Suspected Loan Shark Pleads Guilty to Conspiracy in Investment Scam

A suspected loan shark--who is said to have siphoned hundreds of thousands of dollars from investors by promising them a return on their money of up to 1% a week--pleaded guilty Tuesday to federal charges of conspiracy and filing false tax returns.

Daniel L. Mondavano, 60, of Tarzana, who was once identified by a Mafia kingpin as “one of the best thieves in New England,” could face up to 11 years in prison and a fine of up to $650,000 when he is sentenced July 5, said John L. Newcomer, who heads the U.S. Department of Justice’s Los Angeles organized crime strike force.

Joining Mondavano in the Los Angeles courtroom of Chief U.S. District Judge Manuel L. Real were his son, Dennis, 38, who pleaded guilty to a single charge of conspiracy, and his former wife, Rose, 58, who entered a guilty plea to one charge of filing a false tax return for 1983.

Daniel Mondavano acknowledged guilt in one conspiracy and two tax counts relating to returns for 1982 and 1983.

“In very simple terms, it was a scheme to defraud the government through monies that were generated from a group of investors and from which the Mondavanos ended up receiving substantial profits, which they never reported,” Newcomer said.

Mondavano and his wife also misrepresented the source of some income, Newcomer added.

The April indictment did not quantify the profits the Mondavanos allegedly realized. But a key investor, whose cooperation with the government helped lead to the indictment, estimated that Mondavano coaxed several million dollars from greedy business people who were eager to earn annual returns of 50% or, in some cases, more.

The investor, Roy Lane Elson, a Los Angeles businessman who twice ran for the U.S. Senate in Arizona, told a federal grand jury that a woman who had introduced him to Mondavano’s operation in 1981 had explained that Mondavano ran a money-lending business in the Boston area, making short-term loans to businessmen at extremely high interest rates and dealt only in cash. Elson said he and other investors suspected that they were funneling their money into a loan-sharking enterprise.

After the payments from Mondavano slowed, and then stopped, Elson sought the assistance of members of the Los Angeles Mafia in recovering the nearly $750,000 he had personally invested. Elson, however, never recovered his money.

In his 1973 book, “My Life in the Mafia,” Vincent (The Fat Man) Teresa, once the No. 3 boss in the New England Mafia, wrote glowingly of Daniel Mondavano as “one of the best thieves in New England.” Teresa, who wrote the book after becoming a government informant, had earlier helped put Mondavano behind bars for several years for transporting stolen securities.