New York

Donald Trump’s Tower of Trouble

Meet the Medicaid cheats, coke dealers, mobsters — and those who may have gotten a touch too friendly with mobsters — who call Trump Tower home

by

Tower of Trouble
December 17, 1991

When Trump Tower opened in 1983, its golden entrance, 80-foot waterfall, and rose-peach-and-orange-colored marble atrium quickly established themselves as the most photogenic symbols of Trump glamour. Donald launched a $2 million promotional campaign, complete with a lavish brochure promising the ultimate in luxury—hairdressers, masseuses, limou­sines, helicopters … all at your service with a phone call to your concierge—mak­ing the tower the place to buy. In a mas­terstroke of media deception, he even floated the rumor that Prince Charles was thinking of moving in at Fifth Avenue and 56th Street. But the clientele never did get that exclusive.

You approach the residential entrance — an entrance totally inaccessible to the public… 
– The Trump Tower brochure

The entrance is inviting, and Times archi­tecture critic Paul Goldberger especially liked the six-story atrium and the combi­nation of marble and brass, but it didn’t turn out exactly as Trump architect Der Scutt had planned. Scutt originally de­signed discreet, Tiffany-like 18-inch-high letters for the front entrance, but Trump wanted his name bigger. According to the architect, Donald simply intercepted the shop drawings and doubled the height of the letters. In fact, Donald didn’t even discuss the matter with him. “The height of the Trump Tower letters is … a typical act by Trump to get his own way and to announce his presence,” says Scutt, add­ing, “Bigness is not always greatness.”

Maid service, valet, laundering and dry cleaning, stenographers, interpreters, mul­tilingual secretaries… 

From the beginning, the tower was an international project. The demolition contractor, William Kaszycki, won the job with a bid of just $775,000, a price he was able to propose because most of his work­ers were illegal Polish aliens working at rates one-half to one-third those of union scale. Kaszycki’s wife recruited the work­ers in Poland, promising housing (they slept in groups of eight in slum apart­ments or motel rooms) as well as $4 to $6 an hour in wages. On Trump’s job 200 of them worked 12-to-18-hour shifts hauling asbestos-covered piping and other materi­al out of the building virtually unprotect­ed, with no days off or overtime. Labor department agents eventually raided two New Jersey motels where Kaszycki had Pol­ish workers holed up, and he was convicted of importing and exploiting Polish aliens.

It’s been fifty years at least since people could actually live at this address. They were the Astors. And the Whitneys lived just around the corner. And the Vander­bilts across the street…

Well, actually, your Trump Tower neigh­bors are as likely to be Medicaid cheats, coke dealers, mobsters, or those who may have gotten a touch too friendly with mobsters. Take, for example, Verina Hixon, a strikingly beautiful Austrian di­vorcee with no visible income (or alimo­ny), who, in 1982, bought six apartments on the tower’s 64th and 65th floors for about $10 million. (Trump Tower is really 58 stories high, but Donald had juggled the floor numbers, skipping 10 flights and renumbering it as if it were a 68-story structure.)

Hixon’s good friend was the powerful concrete union boss John Cody, a balding, bulky, 60-year-old who had weathered eight arrests, including one for attempted rape, and three convictions. Since Donald had decided to build the tower of con­crete, he and Cody became closely inter­twined. But before the building was fin­ished, Cody was indicted in an eight­-count federal racketeering case, charged with taking $160,000 in kickbacks. His mob associations were so strong that the FBI claimed that Carlo Gambino, the most powerful mobster in America, came to the $51,000 wedding of Cody’s son in Long Island in 1973. The concrete boss’s bodyguard, indicted on a murder rap and bailed out by Cody’s investment banker son, was later shot to death. The Justice Department’s Organized Crime Strike Force questioned Trump about information it had received indicating that the union leader had strong-armed him and won a commitment for an apartment in Trump Tower in exchange for labor peace during its construction.

When Hixon ran into problems with her apartment renovations—she wanted simplexes, not the duplexes Donald had planned, as well as the tower’s only swim­ming pool, which required a special concrete bracing effort—Cody began meeting with Trump to iron out the difficulties. When Hixon’s bank financing fell short by $3 million, Cody spoke directly to Donald and asked him to arrange a mort­gage. Trump did, and, according to Hixon, she was not even asked by the bank to file a financial statement or fill out any forms—a fortunate oversight since she could not have met single-family FHA standards. ”I don’t think I could’ve moved in without Mr. Cody’s help,” said Hixon. Though she and Cody traveled together—to Florida and elsewhere—and frequently lunched at “21,” the two insist there was never an intimate relationship between them. But they also agree that Trump thought there was. “Donald made his crack remarks,” Hixon said, adding that he had “a foul mouth and a dirty fantasy.”

As the renovation costs on the apart­ments skyrocketed from $850,000 in 1982 to $2 million by 1984, Cody directly in­vested in them, loaning Hixon half a mil­lion dollars in 1983, drawn from a Swiss bank account, relayed through a Cody friend in London and never repaid. Hixon later described the loan as Cody’s gentle­manly way of helping out a friend “in distress,” but Cody said he thought he “might have moved” permanently into some of the units if he won his appeal or after he did his time (he was eventually convicted of racketeering and sentenced to a five-year prison term).

Nick Auletta, the president of a con­crete company actually owned by the heads of two crime families, who was later convicted in his own racketeering case, also helped Hixon out, “loaning” her an additional $100,000 in 1983 to help cover the rising construction costs on the apart­ments. Hixon says she gave Auletta a dia­mond worth more than $100,000 to cover the loan, but Auletta maintains the loan was never repaid. (Auletta’s conviction was recently overturned, but federal prosecutors plan to bring the case to trial again.)

In 1984, after Cody went to jail, Don­ald sued Hixon, charging that she owed $250,000 on the apartment alterations (she’d paid almost $1.9 million). Hixon countersued for $20 million, charging that she’d been forced to pay “kickbacks” to Trump through his architect. In a settle­ment, Donald agreed in March of 1985 to pay Hixon half a million dollars, and ex­tracted a commitment from her to keep the settlement confidential; Trump per­sonally negotiated the terms.

Hixon never did get a swim in her pool. After seven years of litigation filed by Trump and the banks (she made less than a year’s worth of mortgage payments), bankrupt and living in a barren and un­finished apartment, she lost all her Trump Tower property to the banks.

Other modern-age Astors included Ro­berto Polo, an Italian financier subsequently jailed for swindling clients of more than $110 million and other charges, who bought his six tower apartments in the names of offshore corporations in 1983, and Sheldon and Jay Weinberg, a father and son team who were eventually convict­ed in the largest Medicaid fraud case in history. Weinbergs pere et fils rented three apartments on the 63rd floor that Trump had personally acquired himself. The Trump Organization was apparently un­perplexed about how Sheldon Weinberg, who was not a doctor but ran a health clinic in the Bedford Stuyvesant section of Brooklyn, could afford the $180,000 a year in rent on his two apartments. Jay Weinberg’s grand larceny conviction in 1986, insurance fraud conviction in 1983, and the SEC’s permanent injunction against him acting as an investment ad­viser in 1984 had apparently no bearing on the organization’s willingness to rent him his $46,000-a-year apartment.

The facts of the insurance fraud case might have been of some interest to Trump, since it involved burglaries that Weinberg staged in his Brooklyn apartment so he could collect thousands in insurance claims. He was caught when he used the same receipts—including one for a $5500 coyote coat—as proof of his losses for two different burglaries. It wasn’t until the end of 1988, following the conviction of the two Weinbergs for stealing $16 million in Medicaid funds targeted for the poor, that they moved out of the tower. They never paid the moving company.

The Weinbergs’ downstairs neighbor was David Bogatin, a high-level member of a Russian emigré crime family, who bought five tower apartments in 1984 for $6 million. Working with Colombo capo Michael Franzese, Bogatin was part of a ring of oil entrepreneurs con­victed in a record-setting gas-tax evasion scam. He pleaded guilty in 1987, agree­ing to pay $5 million in back taxes, but before he was sentenced, Bogatin fled to Vienna; he remains a fugitive today. The state seized Bogatin’s tower apart­ments, and state prosecutors concluded that he’d purchased them “to launder money, to shelter and hide assets,” and used them on weekends and “for parties.”

While there’s no evidence that Polo, the Weinbergs, or Bogatin were person­ally close to Trump, other felon resi­dents were. Convicted cocaine dealer Joe Weichselbaum, whose helicopter company serviced the Trump casinos, didn’t move into the two adjoining apartments his girlfriend bought for $2.4 million until he got out of federal prison in 1989. But before that, the mysterious Weichselbaum—who was so friendly with Donald he was gossiping with his parole officer about Marla Maples well before her association with Donald ever hit the newspapers—rented an apart­ment owned by Donald in Trump Plaza, paying half its $7000 a month rent in bartered copter service. On his release from prison (he’d told his parole board he was going to become a Trump consul­tant), he and his girlfriend managed to move into their apartments without the burden of any mortgage financing.

Finally, there was Robert Hopkins, a Lucchese crime family associate, who was arrested in his Trump Tower suite for ordering a mob murder of a gam­bling competitor. While the murder count was dismissed, Hopkins was con­victed of running one of the city’s big­gest illegal gambling operations—taking in half a million a week and running numbers out of as many as a hundred locations. State investigators maintained a tap on his Trump Tower phone for months, concluding that he “controlled the enterprise” from the tower apartments.

Donald was not as friendly with Hop­kins as he was with Weichselbaum, but he did know him through Roy Cohn, whose firm handled both Weichsel­baum’s criminal cases and those of the major mob figure behind him, “Joe Beck” DePalermo. Robert Lamagra, a mob-tied mortgage broker, subsequently convicted in two federal fraud cases, ar­ranged Hopkins’s mortgages of nearly $1.7 million. Donald personally visited the closing, to which Hopkins brought a briefcase containing as much as $200,000 in cash and sat at the end of Trump’s conference table counting it.

Since much of Hopkins’s income was too fluid to be found in a bank state­ment, it is unclear how he convinced not only the Trump Organization but Mid­lantic Bank that he could make the com­mon charge and mortgage payments. The loans went bad even before the gambling arrest, and the bank had to foreclose.

You turn the key and wait a moment before turning on the light. A quiet mo­ment to take in the view…  Your diamond in the sky. It seems a fantasy. And you are home.

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