by David Howard
He and Jack each processed the countless hours they’d invested in the case, the angst, their squabbles, the lost sleep, the dollars spent and tens of thousands of miles flown. Most likely, considering everything they knew about Phil, the arrest would be the easy part. After listening to Phil’s cynical deconstruction of the criminal justice system, they found it hard not to feel anxious about what lay ahead—about the hatch door he might open and slip through.
That was the only outcome that felt more crushing than telling Phil the truth—the idea that after giving so much to reel in their catch, they were destined to watch him wriggle out of the net.
They knew the classic story. Ahab gnashed his teeth and raised his fist to the heavens. The whale just swam on.
Part IV
THE RECKONING
“But he stays by the window, remembering that life. They had laughed. They had leaned on each other and laughed until the tears had come, while everything else—the cold and where he’d go in it—was outside, for a while anyway.”
—Raymond Carver, “Everything Stuck to Him”
23
You Have to Believe It to See It
OCTOBER 18, 1977
He looked composed and confident as he walked off a Braniff International flight from Panama City to Miami around five p.m. The afternoon was typical South Florida: sultry and warm. Phil Kitzer didn’t know what to expect, exactly, beyond that he was swapping some unpleasantries in Panama for a legal snag back home. The Panamanians had told him that an indictment was awaiting him in the States, and Kitzer had boarded the flight ready to surrender. He’d been expecting this since the FBI had shown up several weeks earlier, so he was unruffled. He considered his firewall secure. He would call Frank Oliver, and they would go to battle.
As Phil walked into the customs area, a tall, balding man in his fifties stepped forward. Kitzer recognized Phil Hanlon immediately. Hanlon was an FBI elder statesman, a canny and seasoned Southern California–based agent whom the promoters respected. Kitzer had avoided Vince Carrano’s mess in part because the Swiss Vaults were on Hanlon’s turf.
Kitzer said, “Phil Hanlon? From Los Angeles? What are you doing here?”
Hanlon explained in his deep, stentorian voice that he was there to arrest Kitzer. He placed handcuffs around Phil’s wrists and lightly guided him to a waiting car. They drove downtown and headed into the spacious office of the FBI’s special agent in charge in Miami, where Hanlon uncuffed him. Kitzer was genial and cooperative but said nothing of substance.
But he was puzzled. He kept staring at Hanlon, as if baffled over why the agent had flown all the way across the country for this when any rank-and-file G-man would do. This was as Jack and J.J. wanted it. J.J. had the idea that Hanlon should be the arresting officer—considered a great honor in the bureau after a major investigation—because they knew his presence would telegraph that the FBI had built a huge case. They wanted Phil’s full attention.
Hanlon explained that Kitzer faced charges in both the Elvis Presley airplane case and in a fraud conspiracy in Louisville headlined by John Kaye, the natural-gas entrepreneur who’d acquired a $100,000 certificate of deposit from Seven Oak and then foolishly tried to cash it. But there were more indictments coming. From all over the country.
Kitzer digested this and asked to call his attorney.
Then he said, “I want you to know that my friends Jack and J.J., they’re not involved in any of this.”
—
Later, when Hanlon told the agents what Phil had said, it was a gut punch. Why, at that moment, did he choose to try to protect them?
There was one possible selfish motivation: Phil believed that Jack and J.J. were inexperienced with the criminal justice system. He might have worried they’d veer from the script, or fall apart and confess. Or maybe he wanted them to stay out of prison so they could keep doing deals for him in the event he was convicted. There was the question, too, of whether they were who they claimed to be—Kitzer’s doubts about their real identities sometimes seemed to gnaw at him like a recurring dream whose meaning could never quite be deciphered. But it was also possible that Phil simply cared about them—that he considered himself a father figure to two young men he believed were about to enter a world of trouble.
Hanlon told Phil to wait, then exited into the hallway where J.J. and Jack stood. He nodded.
A knot formed in the pit of J.J.’s stomach, and a twinge of nausea rolled through him. He felt short of breath, and his heart banged in his chest like that of a freshly caged animal as he opened the door to the room where Phil was waiting.
—
The arrest triggered an avalanche of activity around the country. Within minutes, the FBI in Louisville called a press conference to announce indictments involving “white-collar crime of a high magnitude.” Teams of FBI agents mobilized in Miami, Boston, and New York.
The Hammond Times reported that both the FBI’s director, Clarence Kelley, and U.S. Attorney General Griffin Bell had “been keeping a close watch over the investigation.” Kelley’s spokesman added that the probe “involves many, many people and financial institutions worldwide.”
Agents arrested Fred Pro at the Trident Consortium offices, seizing his passport and almost $20,000 in cash. Pro walked with a limp, which his attorney described as “pre-phlebitis,” and sported an unexplained bruise below his left eye. Myron Fuller needed five people to pore over all the documents he’d seized weeks earlier, which showed Pro had swindled between $3 million and $5 million over eight months by promising about $1 billion in loans. More indictments for Trident were on their way; the wiretap had “opened a new curtain” for the FBI in New York, Fuller said. Decades later, he added, “I could still be there working cases from that. It was incredible.”
From the Presley case, the FBI arrested four co-conspirators in and around Miami and a fifth in Boston. Agents in Ohio collared John Kaye and Tom Bannon, already in prison for a prior conviction, in the Louisville case. In Boston, they took John Calandrella into custody. The FBI sent arrest warrants to Europe for John Packman, in London, and Jean-Claude and Pascal Cornaz, in Geneva. In its own ongoing probe, Scotland Yard had seized more than nineteen hundred telexes from Seven Oak Finance.
In the subsequent months, there would be more: Andy D’Amato, Armand Mucci, Bob Bendis, Mark Iuteri, Sonny Santini—in all, more than two dozen people. Beginning that day in October, the FBI systematically disassembled the Fraternity.
—
Phil’s first expression was surprise. He turned and saw J.J. and Jack enter the room, and his eyes widened. “Guys,” he said, jumping to his feet. “What are you doing here? I told them you weren’t involved!”
He started to lecture them about not talking until Frank Oliver arrived.
J.J. held up his hand. They hadn’t scripted anything, so he just took a breath and said, “Phil. It’s not like that.”
“I told them that you—”
“Phil, listen,” J.J. said, louder, interrupting. “We’re FBI agents.”
Phil stared at him, his mouth frozen in place around his last word. Then: “What?”
“We’re FBI agents, Phil.” J.J. held up his badge. “We were agents all this time. We need to talk to you about all this.”
Phil stared at them for long seconds. Then he turned away slowly, scoffed, shook his head. Looked back at them. “You’re FBI agents?”
They nodded. J.J. was still holding his badge out, thrusting it into the space between them.
Phil crunched up his face. “Let me see that.”
He took J.J.’s badge, then Jack’s. He stared at the metal shields without actually looking at them. He had the glazed eyes of a man flailing to reconcile a stupefying new reality, struggling to balance as tectonic plates groaned and buckled beneath him. It was less about the present moment than about the previous nine months—every day of which now had to be reprocessed through the lens of this staggering revelation.
Phil handed the badges back, then
asked to see them again. He stared at them some more. He returned the credentials and paced around, looking at the floor. Finally he lowered himself heavily into a seat and placed one hand over his midsection. Reflexively, Jack asked if he needed a Tums. Phil ignored him and stared at a photograph on the wall as if it were a thousand miles away. Then he stood again and blew out a breath.
“All right,” he said. “Okay, you guys are FBI agents. Okay. I’m not talking to them”—he gestured toward the door, indicating Hanlon and the other FBI officers waiting outside—“but I’ll talk to you guys.”
They all sat. Phil leaned back, looking at them silently for a spell—long enough that the agents were tempted to jump in and fill the lull. Finally, he said, “So you guys are FBI agents.” He shook his head and wore an incredulous grin. “When did you guys start this—was it Norman? Holy shit, he set me up?”
They started to explain, but Phil interrupted with questions: That time the FBI showed up in D’Amato’s room in Hawaii—were you behind that? And Fred Pro’s wiretap? Who else knew? Phil asked how they kept track of everything—all the deals and meetings and conversations. They explained about the Nagra and hiding a recorder in the curtain in Hawaii, and Bowen Johnson’s spectral presence.
The agents could see the scenes playing behind Phil’s eyes. He pulled at his face, stared at them. When Jack brought up the show tunes at the Graycliff in Nassau—reflecting on an authentic moment they’d shared—Phil smiled and said he hoped there were no tapes of them singing. They laughed again about Jack ripping the phone out of the wall. They talked about all the characters: Dorian and Pro doing lines of coke, and Calandrella trying to stiff them in Frankfurt, and, of course, Santini. “Oh yeah, Sonny,” Phil said, shaking his head. “That piece of shit.”
They spent almost two hours unspooling this movie reel before Phil’s demeanor shifted back to the present. The agents didn’t want to rush him, but they had a goal in mind: They wanted to convince him to become a government witness. With his hypnotic salesmanship, his skills as a raconteur, and his uncommonly strong recall for people and conversations, he would make a potent weapon in the effort to ship the members of the Fraternity to prison.
They knew what he was capable of, and they wanted him on their side.
The government would offer a plea deal, which they hoped he would take, Jack told Phil. True, he would have to plead guilty, and admit what he’d done, and accept some prison time—but then they could help him.
In making this pitch, the agents faced an impossible task: They had to convince Phil that they were now telling the truth and were on his side, after spending the past nine months deceiving him. J.J. wanted to pull Phil to him, get him to see that they could revive their old bond. He longed to convince Phil that he could still lean on the undeniably powerful connection that they’d forged, even in light of everything that had happened and would happen. Finally, finally, the agents could share the complete truth, if only Phil could be open to it and be truthful himself.
“Look at me, Phil,” J.J. said. “We can get through this—you just have to trust me.”
He tried to will Kitzer to see it. He felt in that moment that he could make a connection that would transcend the devastation Phil was feeling.
Jack concurred. “You need to do what you need to do,” he said. “But we’ll help you if you’ll let us be your friends.”
Phil agreed to think it over. The agents said he could reach them anytime—but once he had a lawyer, they couldn’t talk to him until they had a deal. They also told him that none of what had happened between them that evening, or over the last nine months, would change one fact: If he fought the charges and staged another circus like the one in Bismarck, the government would go after him hard. And they would be first in line to testify against him.
Then they summoned Hanlon, who cuffed Phil again and told him they were headed to the Federal Correctional Institution of Dade County. The agents saw, for the first time, fear in Phil’s eyes.
He seemed to shrink as an agent helped him clamber into a car. Another agent helped lower him onto the backseat. He didn’t look back as the car pulled away, carrying him off toward an unknown world.
24
Hobson’s Choice
OCTOBER 19, 1977
Phil wore an orange jumpsuit when he walked into the Miami courtroom to appear before U.S. magistrate Charlene H. Sorrentino, after spending the night in jail. The appearance was brief and procedural, intended to determine the first steps in his journey through the criminal justice system. The judge noted the charges filed in Louisville and Memphis: mail fraud, fraud by wire, interstate transportation of stolen property, and so on. The previous week, Charles M. Allen, chief judge of the U.S. District Court in Louisville, had set Kitzer’s bond at $250,000 cash and ordered that he surrender his passport.
Phil needed a lawyer, and he was still trying to reach Frank Oliver, nearly fifteen hundred miles away. The fact that Jack and J.J. were agents would make it tougher, but Phil was still figuring he would take on the government. If he could team up with, say, Fred Pro and Andy D’Amato, they could stage a dazzling defense. He hoped Oliver would help coordinate his looming battle with that of his fellow promoters.
A few days passed in the Miami lockup with no response from anyone. At first, Phil likely wondered whether all of his friends and associates were in the same predicament: freshly arrested, sitting in jail. But then a darker thought must have occurred to him: Maybe everyone in the Fraternity now knew that Phil was the source of their troubles—Phil and his decision to travel with and vouch for a pair of undercover agents. Even Oliver could be implicated.
Phil managed to get a call through to Jack Elliott out in California, who by then was dealing with troubles of his own. Elliott later recalled that Phil sounded desperate: Phil “told me that he was broke and everybody deserted him and he had no money and would I send him some money?”
By then, Phil clearly knew he had a major problem. To the rest of the Fraternity, he was toxic.
—
That morning, Hanlon joined Wedick and Brennan for breakfast at the Royal Sonesta Beach Hotel. It was a warm, blue-sky South Florida morning. The three of them walked back through everything that had happened—Phil’s reaction, how they’d felt as nervous as they’d been the day they first met him—and all that might happen next.
J.J. shook his head. “Holy shit,” he said, “do you guys realize what just happened? I mean, like…”
They all sat there in silence for a few minutes while the weight of it passed over them. It was heady but bittersweet. This was an ending of sorts for Jack and J.J., too. Soon enough, they knew, they would go from traveling and working together nonstop to being three time zones apart.
—
On November 3, the U.S. Marshals Service moved Phil to the Jefferson County Jail in Louisville, where the government would prosecute its first OpFoPen case. Phil was still unable to talk to Oliver—who, it turned out, was defending someone in a murder trial. But Oliver had asked two Louisville attorneys, Robert Zeman and Richard Heideman, to stand in on his behalf.
Phil’s first priority: Get out of jail.
On November 7, Zeman asked the court to reduce Phil’s bail to $10,000. He pointed out that Phil had never been convicted of a felony and would return home to Ellendale and agree not to leave the continental United States with the case pending.
Assistant U.S. Attorney David Everett, arguing against the motion on November 9, called Wedick as a witness. J.J. testified that Phil had told them he kept a get-out-of-jail fund of $700,000—though other promoters had told him that they thought Phil had tucked away at least $2 million. It was impossible to know for certain because Phil kept no books or records. Kitzer had also told the undercover agents that he knew someone who could furnish phony birth certificates that could be used to obtain a passport. If he really had a cache of money, he clearly couldn’t get to it from prison. But if he was allowed to walk free, Wedick testified, he might acces
s the stash and vanish or use his freedom to operate more scams.
The bail remained intact.
One by one, every trapdoor Phil had expected to slip through was sealed off. A full-blooded extrovert who had routinely placed dozens of phone calls a day, Phil became increasingly anxious in his isolation. He grew suspicious that someone—possibly one of his lawyers—was leaking information about his case, potentially endangering his life.
On November 12, three and a half weeks after his arrest, Phil wrote a letter to U.S. District Judge Edward Johnstone, appealing for help preparing his defense for trial, which was scheduled to begin on December 5. He asked for phone access to round up the cash he needed to purchase writing materials and send mail. “I have made repeated requests to jail personal [sic] that I be given access to long distance telephone calls, which have not been denied, but as of this date the requests have never been granted,” he wrote.
His captors wouldn’t turn over the fifty dollars he’d had in his wallet when Hanlon arrested him in Miami. Phil added that he’d appealed to the U.S. Marshals office, to no avail. “The government already has the distinct advantage of time,” he wrote. “They have taken one year to prepare their case against me, and I have been given less than one month to prepare a defence [sic], in custody, under conditions that border on being held incommunicado.” For someone who had long lived in comfort and privilege, this was alien to him—but not a violation of his civil rights, Everett noted in a brief of his own on Phil’s situation.
On November 15, attorney Heideman called Oliver. Neither he nor Zeman had been paid for defending Kitzer, and they saw no indication that any money was forthcoming. Zeman also called Audrey Kitzer, who said the family owned no property and that she had no funds. She said she’d filed for Aid to Families with Dependent Children. As far as the lawyers and the government were concerned, the Kitzers were—at least on paper—destitute.