Western Union Says Executive Stole Business : Charges Telex,Other Services Were Misused

A former top Western Union Corp. executive set up a network of “double agents” to establish a rival to the troubled telecommunications company and used his position to steal Latin American business from it, Western Union charges.

But a lawyer for the former executive, John Lanzelotti of Port Reading, N.J., said Friday that the suit was in retaliation for fee and expense claims by Latin American agent companies and denied the charges.

Some of the defendants, who include former Western Union South American sales agents and an Israeli company, illegally tried to supply helicopters and other equipment to armed forces in Peru and Ecuador and other countries, said the suit, filed Wednesday in federal court in Newark.

The suit also charges that defendants bribed communications authorities in Latin American nations including Ecuador, Bolivia and Suriname to gain their business.

Western Union claims that Lanzelotti, who left the company Feb. 12 after six years, worked on behalf of the alleged “racketeering” enterprise while he was Western Union’s regional vice president for the Western Hemisphere.

“It is our allegation that while Mr. Lanzelotti was a Western Union employee, we are certain . . . that he had put into place a number of agents in Latin America that were truly double agents,” said Western Union lawyer Susan Littman.

The defendants had “worldwide aspirations” to set up a rival telecommunications company to supply telex and electronic mail services, she said. They used telex services that Western Union provides free to its employees to further their goals, even selling the services to others and keeping the money, the complaint said.

The complaint provided little detail on the allegations about helicopter sales, and Littman would not comment further.

“We know that (the defendants) were involved in these activities as part of the conspiracy,” she said.

Lanzelotti, reached by telephone at his lawyer’s office in Carteret, N.J., referred questions to his attorney, Louis J. R. Kady. Kady denied the claims but said that he would not address them specifically.