Alan Phillips October 5 1963


Alan Phillips October 5 1963


Money has become the Mafia’s leading product. They get it from counterfeit presses, bucket shops and bond robberies. This is how

Alan Phillips


IN 1930 the infiltration of labor and business by U. S. criminal syndicates moved author Courtenay Terrett to write that “there is an excellent chance that racketeering will some day be not an industry, but industry itself.”

The degree to which his prediction has come true was illustrated in 1957. Sixty-three top-level racketeers met at Apalachin, New York. More than fifty of them had records of arrest (eighteen in connection with murder), yet all were legitimate businessmen but one, and he was the conductor of a dance band. “The overlords of crime,” says FBI chief J. Edgar Hoover, “have moved out of gang hideouts into the mainstream of American life.”

Today’s underworld leader more often reads the financial page than the comics. He notes currency fluctuations and communicates by cable code with associates in Paris, Marseilles, Zurich, Beirut or Naples. Banks woo his patronage. He hobnobs with politicians and lawyers. Last winter Armand Duhamel, the biggest fence for the Montreal syndicate, holidayed in Japan with his lawyer. The racketeer is no longer an outlaw preying on men of property. He works from within the community. He is the man of property.

This change is of more than academic interest to Canadians. In the early Fifties the Brooklyn syndicate of Joe Bonanno, wealthy owner of laundries, a cheese company and midwestern real estate, moved into Montreal. Under a ruthless killer. Carmine Galente, Bonanno set up. in effect, a Canadian subsidiary. Over the years its Canadian fronts and employees became its directors, making independent decisions much as Imperial Oil in Canada makes many decisions independent of Standard Oil. A for-

mer paid enforcer, Vincent Cotroni, now a night club owner and real estate operator, rose to chairmanship of the board of the Montreal syndicate, holding it together by his connections in the cartel, and by the cohesive force of a strong-arm squad commanded by his younger brother Frank. His directors, like those of the parent Brooklyn syndicate, are shrewd experienced businessmen who bring to their illegal ventures their legal business methods and viewpoint.

Herein lies the significance of the change in underworld leadership. Business in North America is dynamic. It continually tries to get the most from its management, plant and staff. It continually seeks new markets, thus cutting costs and raising profits. It continually reinvests the surplus profit. Crime in every society follows progress like a shadow, perversely mocking and mimicking our virtues. Since ours is a business community, crime mimics the virtues of business.

“During the ten years between 1950 and 1960,” says J. Edgar Hoover, “crime grew five times faster than population.” Canada has just set up

a crime statistics section, and we have no comparable figures as yet, but RCMP Commissioner C. W. Harvison has long been warning that U. S. criminal syndicates were expanding their Canadian activities.

The dimensions of this expansion are almost impossible to gauge. The syndicate does its illegal business in cash. It does not open its books for inspection. It does not report its sales, payroll or income. On the contrary it goes to some length to conceal them. One Montreal man was paid seventy-five dollars a week for the use of his name to mask ownership by a syndicate director of a night club. The impact of U. S. control of illegal business in Montreal can only be judged by the marketing of its products.

One of these products is an engraved company certificate bought through brokers licensed to sell on the stock market. It certifies that its buyer owns “a share” in the company. The stock market is a relatively new field for the cartel, which came into it in Montreal through its ancient trade of extortion.

Canada’s postwar mining boom had

Mafia was behind bucket shops that stole millions


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Its top men are intelligent, trained in finance, and with a knowledge of human cupidity

spawned a species of con men who trade on U. S. interest in our new strikes. These stockateers sell shares in worthless bushland known as

moose pasture by telephone campaigns so high-pressured the offices they originate in are called boiler shops. In the early Fifties the Ontario Securities Commission was gradually driving them out of Toronto. By 1955 Montreal had become a haven for sixteen boiler shops, each paying ten percent of their take to the syndicate, who had provincial authorities on their payroll.

The elite among these gentry were the promoters, men who put up the

capital, set up the company structure, and manipulated the price of shares on the market. These are men of sharp intelligence, sound financial training, and a clear perception of human cupidity. Some of the best were then in Montreal. Ken Gregory, the black sheep of a fine Ontario family, had been a brilliant student at the University of Toronto. Chubby little George Caldough from Moose Jaw. an urbane twenty-six-year-old sporting a derby, gloves and cane.

was just stepping up to the big time. There v'as Frank Kaftel, a onetime song-and-dance man from Cleveland, who before settling in Canada in 1942 had studied the art of stock fraud in New York and London. And there was a former South African called Albert Edward DePalma, Who began his virtuoso career as a New York necktie salesman. He apprenticed in securities with promoter Charles Anthony Hudson, and when Hudson went to jail for fraud DePalma skipped to Toronto. He became a broker, a millionaire with a mansion guarded by Great Dane dogs. When he lost his licence he carried on — as others do today — behind a brokerage firm in Toronto and one in Montreal. In Montreal he maintained a suite at the Ritz and two apartments, and he was always accompanied by a bodyguard.

These men gathered around them a group of salesmen known as loaders: a onetime Vancouver bootlegger's runner named Walter Harvey Link; a former burglar and San Quentin convict, Herman Feldman; a Montreal syndicate strong-arm man. Barney Altwerger (Auld); Hugh Caradog, "Red" Jones, James San Severino, Vaughan Ralston, and many more. It is estimated that these sincere-sounding Canadians were siphoning $350 million a year from the U. S.

In 1955 Quebec set up a securities commission. Some of the stocketeers drifted south and the U. S. securities commission (SEC) noted in 1956 that syndicate hoodlums were moving in on boiler rooms. DePalma, Caldough. Link and others went back to Toronto, and after the 1956 boom eleven stocks were delisted. In Calgary that year a letter of market advice by John Hammond of Dominion Investment Analysts puffed oil stocks sold by North American Securities Ltd. Its offices, investigation disclosed, had been set up by Hammond, Herman Feldman and Barney Auld: its salesmen included Walter Harvey Link and San Severino. Hammond, who fled to Mexico, was a henchman of Eddy DePalma, who was masterminding the swindle from Toronto.

Next year, 1957, the loaders showed up in Halifax, illustrating why brokers call them “the here-and-gone boys”. They were now selling stocks for Manor Securities, controlled by Ivan Gordon, the right-hand man of Eddy DePalma.

The RCMP closed Manor down and it opened that fall in Vancouver. Barney Auld rented rooms for three boiler shops and stayed on as sales manager. Red Jones was there and then vanished, and Walter Harvey Link appeared as the contact with Gordon in Halifax, and with Herman Feldman, who sold worthless stock from Regina and Saskatoon. Link had a payroll of twenty-five thousand dollars a week coming in from Gordon, and Link himself earned three thousand a week. His telephone bills for forty days totaled $64,786. Police raided them finally but all they found was nineteen empty phones and Barney Auld who said innocently, “What do you fellows want?” It is estimated that Gordon, in Vancouver alone, cleared about eight hundred thousand dollars.

The big-time market rigger has a remarkable apparatus. It can be seen

in the rise and fall of Pontiac Petroleums. In 1953 a major shareholder in Pontiac was stocketcer Frank Kaftel.

Kaftel was also manager of Pontiac at fifteen thousand dollars a year, though his name did not show on the company's statement. He had put two hundred and fifty thousand dollars in Pontiac’s treasury in return for five hundred thousand Pontiac shares. As manager he traded seven hundred anil fifty thousand more shares to a com-

pany called New Continental for two drilling rigs. Continental resold the shares to Charles L. Snaith in Vancouver, a former office manager of Frank Kaftel Ltd. Snaith sold them back to Pontiac. Kaftel now controlled Pontiac. He then proceeded to turn Pontiac shares into money.

In Montreal Maine Investments touted the stock. In Ontario it was pushed by J. L. Gillanders, a market adviser, with the aid of a mailing service and market writers. A high

pressure telephone campaign from the office of the Uneeda Taxi Cab Company sold twenty thousand shares a day. Orders were placed with Rittenhouse & Company in Toronto and St. James Securities in Montreal. With the exception of Rittenhouse, all these firms were part of the Kaftel organization.

Pontiac, which Kaftel had first bought at fifty cents a share, climbed to three dollars on three exchanges, then collapsed. Gillanders fled to

Montreal. The Rittenhouse licence was canceled. Pontiac was delisted and dropped out of sight. Then, in 1957, Alberta set up its securities commission. The first issue offered by Albert Moss, one of the first brokers registered, was Pontiac Petroleums. Its backers now were an Edmonton broker and a dummy Vancouver company in which the name Woodhall appeared. Woodhall was the proper name of George Caldough and the Edmonton broker was a friend and relation of Caldough. Caldough was then in Vancouver, where his hilltop house and its kidney-shaped pool was becoming a rendezvous for a moneyed set.

Moss opened an office in Calgary and applied for so many phones that the Alberta Commission investigated him. He nevertheless began an illegal sales campaign for Pontiac. He was closed down and queried on why he'd persisted. He was being bankrolled by someone. Moss said, and he hadn't dared to stop. This someone, who lived in Calgary’s plush Rideau Towers, was Herman Feldman. He had threatened to break every bone in the broker's body if he quit.

Such promoters live in a shadowland between fraud and legality. They cannot call the police when the syndicate moves in. They co-operate through fear of violence or blackmail. They may be in debt to the syndicate loan sharks. Some need financial backing — even good promoters go broke. Some may even find the syndicate’s contacts useful.

The syndicate carefully conceals its market interests. Its money flows in and out by devious routes. In Alberta in 1957 a promoter named Robert Weston, a onetime alcoholic of unstable brilliance, rigged the market on a New Brunswick mining issue. Canadia Scotian, and took Alberta brokers for several hundred thousand dollars. He had been making payments, investigators found, to the leading gambler in Calgary, Jack Baxter, who in turn was in frequent contact with gamblers in Las Vegas. Weston had also sent bank drafts to George Caldough in Vancouver, who was rerouting the money to Las Vegas. The syndicate has interests in several Las Vegas casinos. Weston, incidentally, never got back into business.

Ivan Gordon’s Manor Securities is another case in point. A small part of its proceeds have been traced. A company called Baybar Investments, set up in Nassau by Gordon, transferred fifty thousand dollars through a Montreal syndicate contact to a Victor Reagan in Vancouver. “Reagan” was Walter Harvey Link. He passed the money to George Caldough who passed it on through a dummy company, Dorwood Holdings, probably to Sam Magin. Magin is a henchman of Frank “Buster” Wortman, a U. S. gambler and Mafia front man in East St. Louis.

George Caldough was considered a contact man for both syndicate and loaders, and confirming this, he appears in deals for no other apparent reason. In Calgary in late 1959 Red Jones and Barney Auld were sharing a suite in the Rideau Towers. An elaborate real estate promotion, St. Lawrence Industrial Development Corporation, was about to begin

across the country. Its promoter4was a thirtv-vear-old Montrealer. Maurice Soiffer He had convinced officials of Sorel. Quebec, to rezone land for factor) sites, and was now about to extol them in purple prose. The Alberta Securities Commission broke up his piteh in the West before his backers could get their investment back, and telephone calls from Red Jones, vice-president of the company, linked the promotion to Caldough in Vancouver. where St. Lawrence brochures had been printed and stored.

Caldough that fall was planning to finance his house guest. Errol Flynn, in a TV serial and he had a big stock promotion of his own running in the Yukon. But Flynn dCd while he was Caldough's guest, worn out by drug .iddiction. and the RCMP broke up the Yukon swindle. Caldough vanished. Interpol, the international police organization, located him on Wigmore Street in London, in the office of the St. Lawrence Industrial Development Corporation, preparing to launch a full scale offensive against investors in England. He fought extradition up to the supreme court, but was finally sentenced to six years in jail, a rare penalty for a big-time con man.

It is thought that Walter Harvey Link became the new syndicate contact. Link is a curly-haired, sharpeyed. handsome six-footer. He married (and was later divorced from) the sister of Frank Pretrulla. the Monrrea’i sy wAvcvACs former enforcer Link, Jones, and their team of loaders have figured in almost every fraud 1 have mentioned, and more. In 1960 they reappeared in a small town near Hull. Quebec. Gatineau Point. Here, from two flats, they sold St. Stephen Nickel, an unproven New Brunswick property.

The promoter was Can-Am Invest-

mens, set up by Kenneth Ci regor). He had grown big since his early Montreal days. His sucker lists were a hundred thousand names long. His gloss) brochures, turned out by a Montreal specialist. Dennis Miller, were pouring into the U. S. at the rate of ten thousand copies a week. When Gatineau Point was raided Link and his loaders moved to St. John, where the main operation was underway. Link drove into St. John in a white convertible, beside him a

shapely brunette and a large French poodle. He took a furnished house at two hundred and fifty dollars a month, rented a power boat, and joined the Riverside golf club. Downtown. in the office of “Fleetway Aluminum Corporation — Wholesale Only", in eight cubicles of wallboard. each with a telephone, benzedrine and tranquilizers, his salesmen sold (counting Gatineau sales) thirty-five hundred U. S. investors. A sharecropper in Tennessee with ten children lost his

life's savings. A retired and senile man in Boston lost $97.000. The scale of the fraud is clear in its costs: $360.000 for literature. $230,000 in phone bills, about $600.000 to the salesmen—-a total cost of 1.1 million dollars for a profit of more than one hundred percent in sixteen months.

The New Brunswick authorities had here proved so accommodating that a New Yorker, Stanley Younger, came up and opened another boiler room. A Montreal public relations man of-

ten used by stocketeers, Francis Algernon Gaylord Powis, was given a broker’s licence and opened a third. Stocketeers in New Brunswick took more than seven million dollars out of the U. S.

The New Brunswick government changed and police moved in. Powis and Dennis Miller left the country. Ken Gregory routed his profits to Switzerland, then followed them. Link went back to Vancouver, rented Caldough's hilltop house, and went

into Argus Securities. Another loader. San Sevcrino, though listed only as a salesman, is now active in Columbia Securities in Vancouver. Barney Auld showed up last winter in Calgary and Edmonton, connected with an Alberta company, Sastex Oil and Gas. Its biggest shareholder was an Edmonton merchant turned oil promoter, a friend of Maurice Soiffer, promotor of St. Lawrence. Earlier he had transferred Sastex stock through a broker in Calgary to the previously mention-

ed stocketeer. Stan Younger, in New York.

An investigation of Younger, and of Gregory in New Brunswick, has disclosed the secret partners of this interwoven troupe. Younger came into Toronto in November of 1957, an impressively large young man of twenty-seven, and opened a Bank of Commerce account of sixty-six thousand dollars. He headed a group that included Arthur Tortorello and Louis DeFilippo which took control of a

corporate shell. Shoreland Mines. Over the name of an old and wellestablished investment house Younger wired the holders of Shoreland's nearworthless stock: WILL BID THREESEVENTYFIVE CANADIAN FUNDS FOR TWENTY THOUSAND SHARES SHORELAND MINES LTD ALL OR NONE DRAFT STOCK CANADIAN BANK OF COMMERCE KING AND BAY TORONTO WITHIN TEN DAYS.

When the shareholders tried to pick up more shares to profiteer on this offer, Younger, who held a huge block he had bought for a few cents each, sold them for ninety-five cents to a dollar. He sold them through Lincoln Securities, a reputable New York corporation which his group took over by threatening to kill its owners. As the New York attorneygeneral, Louis J. Lefkowitz, warned at the time: “A criminal network has been successful in muscling into Wall Street in a shocking number of cases.”

The Younger group, the SEC has estimated, cleared some three million dollars from selling shares in six Canadian companies: Shoreland. Sastex, Atlas Gypsum, International Ceramics, National Electro Process and Monarch Asbestos. Investigation also disclosed that Younger's associate, Arthur Tortorello, carried a cheque for twenty-five thousand dollars from Saint John to New York. It was cashed by Bernard Azarow, an international weapons trafficker convicted in Tel Aviv on currency charges. Two months ago the SEC named the man behind the Younger group: Carmine Lombardozzi of Brooklyn.

Lombardozzi, at fifty, is a modern Mafia don, a labor and public relations consultant. His syndicate, headed by labor management consultant Carlo Gambino, belongs, like Joe Bonanno's, in the family of Joseph Magliocco, Capo Mafioso of Brooklyn. Lombardozzi is a behindthe-scenes influence in the International Longshoremen’s Association. He recently set up an eye clinic selling lenses to association members. As an-

other sideline he extorted live hundred dollars a day from the Monti Marine Corporation which had a navy contract. He is also involved in vending machines, firearms, narcotics and gambling, and he was one of the Mafia dons at the Apalachin conference. Informers claim it was he who backed Ken Gregory in New Brunswick, loaning him a hundred thousand dollars at ten percent a month, an exorbitant rate of interest known as a juice deal.

The syndicate coffers are full of money it wants to put to work. It has now been determined that the I960 crash of a National Airlines plane in North C arolina, which killed thirty-three, was caused by a bomb beneath the seat of New York lawyer Julian Frank, who had been investing money, unsuccessfully, for the Brooklyn syndicate. The syndicate is a suspect as well in the 1959 crash which killed thirty-four near Buffalo, Texas. Aboard the Braniff Electro was a big money gambler, George Uffner, friend of the one-time Mafia controller in New York, Frank Costello.

Money is the universal solvent. It makes the syndicate palatable in most of our major cities to a small un-

scrupulous coterie of brokers, dealers, lawyers, politicians and businessmen. I cannot judge their impact on stockmarket ethics, but their ; impact on the public has been clear in. the mining market. The leaders and confederates of the Mafia (which insiders call The Outfit, The C ombination or, in Italian the Cosa Nostra, Our Thing) are economic saboteurs, undermining public faith in the central mechanism by which industry grows and shares the wealth.

The tentacles of this crime cartel extend to the West Indies, Latin America, Africa, the Middle East and Europe, from where, in such havens as Luxemburg, Liechtenstein, and Belgium, international market manipulators like Frank Kaftel are now selling dubious Canadian and U. S. stocks. A few years ago Frank Kaftel was questioned at New York while in transit. He was carrying an unexplained one hundred thousand dollars in cash.

Nowhere is this international aspect of the cartel more evident than in stolen securities. In 1955 a series of break-ins in Saskatchewan netted thieves several hundred thousand dollars in securities. In January 1957, in

Outremont, Quebec, 137 Bank of Montreal deposit boxes, marked with lipstick by an employee who afterward left for Miami, were ransacked of $1,100,000 in cash, bonds and jewelry, more than the record haul from the 1950 Brinks holdup in Boston. Then in May the Brockville Trust and Savings was looted of ten millions, a spectacular new world's record. It was followed by milliondollar break-ins at the Premier Trust in St. Catharines, and Montreal's C'aisse Nationale. Since then not a month has gone by that one to four robberies have not occurred, each distinguished by the stealing of securities.

Until 1955 robbers ignored deposit boxes. They did not have the marketing apparatus. But in 1955. with Montreal governed by reformers, the syndicate’s dwindling take brought some bold new' planning.

Carmine Galente that year had been pressured out of Canada by the RCMP and the immigration department. Joe Bonanno's Brooklyn syndicate replaced him w'ith Salvatore Ciiglio. When Giglio was arrested in 195$ on a customs charge he was sharing a suite w'ith Rosario Mancuso. an enforcer for Giuseppe and Salvatore Falcone. Mafia bosses of Utica in upstate New' York. Mancuso had control of local 186 of the International Hod Carriers in Plattsburg. a union that helped construct the Strategic Air Command base there, a fact that in itself is cause for reflection. He was co-owner of the Italian Village, a Plattsburg café, contact point for eastern racketeers. And he had attended the Apalachin conference the year before. Why was a man of his description in Montreal? I can only speculate.

Mancuso’s chief Montreal colleague was Giuseppe “Pepe*' Cotroni. brother of Vincent Cotroni, Montreal Mafia don. Pepe ran the Ontario Spaghetti House with Peter “The Russian” Stepanoff and they gathered around them a rare combination of skills: experts in explosives, in cutting steel with acetylene, in locks, bank layouts, getaways, every facet of robbery. The Russian and Pepe w'ere jailed in 1960 — they were caught with drugs and bonds from St. Catharines and Brockville — but the robberies continued under new supervision. Safe blowing in Ontario, with imported U. S. equipment, is increasing. Bonds are now a new product of the cartel, which can market them.

Some show up on the cartel’s drug routes. Several weeks after La Caisse Nationale d’Economie in Montreal was robbed a batch of its bonds w'ere recovered in Geneva. A MarseillesMontreal-New York drug courier. Gabriel Graziani. had tried to cash them in a Sw iss bank.

Outrcmont bonds were recovered in 1961 from a bookie in Revelstoke. a drug addict in Vancouver and a bank robber in Edmonton. They had been carried west by Alex McDonald, notorious drug distributor jailed in Vancouver last year. He had got them, he told an informant, from the Mafia in Toronto, whose drug-ring affiliates were then servicing Vancouver.

Bonds from the St. Catharines' burglary turned up with a New York

firm of brokers. The businessman who had sold them said he got them from a lawyer. The lawyer represented Charles Ara Hanson, a Las Vegas and Los Angeles rancher, hotel owner and promoter. He said he won them from a "Tony" in a Los Angeles card game. A month later Thomas Pytel. sometimes known as Tony, was arrested carrying Hanson's cheque for twenty-six hundred dollars. Pytel was a Montreal syndicate drug courier.

More St. Catharines' bonds turned up in 1960 in Beirut. Lebanon, the Middle East's drug capital. The passer was a Texan. John Dewey Green. He had been marketing pesos for exiled Cubans, he told police, including the family of ex-president Batista. He had got the bonds at a meeting of Mafia businessmen in Brooklyn who had given him names of bankers and businessmen in Syria and Lebanon.

Bonds from the syndicate's robber-

ies showed up with Sam Feldman in Philadelphia, business manager of a local Teamster’s Union; with Bernard J. Ezhaya of Boston, president of Industrial Relations Associates Inc.: with Gonzalez Acevedo in Puerto Rico, who claimed to be raising funds for a revolution in the Dominican Republic: with Albert Cordeu, president of the Banco del Sur of Buenos Aires, who tried to sell them through Grace National Bank in New York: with a

brokerage firm in Mexico City: with businessmen in Montreal. Cleveland. Chicago and New York, including Edward Browder Jr., partner in a New York firm of gold and sugar brokers, who took with him eight hundred thousand dollars in bonds to Zurich. Switzerland, while on a weapons and currency deal for which he carried a letter of credit for .$3,200,000. He failed to sell them and was caught in Miami with bonds from the Brockville robbery worth $135,650. He had been trying to talk a young Canadian, Douglas Lethbridge, a lieutenant in Castro's Revolutionary Air Force, into flying bonds and black market pesos to Cuba. The courier who supplied him is believed to be Frank Ferrara, an ex-wire service operator in the Mafia family of don Raymond Patriarca of Boston.

Cashing the bonds is relatively simple. In October 1959 in Chicago. William Rabin of Central Trust, an apple-cheeked, cane-carrying former Winnipegger, secured a loan from the C entral National Bank with ninetyeight thousand dollars in Brockville bonds, ('entrai Trust had been set up four days before by a Washington lawyer, and Rabin had flown to Montreal the previous month.

That December Rabin checked into the Hotel Edison in New York. The Washington lawyer came in on the same day. Three days later Rene Robert, a flunkey for Giuseppe Cotroni, head of the Montreal robbery ring, checked in and out. In January the lawyer and Rabin met in Zurich. Switzerland, and the lawyer, who spoke German, took Rabin to see a hanker in Basel. The banker escorted them to the Credit Suisse, which loaned Rabin $87,500 on Brockville bonds worth $140,000.

Rabin was a Chicago business consultant. He owned the Continental Radio Corporation, and he was involved with the Pittsburgh Mafia dons Sam Mannarino. his brother Gabriel, an Apalachin delegate, and Big John La Rocca. He flew at least twice from Montreal to Buffalo, once with Giuseppe Cotroni and René Robert, once with Sam Mannarino himself. Rabin was later convicted of trafficking in bonds. The trial prosecutor called him "highly educated and sophisticated'’. an underworld go-between and financier. It was said that while in Europe he tried to buy a European bank for the cartel to aid in its distribution of securities. After he was arrested the syndicate sold a million dollars or more in bonds to insurance companies for ten to twelve cents on the dollar.

The financiers who serve the cartel are disloyal at their peril. In 1961, Mervin Lee Gold of Cleveland, a cab driver only a few years before, operated the Daily Drug Company, Buckeye Mortgages Inc., the Cleveland Budget Company, and three investment firms. That year he got loans of thirty-six thousand dollars from two banks on bonds from four Quebec robberies and the Premier Trust in St. Catharines. Then, liquidating his assets, he took oft for Naples. Lisbon and Tel Avi\ vsith nearly a million dollars in cash.

He was finally brought hack, convicted. fined and sentenced to stand

trial again for defrauding the U. S. small loans administration. He was out on a hundred thousand dollars bail this July when he disappeared from his seventy thousand dollar suburban home. He was found wrapped in a blanket in the trunk of his car. a green plastic cord around his neck and beneath it two bullet holes. His wife gave the FBI sealed letters left by Gold with her, she said, in case he failed to return from a visit to Cleveland racketeer Alex Birns. Gold's sudden rise to riches had coincided with his association with Teamster union officials in Cleveland, and he had been known to meet with John T. Scalish. Mafia boss of Cleveland, a power in the union.

.Securities, stolen and phony, arc only two of the Mafia's new products. Jewelry, stolen in New York and the eastern U. S. states, is being sent to Toronto for marketing. "Counterfeiting." says RCMP Commissioner C. W. Harvison, “has had a tremendous increase. Ten years ago wc investigated about twenty cases a year. Today it's about two thousand." In the past three years the U. S. Secret Service chief. James Rowley, reports a ten-fold rise in counterfeit money seized.

The dev ‘lopment of photography has made counterfeiting easy. Kodak, in a demonstration of new color film, has copied a Belgian franc so closely that spectators saw no difference. Any competent photographer and printer can turn out plates that will print a million dollars in one night. Photography is responsible for a new and alarming trend: printing only a few phony bills with the same serial number, which makes detection immeasurably more difficult. As a hoodlum in Montreal remarks. "Why use a gun when a piece of paper will do?"

Counterfeiting is centred in three groups in Montreal: one in the east end, one in the west and one downtown. They run off sample proofs for their hackers, the men who finance new issues, who give them the goahead for the run. Paper and ink arc usually bought through some other firm, or hi-jacked. The plate is destroyed and the counterfeit, “the bundle,” is cached. When the hacker has held it long enough to feel sure it will not he traced—and the longer the surer — the organization goes into action.

A hig operation employs as many as sixty suppliers, distributors and passers. In several cities they await

the telephone call that starts the pass. “The drop” is co-ordinated: the passers ali begin at the same hour, work a weekend, perhaps only two hours, then leave town. The passers know only iheir distributor. He knows only his supplier. The supplier is often the sole link with the printer, except for the backer, who moves himself even further back by working through a lieutenant.

The east-end group specializes in twenty-dollar bills. Last fall their pushers hit Cleveland. Vancouver, and (in passing through) Winnipeg, and a courier. Dr. Mally Hafid. an Algerian M.D.. was caught with $10.900 of east-end bills in Switzerland. One of their passers. Albert LeDuc. chased by city police in Vancouver, tried to leap a picket fence and impaled himself.

The midtown group turn out tendollar bills and use freelance distributors. They flooded the west in 1960, and in 1961 they hit Vancouver. Calgary, Regina, Winnipeg, the lakehead. and points between. Their bills turned up in Newfoundland. Maine. Jamaica and California, and arc still coming in. At the lakehead a pusher. Conrad Brunelle, was arrested. A businessman from Montreal flew out and put up his bail.

The west-end ring specializes in U.S. bills: twenties, fifties and hundreds. Some have turned up in the syndicate's hot-bond channels. In 1958 a Miami jewel thief, Chester Zoehowski, was arrested for passing hundred-dollar phonies in Havana. He was a friend of gambler Norman Rothman, associate of Sam Mannarino, Mafia don in Pittsburgh. Then last year Clifford Van Aldcnbruck of San Bernardino, Calif., who was out on bail for possessing Outremont bonds, was picked up for passing counterfeit U.S. fifties. The vicepresident of the printing firm this ring operates, Lawrence Buckzar, now a real estate developer still associated with the firm, is a syndicate associate. And one of the ring's suppliers, shot last year, was a syndicate supervisor.

The counterfeiters forge identification — birth certificates, drivers’ permits, car licences — for syndicate hot-bond passers, for the rings who steal licence plates in Canada then steal cars to match in the U. S. and drive them back across the border, for cheque passers, for criminals of all kinds. They counterfeit stock certificates, bond coupons, race-track tickets, vacation pay stamps, postal orders, credit cards and company cheques. Last year the U. S. Secret Service reported that they "followed the trail of the forgers (of Canadian Pacific travelers' cheques) through Virginia, West Virginia, Michigan, Ohio, Illinois. Indiana, Maryland and New York.” This ring, though American. included several Canadians, and the plates for the cheques were the handiwork of photographer Conrad Albert, an American, secretary-treasurer of the west-end group’s printing firm.

Big money and organization is now behind counterfeiting. Its printers, like other businessmen who co-operate with the Mafia, hold one value supreme: the buck. They blur any dis‘inction between the underworld and

the community. One of the biggest real estate men in Quebec City works with the Mafia. Two of Montreal's best-known restaurants were controlled by a Mafia associate who sold his interests two years ago for close to four million dollars. A Chicago Mafia don. Sam “Mooney” Giancano, has interests in some seventy-six corporations.

The concept of the underworld as a place, a slum, is outdated. The gang boss today may live like Tony Ac-

cardo. board chairman of crime in Chicago, in a twenty-two room mansion with gold bath fixtures and onyx tub. He may live, like a Hamilton Mafia don. in a working man's house on a lower-class street, a fair-sized section of which this criminal owns. He is. in either case, a pillar of the community. As the British Political Quarterly predicted thirty years ago: “If rackets continue to grow at their present pace . . . there will be established a new aristocracy in business,

traceable to a criminal class.”

Apalachin. says the distinguished sociologist Herbert Bloch, has never been fully comprehended. “It was less a meeting of the underworld, in the older traditional sense, than a business meeting of the leaders of a bureaucracy which has now* become an integral part of the American social scene.”

Alan Phillip's report on the crime cartel continues in an early issue.