Monday, October 17, 2016

Donald Trump and the Mob

Donald Trump and the Mob

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In 1981, a young and ambitious Donald Trump sat down with federal agents and discussed his calculation in entering the mob-infested world of Atlantic City casinos.
He acknowledged it might tarnish the reputation his family built through traditional real-estate development in New York. He was aware a business partner in the New Jersey beach town knew people who might be unsavory. A Federal Bureau of Investigation agent advised Mr. Trump there were easier ways he could invest, said an FBI memo recounting the discussion.
There, as well as in his New York real-estate work, Mr. Trump, now the Republican nominee for president, sometimes dealt with people who had ties to organized crime, a Wall Street Journal examination of his career shows.
They included a man described by law enforcement as an agent of the Philadelphia mob; a gambler convicted of tax fraud and barred from New York racetracks; a union leader found guilty of racketeering; and a real-estate developer convicted in a stock scheme that involved several Mafiosi.
With one exception, these associations were long ago. Still, in the home stretch of Mr. Trump’s run for the presidency, he frequently cites his lucrative business career as a qualification for the nation’s highest office, and his past associations color that record.
Mr. Trump acknowledged in an interview he worked at times with people who might have had such ties, but said he either had only cursory relationships with them or wasn’t aware of the ties at the time.
“If people were like me, there would be no mob, because I don’t play that game,” Mr. Trump said. He called himself “the cleanest guy there is.”
Like many in the construction, real estate and gambling worlds three or four decades ago, especially those who built in Atlantic City and New York, Mr. Trump sometimes had to choose whether or not to deal with figures who had sketchy backgrounds.
Mr. Trump opened the opulent Taj Mahal casino in Atlantic City, N.J., in April 1990.
Mr. Trump opened the opulent Taj Mahal casino in Atlantic City, N.J., in April 1990. Photo: Mike Derer/Associated Press
People in the industry say those moments were unavoidable in the days when unions representing construction workers and supply deliverers were controlled by organized crime, which also had a presence in the casino world. That didn’t mean the developers sought out those relationships—much less that they themselves were gangsters.
Mr. Trump “wasn’t going to build Trump Tower without having those connections. Every builder in New York had to do that at that time,” said Michael Cody, the son of a mob-linked union leader Mr. Trump and other builders dealt with.
Some developers avoided working directly with unsavory figures by operating through a general contractor. Mr. Trump said he preferred to negotiate business matters personally, because he made more money that way.
Referring to a concrete contracting firm that law enforcement said was affiliated with one of New York’s Mafia families, Mr. Trump said: “That was a major contractor. You hear stories that they may have been [mob-controlled].
“In the meantime, I was a builder. I was never going to run for office.… I’d go by the lowest bid and I’d go by their track record, but I didn’t do a personal history of who they are.”
Many of the associations the Journal explored have been previously reported piecemeal. In the early 1990s, Mr. Trump’s license to operate casinos in Atlantic City was re-examined after a book by reporter Wayne Barrett alleged a number of organized-crime connections. New Jersey officials determined Mr. Trump remained eligible.
In its own examination, the Journal reviewed thousands of pages of legal and corporate documents and interviewed dozens of Mr. Trump’s business associates.
The gambling business now is largely corporate, but at the time when Atlantic City was newly opened to casinos and a family friend suggested Mr. Trump build there, many banks shunned the industry.
“Any project in the gaming arena in general is a difficult project to finance, because of the natural prohibition that a lot of institutions have,” Mr. Trump told New Jersey casino regulators in 1982.
Some of the people he dealt with in Atlantic City illustrate why the FBI agent counseled caution.
Kenneth Shapiro owned part of a site where Mr. Trump wanted to build his first casino. Mr. Shapiro was a Philadelphia scrap-metal dealer and property investor, described by law enforcement as an “agent” of Philadelphia mob boss Nicodemo “Little Nicky” Scarfo.
A co-owner of the site was Daniel Sullivan, a gregarious six-foot-five Teamster and labor consultant with a criminal record that included a weapons violation. “He knew a lot of organized-crime figures and they knew him,” said Walter Stowe, a former FBI agent.
Mr. Sullivan also was a tipster to the FBI. Gangsters “knew he was an informant. I don’t know why nobody ever tried to kill him,” Mr. Stowe said.
Mr. Trump negotiated with Messrs. Shapiro and Sullivan, now both dead, to lease their property. “They are not bad people from what I see,” Mr. Trump said at a regulatory hearing in 1982. His project nonetheless faced obstacles because of their involvement.
Mr. Sullivan, Mr. Trump and another partner had a deal to acquire an interest in a drywall company. New Jersey casino regulators told Mr. Trump any dealings with Mr. Sullivan beyond the property lease could delay casino licensing. He backed out of the drywall deal.
When the hotel-casino was near completion, the regulators said Messrs. Shapiro and Sullivan might need casino licenses too, as site owners, but could have trouble getting them. Eventually, Mr. Trump bought the two out.
Mr. Trump also used Mr. Sullivan as an adviser on New York labor issues. These included a 1980 dispute over the use of undocumented Polish workers to demolish the Bonwit Teller store on Fifth Avenue to make way for Trump Tower, Mr. Sullivan said in lawsuit testimony. Mr. Trump, in testimony of his own, said he didn’t know there were undocumented workers at the site.
Mr. Trump told the Journal he knew Mr. Sullivan and considered him “OK” because he traveled with FBI agents. He said he didn’t know of any underworld connection Mr. Shapiro might have had.
Mr. Shapiro was a conduit the Scarfo crime family used to buy influence with Atlantic City’s then-mayor, Michael J. Matthews, according to a 1984 indictment of the mayor. The late Mr. Matthews pleaded guilty to extortion. Mr. Scarfo, now in prison, didn’t agree to an interview.
Mr. Trump, as a casino owner, couldn’t legally contribute to the local politicians who controlled such matters as zoning and signs. Mr. Shapiro told a federal grand jury he secretly gave thousands of dollars to the mayor on Mr. Trump’s behalf, said people familiar with his account.
“Donald was always trying to maneuver politically to get things done,” said Mr. Shapiro’s brother Barry Shapiro.
Kenneth Shapiro said he never was reimbursed for the money given to the mayor, according to his brother and two other people. “Donald just reneged; that’s his automatic thing,” Barry Shapiro said.
Asked about this, Mr. Trump said he didn’t make contributions to the Atlantic City mayor. “I’m not interested in giving cash, OK?...The last thing I’m doing is now handing cash.”
As for Mr. Shapiro, “I never remember him asking me for money. He was always straight with me...I didn’t know Shapiro well other than to know that we did a pretty small little land transaction down in Atlantic City, which was fine.”
A major profit source at one Trump casino was a racehorse trader named Robert LiButti. His gambling losses earned Trump Plaza $11 million between 1986 and 1989, state documents show.
Mr. LiButti had been convicted of tax fraud related to horse sales in 1977 and was barred from attending races in New York for trying to conceal his horse ownership. A Trump employee told New Jersey regulators that Mr. LiButti repeatedly invoked the name of gangster John Gotti and called him “my boss,” according to a 1991 state investigative report.
“LiButti was a high-roller in Atlantic City,” Mr. Trump said in an interview. “I found him to be a nice guy. But I had nothing to do with him.”
Jack O’Donnell, who ran Trump Plaza in the late 1980s, said, “It isn’t like [Mr. Trump] saw LiButti once or twice—he spent time with him, saw him multiple times,” and even attended a birthday party for Mr. LiButti’s daughter.
The daughter declined to be interviewed but confirmed to Yahoo YHOO 0.86 % News that Mr. Trump attended a birthday party for her.
It was illegal in New Jersey for casinos to keep high-rollers happy by giving them cash gifts. Regulators, in a ruling that didn’t cite Mr. Trump personally, fined Trump Plaza for funneling Mr. LiButti $1.65 million via gifts of expensive cars quickly converted into cash.
Mr. Trump agreed in 1988 to buy a horse from Mr. LiButti for $250,000, Mr. O’Donnell said in a book he wrote after quitting Trump Plaza. The horse, named D.J. Trump, had cost the LiButti family just $90,000 a year earlier, according to Blood Horse magazine. Mr. O’Donnell said Mr. Trump aborted the deal after the horse had a health problem.
Mr. Trump didn’t respond to questions about the horse and the birthday party.
Mr. LiButti, who died in 2014, denied to casino regulators that he had links to organized crime.
For legal help Mr. Trump often looked to Roy Cohn, seen on the right here in 1984.
For legal help Mr. Trump often looked to Roy Cohn, seen on the right here in 1984. Photo: Bettmann Archive/Getty Images
A lawyer Mr. Trump relied on and socialized with in his early years was the hard-driving attorney Roy Cohn. Among Mr. Cohn’s clients were several gangsters, including Anthony “Fat Tony” Salerno, co-owner of a concrete company important to New York builders. Former Trump Organization executive Barbara Res said that during heated negotiations with contractors, Mr. Trump would pull out a photo of Mr. Cohn and say, “I’m not afraid to sue you and this is who my lawyer is.”
Mr. Trump called that “totally false.” He said people in the construction industry “don’t get scared by holding up a picture.”
Mr. Trump was a character witness for Mr. Cohn in proceedings that led to the lawyer’s disbarment shortly before his death in 1986.
Mr. Cohn had many clients who, like Mr. Trump, weren’t mob-affiliated, such as the late Yankees owner George Steinbrenner. “Roy was a great lawyer if he wanted to be,” Mr. Trump said in an interview.
Messrs. Cohn and Trump had a common associate in Teamsters official John A. Cody. Mr. Cody had a lengthy arrest record and was close to mob bosses Carlo Gambino and Paul Castellano, according to a Justice Department memo from 1982, when Mr. Cody was convicted of racketeering.
Mr. Cody led a powerful union local that represented drivers who delivered cement to New York construction sites.
When he called a strike, Mr. Trump still received cement for Trump Tower, said Mr. Cody’s son, Michael.
“My father wasn’t that generous, unless there was a reason,” Michael Cody said.
Referring to John Cody, Mr. Trump said, “Part of the reason I got my concrete was I didn’t put up with his bull—.”
Mr. Trump said he would bring in private cement deliverers, or threaten to. The Teamsters people “knew I didn’t play games. When I said, ‘OK, I’m going private.’... ten minutes later I’d get a phone call [saying] ‘Well, all right, we’re going to approve you. It’s settled.”
Mr. Cody was “truly a bad dude,” Mr. Trump said. “I employed a lot Teamsters, and this guy would absolutely make life miserable and…I would fight through it.” Many developers in New York had to deal with Mr. Cody to get cement, and Mr. Trump said they all hated him.
John Cody is dead, as are Messrs. Gambino and Castellano.
Mr. Trump with Bayrock Group’s Tevfik Arif and Felix Sater at a 2007 launch party for the Trump SoHo condo hotel.
Mr. Trump with Bayrock Group’s Tevfik Arif and Felix Sater at a 2007 launch party for the Trump SoHo condo hotel. Photo: Mark Von Holden/WireImage/Getty Images
In the 2000s, Mr. Trump dealt with another figure who had gangland ties. It happened when a small real-estate firm called Bayrock Group rented space in Trump Tower, two floors below Mr. Trump’s offices, and negotiated deals with Mr. Trump to put his name on buildings and give him equity in them. One person Mr. Trump worked with at Bayrock was Felix Sater.
In the early 1990s, well before Mr. Trump knew him, the Russian-born Mr. Sater was a stockbroker but lost his license and went to prison after he jabbed a margarita glass into a man’s face in a bar fight.
Later in the 1990s, Mr. Sater was involved in a Mafia-linked scheme to pump up marginal stocks, dump them on unsuspecting investors and stash the profits abroad. The scheme relied on gangsters from three mob families for protection, said a Justice Department news release. It quoted the New York police commissioner at the time as saying the operation could have been called “Goodfellas Meet the Boiler Room.”
Mr. Sater pleaded guilty to racketeering, cooperated with prosecutors and had his conviction sealed. It was then, around 2000, that he joined Bayrock and sometimes dealt with Mr. Trump on real estate.
Bayrock’s projects included the Trump SoHo condos in New York and Trump International Hotel & Tower in Fort Lauderdale, Fla. Its marketing in Fort Lauderdale included a letter in which Mr. Trump said, “This magnificent oceanfront resort offers the finest and most luxurious experience I have ever created.”
The New York Times NYT -1.73 % described Mr. Sater’s criminal history in an article in 2007. Mr. Trump, giving a court deposition days later, said he was unaware of it until then.
Two federal press releases in 2000 had referred to Mr. Sater’s past, one from the National Association of Securities Dealers and one from the Justice Department. The Justice Department one announced the indictment of 19 people in the pump-and-dump stock scheme Mr. Sater was part of, including several it identified as members of La Cosa Nostra.
The Justice Department release said a Genovese crime-family soldier, Ernest “Butch” Montevecchi, had protected Mr. Sater from an extortion effort.
Mr. Montevecchi declined to comment.
In a 2009 court proceeding, Mr. Sater described the Bayrock real-estate business, which is no longer active, as one he “built with my own two hands” and where he was probably the No. 2 person. In an interview, Mr. Sater said he had atoned for his crimes by cooperating with the government in the pump-and-dump case and on national-security matters. He declined to answer questions about Mr. Trump.
Alan Garten, general counsel of the Trump Organization, said that in business deals the organization vets a partner company and its ownership, but not the company’s employees, which Mr. Sater was. He added that since Mr. Sater’s racketeering conviction was sealed, it would be unfair to “go back and say, ‘Well, you should have known.’ ”
In 2010, well after Mr. Trump had learned of Mr. Sater’s criminal background, the Trump Organization allowed Mr. Sater to be an unpaid consultant, with space in Trump Organization offices and business cards calling him a “Senior Advisor to Donald Trump.”
In an interview, Mr. Trump said, “I just said, ‘Hey, if you have a good deal bring it up.’ He actually brought me two deals and I didn’t like them.”
Mr. Trump said Mr. Sater appeared meek and mild, and Mr. Trump didn’t see him as being connected to the mob. Dealing with gangsters is “not my thing,” he said.
“When you have those relationships, in the end, you lose,” Mr. Trump said. “You can solve some problems short term, but long term, you’ve got a disaster.”
—Lisa Schwartz and Jim Oberman contributed to this article.
Write to Michael Rothfeld at and Alexandra Berzon
Read the whole story
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Volume 29, Issue 4, Winter 2016, Page 849-856

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A Look at Why Organized Crime and Terror Groups Are Converging

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In 2009, the United Nations Office on Drugs and Crime estimated that transnational organized crime (TOC) activities were valued at $870 billion, or approximately 1.5 percent of global GDP. Today, TOC value is well above $1 trillion per year. This amount of money has the potential to compromise legitimate economies and have a direct political impact on elections through corruption and bribery.
Crime committed across international borders by organized crime groups (OCGs) is nothing new. The U.S. branch of the Italian Mafia, La Cosa Nostra, has been a major influence for nearly 100 years. Colombian cartels and Mexican drug-trafficking organizations (DTOs) have been operating within the United States for decades. So what has changed?
Intelligence community documents, congressional hearings and media reports point to a growing international convergence of OCGs and terror organizations to take advantage of the specialized skills and assets of each group.
For example, there is evidence of Hezbollah establishing a strong base in Latin America over the past decade or more and working with Mexican DTOs to launder money, finance terrorism and smuggle people. According to Jennifer Hesterman, author of “The Terrorist-Criminal Nexus,” the Italian Mafia has worked with al-Qaida, and DTOs with U.S. outlaw motorcycle gangs, to carry out illicit operations. These are groups with diverging interests, goals and philosophies, yet they are working together to capitalize on each other’s specific skills or assets.


In January 2010, the U.S. government completed a review of international organized crime (IOC), the first comprehensive study of IOC since 1995. It found that IOC had expanded dramatically, leading the government to alter its position and view IOC as a serious national security threat. Based on organized crime’s expansion across national boundaries and the influence it exerts, the government adopted a new moniker: TOC. TOC more accurately reflects its reach and the potential impact from converging threats of drug-, human- and weapons-trafficking organizations with traditional terrorist groups, such as Hezbollah.
“In years past, TOC was largely regional in scope, hierarchically structured and had only occasional links to terrorism,” according to the National Security Council. “Today’s criminal networks are fluid, striking new allegiances with other networks around the world and engaging in a wide range of illicit activities, including cybercrime and providing support for terrorism.”
TOC presents an international threat to financial systems through cybercrime and sophisticated fraud schemes to create channels to fund terror campaigns and mass-casualty weapons. TOC includes all types of profit-motivated crime involving more than one country and including the following:
  • Money laundering
  • Financial fraud
  • Counterfeit goods
  • Terrorist financing
  • Drug trafficking
  • Human trafficking
  • Migrant smuggling
  • Weapons trafficking
  • Cybercrime (certain aspects)
Developing countries with limited resources may be particularly vulnerable, which creates opportunities for TOCs to provide financial assistance in exchange for being allowed to operate more freely. One compromised country may lead to others, creating a regional cluster for organized crime.
For example, Hezbollah has a strong foothold in the Tri-Border Area (TBA) in Latin America. According to a 2012 Majority Report of the U.S. House Committee on Homeland Security, the large Lebanese population and friendly local governments provide Hezbollah a base from which to operate in the Western Hemisphere. The report says that the TBA is the largest underground economy in the Western Hemisphere, providing Hezbollah with an estimated $12 billion a year in illegal commerce. Financial crimes are a specialty in the TBA and include money laundering, intellectual property fraud, counterfeiting and smuggling.

Transnational Organized Crime Growth Factors

For decades, organized crime was largely local and regional. In the 1900s, as Europeans immigrated to the United States, so, too, did members of OCGs, the most notable being the Italian Mafia. They not only established their groups in the United States, but they maintained their links back to Italy in an early transnational crime network.
Later that century, Colombian drug cartels made inroads in the United States, creating international drug-trafficking organizations and the model Mexican drug organizations would later use as they rose to power.
TOCs have expanded over the past 25 years due to a number of factors. The collapse of the Soviet Union and the rise of the European Union created many loosely controlled borders from Europe to the Pacific, according to Louise Shelley in her book “Human Traffic and Transnational Crime.” With easier movement of people and goods throughout the European Union, OCGs were better able to expand their operations across borders. The collapse of the Soviet Union and subsequent privatization initiatives allowed Russian OCGs to grab power and money, which helped fuel their growth.
The expansion of commercial air travel and international scope of legitimate businesses created opportunities for TOCs to move goods, money and people around the globe. According to the World Trade Organization, world trade has grown more than 170 percent since 1990 and worldwide free trade zones have grown rapidly since 2000. The combination of these two has allowed criminal groups to transfer illicit goods and launder money through trade-based techniques with minimal risk.
An estimated 25 million cargo containers enter U.S. ports annually and are valued at more than $18 trillion. Although this information is not disclosed, it is believed that U.S. Customs and Border Protection inspects less than 10 percent of the containers.
The trusted shipper programs, designed to increase the efficiency of cross-border shipments of goods between the United States, Canada and Mexico, are exploited by OCGs. They pose as legitimate traders (using companies that have been compromised) and gain safe passage for smuggled goods such as weapons, drugs and cigarettes across the U.S. borders. With only a fraction of the trucks crossing the borders searched, trucking has become an ideal channel for drug trafficking and human smuggling. According to a National Post article, an RCMP intelligence report, obtained by a freelance journalist, said that truckers who earn $1,000 or less per week could make as much as $28,000 for shipments of cocaine to Montreal from California.
Panama is a major hub for the transshipment of maritime containers, many of which originate in cocaine-producing countries in South America and are destined for Europe and North America. New Panamax ships can carry twice the number of containers than conventional Panamax ships. TOCs are well aware that very few containers are inspected, so they conceal illicit cargo within legitimate shipments. The canal expansion will also drive an increase in trade-based money laundering between South America, North America and Europe.
Additionally, increased communication abilities via cell phones, email and the Internet further organizations’ enhanced ability to expand their reach into all corners of the world. The rise of social media has dramatically increased the ability for TOCs to connect, sell stolen property such as credit cards and identities and generate massive amounts of revenue through online fraud schemes. Regarding terrorist groups, social media has become an invaluable tool to raise awareness and recruit new members. This development is a significant factor in the increased “lone wolf” threat, such as the kind seen in the Boston Marathon bombing and the shooting at Fort Hood, Texas.
TOCs are now able to decentralize their operations and establish “branches” in foreign countries. Globalization has improved the prospects of legitimate businesses, but it has also fueled the growth of TOC. The increased globalization of trade, communication and logistics has helped TOC evolve into sophisticated organizations not unlike a multinational corporation. Organized crime and terrorismmay have achieved equal status, as fraud, extortion and other OCG activities are needed to fund terror operations.

Reach of Organized Crime

Over the past 25 years, organized crime and terrorist organizations have developed working relationships, recognizing that they may accomplish more and achieve more success using the expertise and specializations of each other’s networks. Despite their often dissimilar goals and/or cultural animuses, varied criminal and terror groups are working together. This is the corporate equivalent of outsourcing.
Large corporations must have vast networks of employees with varying expertise, such as lawyers, accountants and logistics, located around the world. TOCs operate similarly on an international scale, forging partnerships with other OCGs to leverage expertise.
According to the report “Methods and Motives: Exploring Links Between Transnational Organized Crime & International Terrorism,” while organized crime is traditionally associated with the Mafia or drug trafficking, it can extend to money laundering and white-collar crimes such as insurance, mortgage and prescription fraud. The differences between the OCGs and terror groups are numerous. Terrorists pursue political and/or religious objectives through overt violence against civilians and military targets.
OCGs are driven by profit; they are “in business” to make money. Terrorist groups, motivated by ideology, only need money to fund their operations, so they turn to OCGs for the money they need to survive and operate. Each group will look to another for lessons learned and strategy development. Strategies include funding, recruiting, training and morale-boosting techniques. Groups that possess a specialized capability will sell or trade on that capability.
The collaboration between Hezbollah and the Mexican drug cartels is one example of an increasing convergence of organized crime and terrorism. Mexican drug cartel tunnels have increasingly become more advanced with the addition of ventilation, lighting, high ceilings, medical facilities, dormitories and other high-tech features. The engineering features in these tunnels are believed to be the work of Hezbollah, which has created a vast network of tunnels in Lebanon to protect its members from Israeli airstrikes.

Cybercriminal Threats on the Rise

In addition to OCGs and terrorist groups converging, there has also been an increasing convergence of nation-states and cybercriminal organizations. As cybercriminals have become more sophisticated, they have often taken on a patriotic role by waging cyberwarfare on behalf of governments. Evidence of this can be seen as far back as the 1990s in Chechnya and Kosovo, as discussed in FireEye’s“World War C: Understanding Nation-State Motives Behind Today’s Advanced Cyber Attacks” report.
Those patriotic roles persist today around the world. Social unrest and challenging political landscapes across Eastern Europe and the Middle East have given cybercriminals ample opportunity to act in the name of their country or ideological movement. Additionally, there is an active market in which certain governments will hire cybercrime groups to carry out attacks or acts of espionage against other governments and private companies.
“FireEye researchers have even seen one nation-state develop and use a sophisticated Trojan and later (after its own counter-Trojan measures were in place) sell it to cybercriminals on the black market,” according to the report. “Thus, some cyberattack campaigns may be the hallmarks of both state and nonstate actors, making positive attribution almost impossible.”
In today’s world of organized crime, bad actors sell their specialized services to assist in the execution of large frauds and money laundering. For example, the following is an example of actors involved in a data breach that compromised thousands of credit card holders, a common occurrence today. The possible location is intended to show the transnational reach of the organizations and their interactions with other OCGs.
  • The target company must be breached and credit card information harvested by hackers.
  • The raw credit card data must be sold, which is done through a “carding forum” on the Internet. The group that stole the card information is paid, and their involvement is ended.
  • The owner of the card information must now make online purchases of merchandise or create fake cards with the stolen information encoded. In either case, the fraudster will need individuals to accept delivery of merchandise or money derived from the operation. These individuals are called “money mules” and are available from groups known as mule herders.
  • Mule herders constantly recruit suspecting or unsuspecting people to accept cash or receive goods on behalf of the foreign OCG. Mules are often recruited through Internet advertisements for “work-at-home” schemes. The mules may accept merchandise and reship to a foreign address, or they will accept and deposit worthless checks into accounts in their own name and subsequently wire money out of the account to a foreign account — minus their fee. Mules are typically the ones that are left to be caught.

The Convergence of Organized Crime Groups and Terrorist Organizations

The convergence of OCGs and terrorist organizations has progressed rapidly over the past 25 years. Advances in technology and commerce that have benefited society and the economy have helped fuel the growth and expansion of TOC. Criminal organizations are very adaptive and are able to modify their behavior in response to pressure from governments and law enforcement. While this type of crime will likely never be eradicated, it can be hindered. Financial institutions are ideally positioned to identify suspicious activity and assist law enforcement’s investigations.
Financial institutions should also have a robust counter-financial-crime process in place by integrating their fraud, anti-money-laundering and cybersecurity functions to enhance their ability to detect and prevent illicit activity.
Read the whole story
· · · · · · · · ·

Dirty secrets of the mail fraud mafia - CNN Money - CNNMoney

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Dirty secrets of the mail fraud mafia - CNN Money
This is how someone goes from being a low-level bank employee to running an international enterprise now singled out by the U.S. government as one of the ...

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Brighton Beach Mob Boss Agrees To Testify Against Fellow Gangsters - Sheepshead Bites

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Sheepshead Bites

Brighton Beach Mob Boss Agrees To Testify Against Fellow Gangsters
Sheepshead Bites
Yesterday he admitted in court that he is known for “being associated with organized crime.” He is looking for a lighter sentence in the strange assassination plot and will tell the feds what they want to hear in exchange for it. According to the Post ...

Ruthless mafia networks extending their influence

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In the wake of the Maidan revolution, east Ukraine has descended into chaos: providing fertile ground for organised crime gangs to extend their influence.
With the attention of Ukrainian authorities focussed on their conflict with pro-Moscow rebels, organised criminals have been able to consolidate and expand lucrative human trafficking and drugs smuggling routes.
It is alleged that Russian organised crime figures have served as agents for Russia in east Ukraine, where they have been used to foment pro-Russian unrest, and transport arms and supplies to rebel groups.
At the recent inquiry into the London murder of Alexander Litvinenko, a court heard that the former KGB spy and Putin critic was killed after threatening to expose links between the Kremlin and Russian organised crime gangs.
"A significant part of Russian organised crime is organised directly from the offices of the Kremlin. Vladimir Putin's Russia is a mafia state," alleged prosecutor Ben Emmerson.
The claims echoed those of a Spanish judge, who in the 2010 WikiLeaks cables alleges that Russian officials and security services were tightly bound together.
The leaked cables sensationally claimed that Russian mafia bosses and FSB agents colluded in illegal arms trading, and Russian law enforcement agencies operated de facto protection rackets for criminal networks.
After the collapse of the Soviet Union organised crime exploded in Russia, and crime gangs extended their influence into western Europe, the US and beyond.
Experts argue that there are thousands of loosely connected criminal gangs operating in the former Soviet Union, and it's an error to think of them as structured organisations on the model of the Sicilian mafia or the Japanese Yakuza.
"They are as much as anything else clubs and contact markets, comprising inner core groups tied to key figures, semi-autonomous other gangs, local franchises, semi-independent contractors, corrupt patrons and some-time customers of their services. It is often very hard to say where one ends and another begins, or who is 'in' which," writes organised crime expert Mark Galleotti.
Traditionally, Russian mafia leaders were drawn from the Thieves in Law, elite criminals united by a thieves 'code of honour', usually inducted within the Russian penal system and notorious for their elaborate tattoos.
In recent years, a college educated class of managerial criminals is believed to have established dominance.
IBTimes profiles some of its leading luminaries.

Solntsevskaya Bratva

Recently named by Fortune magazine as one of the wealthiest criminal organisations in the world with an estimated revenue of $8.5bn (£5.77bn, 7.97bn), the gang is believed to have close ties with Russia's federal intelligence agency, the FSB.
Formed in the mid-1980s in the Solntsevo district in southern Moscow by former gulag inmate Sergei Mikhailov, the gang went on to establish itself as one of the most powerful in Russia, operating drugs smuggling, arms trading, prostitution and kidnapping rackets.
The group's tentacles are now believed to extend as far as Indonesia and Latin America, where they have established cocaine trafficking networks in collusion with Mexican cartels.
The group is structured as semi-autonomous cells, with key decisions made by a core leadership council. The WikiLeaks cables allege that the group is able to operate racketeering operations with impunity, due to its connections to Russian security services.

Bratskii Krug

Also known as the Family of Eleven, the shadowy syndicate of criminal groups operates a drug smuggling empire that stretched from the former Soviet Union into the Middle East, Asia, Africa, Latin America, and the United States.
In 2011, the group was named by the US as one of its four key targets in its Strategy to Combat Transnational Crime, and Russian pop star Grigory Lepsveridze, who goes by the stage name Grigory Leps, was alleged to be a courier working for the group.
In 2012, the US Treasury department identified Yekaterinburg crime boss Temuri Mirzoyev as the group's leader, in a memo announcing that the financial assets of five senior figures in the group were being targeted.

Tambovskaya Prestupnaya Grupirovka

Formed in St Petersburg in the late 1980s by Vladimir Barsukov, aka Vladimir Sergeevich Kumarin, the group expanded from its original protection racket operations to comprise criminal operations including arms trafficking, drugs trafficking and cybercrime.
In the 1990s, Barsukov expanded the group's portfolio to acquire legitimate businesses, branching out into banking, the timber trade and computers. In 1994, then St Petersburg municipal official Vladimir Putin, now Russian president, awarded Tambovskaya company PTK the right to supply gasoline to the entire city.
The group continues to dominate organised crime in the St Petersburg area.

Chechen mafia

Competing alongside established Russian mafia groups are myriad groups from former Soviet states, including Armenia, Georgia, and Azerbaijan.
Arguably the foremost of these is the Chechen mafia, which rejects the Thieves in Law codes and structures of their Russian counterparts, in favour of a tribal Teip structure.
Also named the Chechen Obschina, or community, the Moscow branch was reportedly founded by Nikolai Suleimanov in the 1980s, and went on to dominate organised crime in the city by the 1990s, becoming famed for its efficiency and brutality. A turf war ensued, as Slavic gangs attempted to re-establish their dominance.
The Chechen mafia remains one of the most powerful in Russia, with connections throughout the country's extensive Chechen diaspora.
Though lacking the flexibility of Russian crime gangs due to their emphasis on tribal loyalty, Chechen gangs have established connections in parts of western Europe, including Germany.
Chechen leader Ramzan Kadyrov, who secured the backing of Russian president Vladimir Putin for keeping a lid on the Islamist insurgency in the semi-autonomous region, has reportedly close ties with Chechen gangs, drafting convicted criminals into his security services.
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· · · · ·

Distinguishing True From False: Fakes And Forgeries In Russia's Information War Against Ukraine – Analysis - Eurasia Review

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Eurasia Review

Distinguishing True From False: Fakes And Forgeries In Russia's Information War Against Ukraine – Analysis
Eurasia Review
A lucrative trade in false identification papers and passports thrives in Europe today, thanks in no small part to the influx of hundreds of thousands of undocumented persons and organized crime networks with readymade solutions.[27] ... Russian ...

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Seven Reasons The New Russian Hack Announcement is A Big Deal - POLITICO Magazine

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Seven Reasons The New Russian Hack Announcement is A Big Deal
"The U.S. Intelligence Community is confident that the Russian Government directed the recent compromises of e-mails from US persons and institutions, including from US political organizations,” the statement said, concluding that “these thefts and ...
Intelligence Community 'Confident' That Russia 'Directed' Campaign HacksPJ Media
US government formally blames Russia for political hacks of the DNCExtremeTech
Joint DHS and ODNI Election Security Statement - National IntelligenceNational Intelligence
Homeland Security
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Treat Russia Like the International Poison It Is - Bloomberg View - Bloomberg

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Treat Russia Like the International Poison It Is - Bloomberg View
High expectations from the U.S. did not lead the Kremlin to better behavior. Quite the opposite.

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A fresh start for a new version of the KGB - Russia Direct

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A fresh start for a new version of the KGB
Russia Direct
After the fall of the Soviet Union the various departments of the KGB turned into separate security forces, such as the Federal Protective Service (FSO), the Foreign Intelligence Service(SVR) and the FSB. Yet now these departments are going to ... It ...

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Russians, lies and WikiLeaks - Politico

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Russians, lies and WikiLeaks
Experts have warned for months about the possibility that the document leaks may eventually include a sprinkling of falsehoods to stoke their impact, noting that Russian and Soviet intelligence services had long used such techniques against their enemies.
Sixteen National Security Experts Warn Media To Take Great Care When Reporting On Information Published From ...Media Matters for America (blog)
John Podesta Says Russian Spies Hacked His Emails to Sway ElectionNew York Times
Hackers release evidence that shows Hillary was exactly what everyone thought she wasNational Review Online
Sputnik International -WikiLeaks
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The NSA's Far Reach? Power Fails After Putin 'Said Something Wrong' (VIDEO) - Sputnik International

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New York Daily News

The NSA's Far Reach? Power Fails After Putin 'Said Something Wrong' (VIDEO)
Sputnik International
Putin warned Russian journalists that the US National Security Agency (NSA) and allied surveillance departments were keeping an eye on them. "You are all objects of inquiries by the respective [intelligenceservices," he said. "You are the bearers of ...
'Maybe I said something wrong': Putin mocks US surveillance during presser power blackoutRT
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The Superpower Cyber War and the US ElectionsCSS Resources (blog)
New York Daily News -Breaking Israel News
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Donald Trump And The Felon: Inside His Business Dealings With A Mob-Connected Hustler - Forbes

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Donald Trump And The Felon: Inside His Business Dealings With A Mob-Connected Hustler
Felix Sater is not a name that has come up much during the presidential campaign. That he has a colorful past is an understatement: The Russian-born Sater served a year in prison for stabbing a man in the face with a margarita glass during a bar fight, ...

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The Ex-Con Who Spent 10 Years Running Trump Tower Has Been Accused of Taking Kickbacks - New York Magazine

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New York Magazine

The Ex-Con Who Spent 10 Years Running Trump Tower Has Been Accused of Taking Kickbacks
New York Magazine
More recently, Trump famously hired Felix Sater as a senior adviser, in 2010. At the time, Sater was a mafia-linked executive convicted of stock fraud who eventually turned state's witness. Trump often couches his engagement with ex-cons in terms of ...

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Felix Sater says he's being shaken down with $250M suit over Trump projects - Real Estate Weekly

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Real Estate Weekly

Felix Sater says he's being shaken down with $250M suit over Trump projects
Real Estate Weekly
A new complaint has emerged accusing East River Partners co-founder Jody Kriss of of being involved in a “billion-dollar shakedown” through his former lawyers Frederick Oberlander and Richard Lerner. The case, which was filed Monday in New York ...

Just What Were Donald Trump's Ties to the Mob?

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In his signature book, The Art of the Deal, Donald Trump boasted that when he wanted to build a casino in Atlantic City, he persuaded the state attorney general to limit the investigation of his background to six months. Most potential owners were scrutinized for more than a year. Trump argued that he was “clean as a whistle”—young enough that he hadn’t had time to get into any sort of trouble. He got the sped-up background check, and eventually got the casino license.
But Trump was not clean as a whistle. Beginning three years earlier, he’d hired mobbed-up firms to erect Trump Tower and his Trump Plaza apartment building in Manhattan, including buying ostensibly overpriced concrete from a company controlled by mafia chieftains Anthony “Fat Tony” Salerno and Paul Castellano. That story eventually came out in a federal investigation, which also concluded that in a construction industry saturated with mob influence, the Trump Plaza apartment building most likely benefited from connections to racketeering. Trump also failed to disclose that he was under investigation by a grand jury directed by the U.S. attorney in Brooklyn, who wanted to learn how Trump obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan.
Story Continued Below
Why did Trump get his casino license anyway? Why didn’t investigators look any harder? And how deep did his connections to criminals really go?
These questions ate at me as I wrote about Atlantic City for The Philadelphia Inquirer, and then went more deeply into the issues in a book, Temples of Chance: How America Inc. Bought Out Murder Inc. to Win Control of the Casino Business. In all, I’ve covered Donald Trump off and on for 27 years, and in that time I’ve encountered multiple threads linking Trump to organized crime. Some of Trump’s unsavory connections have been followed by investigators and substantiated in court; some haven’t. And some of those links have continued until recent years, though when confronted with evidence of such associations, Trump has often claimed a faulty memory. In an April 27 phone call to respond to my questions for this story, Trump told me he did not recall many of the events recounted in this article and they “were a long time ago.” He also said that I had “sometimes been fair, sometimes not” in writing about him, adding “if I don’t like what you write, I’ll sue you.”
I’m not the only one who has picked up signals over the years. Wayne Barrett, author of a 1992 investigative biography of Trump’s real-estate dealings, has tied Trump to mob and mob-connected men.
No other candidate for the White House this year has anything close to Trump’s record of repeated social and business dealings with mobsters, swindlers, and other crooks. Professor Douglas Brinkley, a presidential historian, said the closest historical example would be President Warren G. Harding and Teapot Dome, a bribery and bid-rigging scandal in which the interior secretary went to prison. But even that has a key difference: Harding’s associates were corrupt but otherwise legitimate businessmen, not mobsters and drug dealers.
This is part of the Donald Trump story that few know. As Barrett wrote in his book, Trump didn’t just do business with mobbed-up concrete companies: he also probably met personally with Salerno at the townhouse of notorious New York fixer Roy Cohn, in a meeting recounted by a Cohn staffer who told Barrett she was present. This came at a time when other developers in New York were pleading with the FBI to free them of mob control of the concrete business.
From the public record and published accounts like that one, it’s possible to assemble a clear picture of what we do know. The picture shows that Trump’s career has benefited from a decades-long and largely successful effort to limit and deflect law enforcement investigations into his dealings with top mobsters, organized crime associates, labor fixers, corrupt union leaders, con artists and even a one-time drug trafficker whom Trump retained as the head of his personal helicopter service.
Now that he’s running for president, I pulled together what’s known – piecing together the long history of federal filings, court records, biographical anecdotes, and research from my and Barrett’s files. What emerges is a pattern of business dealings with mob figuresnot only local figures, but even the son of a reputed Russian mob boss whom Trump had at his side at a gala Trump hotel opening, but has since claimed under oath he barely knows.
Neither Trump’s campaign spokesperson, Hope Hicks, nor Jason Greenblatt, the executive vice president and chief legal officer at the Trump Organization, responded to several emailed requests for comment on the issues raised in this article.
Here, as close as we can get to the truth, is what really happened.
After graduating in 1968 from the University of Pennsylvania, a rich young man from the outer boroughs of New York City sought his fortune on the island of Manhattan. Within a few years Donald J. Trump had made friends with the city’s most notorious fixer, lawyer Roy Cohn, who had become famous as lead counsel to Senator Joseph McCarthy. Among other things Cohn was now a mob consigliere, with clients including “Fat Tony” Salerno, boss of the Genovese crime family, the most powerful Mafia group in New York, and Paul Castellano, head of what was said to be the second largest family, the Gambinos.
This business connection proved useful when Trump began work on what would become Trump Tower, the 58-story high-rise where he still lives when he’s not at his Florida estate.
There was something a little peculiar about the construction of Trump Tower, and subsequent Trump projects in New York. Most skyscrapers are steel girder construction, and that was especially true in the 1980s, says John Cross of the American Iron & Steel Institute. Some use pre-cast concrete. Trump chose a costlier and in many ways riskier method: ready-mix concrete. Ready-mix has some advantages: it can speed up construction, and doesn’t require costly fireproofing. But it must be poured quickly or it will harden in the delivery truck drums, ruining them as well as creating costly problems with the building itself. That leaves developers vulnerable to the unions: the worksite gate is union controlled, so even a brief labor slowdown can turn into an expensive disaster.
Salerno, Castellano and other organized crime figures controlled the ready-mix business in New York, and everyone in construction at the time knew it. So did government investigators trying to break up the mob, urged on by major developers such as the LeFrak and Resnick families. Trump ended up not only using ready-mix concrete, but also paying what a federal indictment of Salerno later concluded were inflated prices for it – repeatedly – to S & A Concrete, a firm Salerno and Castellano owned through fronts, and possibly to other mob-controlled firms. As Barrett noted, by choosing to build with ready-mix concrete rather than other materials, Trump put himself “at the mercy of a legion of concrete racketeers.”
Salerno and Castellano and other mob families controlled both the concrete business and the unions involved in delivering and pouring it. The risks this created became clear from testimony later by Irving Fischer, the general contractor who built Trump Tower. Fischer said concrete union “goons” once stormed his offices, holding a knife to throat of his switchboard operator to drive home the seriousness of their demands, which included no-show jobs during construction of Trump Tower.
But with Cohn as his lawyer, Trump apparently had no reason to personally fear Salerno or Castellanoat least, not once he agreed to pay inflated concrete prices. What Trump appeared to receive in return was union peace. That meant the project would never face costly construction or delivery delays.
The indictment on which Salerno was convicted in 1988 and sent to prison, where he died, listed the nearly $8 million contract for concrete at Trump Plaza, an East Side high-rise apartment building, as one of the acts establishing that S &A was part of a racketeering enterprise. (While the concrete business was central to the case, the trial also proved extortion, narcotics, rigged union elections and murders by the Genovese and Gambino crime families in what Michael Chertoff, the chief prosecutor, called “the largest and most vicious criminal business in the history of the United States.'')
FBI agents subpoenaed Trump in 1980 to ask about his dealing with John Cody, a Teamsters official described by law enforcement as a very close associate of the Gambino crime family. The FBI believed that Cody previously had obtained free apartments from other developers. FBI agents suspected that Cody, who controlled the flow of concrete trucks, might get a free Trump Tower apartment. Trump denied it. But a female friend of Cody’s, a woman with no job who attributed her lavish lifestyle to the kindness of friends, bought three Trump Tower apartments right beneath the triplex where Donald lived with his wife Ivana. Cody stayed there on occasion and invested $500,000 in the units. Trump, Barrett reported, helped the woman get a $3 million mortgage without filling out a loan application or showing financials.
In the summer of 1982 Cody, then under indictment, ordered a citywide strike—but the concrete work continued at Trump Tower. After Cody was convicted of racketeering, imprisoned and lost control of the union, Trump sued the woman for $250,000 for alteration work. She countersued for $20 million and in court papers accused Trump of taking kickbacks from contractors, asserting this could “be the basis of a criminal proceeding requiring an attorney general’s investigation” into Trump. Trump then quickly settled, paying the woman a half-million dollars. Trump said at the time and since then that he hardly knew those involved and there was nothing improper his dealings with Cody or the woman.
There were other irregularities in Trump’s first big construction project. In 1979, when Trump hired a demolition contractor to take down the Bonwit Teller department store to make way for Trump Tower, he hired as many as 200 non-union men to work alongside about 15 members of the House Wreckers Union Local 95. The non-union workers were mostly illegal Polish immigrants paid $4 to $6 per hour with no benefits, far below the union contract. At least some of them did not use power tools but sledgehammers, working 12 hours a day or more and often seven days a week. Known as the “Polish brigade,” many didn’t wear hard hats. Many slept on the construction site.
Normally the use of nonunion workers at a union job site would have guaranteed a picket line. Not at this site, however. Work proceeded because the Genovese family principally controlled the union; this was demonstrated by extensive testimony, documents and convictions in federal trials, as well as a later report by the New York State Organized Crime Task Force.
When the Polish workers and a union dissident sued for their pay and benefits, Trump denied any knowledge that illegal workers without hard hats were taking down Bonwit with sledgehammers. The trial, however, demonstrated otherwise: Testimony showed that Trump panicked when the nonunion Polish men threatened a work stoppage because they had not been paid. Trump turned to Daniel Sullivan, a labor fixer and FBI informant, who told him to fire the Polish workers.
Trump knew the Polish brigade was composed of underpaid illegal immigrants and that S&A was a mob-owned firm, according to Sullivan and others. "Donald told me that he was having his difficulties and he admitted to me that — seeking my advice — that he had some illegal Polish employees on the job. I reacted by saying to Donald that 'I think you are nuts,'" Sullivan testified at the time. "I told him to fire them promptly if he had any brains." In an interview later, Sullivan told me the same thing.
In 1991, a federal judge, Charles E. Stewart Jr., ruled that Trump had engaged in a conspiracy to violate a fiduciary duty, or duty of loyalty, to the workers and their union and that the “breach involved fraud and the Trump defendants knowingly participated in his breach.” The judge did not find Trump’s testimony to be sufficiently credible and set damages at $325,000. The case was later settled by negotiation, and the agreement was sealed.
While Trump’s buildings were going up in Manhattan, he was entering a highly regulated industry in New Jersey – one that had the responsibility, and the means, to investigate him and bring the facts to light.
From the beginning, Trump tried to have it both ways. While he leveraged Roy Cohn’s mob contacts in New York, he was telling the FBI he wanted nothing to do with organized crime in Atlantic City, and even proposed putting an undercover FBI agent in his casinos. In April of 1981, when he was considering building a New Jersey casino, he expressed concern about his reputation in a meeting with the FBI, according to an FBI document in my possession and which the site Smoking Gun also posted. “Trump advised Agents that he had read in the press media and had heard from various acquaintances that Organized Crime elements were known to operate in Atlantic City,” the FBI recorded. “Trump also expressed at this meeting the reservation that his life and those around him would be subject to microscopic examination. Trump advised that he wanted to build a casino in Atlantic City but he did not wish to tarnish his family’s name.”
Part of the licensing process was supposed to be a deep investigation into his background, taking more than a year for would-be casino owners, but Trump managed to cut that short. As he told the story in The Art of the Deal, in 1981 he threatened to not build in Atlantic City unless New Jersey’s attorney general, John Degnan, limited the investigation to six months. Degnan was worried that Trump might someday get approval for a casino at the Grand Hyatt Hotel in Manhattan, which could have crushed Atlantic City’s lucrative gaming industry, so Degnan agreed to Trump’s terms. Trump seemingly paid Degnan back by becoming an ardent foe of gambling anywhere in the East except Atlantic City—a position that obviously protected his newfound business investment as well, of course.
Trump was required to disclose any investigations in which he might have been involved in the past, even if they never resulted in charges. Trump didn’t disclose a federal grand jury inquiry into how he obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan. The failure to disclose either that inquiry or the Cody inquiry probably should have disqualified Trump from receiving a license under the standards set by the gaming authorities.
Once Trump was licensed in 1982, critical facts that should have resulted in license denial began emerging in Trump’s own books and in reports by Barrett—an embarrassment for the licensing commission and state investigators, who were supposed to have turned these stones over. Forced after the fact to look into Trump’s connections, the two federal investigations he failed to reveal and other matters, the New Jersey Division of Gaming Enforcement investigators circled the wagons to defend their work. First they dismissed as unreliable what mobsters, corrupt union bosses and Trump’s biggest customer, among others, had said to Barrett, to me and other journalists and filmmakers about their dealings with Trump. The investigators’ reports showed that they then put Trump under oath. Trump denied any misconduct or testified that he could not remember. They took him at his word. That meant his casino license was secure even though others in the gambling industry, including low-level licensees like card dealers, had been thrown out for far less.
This lapse illustrated a fundamental truth about casino regulation at the time: Once the state licensed an owner, the Division of Gaming Enforcement had a powerful incentive not to overturn its initial judgment. State officials recited like a mantra their promise that New Jersey casinos were the most highly regulated business in American history, more tightly regulated than nuclear power plants. InTemples of Chance I showed that this reputation often owed less to careful enforcement than to their willingness to look the other way when problems arose.
In 1986, three years after Trump Tower opened, Roy Cohn was disbarred for attempting to steal from a client, lying and other conduct that an appellate court found “particularly reprehensible.”
Trump testified that Cohn, who was dying from AIDS, was a man of good character who should keep his license to practice law.
This was not the only time Trump went to bat publicly for a criminal. He has also spoken up for Shapiro and Sullivan. And then there was the case of Joseph Weichselbaum, an embezzler who ran Trump’s personal helicopter service and ferried his most valued clientele.
Trump and Weichselbaum were so close, Barrett reported in his book, that Weichselbaum told his parole officer about how he knew Trump was hiding his mistress, Marla Maples, from his first wife, Ivana, and tried to persuade Trump to end their years-long affair.
Trump’s casinos retained Weichselbaum’s firm to fly high rollers to Atlantic City. Weichselbaum was indicted in Ohio on charges of trafficking in marijuana and cocaine. The head of one of Trump’s casinos was notified of the indictment in October 1985, but Trump continued using Weichselbaum—conduct that again could have cost Trump his casino license had state regulators pressed the matter, because casino owners were required to distance themselves from any hint of crime. Just two months later Trump rented an apartment he owned in the Trump Plaza apartment building in Manhattan to the pilot and his brother for $7,000 a month in cash and flight services. Trump also continued paying Weichselbaum’s firm even after it went bankrupt.
Weichselbaum, who in 1979 had been caught embezzling and had to repay the stolen money, pleaded guilty to two felonies.
Donald Trump vouched for Weichselbaum before his sentencing, writing that the drug trafficker is “a credit to the community” who was “conscientious, forthright, and diligent.” And while Weichselbaum’s confederates got as many as 20 years, Weichselbaum himself got only three, serving 18 months before he was released from the urban prison that the Bureau of Prisons maintains in New York City. In seeking early release, Weichselbaum said Trump had a job waiting for him.
Weichselbaum then moved into Trump Tower, his girlfriend having recently bought two adjoining apartments there for $2.4 million. The cash purchase left no public record of whether any money actually changed hands or, if it did, where it came from. I asked Trump at the time for documents relating to the sale; he did not respond.
As a casino owner, Trump could have lost his license for associating with Weichselbaum. Trump has never been known to use drugs or even drink. What motivated him to risk his valuable license by standing up for a drug trafficker remains unclear to this day.
Trump, in his phone call to me, said he “hardly knew” Weichselbaum.
The facts above come from court records, interviews and other documents in my own files and those generously made available by Barrett, who was the first journalist to take a serious investigative look at Trump. Our files show Trump connected in various deals to many other mobsters and wise guys.
There was, for example, Felix Sater, a senior Trump advisor and son of a reputed Russian mobster, whom Trump kept on long after he was convicted in a mob-connected stock swindle. And there was Bob Libutti, a racehorse swindler who was quite possibly Trump’s biggest customer at the casino tables at the time. Libutti told me and others about arrangements that went beyond the “comps”—free hotel rooms and services, for example—that casinos can legally give to high-rollers. Among these was a deal to sell Trump a less-than-fit horse at the inflated price of $500,000, though Trump backed out at the last minute. Libutti accused Trump of making an improper $250,000 payment to him, which would have cost Trump his license. The DGE dismissed Libutti as unreliable and took Trump at his word when he denied the allegations. (Libutti was a major figure in my 1992 bookTemples of Chance.)
Some of the dealings came at a remove. In Atlantic City, Trump built on property where mobsters controlled parts of the adjoining land needed for parking. He paid $1.1 million for about a 5,000-square-foot lot that had been bought five years earlier for just $195,000. The sellers were Salvy Testa and Frank Narducci Jr., a pair of hitmen for Atlantic City mob boss Nicky Scarfo who wereknown as the Young Executioners. For several adjoining acres, Trump ignored the principal owner of record and instead negotiated directly in a deal that also likely ended up benefiting the Scarfo mob. Trump arranged a 98-year lease deal with Sullivan, the FBI informant and labor fixer, and Ken Shapiro, described in government reports as Scarfo’s “investment banker.” Eventually the lease was converted into a sale after the Division of Gaming Enforcement objected to Sullivan and Shapiro being Trump’s landlords.
Trump later boasted in a sworn affidavit in a civil case that he made the deals himself, his “unique contribution” making the land deals possible. In formal hearings Trump later defended Sullivan and Shapiro as “well thought of.” Casino regulators thought otherwise, and banned Sullivan and Shapiro from the casino industry. But the Casino Control Commission was never asked to look into FBI reports that Trump was involved, via Shapiro, in the payoffs at the time of the land deals that resulted in Mayor Michael Mathews going to prison.
Thanks in part to the laxity of New Jersey gaming investigators, Trump has never had to address his dealings with mobsters and swindlers head-on. For instance, Barrett reported in his book that Trump was believed to have met personally with Salerno at Roy Cohn’s townhouse; he found that there were witnesses to the meeting, one of whom kept detailed notes on all of Cohn’s contacts. But instead of looking for the witnesses (one of whom had died) and the office diary one kept, the New Jersey Division of Gaming Enforcement (DGE) took an easier path. They put Trump under oath and asked if he had ever attended such a meeting. Trump denied it. The inquiry ended.
Taking Trump at his word that he never met with the mobsters in Cohn’s townhouse saved the casino investigators from having to acknowledge their earlier failure—that from the start, they had never properly investigated Trump and his connections to criminals. They certainly had the leverage to push harder if they chose. Indeed, two of the five Casino Control commissioners in 1991 declared that the DGE showed official favoritism to Trump. Commissioner David Waters complained that DGE did not go nearly far enough in seeking a $30,000 fine against Trump for taking an illegal loan from his father, which could be grounds to revoke Trump’s casino licenses. Waters called it “an outrage that the Division of Gaming Enforcement would take this position and fail to carry out what I understand to be its responsibility to enforce the provisions of the Casino Control Act.”
Even after he got his license, Trump continued to have relationships that should have prompted inquiries. For example, he made a deal to have Cadillacs dolled up with fancy interiors and exteriors beginning in 1988, marketing them as Trump Golden Series and Trump Executive Series limousines. The modifications were made at the Dillinger Coach Works, which was owned by a pair of convicted felons, convicted extortionist Jack Schwartz and convicted thief John Staluppi, who was so close to mobsters that he was invited to the wedding of a mob capo’s daughter. New York liquor regulators proved tougher than those in New Jersey, denying Staluppi, a rich car dealer, a license because of his rap sheet and his extensive dealings with mobsters, as Barrett’s former reporting partner Bill Bastone found in public records. So why did Trump repeatedly do business with mob owned businesses and mob-controlled unions? Why go down the aisle with an expensive mobbed-up concrete firm when other options were available?
“Why’d Donald do it?” Barrett said when I put the question to him. “Because he saw these mob guys as pathways to money, and Donald is all about money.”
From a $400 million tax giveaway on his first big project, to getting a casino license, to collecting fees for putting his name on everything from bottled water and buildings to neckties and steaks, Trump’s life has been dedicated to the next big score. Through Cohn, Trump made choices that—gratuitously, it appears—resulted in his first known business dealings with mob-controlled companies and unions, a pattern that continued long after Cohn died.
What Trump has to say about the reasons for his long, close and wide-ranging dealings with organized crime figures, with the role of mobsters in cheating Trump Tower workers, his dealings with Felix Sater and Trump’s seeming leniency for Weichselbaum, are questions that voters deserve full answers about before casting their ballots.
David Cay Johnston won a Pulitzer Prize for his New York Times reporting on the American tax system. Since 2009 he has taught the business, property and tax law of the ancient world at Syracuse University’s law and graduate business schools.
Read the whole story
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