Mafia Inc.: The Long, Bloody Reign of Canada's Sicilian Clan - André Cédilot, André Noël (2011)
Chapter 9. OPERATION COMPOTE
FROM THE OFFICES OF THEIR law firm on the seventh floor of the Yale Building, at the corner of Peel Street and De Maisonneuve Boulevard in downtown Montreal, Giuseppe (Joe) Lagana and his partners had a bird’s-eye view of a neat, modern facility on the other side of the street that specialized in exchanging currency. The agency, registered to a numbered company, 2841–6923 Québec, and operating under the corporate name Centre International Monétaire de Montréal (CIMM, or Montreal International Currency Centre), had opened its doors on September 29, 1990, right beside an entrance to the Peel metro station. It was located on the ground floor, in the same space as a money-changing counter that had closed after a series of holdups and burglaries. Behind the bulletproof front window, passersby could admire tasteful prints on the walls, varnished hardwood accents, and orangetinted marble flooring. Bill-counting machines sat on tables and, in the rear, a door led to a secure room away from prying eyes. The CIMM’S staff of three men and one woman answered customers’ questions with consummate diligence and conducted more than three hundred transactions per week.
Lagana, aged thirty-eight, was a lawyer above suspicion. He lived north of downtown, in the upscale Town of Mount-Royal. His wife was also a lawyer, with a reputable firm, and one of his partners was the mayor of Montreal West, another suburb. Few people were aware, however, that Joe Lagana’s biggest client was Vito Rizzuto. The mob was always looking for ways to solve a perpetual problem: it had too much money. With thousands of ten-, twenty- and one-hundred-dollar notes piling up left, right and centre, the Mafiosi had reasoned that entrusting these huge loads of cash to lawyers might be a good idea. Since members of the bar are bound by professional confidentiality, police usually struggle to persuade a judge to authorize electronic surveillance or searches of law offices.
Narcotics traffickers were finding it increasingly difficult to make large cash deposits at banks, where they were likely to face awkward questions. For the past two years, financial institutions had been urged to report any suspicious transactions to the RCMP. In Montreal alone, the street dealers working for the mob could rake in a million dollars every two days. The wads of bills would be stored in apartments, to which Lagana regularly sent couriers to pick up the money.
Being a lawyer for organized crime is not a job for the faint-hearted. On October 15, 1985, Frank Shoofey, a criminal defence lawyer whose clients included the Hilton family of boxers, was shot three times in the head and twice in the chest as he stood in the corridor outside his office on Cherrier Street, near Montreal’s La Fontaine Park. On May 13, 1991, Sydney Leithman, who was representing a Cali drug baron by the name of Jairo Garcia, was killed at the wheel of his Saab convertible shortly after leaving his Town of Mount-Royal home. The hit man, wielding a .45 calibre weapon, shot him four times in the head. On September 10 of the same year, Paul Beaudry, another defence attorney whose clients included Colombian narcotraficantes, was shot in his Old Montreal office. Fatally wounded in the stomach, he managed to pursue his two assailants a short distance before collapsing in the building’s lobby. Other lawyers had been taken to court or penalized by the bar association, often for conspiring with their clients.
From his vantage point above Peel Street, Lagana kept a close eye on the Centre International Monétaire for a year before setting foot on the premises. He had envoys put out feelers: one of them inquired about the possibility of exchanging amounts in the neighbourhood of $100,000. In June 1991, a man walked into the CIMM and asked if he could wire $500,000 to a foreign country. His name was Kazimir Sypniewski, age sixty-seven, and he worked as a security guard in the Yale Building, where Lagana’s law firm was located. The currency exchange counter employees would be no fools: it was highly unlikely that a man on a security guard’s salary would have half a million dollars to transfer to an offshore account. But they allowed the transaction regardless.
Dollar after dollar, deposit after deposit, Joe Lagana grew increasingly confident in the new exchange counter across the street. Before long, his partners, Richard Judd, forty, and Vincenzo Vecchio, thirty-six, were dropping in to the posh facility with suitcases, hockey equipment bags, shoeboxes and plastic grocery bags filled with low-denomination banknotes. The small bills were exchanged for bank drafts, U.S. currency or “pinkies,” thousand-dollar Canadian bills that the Bank of Canada had recently stopped printing, precisely for the purpose of making money laundering more difficult. The funds were then transferred to any of about two hundred bank accounts in Europe, the United States and South America.
What the mob lawyers didn’t know was that the Centre International Monétaire de Montréal had been set up by the RCMP to lure money launderers of all stripes. The polite and friendly staff were all undercover police officers and had been trained at the National Bank of Canada to convincingly perform their tasks as cashiers. Video cameras hidden in the walls of the facility filmed customers’ transactions, and microphones picked up their every word.
The Mounties had also set up another covert operation: a courier company called Courtex. From its offices on the other side of De Maisonneuve Boulevard, investigators photographed customers as they entered and exited the CIMM. Those who seemed suspicious were then tailed.
The reverse sting operation was identified by several code names beginning with the letter c (which designated the RCMP’s Quebec section), the most well known of which were “Operation Compote” and “Operation Contract.” It was overseen by Staff Sergeant Yvon Gagnon, who was an imaginative man. He had concocted a slew of stratagems to attract the CIMM’S desired (i.e., criminal) clientele, while dissuading unwanted (i.e., honest) customers. This included posting police officers easily identifiable as such outside other foreign exchange counters nearby, who openly filmed suspicious clients as they approached, in hopes of steering them to the only facility that didn’t seem to be under surveillance: their covert one. The CIMM bought advertising space in daily newspapers promising easy fund transfers overseas and distributed flyers in neighbourhoods where targets were known to live, mostly in the South Shore city of Brossard. “All suspicious customers will be billed 1% extra,” a weekly internal RCMP report says. “This will allow us to distinguish legitimate customers from illicit ones. The latter, trusting in our discretion, prefer to continue doing business with us in spite of the surcharge.” Two months later, investigators were already patting themselves on the back: “With the help of the advertising, we concluded 274 financial transactions, an increase of more than 30% over the previous week,” Corporal Pierre Bolduc enthusiastically noted in his weekly report dated October 19, 1990. Only a month since the CIMM began operations, he added, “two major investigations” had been turned over to the drug squad.
Operation Compote, the largest undercover operation in the history of the RCMP, owed its existence in part to pressure from the DEA. The American agency had long been aware of South American expatriates flying from Montreal to Cartagena, Colombia, their suitcases bulging with narcodollars. And as part of its investigations of criminal networks in Houston, Cincinnati and Denver, it had also noted the existence of a suspicious currency exchange business at the corner of McGill College Avenue and De Maisonneuve Boulevard, the National Foreign Exchange Office, which was a paradise for money launderers. The U.S. ambassador in Ottawa had brought up the matter with Canadian authorities.
On September 20, 1991, Kazimir Sypniewski, the Yale Building security guard, walked across the street to the CIMM and hefted $470,000 in twenty-dollar bills onto the counter. When he left, officers discreetly followed as he went back into the Yale Building and upstairs to Joe Lagana’s law firm. Looking back through its files, the RCMP noticed the lawyer’s name had popped up in a number of drug squad investigations: specifically, Lagana was linked to Vito Rizzuto and his well-known laundryman, Dima Messina. The following month, the CIMM staffers made an intentional mistake: after counting the stacks of notes deposited by Sypniewski, they handed him two cheques instead of the usual four. Later, Lagana telephoned the CIMM to report the slip-up: there were two cheques missing, he said. “So sorry, our mistake,” the staffer replied. “We’ll issue the two others right away.” The Mounties’ suspicions were confirmed: Sypniewski was simply a messenger, and Lagana was his paymaster. Some time later, an RCMP team drilled a tiny hole into the wall of the corridor outside Lagana’s office and carefully placed a bug inside, making sure to remove all traces of the job. They had to work fast; even at night, there were frequent comings and goings on the seventh floor of the Yale Building, which the law firm shared with a telemarketing call centre.
In the months that followed, Sypniewski continued hauling banknotes, several hundred thousand dollars at a time, across the street to be exchanged into bank drafts. And Lagana wasn’t the only client taking advantage of the currency exchange counter’s friendly and courteous service. At the end of its first year of operation, the CIMM had made a profit of $23,297; Canadian taxpayers wouldn’t have to put up any money for the investigation, and the money launderers were covering the cost of the operation that would eventually pinch them. On a plastic bag that had been used to carry banknotes deposited at the fake currency exchange counter, investigators found fingerprints matching, among other people, Francesco Cotroni Jr., son of the Calabrian clan chieftain. Frank Jr. was also observed across the street from the CIMM, talking to Joe Lagana and Giovanni Marra; the latter was a high-level narcotics dealer and long-time Cotroni family associate.
Confident now that the currency exchange was willing to accept large sums of cash without asking questions or alerting the police, Lagana met with the man he knew as its manager. His alias was Pierre Morais, and Lagana told him he would soon have more money to exchange, in the millions of dollars. Not a problem, the undercover officer replied.
Early in 1992, a man named Domenico Tozzi introduced himself to CIMM staffers as an associate of Lagana’s. He said he was president of a company called Toscani Import, and that he had fifteen million dollars that he wanted to transfer to the United States: “It’s for one of my customers; he’s had the money for eight years and he’s fed up of hanging on to it,” he explained to the CIMM cashiers at a meeting in Lagana’s offices.
The fifty-year-old Tozzi acted the part of a big shot who threw big money around and knew wheelers and dealers. Tozzi’s every word was being recorded, and RCMP officers listened with glee: the man was boasting to them about how he’d laundered money for the past twenty or so years.
“Oh yeah?” one officer asked ingenuously. “Do you know … what’s his name already … Vito Rizzuto?”
“Sure,” Tozzi said. “He’s the big boss. He’s the one who decides everything, but he doesn’t touch anything. He’s very well known to police. He can’t be too visible, otherwise he’ll end up in prison …” Then, in a hushed tone, he added, “Vito is a Sicilian. He’s dangerous and he isn’t afraid of anyone.”
Tozzi himself never met directly with Vito, he explained. If he did see him, it was in Lagana’s offices. According to Tozzi, Rizzuto wasn’t content to oversee the financial dealings of the Sicilian Mafia; he also helped other criminal gangs out. For instance, he was handling a transaction for Robert Steve Johnston, “one of the big bosses of the West End Gang,” Tozzi said, referring to Montreal’s Irish mob. “The Italian big boss in Montreal is in charge of transferring the first ten to twenty million from Johnston,” he continued. “He makes the decisions. He really doesn’t want to lose this customer.” Johnston was looking to repatriate a sum of between thirty and forty million dollars lying dormant in a Liechtenstein account, Tozzi explained.
Tozzi bragged of having contacts all over the world—the United States, France, Colombia, Mexico—and dropped several names. “I know the Mexico City chief of police very well; I’ve done business with him in the past,” he let slip to a CIMM staffer one day, with a knowing wink. Tozzi had a solid network in Africa, doing business in Senegal, among other countries, where he exported everything from tobacco to wine coolers to military material. He claimed to have applied to become an honorary consul of Nigeria. Officers carefully noted this last admission: they knew that a diplomatic passport offered several perks, not least of which was permission to cross borders carrying diplomatic pouches—which were almost never subjected to searches by customs officers.
It was during this series of meetings that Tozzi claimed he was the one who paid the $800,000 bribe to secure the release of Nicolò Rizzuto from prison in Venezuela. He made the boast while having dinner with the undercover officer posing as the manager of the currency exchange on April 1, 1993. In a report dated April 30, Sergeant Marc Lavoie referred to the conversation between Tozzi and “Pierre Morais”: “As for Tozzi, he himself brought $800,000 to Venezuela to get out of jail Nick Rizzuto, the father of Vito,” he wrote.
The Mounties widened their surveillance. They observed Jorge Luis Cantieri in a vehicle owned by Tozzi’s company. Cantieri, a Brazilian then aged forty-one, described himself as a businessman involved in the import-export trade. He owned the company Mercanti Holdings and several businesses controlled by the numbered company 2697203 Canada. Along with accomplices like the globe-trotting businessman Norman Rosenblum, Cantieri had been found guilty of smuggling cocaine and hashish in the mid-1980s.
Out on parole since March 1990, Cantieri was officially barred from leaving Canada. Yet he was travelling frequently to Europe, Colombia, Ecuador, Panama and Costa Rica, and getting richer by the day. Besides owning a luxury home in Dollard-des-Ormeaux, in northwest Montreal, he had land in Vaudreuil, just off the western tip of the Island of Montreal, and an apartment on Nuns’ Island, an upscale suburban area just south of downtown, and was about to make an offer on an apartment in Nice, on the French Riviera.
Dirty money was flowing into the CIMM. The trap was working like a charm. It was an interesting break from routine. The police didn’t have to chase the criminals; the criminals were dropping in to see them—and with smiles on their faces, to boot. But the millions they were unloading at the currency exchange weren’t enough to constitute proof beyond a reasonable doubt, as demanded in a court of law. The police would have to show that the money represented the proceeds of the narcotics trade. Once they were sure they had Lagana’s confidence, the undercover officers at the CIMM led him to understand that they had partners who were ready to do business of another kind. That is, they were prepared to help them transport drugs. The CIMM, they explained, was the Montreal branch office of an investment consultancy in Amsterdam—in reality, another fake company that the RCMP had created, this time jointly with police in the Netherlands.
The offer came at just the right time. The Mafia and the Hells Angels had joined forces in a plot to import 558 kilos of cocaine from Colombia. The Colombians were equipped with power yachts and prepared to hand over the drugs at a location in the Caribbean Sea, north of Santa Marta. From there, the cargo needed to be delivered to Great Britain, where it would be picked up by members of the Sherbrooke, Quebec, chapter of the Hells Angels and sold to British members of the gang. All that was missing was a vessel equipped for transatlantic travel, and an adventurous captain. The RCMP created a bogus London-based shipping company and secretly chartered a boat in Miami, in collaboration with U.S. customs and the DEA, telling Lagana and co. that it was normally used to ferry supplies to oil rigs off Venezuela.
Lagana fell for it. He met with undercover police in the Netherlands, who were posing as smugglers, to work out the details of how the drugs would be transported. Norman Rosenblum, who already had two prior convictions for international drug trafficking, flew to Colombia. The RCMP undercover agents feigned impatience. The transaction was dragging on; what was the problem? they asked. Calls were made. Rosenblum was chomping at the bit: the cargo was ready, he told Lagana. The Colombians wanted to make the drop immediately; they had to act fast because an ocean storm was brewing. Lagana made several calls to Europe. According to the deal that had been arranged, only Cantieri—as the man with the connection to the Colombian suppliers—could green-light the shipment. But Lagana couldn’t reach Cantieri; he was busy with his apartment deal in Nice.
Lagana went ahead and authorized the shipment without Cantieri’s sanction. When the Brazilian found out, he was not pleased. He called Lagana and said there were still clauses to be worked out in the contract with the Colombians. They hadn’t reached agreement on the “insurance”; in other words, how to share the losses in case the deal was compromised—for example, if the drugs were seized.
It was too late: the delivery order had been given.
On August 17, 1994, the RCMP’s chartered supply ship approached the Colombian coast near Santa Marta, a port city and tourism hub with a population of about 500,000. Rosenblum met up with the suppliers as planned, aboard the power yacht. He enthusiastically helped out in transferring the fourteen bales of cocaine, weighing a total of 558 kilos, trading jokes with crew members. They included Sergeant Pierre Jeannotte and Corporal Claude Bellemare of the RCMP, though Rosenblum believed them to be simple seamen; he was also ignorant of the fact that the ship’s captain was an undercover U.S. customs agent. To his mind, everything was going according to plan. Rosenblum was ecstatic. The transfer complete, he headed back to shore with his suppliers, then flew to Vancouver. The supply ship sailed to Miami, where the drugs were removed from the hold and sent by air to Montreal, to be retained as evidence.
The putative co-conspirators at the CIMM told the traffickers that the ship was headed to England, where the Hells Angels were to take delivery. Then they went on the offensive, demanding to be paid for the transportation end of the deal, otherwise they wouldn’t make the delivery. Their fee: one million dollars. On Monday, August 29, Lagana’s lawyer partners, Richard Judd and Vincenzo Vecchio, went to pick up the money from Shimon Ben-David, an associate of well-known Montreal drug trafficker Morris Mayers, and then delivered it to the fake currency exchange. Judd was carrying a burgundy suitcase; Vecchio, a black one. Each contained $250,000 in one-hundred-dollar bills. Later that day, they made the same return trip, delivering the balance of the fee. The lawyers counted up the bills and pocketed $70,000 as commission.
At six in the morning on Tuesday, August 30, about five hundred federal, provincial and municipal police officers made some sixty arrests in Montreal, Quebec City, Trois-Rivières, Vancouver and Toronto. At the request of RCMPofficers who had travelled to London, British police also arrested Pierre Rodrigue, age thirty-two, and David Rouleau, age thirty, the two members of the Sherbrooke Hells Angels whose job was to pick up the cocaine. They were imprisoned pending extradition to Canada. London police also picked up Morris Mayers but released him later the same day.
The Mounties had 558 kilos of coke sitting in their evidence room, and proof that Lagana and his Mafia associates had washed $97 million in drug money over a four-year period. The indictment ran to 1,500 pages, was based on 3,500 recorded conversations, and listed evidence amassed to support charges against 57 people.
Lagana, Judd and Vecchio were among those charged. They pleaded guilty and were sentenced to prison terms of varying length. Kazimir Sypniewski, the Yale Building security guard who had deposited millions of dollars at the RCMP’s fake currency exchange at Lagana’s request, died aged seventy on January 17, 1995, before his case could come to trial. Emanuele Ragusa, fifty-four, a well-known member of Montreal’s Sicilian Mafia, faced twenty-eight separate counts on various charges. Jorge Luis Cantieri was handed a fifteen-year prison sentence. Domenico Tozzi, Norman Rosenblum, Pierre Rodrigue, David Rouleau, Jean-Pierre Renault and several others also went to jail. Renault, originally from the Beauce region south of Quebec City and a former lawyer, had previously been arrested in 1985 for having set up the first cocaine lab ever discovered in Canada, in Rosemere, a suburb north of Montreal.
One name, however, was conspicuously absent from the list of accused: Vito Rizzuto. “We have evidence suggesting that he is part of the conspiracy [to launder profits from the sale of cocaine]. But because of certain legal principles, we cannot file this evidence against Mr. Rizzuto,” prosecutor Danielle Côté said at an August 31 news conference announcing the wrap-up of Operation Compote and the dismantling of the CIMM.
As the sting operation wound down, investigators had been virtually certain they would finally be able to nail the big boss. They had recorded several conversations between Rizzuto and Lagana and photographed them together. On January 18, 1994, they had watched as Vito parked his Jeep Cherokee on Peel Street; a few minutes later, Lagana exited a building and got in. Two and a half weeks later, on February 4, they had seen Rizzuto and Lagana in the same building with Jorge Luis Cantieri. And the year before, on September 23, they had observed Rizzuto and Cantieri dining together at Le Latini restaurant, on Jeanne-Mance Street in downtown Montreal.
One meeting in particular had fired investigators’ hopes. After taking possession of the 558 kilos of cocaine off the Colombian coast, the RCMP asked Swiss authorities to freeze certain bank accounts in their country. The Mounties wanted to prevent the accounts from being emptied once they filed their charges against the conspirators. Lagana was notified of the request by a Swiss banker. Large sums had been deposited in those accounts, for which he was responsible. Lagana immediately picked up the phone and called Vito Rizzuto at home. It was five in the morning. He asked Vito to come to his office as soon as possible to attend to an urgent matter.
The RCMP had proof that the Swiss accounts were key cogs in Lagana’s money-laundering machine. The covert cashiers at the CIMM had transferred funds to those accounts at the lawyer’s behest. Now they had a chance to gather evidence of Vito Rizzuto giving instructions on the management of those accounts. It would be enough to lay charges against him. With the bug hidden in the wall of Lagana’s law office, they hoped to catch Rizzuto in the act.
Their hopes soon faded. In Lagana’s office, Rizzuto adhered to the same strict rule he had followed for years in such situations: he said almost nothing. When he did speak, it was in cavernous tones, and he slurred his speech. Worse, the bug had inadvertently been concealed next to the building’s main waste-water evacuation line, causing the conversations to be muffled by the sound of toilets flushing. The RCMP sent the tape to an FBI sound lab in Washington, but their experts were able to eliminate only part of the unwanted sounds. The lead prosecutor in the case, Claude Bélanger, determined that what was left of the recording would be inadmissible in court.
After the official conclusion of Operation Compote, a small celebration was held at RCMP Quebec headquarters in Westmount. A hundred or so police officers, lawyers, Canada Customs agents and tax inspectors toasted their triumph in the third-floor mess hall. It was a time to rejoice. Over the past four years, the covert operation had seen $160 million moved through the CIMM. Of that amount, nearly $140 million had been brought in by criminals. The police happily informed Revenue Canada about the thousands of transactions involving clandestine cash. The operation hadn’t cost taxpayers a cent—better still, the RCMP had earned a net profit of $2 million.
Several investigators, however, remained frustrated that Rizzuto was beating the rap—again. Was there really no way he could be charged? they asked Claude Bélanger. None, the lead prosecutor replied. Rizzuto could only be named an “unindicted co-conspirator” in the plot to import 558 kilograms of cocaine.
“Had we laid charges against Rizzuto, we could have exposed everything we had on him to the courts and the entire population,” Sergeant Yvon Gagnon, the man who had overseen Operation Compote, said years later. “Our revelations would certainly have weakened his leadership. We sincerely believed we had a good chance of convicting him.”
The operation had allowed police to net an impressive number of criminals. The most notorious of the bunch was fifty-six-year-old Vincenzo “Jimmy” Di Maulo, Joe Di Maulo’s older brother and a close friend of Frank Cotroni. He was charged with forty-six counts of money laundering and drug trafficking. He eventually admitted to washing more than $10.5 million in dirty cash between 1990 and 1994 via the CIMM and was convicted for his role in a plan to import 2,500 kilos of cocaine from Colombia. Unfortunately for him and his associates, the drugs were now at the bottom of the Caribbean Sea: the Tromso, a ferry purchased in Florida and repurposed for smuggling, had sunk off the coast of Jamaica.
Di Maulo was a repeat offender and well known to police. Twenty years earlier, he had taken part in the murder of Robert “Ti-Cul” Allard, the right-hand man of infamous Québécois gangster and multiple murderer Richard Blass. In the 1960s, Blass and his gang had challenged the Italian Mafia’s hegemony over Montreal organized crime, unhesitatingly taking out Mafiosi. Found guilty of killing Allard in 1970, Di Maulo had been sentenced to a life term, but won parole in 1981. Since that time, he had amassed a fortune estimated at fifteen million dollars. He was a true success story, personifying the integration of organized crime into the licit economy.
Operation Compote proved that Di Maulo had relied on the services of Domenico Tozzi to launder his profits from the drug trade. As part of his unwitting confessions to undercover RCMP officers, the loose-lipped Tozzi had often sung the praises of his good friend Di Maulo, whom he had known for more than thirty years. “He’s done time in the past, but now he’s a respected businessman,” he told “Pierre Morais,” the covert currency exchange manager, as the two dined (and downed copious amounts of alcohol) at Restaurant Carpaccio on Montreal’s University Street, on April 28, 1992.
Di Maulo had parked a considerable portion of his ill-gotten gains in his Swiss accounts. He had also recycled some of his narcodollars through real estate ventures in Montreal and the surrounding area. This allowed him to project an image of a leading, respectable property developer—and that of a good corporate citizen: every year, he helped organize a charity golf tournament to benefit Santa Cabrini Hospital, in east-end Montreal.
Di Maulo’s property development company had its head office in a building called Place Cardinal, at 5365 Jean-Talon Street East, also home to Saint-Léonard’s municipal courtroom. The office shared its reception and secretarial services with the law firm of Francischiello, Tibshirani and Associates. Nicknamed Capo Bianco because of his white hair, the rich Mafioso was also the head of an international conglomerate that had been incorporated in Panama and was connected to Swiss bank accounts. The conglomerate provided funding to eighteen companies that had made major investments in Quebec and elsewhere. Di Maulo managed funds not only for the Italian Mafia, but for other criminal organizations including the Dubois clan and the West End Gang.
Di Maulo owned residential buildings and land in Saint-Sauveur, a ski resort town at the foot of the mountain of the same name, in the Laurentians. The year he asked Domenico Tozzi to help launder his drug money, he launched the second phase of an extensive residential development in the picturesque community. The project, poetically named “Au Tournant du Boisé” (The Bend in the Woods), was evaluated at $18 million and planned for 119 apartments to be built. Officially, two businessmen owned the 58,000-square-metre development. One of them, Jean Corneau, spoke to La Presse not long after the Mafioso was sent back behind bars. “Mr. Di Maulo was a gentleman with me,” he said. “I didn’t have to spend a penny to acquire the first lot. I pay him a piece rate, as each unit is sold.”
Other lots in the same neighbourhood were in the name of the wife of Adrien Dubois, the youngest of the Dubois brothers from Saint-Henri, and Paul Fontaine, a Hells Angels member. At the time of his arrest on August 30, 1994, Di Maulo was planning a new venture in partnership with Corneau, a residential development adjacent to the Mirage golf course in Terrebonne, northeast of Montreal. Corneau was killed some years later in a road accident.
Year in, year out, Di Maulo played at least a dozen rounds of golf with Vito Rizzuto. Domenico Tozzi had called him “the king of the drug importers.” Not all of his transactions were profitable, though: Di Maulo lost a million dollars when the Tromso went down off the coast of Jamaica, and had to bid adieu to the 2,500 kilos of coke the ship was supposed to have been carrying; Tozzi said he felt sorry for him.
When he was arrested, Di Maulo knew he was likely to be handed a lengthy prison sentence. Two of his friends, Fernando De Francesco and Ricardo Di Massimo, spoke to one of their neighbours, Corporal Jocelyn Chagnon, who worked for the RCMP Proceeds of Crime unit. They promised to pay him $100,000 if he persuaded the prosecution to offer a lighter sentence: eight years’ imprisonment instead of twelve. Chagnon pretended to accept the bribe. He met with De Francesco and Di Massimo on several occasions, each of which was filmed by police. Di Maulo’s wife, Micheline Kemp, paid Chagnon an initial instalment of $15,000. She was arrested and convicted, as were De Francesco and Di Massimo. Di Maulo received a twelve-year sentence as planned, and assets from his $4.5 million in personal wealth were seized—for the most part, the buildings and land in Saint-Sauveur.
In the space of less than three years—between December 2, 1991, and July 28, 1994—Domenico Tozzi had moved more than $27 million in small-denomination notes through the RCMP’s covert currency exchange. Police stated that the cash came entirely from narcotics smuggling operations run by organized criminal groups. Several of the CIMM’S customers, including Jimmy Di Maulo, did indeed belong to the Mafia, while others were from different communities.
On November 23, 1993, an excited Di Maulo strode into the CIMM. “There’s a whole pile of money to exchange!” he announced frantically, explaining that “The Jews just got a 25-tonne shipment of hashish in the Port of Montreal.” More than once during the investigation he was overheard saying that he planned to bring in thirty million dollars for “the Jewish mob.” “The money was to be transferred to Switzerland, then to Israel, to finance both legal and illegal activities,” an RCMP report stated.
The shadow of Morris Mayers hung over the plot to transfer the 558 kilos of cocaine to the Sherbrooke Hells Angels in London. Mayers, arrested in England along with two Angels, was released for lack of evidence. Only later did police succeed in taking down his network. Mayers owned a ranch and a stake in a gold mine in Suriname (part of the former Dutch Guiana, in South America) and had extensive contacts in Israel.
“Domenico Tozzi’s specialty is moving money around the world,” lead prosecutor Claude Bélanger said at the end of the trial. Tozzi was convicted, sentenced to ten years in prison and fined $150,000. When he refused to pay the fine, he had two more years tacked on to his jail term. Polite and affable, he said, “Gros merci (thanks a bunch),” to Judge Jean-Pierre Bonin after the latter read out his sentence. Tozzi was released two years later, after serving one-sixth of his sentence.
While Vito Rizzuto was not indicted, he certainly felt the impact of Operation Compote. One of the fifty-seven accused was a man by the name of Valentino Morielli. He was charged, along with Jimmy Di Maulo, of attempting to import 2,500 kilograms of cocaine on board the Tromso. On November 21, 1996, at the request of the prosecution, Vito was called to testify at their trial. Rizzuto and Morielli were both aged fifty at the time. Rizzuto said in court that he had first met the accused and his family when he was around ten years old; they grew up together in the Villeray neighbourhood. “He’s a friend, but we don’t do business together,” he explained, adding that the last he had heard, Morielli was serving beer in a tavern, but that he didn’t know anything more.
The police, however, knew that Morielli was Rizzuto’s right-hand man, having replaced Joe LoPresti, who had been the Montreal Mafia’s “ambassador” to the Bonanno family until his murder in 1992. Morielli had three prior convictions for theft and drug trafficking. He’d also had a brush with death during a near-disastrous smuggling attempt in 1985. He had been with a team of drug runners on board two small fishing vessels, Gaspésienne VI and Gaspésienne VII, on the way to pick up a shipment of hashish from Beirut, when they were caught in a squall some three hundred kilometres south of Newfoundland. Both boats sank, leaving Morielli and his accomplices to drift for several days in lifeboats. The episode obviously failed to quell his taste for adventure, as he would subsequently be brought up on more trafficking charges.
The presumed head of the Montreal Mafia on the witness stand was a rare sight indeed. Prosecutor Claude Bélanger, not about to pass up such a golden opportunity, questioned Rizzuto as aggressively as he could but couldn’t come up with much. Bélanger sought to prove that Rizzuto had met with Morielli on multiple occasions while the latter planned the operation to transfer the 2,500-kilo cocaine shipment to the Tromso. The ferry refitted as a freighter was now lying on the ocean floor, but the proof of the smuggling plot—cash and cocaine—was safe in the covert currency exchange and the RCMP’s evidence room.
Under intense questioning, Rizzuto finally admitted that Morielli, like Jimmy Di Maulo, was one of his favourite golfing partners. The baron of Antoine-Berthelet Avenue, it seemed, took his golf seriously and had played on so many courses in and around Montreal as well as on various Caribbean islands that he couldn’t remember their names. He said he played about a hundred times a year.
“For the last seven years, am I to understand that you play around one hundred games—more than a hundred games a year?” Bélanger asked.
“Yes,” Vito answered.
If, as could logically be assumed, he had played several of those rounds in the company of Morielli, it seemed impossible that they never would have discussed the cocaine importing scheme. At any rate, Morielli was found guilty and sentenced to ten years in prison.
Operation Compote also exposed the activities of narcotrafficker Jean-Pierre Leblanc. The Hells Angels chapter in Trois-Rivières, halfway between Montreal and Quebec City, relied on him to import massive quantities of Jamaican hashish. Leblanc was nicknamed the Rancher of Bécancour because he ran a huge beef farm in the municipality of that name, across the St. Lawrence River from Trois-Rivières. His livestock included at least 365 head of purebred steers and cows. He was just one of many drug traffickers who, oddly, seemed to have an immoderate interest in cattle raising.
Leblanc, however, made a lot more money with his network of mules than his cattle. Young people were hired to travel to Kingston, Jamaica, where they were given up to seven hundred grams of hashish each. Before boarding the plane for the return flight, they would swallow the “gum,” pressed into pellets and carefully wrapped in Cellophane. Then they would go through customs at the airport in Montreal hoping the Cellophane wouldn’t rupture while in their stomachs.
Some couriers also hid hash on their person before boarding cruise ships sailing between the Bahamas and Miami. The drugs were then transported by road into Quebec, to be dealt on the street in Montreal as well as in the Mauricie and Beauce regions, around Trois Rivières and south of Quebec City, respectively. Leblanc personally negotiated his purchases with his Jamaican contacts. Investigators with Customs and Excise believed that between two and three hundred mules had worked for him. Between April 14, 1991, and September 24, 1993, Leblanc had deposited $3.4 million at the RCMP’s fake currency exchange. He was sentenced to eight years in prison, but released after serving one-sixth of his term, or sixteen months. His ranch, farm equipment and livestock were confiscated, along with apartment buildings that he had bought in a new development in Cap-de-la-Madeleine, a suburb of Trois-Rivières.
One of the CIMM’S biggest customers was nowhere to be found, however, when police made their early-morning bust on August 30, 1994. Police had tailed Sabatino “Sammy” Nicolucci, aged forty-seven, ten years earlier when he and Vito Rizzuto had boarded a plane to Venezuela, where a drug transaction was concluded (see Chapter 6), and then arrested him after the investigation stemming from the seizure of a dozen kilos of cocaine at Vancouver International Airport. The following year, 1985, he was sentenced to fourteen years in prison. But upon his parole in 1991, he had energetically resumed his narcotics trafficking career. The RCMP calculated that he had laundered $31 million through the Peel Street currency exchange in a span of less than three years. He had also abetted Jorge Luis Cantieri and Norman Rosenblum in the plot to ship the 558 kilos of coke to England.
An arrest warrant was issued, but it couldn’t be executed: Nicolucci had been kidnapped by Colombian drug smugglers early in August. In July, he’d gone on a twenty-thousand-dollar Alaskan cruise, for a romantic cause: his honeymoon. After his return, he went to the Castel Tina, the infamous strip club in east-end Montreal. On August 2, 1994, a group of local representatives of the Cali cartel stopped by the club to see him. After heated words were exchanged in Spanish, Nicolucci agreed to accompany his captors away from the club.
That evening, at 7:58 P.M., police officers listening in on the tapped telephone line of Emanuele Ragusa, a senior member of the Sicilian clan, heard an alarming conversation. A distraught Nicolucci said to Ragusa: “They want the bill to be paid, otherwise they’re holding on to me.” Another man grabbed the phone and repeated the warning in French: “You’d better move; your friend is going to stay with us until the bill is paid, to the last peso.” He told Ragusa to warn Nicolucci’s wife, Lina Carpinelli, not to alert the police.
The kidnappers then allowed Nicolucci to call his new bride. He spoke to her in Spanish but used code words so that she would understand that he wanted her to contact Joe Lagana and tell him Sammy had a pressing need for banknotes. Lina Carpinelli called the lawyer immediately: “My husband’s been kidnapped. He needs money,” she said. Lagana tried to reassure her, told her not to say any more over the phone and suggested that she call Emanuele Ragusa.
The Cali emissaries wanted $1.7 million—the amount Nicolucci owed them for 280 kilos of cocaine that had been delivered but that he had refused to pay for because he had deemed its quality to be substandard. The soured deal had been dragging on for several months and had been the subject of harsh discussions among the leaders of the cartel, in Florida and in Cali. The Colombians were threatening to cut off the supply lines to the Montreal Mafia.
There was frantic activity in the Rizzuto camp. Nicolucci’s life was in danger. Ragusa was eager to find the money, but obviously, putting such a huge sum together on such short notice posed a problem, even for the Mafia. Domenico Tozzi’s assistance was sought, but efforts failed. Ragusa then called someone named Vincenzo; police reckoned this was Vincenzo “Jimmy” Di Maulo. Ragusa asked him if he had any loose cash and whether others could contribute. “I’m going to try and hold them off by sending them a bit of money,” he said, fearing Nicolucci’s captors might do away with him. Envoys for the Rizuttos and the Colombians negotiated almost daily during the month of August, usually by phone, occasionally in person.
Investigators, just as eager to find Nicolucci but for different reasons, visited the abductee’s wife, but she refused to co-operate. “He’s gone on holiday,” she told Sergeant Detective Jean-Michel Lussier of the Montreal police. Using the numbers in the call registry of Nicolucci’s cellphone, officers determined that he was being held in a chalet in the Laurentians. When the kidnappers saw that the police were patrolling the neighbourhood, they whisked their prisoner to New York, then moved him to Miami, close to the senior representative of the Cali cartel in Florida, a man referred to as “Fernando” and known as their “lawyer.” Fernando stubbornly insisted on payment for the coke delivery, reiterating over the phone the demand that the debt be settled “to the last peso.”
On August 29, the Rizzuto clan agreed to pay $900,000 and sent representatives with part of the amount to the RCMP’s currency exchange for transfer to the Cali cartel members. By that time, however, the police believed Nicolucci’s life was no longer in danger, and seized the money. The next morning, they made their massive arrests and shut down the CIMM.
The kidnappers took Nicolucci to Colombia, where he was placed under a sort of house arrest, to serve as surety: the Colombians were going to hold on to him until their coffers were filled anew thanks to further drug sales to the Montreal Mafia. In February 1995, local police found him in a house in Cali. As there was an international warrant out for his arrest, he was taken to court. Nicolucci fought his extradition to Canada, but in vain. He remained in prison. Three days after his court appearance, an unknown individual telephoned the Canadian Embassy in Bogotá and threatened reprisals against its staff if Canada continued to press its extradition request. Sergeant Varoug Pogharian was the RCMP liaison officer posted to Bogotá at the time. On March 10, in a confidential report to RCMP headquarters in Ottawa, he explained that the embassy was on alert.
“The mission in Bogotá has always taken threats against the Embassy and its staff very seriously,” the sergeant wrote, adding:
Criminals in Colombia often follow through on such threats, without warning and without restraint. In Colombia, the odds of capturing the perpetrator of a crime, whether major or minor, are very slim. The odds of that crime then being punished are even slimmer. The result is a climate of impunity within the population, and often the most outlandish ideas turn into real acts of violence.
It was the first time Canada had made an extradition request to Colombia, Pogharian continued. It was based on an 1888 treaty between the United Kingdom and Colombia. The sergeant was not particularly optimistic, believing the process could drag on for a year. He worried that, in the meantime, the criminals would set off a car bomb outside the embassy.
It was obvious to Pogharian that if Nicolucci were extradited, the Cali cartel members would never see the money that he owed them. “Before his arrest, Nicolucci had been named in an investigation into a Colombian cartel,” he wrote. “If the allegations are true, there is every reason to believe he is setting up a major drug shipment to Canada as a means of paying off his debt. This is clearly the reason why the Colombian traffickers do not want to see him extradited to Canada.”
Nicolucci was close to some Colombian drug barons being held in the same prison, the RCMP liaison officer continued, explaining that Nicolucci prepared meals for them, and the atmosphere was very friendly. “Consular staff state that he gained a good deal of prestige in a short time among the other detainees,” Pogharian reported:
No doubt he owes that status to the influential people who are visiting him in prison. During the interview [with Canadian Embassy representatives], Nicolucci entered a room where other prisoners were playing cards. At a simple hand signal from him, everyone left without saying a word.… During the meeting with the consular officers, Nicolucci was polite and courteous. He did not seem surprised that threats had been directed at the embassy. To his mind, they are proof of how badly his hosts want him to remain in Colombia.
Pogharian raised the possibility that Nicolucci’s “hosts” might try to get him out of the prison before the Colombian court ruled on the extradition request. This would be most easily done, he emphasized, by bribing the guards. The liaison officer recommended that the RCMP ask the Colombian authorities to “move Nicolucci to another prison to minimize the risk of an escape.” Colombia finally agreed to extradite Nicolucci in early 1996; he was brought back to Montreal under heavy escort on May 30. Following a lengthy trial during which he acted in his own defence, Nicolucci was found guilty on more than 150 counts and sentenced to nineteen years in prison.
On June 27, 1995, Joe Lagana, the Peel Street lawyer with close ties to Vito Rizzuto, was given a thirteen-year jail sentence for importing 558 kilos of cocaine and laundering $47.4 million. His partners, Richard Judd and Vincenzo Vecchio, each received a seven-and-a-half-year term. The court ordered the seizure of Lagana’s bank accounts and assets—worth a combined $2.5 million and amassed during the four years that the RCMP investigation was active. Prosecuting attorneys complained that the sentence was too lenient. But in the eyes of some, it wasn’t lenient enough. The federal Liberal government of the time enacted legislation requiring the National Parole Board to automatically release non-violent offenders serving their first term in a federal penitentiary after serving one-sixth of their time rather than one-third. As a result, Lagana went free on August 27, 1997, having served two years and two months instead of the thirteen-year sentence pronounced by the judge.
The majority of the Rizzuto clan’s money launderers benefited from this same legislative godsend. It was perhaps not for nothing that Domenico Tozzi had thanked Justice Jean-Pierre Bonin after his sentence was read out. Handed a ten-year prison term (plus the additional two years for refusing to pay the fine), he got out after just two years. He may well have realized that he would only be out of commission for a relatively short time. At any rate, a good number of police officers and prosecuting lawyers had the distinct impression that the legislative change was tailor-made for swindlers, drug traffickers and, especially, Mafia honchos. Some wondered flat out whether the Mafia might have a powerful lobbyist working for them in Ottawa.
The new statutory provision was skilfully camouflaged amid a welter of amendments. At the time of its enactment, then justice minister Allan Rock announced—with copious amounts of advertising to accompany the move—a strengthening of laws with regard to sex offenders and other dangerous criminals. The amendment to the “accelerated parole review,” meanwhile, was buried twenty pages into a huge omnibus bill containing several measures that had little to do with one another. The amendment was so well hidden that it escaped the attention of Parliament and even lawyers specialized in prison law.
Journalists at Montreal’s La Presse, upon learning that Lagana and his accomplices were to be released after serving one-sixth of their sentences, sought an explanation. No one was able to tell them what had prompted the government to display such generosity. “I am not aware of who made the proposal, but we agreed because early release after serving one-third has been working well since 1992,” said National Parole Board chairman Willie Gibbs. “We thought it would work well at one-sixth.”
As observers wryly noted, with that kind of reasoning, Gibbs might as well have attempted to justify early release after one-twelfth of time served. Even before this new legislation came into force on August 1, 1997, the Quebec Bar along with parole officers had decried the harmful effects of automatic release after one-third of time served, warning parliamentarians that the measure would result in prisons being emptied of defrauders and heavyweight drug traffickers. According to the Bar, automatically freeing non-violent offenders after a third of time served would likely prompt “small and medium-sized criminal organizations” to recruit people fitting that profile and capable of committing bloodless crimes. In a 1994 report, the Bar suggested doing away with automatic parole in such cases. The Liberal government of Prime Minister Jean Chrétien threw the report in the shredder … and instituted automatic release after one-sixth of time served.
Still, the premature release of Joe Lagana, Domenico Tozzi and several other money launderers and narcotics traffickers sparked outrage. In 1999, the federal government announced that members of organized criminal groups would no longer benefit from the measure and would henceforth have to serve one-third of their sentences before being released.
That “tightening” of legislation, as it turned out, was little more than window dressing. It applied only to inmates who had been convicted under new anti-gang legislation—as it turned out, a single person in all of Canada. (Most absurd of all, the man was a down-and-out heroin addict who had in fact helped Montreal police arrest members of the city’s Mafia.)