Bank Calls Its Aid to Mob Family a Mistake

First National Bank of Boston broke its silence Thursday on its multimillion-dollar dealings with a reputed mob family, blaming several mid-level employees for “very poor judgment” that may have allowed the bank to unwittingly be used by organized crime.

Chairman William L. Brown told reporters that the bank gained nothing--”not one dime, not one gratuity”--by its dealings with the “family” of Gennaro Angiulo, who is considered the head of New England’s most powerful organized crime network.

Brown said employees at the North End branch here simply made an innocent mistake and used “very poor judgment” when they placed two real estate companies owned by the Angiulos on a list that exempted their large cash transactions from government scrutiny.

“Just because we’re big doesn’t mean we don’t make mistakes,” Brown said. “You’re assuming all our employees are perfect and they are not. . . . For God’s sake, don’t hang the whole institution because somebody did not read or interpret something correctly.”

He said that if the Angiulo family, which conducted $7.3 million in transactions at the bank between 1979 and 1983, was using the bank for laundering mob money, then the bank was unwittingly used for unlawful purposes.

Guilt ‘Up to the Court’

But he added, “I have not found the Angiulos guilty of anything. That’s up to the court.” Angiulo faces a trial next month on federal loan-sharking and racketeering charges.

Brown refused to identify the branch manager and the other employees responsible for putting the Angiulo companies on the exempt list, and he said no one has been fired, transferred or disciplined.

“We’re not trying to find a scapegoat,” he said. “We will take care of the discipline down the road.”

The Bank of Boston, the country’s 16th-largest bank holding company with $22 billion in assets, pleaded guilty two weeks ago to not reporting $1.2 billion in cash transactions with nine foreign banks. It paid a $500,000 fine, the largest ever levied for violating federal currency-reporting regulations.

Shortly after the bank paid the fine, investigators confirmed published reports that the Bank of Boston had placed the Angiulos on its exempt list, which is legally reserved for retail outlets that ordinarily deal in large amounts of cash, such as supermarkets and sports arenas.

Second Bank Involved

If a company is not on the list, bank employees must notify the Treasury Department every time the company makes a cash transaction larger than $10,000. The regulation was designed to crack down on money laundering by organized crime figures and drug dealers.

In a related story, it was reported that a second Boston bank is under federal scrutiny for accepting large amounts of cash from reputed underworld crime boss Gennaro Angiulo and his family.

The Boston Globe said Provident Institution for Savings, as well as the Bank of Boston, is being investigated by the Securities and Exchange Commission for possible violations of federal securities regulations because of the underworld connection.

The newspaper said the Angiulos maintained 37 different accounts at Provident and withdrew more than $250,000 in a 20-month period.