had quite a career as a plumber. He especially liked the terms, with money paid up-front before the job was started. A guy who cut corners could just line up side jobs and walk off with the up-front money. But Louis figured he might get people a bit too pissed off. He decided to make the landlord job the last one. He kept on going to the work sites every morning.

  He was finishing up a job in Manhattan one afternoon when Louis saw him, waiting outside the construction pit.

  Charlie.

  When Louis got out of jail, Charlie had taken half of the $6,800 Louis had had with him when he was arrested. Then he went away for a while. He stopped beeping. Maybe he had gotten used to Louis being away for a couple of months. But here he was again. He missed him, maybe.

  Charlie got right to the point.

  Louis was making $300 a week. Charlie wanted $100 of it.

  “‘You’re going to do this to me?’ I told him. ‘I just came home, and you’re going to take what I’m earning every week as a plumber for my wife and kid?’

  “He goes, ‘It don’t matter because you’ll have no wife and kid to support. I saved your life. You owe me your life. You don’t pay me for your life, I’m going to take it.’”

  It was a sucky job anyway. Getting up early. The digging. The hauling pipe. Louis was almost relieved when Leo pulled up the next morning and Louis told him to take a hike. He was going back to sleep.

  CHAPTER FORTY-FIVE

  Louis faced several problems as he prepared to reenter the Street in August 1998. The felony conviction was a big obstacle, and even if his record was whistle-clean he’d have had a lot of trouble. Closer regulatory scrutiny of deals, and involvement of law enforcement in the fight against securities fraud, were making life miserable for everybody on his side of the law. “By this time IPOs were, like, shit, and the authorities were catching up with the cash deals. You couldn’t even get a 504 * registered anymore. It was impossible. They changed the regulations. The companies actually had to have money in the bank or their stock couldn’t get registered,” said Louis. The nerve.

  Paper was always a problem. Dumb forms. Dumb filings. Dumb criminal records. Selling stock left a paper trail. Even the cruddiest stocks resulted in SEC filings and trading records, with all the incriminating stuff they often contained, and brokerages piled on their own mountains of processed pulp. Brokers had records that could be searched, and the NASD by the late 1990s was allowing members of the public to access broker record
s through its website.

  Louis hooked up with a firm, First Fidelity, that had found a solution for all that. He was referred by an old friend, Eddie Talmeni. “I called him and said, ‘Eddie, what are yas doing, because I’m fucking dying. I’m being a plumber. I can’t take this shit no more. I got to go back to Wall Street. What’s going on up there?’ He was doing First Fidelity. First Fidelity was a straight ‘I’ll take your money and I’m going to a party’ rip,” said Louis.

  First Fidelity said it sold stocks to its customers, but that was a fib. It didn’t really do that. It took its clients’ money, and didn’t buy the stock for them. A simple idea, and an old one. First Fidelity was a bucket shop—the most ancient scam on Wall Street. Bucket shops didn’t produce much paper. No paper, no problem, at least in theory. You can’t regulate what you can’t see, at least in theory.

  First Fidelity was pushing, of course, an Internet stock, Exchange.Online. Louis used the name “Bruce Follick.” This was a broker with a clean record. By using Follick’s name, he didn’t have to worry about anybody finding out about that felony conviction, or somebody suing Lou Pasciuto for what some Follick guy did. Since Exchange.Online didn’t trade but was a private placement like Chic-Chick, it had no stock symbol with pesky shares that had to be sold and boxed and cleared. First Fidelity was, itself, a “public company” whose “stock” actually “traded,” though its “stock symbol” belonged to another company.

  Just about every day was a payday—$1,000 one day, $3,000 the next. It made Charlie happy. It made the bookies happy, and Louis was able to pay down his mountain of debt. He was at First Fidelity through the beginning of 1999, clearing something in the neighborhood of $200,000, which wasn’t bad for a few months’ work.

  Louis barely looked up from the phone during the market tremors of October 1998, when tech stocks took it on the chin. The market bounced back anyway. It always did. It was a permanent bull market, after all. It would never end.