"The worst network of criminals ever known in Canada”

For 10 years Quebec has been swept by gangland brutality, arson, phony bankruptcies and murder. The worst may be over—but the full dimensions of the terror may never be known. Here’s a behind-the-headlines report on what’s been called

HAL TENNANT May 1 1967

"The worst network of criminals ever known in Canada”

For 10 years Quebec has been swept by gangland brutality, arson, phony bankruptcies and murder. The worst may be over—but the full dimensions of the terror may never be known. Here’s a behind-the-headlines report on what’s been called

HAL TENNANT May 1 1967

"The worst network of criminals ever known in Canada”

For 10 years Quebec has been swept by gangland brutality, arson, phony bankruptcies and murder. The worst may be over—but the full dimensions of the terror may never be known. Here’s a behind-the-headlines report on what’s been called

HAL TENNANT

IT IS SIX YEARS since Quebec was first noticeably beset by its notorious wave of phony bankruptcies and arsons-for-profit, and 10 years since two racketeers committed the first of the infamous “limepit murders” by shooting their victim in cold blood and hacking up the corpse with a butcher knife. But even today nobody can describe the full dimensions and implications of these crimes, because a great part of the mess is not cleaned up — and won’t be, probably, for several years more.

The worst of the wave is almost certainly over, for arson convictions — dozens upon dozens of them — have put many of the most active culprits behind bars. Yet there are still mysterious fires to be accounted for. suspicious bankruptcies to be investigated, killers to be brought to trial, and bodies to be found. And some of the job already done could become undo ne. for as this is written two arson convictions registered against one man, Louis Sicotte, are under question. Sicotte says he was beaten and tortured into confessing.

There are other questions about the whole mess that may never get answered because they are too difficult or too delicate. Such as what connections the Quebec racketeers have in the international underworld. Or what influence they have had, if any, on politicians in Quebec City and Ottawa. There are indications of links of both kinds, but no prosecutor has ever gone into court to prove they actually exist.

About the only chance of such evidence coming to light now lies with a provincial royal commission on the administration of justice in Quebec. The commission, set up in response to demands from the bar associations of Quebec province and Quebec City and headed by Yves Prévost, once a minister in the Union Nationale cabinet of Maurice Duplessis, was to begin public hearings at the end of March. There is no guarantee, however, that the commission will depart from its theoretical terms of reference and find out any more than is already known about Quebec’s wave of arsons and bankruptcies.

But what the record shows is astounding enough: not one vast conspiracy, but several gangs engaged in several vast conspiracies to commit crimes staggering in number, often elaborate in conception and, as a rule, professionally skillful in execution. Anatole Corriveau, chief prosecutor for Quebec City, considers these gangs “the worst network of criminals ever known in Canada.”

If nothing more, the Quebec capers are a revealing study in criminal ingenuity. It’s doubtful whether any other outlaws ever developed so many cunning variations on a few basic larcenous themes. One gang, in particular, managed as well to combine modern techniques of white-collar crime with old-fashioned tactics of terror and brutality. Though the story is necessarily incomplete, even sample facts and partial figures indicate how serious the three major types of crime were at their worst:

ARSON: In a peak year, Quebec was averaging more than one deliberately set fire per day. Many were the work of three gangs, in particular, who made arson a thriving business. Their technique, basically, was to acquire a building — usually a hotel, a house, a warehouse or a store — then insure it heavily and burn it to the ground. When the crackdown finally came, one gang member, known in the racket as a “torch,” pleaded guilty to 52 counts of arson and conspiracy. Incendiary fires took at least half a dozen innocent lives. One blaze that was intended to destroy only a hotel in the village of Lac Frontière, near the U.S. border, got out of control and wiped out the main local industry, a lumbering operation employing several hundred men. A new mill and a new hotel have since been built. Another arson case, involving a $7,500 motel that had been burned down for $13,000 insurance, inspired Judge Albert Dumontier to utter one of the classic understatements of the era. “It is not surprising,” he said, “that people complain of the continual increase in insurance rates.”

BANKRUPTCY: From 1960 through

1964, some 8,500 companies in Quebec went broke owing $390 million, and in 1965 alone there were commercial bankruptcies worth $106 million. There were cases of legitimate distress among these, of course, but according to a report filed in 1965 by a provincial commission of inquiry, “a large proportion” were frauds. Bankruptcy racketeers, sometimes known as “scam operators,” use a basically simple technique: they buy goods on credit, sell them cheap, then declare bankruptcy with the bills still unpaid. In the lumber industry, where “scamming” reached fantastic proportions, even firms unconnected with the frauds got hurt; the racketeers often dumped building materials onto the market at bargain prices no honest firm could match. Phony companies, some bearing names deceptively similar to those of old established firms, popped up and disappeared like spring crocuses. One gang alone, the commission found, set up 60 companies, and each lasted only a few months.

MURDER: This was not one of the profitable facets of the rackets but it was certainly the grisliest. To silence talkative accomplices who “knew too much,” certain members of one gang developed a routine procedure for executions. On the pretext of talking business, they would lure their victim into a car for a drive along a lonely country road, getting him drunk along the way to make him less wary. At an isolated spot the killers would shoot or bludgeon the man to death, strip the body, cover it with quicklime to make it deteriorate quickly, and leave it in a shallow grave. So far. police have found four such bodies, but they know of three other killings, and they suspect there have been half a dozen others besides. Criminals and stool pigeons they hoped to bring in for questioning have simply disappeared.

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“THE WORST NETWORK OF CRIMINALS” continued from page 36

What to buy for a murder trip: small bags of caustic lime

The men w'ho hatched such conspiracies as these w'ere an oddly mixed bag. Some, like Ovila Boulet, were mere thugs willing to do anything for money. Boulet, now in his mid-50s, was an illiterate laborer from Quebec City who made a specialty of setting fires — he’s the one who pleaded guilty to those 52 raps. But. according to the testimony of an accomplice, Boulet also hammered in the skulls of two fellow criminals marked for death by the gang. JeanJacques Gagnon, on the other hand. WTIS an accountant by profession and a published author as well. Several years ago he decided he w'as an authority on the horses (though he lost a lot at the track) and wrote a book in French called How To Heat 7lie Parimutuel Odds, w'hich sold for $10 a copy. Gagnon was not notably successful at beating the odds in court, however; he is now' serving multiple sentences, including life on two counts of murder.

One of Gagnon’s associates, André Lamothe, was often identified in the newspapers as a bankrupt w'ood merchant, but that tag didn't do him justice as a thoughtful and efficient planner. Lamothe used to buy small packages of caustic lime — big ones would have aroused suspicion — and empty them into a bucket w'hich. along with a shovel, was his standard equipment on all murder trips. Lamothe’s chief distinction, however, is having been implicated in all seven gang murders. He is now serving life for two of them. Another thoughtful schemer was Armand Bécotte, a selfstyled “accountant-business administrator’’ who used to scan lists of court litigations to find companies in financial trouble — enough trouble, perhaps, to be w'illing to arrange a profitable fire.

Probably the coolest, most deceptive of the criminals caught so far, however, was Moise Darabaner, a bespactacled, whiny - voiced moneylender w'ho financed many of the biggest frauds. (Authorities differ on whether he was the real brains of his gang, but locally, at least, he was Mr. Big.) Though the prosecutors now say they knew of Darabaner’s crooked activities long before they could pin anything on him. he kept up a front for years as a respectable Quebec City businessman. He used to go fishing with a cop who later rose to a high rank in the Quebec City police force. Darabaner served nearly 12 years as a commissioner of the Superior Court of Quebec and remained in this part-time post for several w'eeks after he was arrested for fraud, arson and conspiracy.

Much to the embarrassment of all others involved. Darabaner was the commissioner who witnessed the swearing out of a document by six Social Credit members of parliament bent on pledging their support of the minority Liberal government in Ottawa immediately after the 1963 election. How did such a man get such an appointment in the first place?

Equally difficult questions can be asked about a totally different chain of connections between the Darabaner gang and certain big-time crooks in the United States. At the very least, the two groups have some interesting mutual friends. Such as Julien Gagnon. alias Gerry Masé, alias Gerry Massie. He is known to have been the source of supply for an odorkilling gas the Quebec arsonists often used to disguise the smell of naphtha used in setting fires. Among Gagnon’s close friends is Lucien Rivard, the drug smuggler whose Ottawa connections brought about the Dorion inquiry.

On the other hand, many of the arsonists and swindlers who plagued Quebec these past few years were not professional criminals but simply waiters and hotelkeepers, furniture dealers and lumber merchants who thought they saw a good way to make a fast buck. Some carried out their crimes on their own; others fell in with one of the gangs, who were always on the lookout for new accomplices. The Darabaner gang, in fact, developed a regular system of recruiting new members: whenever they

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“THE WORST NETWORK OF CRIMINALS” continued

When accidental fires were scarce, they planned a few

needed the services of some specialist — a torch, a phony insurance adjuster, a muscleman — they could rely on one of several lawyers to tip them off about candidates in jail who could be bailed out or released on payment of a fine.

To the harassed police and prosecutors, it seemed that what the independent crooks didn’t think of, the gangs did. Among them they contrived a whole range of dodges that evolved something like this:

Do-it-yourself arson: A 47-year-old janitor, Alfred Bourque, of Weedon, Que., decided he’d rather own three stacks of insurance money than three cottages. He burned them down — and got three two-year sentences.

The inflated claim: Even accidental fires can be profitable, and crooks discovered there was no law (until recently) to stop anybody calling himself a “public adjuster" (a designation common in Quebec). As such, many a gangster raced the fire trucks to a scene and talked the distraught owner into letting him draw up the claim — for a percentage. Such owners were amazed to learn later how valuable their buildings and contents had been. One group of adjusters even had an innocent housewife monitoring fire calls for them on shortwave radio.

Fire for hire: The way she told it in court, Anita Michaud wanted her restaurant burned, so she simply handed a key to Laurent Rivest, 40, who took care of all the messy details. His fee: $500. (Some torches prefer a percentage deal — anything from 10 to 40 percent.)

Get the sucker into debt

Solicited arson: When accidental fires seemed scarce, enterprising public adjusters went out and planned a few. Armand Bccotte, the “business administrator” who scanned the litigation lists, was one of these. So was a gang leader named Wilfrid Jarjour. In a typical caper, Jarjour persuaded Roger Chartrand, 39, of Ste. Thérèse, to have his garage burned in return for 40 percent of a $26,000 damage claim. (“An odious crime,” declared Claude Wagner, then a judge and later provincial minister of justice, as he sentenced Jarjour to 14 years.)

The takeover: Businessmen and

building owners who didn’t take readily to arson had to be persuaded. The quickest way was to get the sucker hopelessly into debt, by lending him money or providing a mortgage, then insisting on bankruptcy or arson when he couldn't pay. Moise Darabaner, the Quebec City moneylender. liked that dodge. In a case that was to become part of his downfall, he put up about $4,000 for a mortgage on a house in St. Lambert de Lévis owned by an innocent party. Mrs. Cora B. Cyr. When she and her husband Alfred couldn’t keep up the payments, Darabaner had JeanJacques Gagnon, accountant, gambler, author and the gang’s No. I torch, burn the place down and split the insurance among the gang. (Like Gagnon, Darabaner is now serving multiple sentences — for arson, fraud and conspiracy.)

“Burning” stock that isn’t there: As a variation on the inflated-claim swindle, the next logical step was to remove the goods or furnishings, then burn a more-or-less empty building and file claims for both building and contents. In 1964, food merchants, dealers and producers from many parts of Quebec had stored canned goods, butter and other foodstuffs worth one million dollars in a Montreal warehouse. One day they all got letters saying the goods had been destroyed by fire. In good faith, they filed claims. But'shortly after, some of the “destroyed” goods were found, in excellent condition, in a Quebec City warehouse.

Buying up a good nante: As a smoother variation of the simple takeover, bankruptcy racketeers found they could sometimes buy a good company’s reputation along with its plant and equipment. That’s what happened in the case of two brothers we’ll call Jean and Jacques Untel. The Untéis had operated a sash-and-door manufacturing plant and a retail lumber store in a small Quebec town for 20 years and were well thought of in the trade. Then in 1960, with business booming, they got careless about their spending and began running into debt. Suppliers, comparing notes, found that apart from what they owed routinely on their current bills, the Untel brothers were $35,000 to $40,000 in debt. Suddenly, in 1963, the Untéis paid off all arrears and Jean left the partnership. Though outsiders had no way of knowing at the time, Jacques had sold out to the mob. Even Jacques himself might have been fooled for a while, for the pitch sounded plausible. An accountant had approached the brothers to say he knew of an investor willing to clear up their debts in return for controlling interest in the plant and store. The investor, he said, saw this as a sound way of getting into a new specialty — prefabricated cottages. And that’s what the newly financed firm did — for two years. In 1965, with Jacques Untel still serving as front man, the company went bankrupt owing $400,000, roughly 10 times the amount the “investor” had put up. Even at this writing, nobody has proved the caper a fraud.

The fast shuffle: When there aren’t any reputable firms ripe for takeover, a wily racketeer can always create his own company, complete with instant respectability and good credit rating. One wheeler-dealer buying lumber on credit by telephone used to give, as a reference, the name of “my bank manager” and his phone number. The “bank manager’s” phone was, in fact, a second telephone on the wheelerdealer's own desk. When it rang, he would answer in a disguised voice and, of course, give himself an excellent credit rating. But even suppliers too wary to be taken in by such a simple ploy as that were often fooled, understandably, by the confusing array of companies the gangsters set up to order goods and provide credit references for each other and to ship materials and products back and forth. Even a cautious supplier often had no practical way of keeping track of where the goods were that he was still expecting to be paid for. And when the delinquent company suddenly declared itself bankrupt, the creditors who closed in to demand their share of any remaining funds often included several phony companies owned by the same gang as the bankrupt firm. Thus even some token payments made during winding up went into the racketeers’ pockets.

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“CRIMINAL NETWORK”

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Buy, build and burn: Here was the perfect blend, at last, of arson and bankruptcy. Rather than dump lumber onto the market at distress prices, a firm intending to go bankrupt would sell to a sister company also owned by the gang. The second firm would use the lumber to throw up “chalets” which, in fact, were little more than shells. Usually, they would be located in a remote area where no one was likely to notice what was going on. With its stock of lumber gone and its bills, of course, still unpaid, the first firm would declare bankruptcy. Shortly after, the second firm, having stocked its “chalets” with cheap, secondhand furniture, would find its new buildings razed by fire. Thus, by torching stolen goods, the crooked firms managed a double payoff.

Such tactics overwhelmed the police throughout Quebec for years, until late in 1964, when Claude Wagner, then minister of justice, appointed a special prosecutor, Gerard Laganière. to organize a fight against the racketeers. Laganière, now a criminal court judge, provided one vital element the police had lacked all along: proper co-ordination between various local forces. Until then, police in three neighboring towns might be working separately on three arson cases when a comparison of clues would have indicated that one man had committed all three crimes. And Montreal newsmen still like to tell how a crook out on bail in a case being heard in one jurisdiction could walk into another court on another charge in another jurisdiction and pose as an innocent first offender. Laganière got around this problem by establishing direct authority over at least one policeman in each force, including the Quebec Provincial Police. These men. still working in their own jurisdictions but reporting direct to Laganière. became known as the “Little FBI.”

Even before the Little FBI was organized. police had managed to do some gangbusting — though their success in some cases depended partly on lucky breaks Such as one they got in June 1964. Searching for evidence against bomb-throwing terrorists, police raided houses and business establishments in and around Montreal. Instead of what they were looking for. they found files indicating that bankruptcy racketeers had fleeced insurance companies, creditors and others out of about $20 million. Within a month Armand Bécotte had turned Crown witness, and the breakup of his gang was under w'ay.

But the big breakthrough came in August 1965 — and it came about through careful planning and patient investigative work that had begun even before the Little FBI was formed. Authorities say now they knewfor years that Moise Darabaner was an active swindler but they bided their time until they could find a major and substantial complaint to justify raiding his office and seizing all his files, so they could go into court w'ith a thorough case against him.

They finally got that opportunity in August 1965. A Quebec City woman complained that, as president of Junior Holdings Ltd., she had been swindled out of $115,000 by Darabaner and one of his associates. Gaston Constantin. Once Darabaner’s files w'ere in police hands and both men were under arrest, Constantin decided to “tell all.” His testimony implicated Darabaner in several other crimes. Among them were three arson cases, including the one involving Mrs. Cora B. Cyr’s house. Darabaner pleaded guilty.

The heat was on

As soon as the heat was on. arsonists and swindlers began squealing on each other. And some of the first revelations, in turn, led to four of the killings. All four victims had cither incriminated members of the Darabaner gang or seemed likely to do so. The victims were Albéric Bilodeau, whose hotel had been deliberately burned; Rédempteur Faucher, who had set many of the fires: and Paul Brie and Henri-Paul Chandonnet, both businessmen who took part in some of the swindles.

But as the police rounded up more gangsters and piled up more evidence, the killers themselves began squealing. In late September and early October of 1965. handcuffed prisoners led police out to lonely graves in swamp countryside less than an hour’s drive south of Quebec City. As one decomposed corpse after another was unearthed. Quebec’s rackets for the first time became hot front-page news all over Canada.

Justice Minister Claude Wagner told newsmen that unidentified gangsters had telephoned him and vaguely suggested they might make some kind of deal — he didn’t know what kind of deal they had in mind. “The overlords.” he said triumphantly, “have begged us for mercy.”

But few of those overlords, even yet. seem likely to see the inside of a jail cell, and Anatole Corriveau, the Quebec City prosecutor, says. “We may never know how big some of those gangs w'ere.”

And the task of bringing even the small fry of Quebec gangland to justice seems likely to keep police, prosecutors. courts and jailers occupied for a long time yet. ★