Drug cartels are not the only criminal enterprises to employ money-laundering services. Take the case of the Gambino crime family.
Two of its reputed high-ranking members are accused of trying to launder more than $30 million in stolen and counterfeit checks. Before their arrests, they told confederates the money was to help finance imprisoned mob boss John Gotti's legal appeals.
The story behind that so-called John Gotti Defense Fund, obtained from court documents and interviews with investigators, illustrates the broad range of money-laundering schemes and how federal agents are attacking the practice.
It is a story that begins in a Texas jail.
Wayne Odom, a Ft. Worth financial manager serving time for state bank fraud, had a friend forward one of his local phone calls to New York, where a voice on the other end had a proposition. Odom had bank accounts in Mexico, and the voice needed help laundering checks stolen from the brokerage houses of Merrill Lynch & Co. Inc. and PaineWebber Inc.
The venture failed when the checks bounced, but the abortive foray was the beginning of a relationship between Odom and the reputed mobsters. At the time, none of the New Yorkers knew Odom had negotiated their initial arrangement while, literally, sitting in a cell.
Early last year, with Odom out of jail, the laundering cabal tried again with more success--cashing five checks stolen from Toplis & Harding Co., another New York brokerage firm, for about $503,000. A sixth check bounced.
According to a federal indictment and complaint, the key figures behind the theft and preparation of phony checks were Gaetano (Tommy) Napoli and Salvatore Caruso, described by a federal prosecutor as top aides to Gotti.
Authorities contend that Caruso and Napoli were represented in the deal by an unlikely agent: Dr. Ronald Gordon, a research pathologist who in his legitimate pursuits studied the cardiovascular systems of corpses. He was, however, married to the goddaughter of Gotti's reputed successor, a connection that federal agents said led to his association with the alleged mobsters.
"He was a highly respected academician who sat in a lab all day doing tests on cadavers. He just got caught up in the excitement of living like a mob guy," said Assistant U.S. Atty. Charles Rose, who is prosecuting the case. He said Gordon is under federal protection after agreeing to cooperate.
Treasury Department agents opened their investigation soon after the five stolen Toplis & Harding checks cleared the bank. Odom, fearing another jail term, went to authorities. He ended up telling his story to Customs Service agent Elaine Banar and returning what was left of the cashed checks--about $300,000.
Odom had only dealt with Gordon and other fringe players, but Banar immediately launched a sting investigation using Odom to find who else was behind the scheme. Meanwhile, Gordon and his backers were getting impatient with Odom's failure to pass along the check proceeds.
Over lunch at the posh Water Club on the East River, Odom reassured his partners that he was not double-crossing them, that the money had been seized by the U.S. Customs Service at the Mexican border for lack of documentation and that while he was waiting to satisfy the bureaucratic technicalities, perhaps they could use the services of his banker friend, Matt Mattucci.
The role of Mattucci, the corrupt banker, was played by veteran Customs undercover agent Matthew Raffa. He watched as Gordon and a tough-acting associate passed Odom napkins with scrawled warnings and threats. Finally, when Odom stepped away from the table, Raffa told them: "Hey, you don't want to deal with this guy."
The undercover agent said that he had banking connections in Europe and that he would be happy to help next time they needed to cash stolen checks. In a short time, Raffa had replaced Odom as the group's laundering specialist.
Last fall, after faking the laundering of $11 million in stolen and counterfeit checks, Customs agents arrested Gordon. He agreed immediately to cooperate with them and, according to the federal filings, linked Caruso and Napoli to the scheme.
Later, wired with surveillance equipment, Gordon met the alleged mobsters at a Brooklyn restaurant to discuss distribution of funds from the laundered checks. Embarrassingly for Caruso, agents said, he was overheard describing how to surreptitiously reduce Napoli's share.
Napoli may also regret his recorded comments. He insisted to Gordon that his share be turned over in cash, quipping: "What? You think I'm gonna take a check?" Then, apparently observing Gordon more closely, Napoli added as federal agents listened: "Ron, you look real nervous. You think we're gonna go to jail?"
Last week Napoli pleaded guilty to bank-fraud conspiracy. Caruso will stand trial for bank fraud and money laundering in U.S. District Court, Brooklyn, on Tuesday.