The Infiltrator

1

IN THE BEGINNING

Staten Island, New York

1950s

WHEN I WAS A BOY, my mother revealed—almost as a cautionary tale—that my great-grandfather, Ralph Cefaro, ran a sham moving company on Manhattan's Lower East Side in order to transport bootleg whiskey during Prohibition for Charles "Lucky" Luciano, one of the most notorious gangsters in America.

My grandfather Joe and his brothers worked for the moving company with other guys who belonged to one of Lucky's crews. When Assistant U.S. Attorney Thomas Dewey went after Lucky and his entire organization, one of the guys in the crew with a record got collared—not for bootlegging—and faced stiff time as a repeat offender. My grandfather, truly a stand-up guy, took the rap. After serving his time, he relocated the family from East Eleventh Street to a tiny second-story apartment near the dry docks on Staten Island. Like a lot of guys in the neighborhood back then, he had a nickname—Two Beers—which he earned because, after the yard whistle blew and his shift ended, he went straight to the Friendly Club, a local hangout, and immediately ordered two beers.

My family agrees that I was his favorite, which explains why, when I was only five years old, he started taking me to the Friendly Club to show me off to his friends. Like every good little Italian boy in those days, I played the accordion, and my grandfather couldn't wait to sit me up on the bar so his buddies could see me playing without looking at sheet music. Surrounded by beer taps and billowing clouds of cigarette smoke, he would glance around the club and say with a look, Hey, shut up. We're going to listen to little Bobby play now. All the guys in the club snapped to attention and listened while I squeezed out a song. It was awful, but no one dared kid Two Beers Cefaro about how his grandson played.

More than a decade after his death, I landed a summer job at Brewer Dry Dock as a carpenter, painter, and rigger. On my first day, one of the guys who had worked the yard for twenty years asked me, "Hey, kid, how da hell did ya get this job?"

"Well, my grandfather worked here years ago, and he had a lot of friends," I said sheepishly. "One of the guys who knew him helped me out."

"Oh, yeah, kid, who's your grandpa?" he asked, tilting his head.

"Well, he's been dead for a while, but everyone knew him as Two Beers Cefaro."

"You're kidding," the guy replied, shocked. "Everybody knew Two Beers! He was a great guy."

After word got around that I was Two Beers's grandson, my AFL-CIO union shop steward, Steve, approached me. "Hey, kid, we need your help today," he said. "After you shape up, come see me at the shitter." Shaping up, in dock speak, meant going in the morning to the guy who ran your skill—carpentry, in my case—and finding out what job you had for the day. The shitter was just that: the bathroom building in the center of the yard.

When I showed, Steve explained that I had to hang around outside and bang on the wall if I saw anyone coming who didn't work in the yard. My assignment coincided with visits from the local bookie, who was taking bets inside the shitter on numbers, horses, and games. Steve rotated this lookout job among a chosen few. But before he could ask me to do it again, another union replaced the AFL-CIO, and Steve lost his power. It was an important—and painless—lesson about loyalty and respect.

A couple of years later, at Wagner College on Staten Island, I stumbled across a job announcement for a co-op position at the Intelligence Division of the IRS. I had no idea what that meant, but it offered full-time summer employment, part-time school-year employment, and a shot at a full-time job after graduation.

Gathering information about the job gave me a chance to speak with a special agent with the division. As he described it, they didn't audit and harass the average Joe. They carried guns and badges and worked shoulder to shoulder with other agencies, including the FBI, on joint task forces. They applied their accounting expertise to criminal tax cases against drug traffickers, mobsters, and big-time tax cheats. He often cited that old saw about the pen being mightier than the sword, ending with, "You know, Al Capone went to prison for income-tax evasion. If it hadn't been for us putting that case together, he never would have seen the inside of Alcatraz."

I was already taking accounting and business courses, and this sounded a lot more fun than becoming a bean-counting CPA. In earlier years, Chase Manhattan Bank and Montgomery Scott, a brokerage firm in downtown Manhattan, had hired me as a paper pusher—and I hated it. I wanted a career that I could be proud of, that kept my interest, that didn't box me into the same boring routine every day. It was no doubt my mind-numbing experience at Chase and Montgomery Scott that drove me to the IRS gig.

That first day on the job at 120 Church Street electrified me with anticipation about what mobster or kingpin we were going to topple by day's end. However, I was in for quite a shock. After I had settled in, Special Agent Morris Skolnick, who didn't look a day under seventy, shuffled over to me and said, "Hey, kid, I'm going to show you the ropes." He grabbed a handful of No. 2 pencils from his desk and slowly made his way to a hand-cranked pencil sharpener. As he struggled to sharpen each pencil, he looked at me with a sigh and mumbled about how important it was to start the day with sharp pencils.

Then he dragged me over to the photocopy machine, placed a schedule on the glass, and pushed START. As the top of the machine slid back and forth, he explained the importance of making "true" copies and always comparing the original to the copier output. My mind spun. What happened to the intrigue and adventure of putting bad guys in jail? This wasn't the super cop job in the ad. It felt like I had been sold a bill of goods.

Later that day, Tony Carpinello rescued me. A young supervisor in the division, he explained that the office had two factions: desk jockeys like Skolnick and guys like himself who got things done. Tony was running what was then called the Strike Force Group, one of a collection of squads that Bobby Kennedy, as attorney general, had established. The agents assigned to Strike Force were working cases on most of the mobsters, drug dealers, and dirty politicians in the city. Tony introduced me to some of the guys, including Tommy Egan, who, along with agents from the DEA and detectives from the NYPD narcotics squad at the 34th Precinct, built the case against the bank that laundered millions for Frank Lucas, one of the biggest heroin traffickers in the state.

Lucas manipulated a ring of corrupt servicemen who were sending back heroin in the body bags of U.S. soldiers killed in Vietnam. His smack destroyed tens of thousands of lives and fed him an endless stream of cash. He and his crew carried huge duffel bags brimming with hundreds of thousands of dollars in small bills into the Westchester Square branch of Chemical Bank. Tommy put the facts together and successfully prosecuted the bank and some of its executives. Chemical Bank paid a several-hundred-thousand-dollar fine; it was a groundbreaking case in its time. But in the end, the fine was little more than a slap on the wrist and the cost of doing business. There had to be a way to up the stakes faced by dirty bankers who played too critical a role. Without their help, Lucas's dirty mountain of cash was a huge liability; it drew too much attention. It dawned on me then that the Achilles' heel of the drug trade was the banks that supplied it with money-laundering services. It was a first taste of my life to come.

My wife and I had our first child while I was working as a special agent in New York City. The baby was fine, but Evelyn suffered severe complications. She underwent months of treatment, during which time I blew through all my vacation and sick leave taking care of them both. She still needed care at home, so I told my bosses at the IRS about the problem, requesting advance leave to drive my wife and son to Tampa, where my brother and sister-in-law lived and were willing to take care of them.

My bosses stunned me the next day when they said, "Hey, you're one lucky guy. There's a three-month detail to Tampa, and we're giving it to you." There had been no detail. They had pulled strings to create one to help me out.

I went to Tampa, worked on some of the cases, and brought my family back to New York three months later. After I returned, the division offered me a permanent transfer to Tampa, which I took.

In sunny Florida, drug traffickers and money launderers were as plentiful as palm trees. To combat the problem, the IRS Intelligence Division had partnered with U.S. Customs in a task force called Operation Greenback that went after drug-money launderers. The cases of the operation often required undercover agents to infiltrate drug- and money-laundering groups, but the Intelligence Division didn't allow its agents to work undercover unless they had gone through an undercover school in Washington, D.C. Now it was getting interesting.

The thought of playing a crook and making split-second decisions that could affect a case—and my life—galvanized me. That position would put me on the front lines, and that's exactly where I wanted to be.

After enduring a merciless campaign of begging, my boss gave in, gave me a chance, and found a slot for me. Imagine my surprise, when I walked into that D.C. classroom, to see that the instructor was Joe Hinton, an old friend from the Intelligence Division in New York City. Joe and the rest of the agents there taught us every trick they knew. Two key pieces of information grabbed my attention and stayed with me.

First: despite the fact that agents at headquarters were helping undercover agents acquire phony identification documents, Joe held that "to the extent you can, don't use headquarters. Develop those documents yourself." If you developed a document on your own, you knew it was solid and no corners were cut. If you received it from someone assigned to an undercover section in D.C. with a connection inside a bank or credit-card company, you could rest assured that a red flag in the company's file identified the government contact in case the account was overdrawn. Those little administrative oversights could kill you if your target had high-level connections.

Second: when you build your cover, stick as close to your real-life experience as possible in order to minimize the number of lies you have to spin. If you're originally from New York City and worked in the Financial District, your new identity should share those same core elements. You can't offer an undercover background that you don't know intimately. The devil's in the details.

Back in Tampa, I started working on my first undercover identity and read stacks of books about how to create new identities and how to check IDs to determine if they were forgeries. With more help from D.C. than I would ever accept on future identities, I created Robert Mangione—just in time for an unexpected assignment and my first undercover gig.

The Tampa Greenback task force had teamed up with the FBI and the Drug Enforcement Agency (DEA) to infiltrate a huge maritime marijuana smuggling ring. The organization was located in San Francisco, but the money launderers were conveniently based sixty miles south of Tampa in Sarasota.

With the help of a snitch, the task force developed a plan for me and two other undercover agents to pose as lead players in a cocaine ring that needed help laundering its profits. Buddy Weinstein, a wiry, outspoken DEA agent from Chicago, played the head of our group perfectly. Jim Barrow, a black FBI agent with a deep voice and the huge build of a defensive end, played the enforcer. I played Robert Mangione, who kept the books and answered to Weinstein.

Weinstein's assignment took him to San Francisco, so Barrow and I dealt in Sarasota with Jack Dubard, an attorney, and an accountant, Charlie Broun. Like many of my future undercover partners, Jim didn't need paperwork and shell companies to convince crooks that he was one of them. He only had to walk through the door. Jim was long on macho and short on paying attention to the details of protecting his identity. More than once, while we were driving around, I caught him about to pay for gas with his government credit card. He also tried to take a gun and his badge with him when we were about to fly to San Francisco to visit the head of the drug organization we were trying to infiltrate. My ass was on the line, and I didn't waste any breath reminding him of same. It must have looked something like Chester the Terrier worrying Spike the Bulldog from the old cartoons.

Jim and I spent a month warming up to Broun and Dubard, who were laundering big bucks for Bruce Perlowin in San Francisco. As a test of their talents, I gave them the opportunity to take me to Las Vegas to introduce me to their casino contacts. As promised, the boys in Vegas exchanged the small denominations—fives, tens, and twenties—that we claimed had been collected from our drug sales for crisp hundreds.

In Vegas, Broun and Dubard also introduced me to Joe Slyman, owner of the Royal Casino—a small operation compared to other casinos like the Dunes—which Broun said also cleaned dope money. Slyman had a great system. He took our small bills, put them in the Casino cage under a phony name, and handed them back the next day as crisp hundreds. To the rest of the world, it looked like some guy no one could ever find was just a lucky gambler. But his system served to make our money compact and a lot easier to smuggle out of the country. Slyman remarkably later beat the federal case brought against him. I guess what he did was business as usual there.

After Broun and Dubard hooked us up with their contacts in Vegas, we needed the help of a lawyer in Florida to acquire offshore corporations to use in order to open accounts outside the United States. It happened in a heartbeat.

Washington National Bank in Grand Cayman opened its arms and its pockets to us and our hoard of hundred-dollar bills. Broun smuggled the money on a commercial flight to Grand Cayman, where he then created elaborate documents as a cover to justify transferring the money back into the U.S. as a seemingly innocent loan to an American company that I controlled. And so fives and tens in a suitcase became financing for a legitimate U.S. company.

Broun and Dubard eventually learned that we were looking for a pot connection for a client in the market for tons of high-grade grass. I told them that, if they helped us find a source, we'd cut them in for a piece of the deal. They soon arranged a meeting among all of us and the head of the San Francisco operation.

Bruce Perlowin, a frail, bespectacled, ponytailed genius, looked more like a psychology grad student than the head of a criminal organization that moved hundreds of tons of pot from Thailand and Colombia to the United States in oceangoing barges, tugboats, and fishing vessels. Hollywood never would have cast him for the part, and, for an instant, when he first walked into a Sarasota hotel room to meet us, he didn't impress. But then he opened his mouth, and when this man spoke he revealed that he thought on levels most people have never even imagined.

"I made my first hundred thousand when I was a fucking kid," he bragged, admitting that, when he operated in Miami, he ran one of the biggest offload organizations the country had ever seen. He owned dozens of speedboats, shrimpers, and trawlers. Just six of the boats in his massive fleet had cost him $3 million. But he had left Miami years earlier because the drug trade in Florida was riddled with killers.

He pioneered a whole new operation in San Francisco, where he spent $500,000 per week on overhead alone—acquiring boats, docks, stash houses, and crews. Since establishing himself in California, he had run seventeen trips, not one of which had been busted. His partner ran a legitimate $30 million business financed from the importation of 40,000 pounds of hashish in the last two years. As Bruce put it, "We know where the Coast Guard is.… I've got all the information. I know where every fucking boat on the West Coast is. Last year we did the 'T' [Thai marijuana] trip. We held the boat offshore for two weeks because there was a massive Coast Guard blockade. It was for a big heroin shipment coming up from Mexico. We knew they were looking for a freighter named the Cyrus. We knew where both [Coast Guard] planes were flying. We knew the route they were taking. We knew where every Coast Guard boat was, and there were more Coast Guard boats out than ever before. We couldn't believe they stood out that long. They don't have the money to stay out that long, but they did. And we just waited them out—and then we came in."

Weinstein and I explained how happy we were that we had stumbled upon him. Perlowin countered with the announcement that he felt free to talk to us because he could sense that we weren't cops. Weinstein—who should have been a comic instead of a fed—couldn't help himself. "Do I look like J. Edgar Hoover?" he joked. (This was before Anthony Summers's