By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
By Raillan Brooks
So there was nothing really out of order about this veteran New York City detective's presence last April 14 on the 16th floor at 5 Hanover Square. He was seated at a conference table with a pair of stock traders. OK, maybe it was a little strange that his girlfriend, a divorced bookkeeper named Sharon Kilcoin, was also there, but the traders were old friends, so why not?
"If this fund works out right and you can open up doors for more funds you won't have to work as long as you live," said trader Jimmy Labate.
"I know," said Gardell.
"This is a hell of a parachute," added Labate's partner, Jeff Pokross.
Gardell and Kilcoin could barely contain themselves. "I won't have to work Monday, Tuesday, Wednesday . . . ," said Gardell. "Will I have to work?" his girlfriend interrupted. "No," he replied.
"I know what I want. I want a Mercedes truck," said Kilcoin.
"Whose name are we putting this under?" asked Pokross.
"We can put this under not the same name as mine," said the laughing detective.
Two months later, the laughter stopped.
Labate, Gardell, and more than 100 othersmobsters, brokers, and big time investment adviserswere indicted for fraud and racketeering. The feds called it the mob's boldest move ever on Wall Street. The schemes included plans to defraud Gardell's union and two others. In league with representatives of all five Mafia families, the clever traders on Hanover Square were accused of scamming the public with a raft of inflated stock deals ranging from dotcoms to a chicken soup franchise. The biggest mob fish in the haul was alleged Bonanno crime family captain Bobby "Little Robert" Lino. Labate and Pokross were both described as mob associates who ran their business, DMN Capital Investments, Inc., under Lino's tutelage.
Pokross didn't take offense since it was also revealed that he had been a government informant since 1997, following his arrest in another stock scam. Pokross, government records show, guided the FBI in placing their bugs and told them everything else that was going on up there on the 16th floor.
Announced by Manhattan U.S. Attorney Mary Jo White on June 14, 2000, the Big Mafia Wall Street Case made headlines from San Francisco to London. Almost half the stories couldn't resist comparisons with The Sopranos, in which the fictional mob crew has its own young wiseguys in training fast-talking customers into shaky deals.
But for Steve Gardell, a 52-year-old decorated cop who helped solve some of Brooklyn's most brutal crimes and is one of the city's best-known detectives, the case was miserable real life. The indictment accused him of dishonoring his badge by steering the DEA's $175 million annuity fund into fraudulent stock schemes, leaking law enforcement secrets, helping the mobbed-up brokers get pistol permits and police parking placards, and even fixing an assault rap.
And for what? A lousy $10,000 worth of gifts and junkets: an aboveground swimming pool in the backyard of his rented home in Staten Island, trips with Kilcoin to Atlantic City and San Francisco, a stolen fur coat, and some bootleg satellite TV chips.
Gardell pled not guilty. His gloom was relieved only by the news that his retirement on a disability pension, one which entitles him to three-quarters of his approximately $80,000 salary, became official the same day he was fingerprinted and charged.
Gardell's union quickly distanced itself. Tom Scotto, the DEA's longtime president, posted a message on the union's answering machine: "Never, and I repeat never,has Steve Gardell approached any of the other four [annuity fund] trustees to invest in any of the companies mentioned in this indictment."
The swirl of talk was especially damaging for Scotto. President of the union since 1986, he's a 36-year police veteran and also heads the powerful National Association of Police Officers, where he befriended both Bill Clinton and Al Gore.
But last month, in response to defense lawyers' demands for added particulars about the charges, federal prosecutors named several additional labor officials, who, as the feds put it, "may or may not have known they were targeted as bribe recipients." Among them was Scotto.
And while no further reference was made to the other union officials, the feds, without citing any specifics, also listed Scotto as an unindicted co-conspirator in the case. Tagging individuals as co-conspirators is common in RICO cases, since it gives the government the opportunity to use their words at trial without actually indicting them.
Reached at his office on Thomas Street last week, Scotto angrily said he had no idea that his name had surfaced in the federal allegations. "Whatever occurred was of private concern with [Gardell]. I have a sterling record of 36 years in this department," he insisted. "I hope this is not character assassination."
Scotto said he confronted FBI agents who seized records from the detectives union offices on the day of Gardell's arrest. "I asked, 'Am I a suspect?' and they said, 'Absolutely not.' "