Whipping Boy

by Allen Kurzweil

  Quilty isn’t rude, but he isn’t exactly welcoming, either. Our conversation lasts about a minute.

  A week later, just days before my recon mission begins, I find a more accommodating source in the Department of Justice, a high-level staffer willing to pass along criminal records on two Badische executives who never took the stand. Neither dossier references Cesar directly, but the milk crate materials suggest that he worked closely with one of the two men and sought legal counsel from the other. Since dealing with Cesar raises the very real possibility of dealing with his associates, it makes sense to read the files closely.

  THE DUKE OF DECEPTION

  The less sinister of the DOJ jackets documents the professional activities of Duke Eric Alba-Teran d’Antin, the goitrous name-dropping Badische executive with a weakness for silk ascots. From the start, I’d had my doubts about the guy. D’Antin never struck me as “credible”—the term Cesar used to describe the duke when pleading for leniency at sentencing. It seemed impossible that a senior officer of the bogus Trust could be wed to a genuine archduchess.

  But much to my chagrin, I had discovered, a few months before, that d’Antin was indeed married to Michaela Maria Madeleine Kiliana von Habsburg-Lothringen, princess imperial and archduchess of Austria. The legitimacy of his matrimonial claims had compelled me to reserve judgment—until, that is, I obtained a detailed account of his criminal record.

  In 1993, five years before he joined the Trust, Eric d’Antin fell under the scrutiny of US law enforcement officers by agreeing to launder the illicit proceeds of a South American drug cartel. According to his case file, this is what happened: A middleman named Thomas McMahon presented the duke with “a soft-sided suitcase containing $200,000 in United States currency in ten and twenty dollar denominations.” The duke carried the suitcase into a Manhattan bank, exited minus the money, and informed his go-between that the funds were on their way to a numbered account in South America. Had d’Antin stuck to the terms of the agreement—he was supposed to wire the $200,000 (minus an 8 percent commission) to its final recipient via a bank in Germany—federal charges against him would have been restricted to “the laundering of monetary instruments.” However, the duke chose a bolder course of action, opting to award himself a 100 percent commission on the funds placed in his care.

  {© Dora Espinoza}

  Duke Eric d’Antin was up to his ascot in fraud long before he joined the Trust.

  It’s hard to know which is dumber: trying to rip off a bagman for a South American drug cartel, or trying to rip off a federal investigator posing as a bagman for a South American drug cartel. D’Antin discovered the consequences of the latter folly when McMahon, revealing himself to be an undercover agent working for the US Customs Service, placed the duke under arrest and, because of the failed switcheroo, broadened the charges to include the embezzlement of government funds.

  Because d’Antin’s Habsburg in-laws owned estates all over Europe, he was deemed a flight risk and ordered to surrender his passport. He complied, then promptly obtained new travel documents under an untitled variant of his highborn name. Bogus passport in hand, d’Antin flew to Europe, where he ostensibly stashed his loot, and returned to stand trial in Brooklyn. The jury found him guilty. The stolen funds were never recovered.

  That was hardly the duke’s first brush with the law. A decade earlier, Florida prosecutors charged d’Antin with racketeering, alleging that he had woven together an elaborate daisy chain of offshore shell corporations and trusts designed to “skim on taxes.” A decade before the Florida indictment, a British court convicted d’Antin on “forgery, obtaining property with forged instruments and conspiracy.” Scrolling back still further, to 1971, the Italian carabinieri arrested d’Antin for “the fraudulent sale of a corporation and an industrial process for 120 million lire.” That was three years after Swiss authorities detained him for bilking a German businessman out of 150,000 deutsche marks.

  The archduchess of Austria appears to have tolerated her consort’s European indiscretions, but her sense of noblesse oblige did not, it seems, extend to American soil. The couple divorced in 1994, soon after d’Antin’s conviction in US federal court. Despite the split, the duke continued to exploit the royal name of his ex, claiming chairmanship of an unfunded charity called the Habsburg Foundation. He did so until his death, ten years later, at the age of eighty-four.

  Had the marriage endured, the duke’s body might have been parceled out, as Habsburg tradition dictates, among various Viennese mausoleums—his heart going to one crypt, his viscera to others. Divorce precluded that privilege. Instead, Eric d’Antin was cremated at a franchise funeral home a mile from Newark Airport, his ashes double-boxed without ritual in black plastic and recycled cardboard.

  The DOJ dossier does not provide details regarding his memorial service, but d’Antin’s date of death suggests that Cesar wasn’t on hand. Prior commitments in Lompoc, California, would have prevented him from paying his last respects.

  THE PREDICATE FELON

  The d’Antin case file described the career of an incorrigible rogue, but none of its particulars suggested a taste for violence. The second DOJ file, chronicling the activities of a behind-the-scenes insurance executive and “legal adviser” to the Trust named Richard Mamarella, offered no such comfort. On the contrary, it served as a wake-up call to the dangers I was courting by traveling to San Francisco.

  Richard Mamarella joined the House of Badische in 1998, after a chance encounter with Prince Robert at Cooper’s, a New York cigar bar located on West Fifty-Eighth Street. At first glance, Mamarella was inclined to dismiss the prince as “an eccentric old man with a propensity to have one too many.” Another Cooper’s regular, the mayor of New York, allegedly set him straight. According to Mamarella, Rudolph Giuliani considered Robert von Badische “one of New York City’s only royalty.”

  Prince Robert wasn’t nearly so standoffish. In fact, he did everything in his power to ingratiate himself to Mamarella, whose business acumen had earned not one but two front-page profiles in the Wall Street Journal.

  By all outward appearances, the two cigar aficionados had little in common. The prince boasted that his Transylvanian ancestry dated back twenty generations to Vlad the Impaler, the inspiration for Bram Stoker’s Dracula. Mamarella, by contrast, was the son of a beat cop from the Bronx.

  When the two met, Richard Mamarella was working for a “litigation service” in Weehawken, New Jersey, and billing clients $200 an hour—less than half what David Glass and his Park Avenue colleagues charged on the tonier side of the Hudson. Employing Mamarella promised to save Badische a bundle in legal fees, money the prince and his associates much preferred to spend on hotel suites and vintage champagne.

  {© 1968, 1972, The Augustan Society, Inc.}

  In 1972, “Prince” Robert convinced a quarterly publication called The Augustan to publish a genealogy that traced his lineage back to Vlad the Impaler, but in all probability, Dracula’s self-proclaimed heir was born Isaac Wolf, in the Jewish ghetto of Oradea, a small Romanian city.

  While the loan program was up and running, Mamarella supplied the Trust all manner of assistance. He developed anti-money-laundering policies, conducted background checks on prospective borrowers, and revised loan contracts, letters, and legal memorandums. After his colleagues started receiving federal subpoenas, Mamarella switched gears and began tutoring the bankers and their shills on how to avoid prosecution.

  None of this seemed particularly noteworthy. What did catch me off guard was the mountain of evidence confirming that Richard Mamarella was not a lawyer employed by criminals, but rather a criminal employed by lawyers.

  Some twenty years before joining Badische, Mamarella was charged with conspiring to defraud Lloyd’s of London, the insurance syndicate, by diverting client premiums to personal bank accounts in Curaçao. That swindle, detailed in a seventy-eight-count federal indictment, attracted the attention of a US attorney named Rudolph Giuliani. Giuliani subse
quently established that Mamarella operated a side business peddling fire insurance to arsonists. When coverage on a property he insured was discovered to have lapsed only after the building was torched, Mamarella remedied the oversight by renewing and backdating the arsonist’s $300,000 fire policy. Presented with irrefutable proof of his role in a blaze that injured seventeen firefighters and left dozens of residents homeless, Mamarella cut a deal, testifying against his codefendants in exchange for five years’ probation on three counts of perjury.

  Soon after that conviction, Mamarella relocated his insurance business to a small town in southern New Jersey where, using as collateral a list of fictitious policies and a pad of blank promissory notes, he and some associates bilked the First Fidelity Bank of New Jersey out of $22 million. It was, at that time, the biggest bank swindle in the history of a state famed for the ambition of its embezzlers. Caught, prosecuted, and found guilty of bank fraud and extortion, Mamarella cut another deal. This one required him to provide a full account of his criminal history.

  Mamarella first made a name for himself in direct sales. While still a teenager, he ran a successful business hawking “boxes of TVs” out of the back of a truck. When John Valentine Goepfert, a legendary insurance swindler, learned that the boxes of TVs contained bricks and telephone directories in lieu of the advertised consumer electronics, he saw potential in the enterprising young salesman and took him under his wing.

  Canceled checks like this one confirmed that Richard Mamarella backdated fire insurance for arsonists.

  Mamarella proved a quick study. It wasn’t long before he caught the eye of Joseph Paterno, a lieutenant in the Gambino crime syndicate. Questioned under oath about the whereabouts of First Fidelity’s $22 million, Mamarella said he’d spent it all. Pressed for specifics, he said, “I ate out a lot.” Although he refused to connect his insurance scam to the Mob, Mamarella did acknowledge operating a highly successful loan-sharking operation whose client list included Antonio Turano, a Sicilian-born footwear executive turned narcotics trafficker with proven ties to the Mafia.

  {Courtesy of Jacqueline Hankins}

  Richard Mamarella. The Bronx-born Weehawken wiseguy provided behind-the-scenes legal advice to the Trust.

  The Mamarella-Turano relationship offered troubling insights into the business practices of the Trust’s legal adviser. After Turano was caught concealing fifteen kilograms of heroin in a shipment of shoes from Thailand, Mamarella decided to safeguard $300,000 he had lent the importer by taking out a short-term life insurance policy in his name.

  The timing couldn’t have been better. While Turano was out on bail, his bullet-riddled, plastic-wrapped corpse was fished out of a marsh in Queens, New York. The money Mamarella collected on the policy more than covered the outstanding principal and interest Turano was unable to repay.

  Mamarella’s approach to debt collection wasn’t usually that premeditated. More typically, when clients failed to meet their obligations in a timely manner, he would flash a “piece” (his term) or hastily arrange a refinancing conference with “T-Ray,” a broad-shouldered associate regularly mistaken for Chicago Bears defensive tackle William “The Refrigerator” Perry.

  Not that Mamarella needed backup. As he noted under oath, he was perfectly at ease assaulting one tardy borrower with a chair (“I should have hit him harder”) and disfiguring another with his ring-studded fists. The Weehawken wiseguy displayed a similar hands-on approach to conflict resolution in his personal life. According to a Wall Street Journal article included in the DOJ case file, “Richard Mamarella is the kind of person who, when he lends you money, is likely to arrange a life-insurance policy to repay it—just in case you don’t. His own lawyer calls him a ‘tough fellow.’ His second wife, who left him after he broke her arm, might agree.”

  As I’m flying out to San Francisco, I inventory the illegalities tied to Cesar and his colleagues. The catalog has grown substantially. It now includes: money laundering, embezzlement, racketeering, arson, forgery, all manner of fraud (wire fraud, insurance fraud, mail fraud), extortion, perjury, check kiting, probation violation, grand larceny, assault and battery, and domestic abuse. All of which makes me wonder: What the hell am I getting myself into? I could have ended the search in the law-firm conference room. That would have been the sensible thing to do. Why am I still pursuing Cesar? Is it to uncover his story? To avoid my own? The bottom line is this: I’m not sure what I’m after. Nor can I explain what compels me to travel cross-country to spy on the actions of a convicted felon I have promised my wife I will not confront. All I know is it sounds nuts when I hear myself telling the yoga instructor sitting in the seat next to me the reason I’m on a plane bound for San Francisco.

  PART VII

  SCOUNDREL TIME

  Time spent on reconnaissance is never wasted.

  John le Carré, A Perfect Spy

  Whatsoever things are true

  Whatsoever things are honest

  Whatsoever things are just

  Whatsoever things are pure

  Whatsoever things are lovely

  Whatsoever things are of good report

  Think on these things.

  Group Captain Watts, former headmaster of Aiglon, invoking Philippians 4:8

  “A GOOD SUSPECT”

  The day before the film fund-raiser, I meet up with a spry sixty-seven-year-old Japanese American named Yosh Morimoto in the lobby of my Bay Area hotel. Morimoto was never called to testify during the Badische trial, but his name and San Jose address appeared on a restitution order listing some of Cesar’s clients.

  It’s been more than five years since Morimoto got taken. Whatever shame or rage he might have felt at the time has been replaced by quiet reflection.

  “My mother and father had a rough life,” he tells me over a pot of tea. “Real rough.”

  Before the Morimotos were interned in a relocation camp under the shameful provisions of Executive Order 9066, they owned a pear orchard outside Sacramento. “We managed to hold on to it, but just barely,” Morimoto says wistfully. The land was eventually sold to developers. Morimoto invested in real estate. His business prospered.

  He remembers learning about the Badische Trust Consortium early in 1998, while trying to fund a $200 million nonprofit hospital-hotel complex in the Central American nation of Belize. Like most of the proposals Cesar presented to the Badische board, the Belize project had failed to attract legitimate investors. After dozens of rejections, Morimoto responded to an online funding offer posted by the Barclay Consulting Group. The managing director of BCG invited him to the firm’s worldwide headquarters in the heart of San Francisco’s financial district.

  “Cesar was the screening person for Badische,” Morimoto tells me. “You had to meet him first. He’d only introduce you to Colonel Sherry and the others if he thought you were a good suspect.”

  Morimoto passed muster.

  “The next thing I knew, we were flying to New York to make a funding presentation.” The visit floored him. “I never saw anything like it,” Morimoto recalls, shaking his head. “Cesar introduced me to about a dozen elderly guys in the boardroom of this really fancy law firm. All of them were really, really well dressed. And all of them were really, really smooth. Most had European accents. One guy even had one of those fancy eyeglass things you hold up like this.” Morimoto forms a circle with thumb and forefinger and brings it to his eye. “It made me wonder. What am I doing here? Why would these guys want to work with a guy like me?”

  {Courtesy of Yosh Morimoto}

  Yosh Morimoto.

  Cesar and Colonel Sherry assured him that he was exactly the kind of person the Trust targeted.

  When Morimoto asked how his loan would be bankrolled, the colonel showed him a flowchart that traced the movement of funds from the anonymous investors in Europe and Africa, to the offshore trusts established by Barclay, to the project he wished to finance.

  Morimoto couldn’t make heads or tails out of all the boxes and arro
ws, but the bottom line was this: thanks to Cesar, the Trust appeared willing to loan him $30 million.

  The New York meetings concluded with a dinner at Benihana, the Japanese restaurant chain noted for the showmanship of its knife-wielding chefs. Toward the end of the meal, Morimoto was again dazzled when Prince Robert introduced him to Rocky Aoki, the chain’s flamboyant founder and (though less widely known) “Ambassador to the Empire of Japan” for the Knights of Malta (Ecumenical), a diplomatic honor the prince bestowed in his capacity as founder and self-appointed grand master of the for-profit chivalric order.

  “With those kind of contacts, I figured these guys had to be the real thing.”

  A flowchart Colonel Sherry dashed off to clarify the Trust’s funding sources.

  Morimoto’s confidence took a hit when he learned that his loan would require three offshore trusts costing “nine thousand dollars a pop.” Like other Barclay clients, he tried to avoid the supersized fees by using his own lawyer. The colonel nixed that idea. “He said it would complicate matters. He said the Trust had its procedures, used for generations, and that Cesar, their intermediary, was well acquainted with them.”

  In the weeks that followed, Morimoto gave Barclay $27,000 to form the obligatory shell corporations and another $210,000 in advance fees that the Trust called “performance guaranties.” In return, Morimoto received an “irrevocable funding commitment” and a secret transaction code that was supposed to release the $30 million required to break ground in Belize.

  “The only other thing I needed was the bank letter,” Morimoto tells me. “But the guys rejected every bank I wanted to use. I went to the Bahamas, Germany, Switzerland, the Canary Islands. Then to Guangzhou in China, back to Switzerland, and to New York a bunch of times. What could I do? Once you get into it, you’ve got to make a decision. Either you bail or keep getting sucked in. And I kept getting sucked in and sucked in. I couldn’t believe I got involved in such crap. I was totally embarrassed. I didn’t know what to do. I didn’t know where to turn.”