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ZORRO, GORBY, AND HOWARD THE DUCK
You call that the headquarters of a worldwide financial empire? The little cinder-block coin shop looks like just another storefront. But from this tiny bunker in Cranston, R. I., coin dealer Stephen A. Saccoccia has allegedly spent much of the past two years glued to a cellular phone, directing a money-laundering network that moved more than $500 million in drug money around the globe. Then again, if the substance of a federal indictment is true, the shabby office isn't the only unusual aspect of Saccoccia's financial dealings.
The alleged laundering operation ground to a halt on Nov. 25, when the Federal Bureau of Investigation swept down on nine Saccoccia companies in three cities. In late-night raids, they nabbed Saccoccia, age 35, and his wife, Donna, in Switzerland, while rounding up about 40 alleged members of his ring back home. Saccoccia and his wife are in Swiss custody and unavailable for comment. He has no attorney of record.
BUMBLING CROOKS. The FBI has been investigating Saccoccia's alleged ring for two years. Its probe offers a rare glimpse into the workings of a money-laundering operation. What comes to light is a cast of sometimes bumbling crooks, with such nicknames as Zorro, Gorby, and Howard the Duck. Once, as federal agents listened in, Saccoccia's men squabbled about who had left the office blinds open, giving passersby a clear view of a money-counting machine.
Stephen Saccoccia, say investigators, saw his opening after a large 1989 money-laundering bust in Los Angeles. Back then, Rhode Island law enforcement officials say, Saccoccia was a small-time coin dealer suspected of fencing for local thieves and working for reputed New England crime boss Raymond Patriarca. He had also served a short jail term for tax evasion in 1985. Then, according to documents filed in federal courts in California and Rhode Island, he set up a string of precious-metals trading outfits on both coasts. Such firms make a handy front, says assistant U. S. Attorney Jean Kawahara, because legitimate trading companies routinely have huge amounts of cash flowing through their accounts.
Saccoccia's alleged scheme highlights how Los Angeles has joined Miami, New York, and Providence as a money-laundering hub, says the FBI. Los Angeles is both the port of entry for heroin from Southeast Asia and cocaine from Central and South America and a major business center. And it's home to a host of big banks that routinely handle large amounts of legitimate cash. Those transactions serve as camouflage for the crooked dealings alleged by the FBI.
The laundry business is so brisk that even large crackdowns only temporarily stem the torrent of an estimated $1 billion that's laundered each year in Los Angeles, says Thomas R. Parker, an FBI agent in Los Angeles. "In a few weeks or days, a new network starts up," he says. "It's like plugging holes in a dike."
BAGS OF CASH. Yet even when Saccoccia was running money through Los Angeles, says the FBI, the Cranston gold shop was the nerve center of his operation. The cash it handled was funneled by drug dealers into Saccoccia-owned businesses in New York's jewelry district, where it was bagged and subsequently transferred by armored car, van, or Federal Express to Rhode Island. Saccoccia couriers then deposited it at local banks.
In April, 1991, after investigators closed his Rhode Island bank account, Saccoccia shifted his business to several West Coast banks. From those institutions funds were wired back to Rhode Island, Miami, New York, South America, or Switzerland.
Saccoccia took extravagant precautions. But the measures often backfired. Cash-laden vans often traveled in conspicuous caravans of three. Mandating code language to throw investigators off the trail, Saccoccia ordered his men to talk only on cellular phones in the mistaken belief that the gadgets were bug-proof. That proved a fatal error when investigators intercepted dozens of calls about "high grade" shipments, bundles of "20 karat," and deliveries of "200 ounces." It didn't take a genius to translate: shipments of large bills, bundles of $20 bills, and deliveries of $200,000 in cash. Says FBI agent Parker: "These people were not particularly shrewd."
By February, Saccoccia's crew was beginning to worry about discovery. "It's no good living like this," said one money-counter on an FBI tape. "I'm 59 years old. I gotta worry about going to the can." If the feds have their way, Saccoccia, too, will have to worry about trading his dingy office for a jail cell.Eric Schine in Los Angeles and Geoffrey Smith in Boston