Cocaine Dealer Tells Court of Paduano ‘Protection’ Offer

A cocaine dealer testified Wednesday that after she was robbed at gunpoint at her home two years ago, Robert Paduano offered her “protection” for 10% of her drug profits.

The woman, Marilyn DeFalco, told the court she became a regular drug dealer for Paduano and an acquaintance of his after that. She said she even became Paduano’s lover for a time.

Paduano, 44, of Newport Beach, a target of numerous government agencies for several years as a possible underworld figure, is under a 73-count grand jury indictment for robbery, burglary and extortion. DeFalco was the only witness Wednesday at the third day of his preliminary hearing before Municipal Judge Alan N. McKone in Westminster.

Prosecutors’ Version

Prosecutors allege that Paduano masterminded the robbery of DeFalco’s home, then coerced her into making protection payments to him to make sure no one robbed her again. Prosecutors allege that Paduano expanded his drug operations by robbing independent drug dealers, then using extortion tactics to get them to work for him.

DeFalco testified that she worked with Paduano for almost a year and a half before she began to believe that he had been behind the robbery at the home she lived in then in Fountain Valley.

But three of Paduano’s four children, who listened to her testimony, bitterly complained about the prosecution using her as a witness.

“They’re giving immunity to a cocaine dealer to testify against a man who is a reputable businessman in the community,” said 23-year-old Robert Paduano Jr. The elder Paduano has a drug-related conviction on his record, but was acquitted in federal court two years ago when he was accused of fraud in a stock transaction.

DeFalco has been granted “informal immunity” by the district attorney’s office, but prosecutors say it does not cover her recent arrest on drug charges.

DeFalco said she met Paduano through friends three days after the Jan. 27, 1986, robbery at her home.

“He told me he could provide protection for me,” DeFalco said. “He said I needed for word to get out on the street that I was OK, that he was protecting me.” DeFalco said Paduano warned her that otherwise she would probably be robbed again.

DeFalco testified that she not only paid Paduano 10% of her profits after that, but she split 50-50 with him the profits from any drugs she sold to customers whose names came from him. Also, she said, she got her drugs from Paduano several times during the next year and a half.

DeFalco discussed her drug operation casually, as if she were in a cosmetics line. She called cocaine her “product” and her sales “business.” The money from her sales she called her “earnings.” She said she had safes in both her house and garage, and a safety deposit box. DeFalco said she also kept “very accurate records” of her narcotics transactions, which is how she knew how much to pay Paduano.

Paduano’s attorney, Alan May, who has a bad cold, jokingly asked DeFalco during a recess if she could let him have some “product” to clear his head.

DeFalco was a witness twice before the grand jury that indicted Paduano. The first time, she denied that a robbery had even taken place.

Then she was arrested three months ago on suspicion of possessing cocaine for sale. She returned to the grand jury this time testifying to the robbery and her dealings with Paduano.

Shouting Match in Court

DeFalco said she had first lied to the grand jury on Paduano’s advice.

Prosecutors and May got into a shouting match before Wednesday’s testimony ended. During the dispute, Deputy Dist. Atty. Wallace J. Wade accused May of trying to intimidate DeFalco by suggesting she should talk to her attorney before the questions moved into some areas concerning her alleged criminal activities. May loudly retorted that he was outraged that Wade was accusing him of a crime. Judge McKone settled the matter by ordering DeFalco to call her attorney and talk to him before resuming the witness stand.

The argument erupted after DeFalco’s testimony regarding some allegedly stolen jewelry that Paduano had given her to hold for him. She said she destroyed the jewelry after learning that investigators for the district attorney knew about the theft.