Roy Cohn’s Cash Clients Crash

Rick Mazzeo was a $15,000-a-year civil servant who managed to put $564,934 into his own small company, between 1975 and 1978, while he was quietly awarding lucra­tive leases to concession owners who were running everything from parking lots to newsstands on city-owned property. The concessionaires were running cash opera­tions and that was precisely the form that many Mazzeo deposits in Vimrik In­dustries took. Last week Mazzeo, the for­mer real estate director for the Department of Transportation’s Marine and Aviation Bureau, who ran Vimrik from a phone in the drawer of his city desk, was sentenced to serve six months in jail and fined $2500 for making false statements on deductions in his federal income tax return. In view of the presentencing infor­mation given U.S. District Court Judge Charles Sifton, the judge accurately de­scribed his own sentence as “the most lenient” he could give.

Assistant U.S. Attorney Susan Shepherd wrote Sifton that “the grand jury investigation developed evidence that directly connected Mazzeo to blatant bidding irregularities” and cited one fast­-food concession where Mazzeo twice got a friend to submit phony bids and wound up collecting one-tenth of the rent he should’ve received. Shepherd pointed out that, despite subpoenas, Mazzeo never produced Vimrik ledgers or “any records which indicate the source of desposits to Vimrik accounts.” “Even after deducting purported sales income from 1976 de­posits, and giving Mazzeo credit for depositing all known sources of income to Vimrik including his entire salary, income tax refunds, dividends and interest,” Shepherd concludes, “the source of more than $43,000 in deposits is unexplained.”

Mazzeo, who used to drive a Mercedes with the license plate “Gatzby” and live in a $20,000-a-year rented home on the Long Island shore, was represented at the sentencing by Michael Rosen, a partner in Saxe, Bacon & Bolan, a firm whose best known partners are Bronx boss Stanley Friedman and Roy Cohn. Rosen said he’d been representing the 36-year-old Mazzeo through a decade of criminal investiga­tions — an interesting revelation since Ro­sen’s firm was simultaneously represent­ing several concessionaires whose deals with Mazzeo cost the city millions in lost revenue. Indeed in 1976, the year cited in the Shepherd letter — when Mazzeo de­posited $43,000 more than he or his com­pany earned from every identifiable source — Mazzeo personally negotiated an extraordinary lease with Paul Dano, de­scribed by the Daily News as Roy Cohn’s “other self.” The city is now pursuing Dano’s former corporate shell, Heliport Enterprises Inc., for $686,000, which they say he owes along with Richard Can­tarella, a New York Post truckdriver to whom Dano transferred stock in the firm for a $35,000 pittance. Then deputy mayor Stanley Friedman, who joined the Cohn firm immediately after leaving city government in 1978, lobbied so heavily for Dano’s lease that he forced a special meet­ing of the Board of Estimate just to con­sider it. The Staten Island Advance re­ported that when one board member announced he was casting the decisive vote against the lease, “Friedman bolted from his chair to confer” with the member, had the meeting suspended for an hour, and got the member to change his vote.

Dano, who built a small empire of parking lot and food concessions with the city and the MTA in the mid-’70s, is now in trouble or out of virtually all of the deals described by numerous Harrison Goldin audits as “sweetheart” deals. The demise of Dano and Mazzeo has shaken a network of cash businesses that persistently extended, despite numerous corporate changes, from the Cohn firm. In a 1980 appearance before a state grand jury, Cohn described his own relationship with Dano: “If a business deal comes along, I will probably refer it to Paul Dano. He is very much interested in busi­ness deals. And he is very imaginative and he has a type of mind I don’t have, with reference to deals and inventions. I always have the idea if it’s good why not let somebody else do it. And he has lots of patience with it. And I refer it over to him.” Cohn also testified that he was the godfather of Dano’s son, a former business partner, and that Dano ran his companies out of the top floor of Cohn’s East 68th Street townhouse. Cohn’s black 1952 Bentley is registered in the name of a Dano corporation. John McLaughlin and Arthur Browne’s excellent, four-part, Daily News series on Cohn, written in 1979, said that Dano’s and Cohn’s lives were “so intertwined, and Cohn’s legal services so linked to Dano’s business ven­tures, that it is hard to tell where Cohn stops and Dano begins.”

Cohn, who avoids massive tax liens by taking no income and living on an abun­dant expense account, “needs to be legally broke,” wrote McLaughlin and Browne. “Dano is a millionaire. Cohn, though officially broke, lives like one,” was the News‘s conclusion. In an interview with the Voice, Cohn suggested that con­cessionaire legal activity was beneath him, denied that he’d eyer shared in any of Dano’s receipts, and said that he and Dano were “not as close” as in the past. If so, part of the reason may be the dramatic decline in Dano’s business which he once described as “handling cash”:

Parking Lots: On March 30, Paul Dano faces eviction from the last of a group of plundered city-owned lots, located at the 60th Street heliport by the East River. The Bureau of Ferries & General Avia­tion, formerly Marine and Aviation re­named after the Mazzeo scandal, initiated eviction proceedings against Dano way back in May 1980.

Leonard Piekarsky, a Goldin favorite who became bureau director that year, has allowed Dano to remain while his agency and the Department of Ports & Terminals fumble through a protracted process of putting the lot and adjacent properties out to bin. for construction of a heliport restaurant and other facilities (the bid request went out in September 1981).

Goldin made peace with Cohn and Friedman after a bitter fight that led to John Dearie’s primary campaign against him in 1981 and hasn’t audited this or any other Dano concession in at least two years. When he was auditing Dano, Goldin pointed out that Dano had failed to make any payments for this lot from 1974 to 1977. In the beginning of 1982, the city signed a stipulation with Saxe, Bacon, permitting Dano to remain but upping his rent to roughly $45,000 a year, several times the previous amount. Five months ago, the consumer affairs department suspended Dano’s license at the lot after three sets of hearings and repeated viola­tions. The suspension was suddenly lifted, a Saxe, Bacon letter got the license re­newed, and Piekarsky left them in place at 60th Street.

Dano was already dispatched from a city Department of Real Property parking lot on 59th Street when it and dozens of other lots were put out to bid at a lease auction. The city is getting four times as much now on the 59th Street lot as it did under Dano.

Mazzeo’s Staten Island lease for Dano contained three five-year renewal clauses, but Assistant Corporation Counsel Jac­queline Berkowitz forced Dano’s de­parture in 1981, shortly after the end of the first five years. A series of Goldin audits led to one eviction proceeding, which the city settled in the summer of 1980, when Dano’s company paid $110,000 due in minimum rent payments. Immediately after the settlement, Heliport Enterprises stopped making minimum payments again. Sometime in 1979 Dano had transferred the company to Cantarella, who told the News that he didn’t know if Dano retained an interest.

Throughout most of the last two years of the Heliport litigation, the company was allowed by the courts to collect 50 cents more per car than approved by the agency, and overpark the lot by almost 250 cars a day. The company maintained no counter and for years submitted no gross receipts statements (it was supposed to be paying the city 80 per cent of receipts in addition to minimum rent). When Piekarsky installed a counter, it was destroyed. Though the company was evicted in October 1981, not a dime of the hundreds of thousands in rent unpaid during the litigation was collected. De­spite this record, the city was at this time allowing Dano to continue running the 60th Street lot. The decision to terminate this lease occurred while the Voice was reporting this story.

Food Concessions and Newsstands: One company has a contract with the MTA to run all 161 of its subway newsstands: Ancorp. Until recently, the same company had a hefty share of Amtrak, Long Island Railroad, and Grand Central newsstands and luncheonette operations, as well as a host of similar concessions at public air­ports throughout the Northeast. Up to two months ago, the company had the Staten Island ferry newsstands. Once it controlled all 16 of the food and news­stand concessions at the ferry terminals.

In a July 1981 affidavit, Roy Cohn said he had “represented Ancorp in a number of matters over a period of years.” It was an understatement. A partner in Cohn’s firm had been Ancorp’s general counsel for a decade; Cohn was the court-ap­pointed bankruptcy attorney for the firm through a seven-year proceeding. More than two decades ago he had represented the winners in a takeover bid for control of the corporation’s board. Paul Dano be­came an Ancorp vice-president and An­corp, in the mid-’70s, turned over seven of its luncheonette concessions with the MTA to a Dano-headed company, Family Heritage. Cohn’s 1981 affidavit was part of a federal suit brought to prevent Am­trak from putting out to bid Ancorp’s massive, interstate, 30-year-old conces­sion contracts with the railroad.

When Cohn’s suit failed, Bernard Carton, a French investor whose Sodexho corporation had purchased Ancorp, of­fered the head of Amtrak’s real estate department $15,000 and a trip to Paris to relent. The Amtrak official was listening to this video-taped solicitation in a Wash­ington hotel room last June, and Carton was immediately arrested, as was Mario Di Domizio, the chief operating officer for Ancorp in this country and an associate of Cohn’s. Top Washington criminal at­torney Bill Hundley, who says he got Carton to vow not to involve Cohn in any way in the case, got Carton off on a thousand-dollar fine and a promise not to enter the country for three years. Di Domizio also pleaded guilty and got one year probation. A month after the arrest, Di Domizio was up in New York signing a six-month-permit with ferry bureau chief Piekarsky and negotiating a possible 10-year lease with him to run the three newsstands on the Staten Island Ferry. Revel­ations by the Staten Island Register and Councilwoman Mary Codd’s insistent nagging of the mayor finally forced Piekarsky to drop Ancorp, which also pleaded guilty to the corporate charges, in December.

It’s a mystery why Pierkarsky let them in the door in the first place. The applica­tion claimed that Sodexho had “com­pletely satisfied all claims” from the 1973 bankruptcy. In fact Piekarsky’s own agency had been left holding an almost $300,000 judgment against a wholly owned Ancorp subsidiary and another Cohn client whom Ancorp had assigned its ferry leases, E. J. Management. They had just skipped with the last year’s rent, while Mazzeo was still in charge. The principal in the other company, convicted felon Edward Jacobson, also ran his com­panies out of Cohn’s townhouse and wound up turning many of them over to Paul Dano.

Despite this track record, two recent convictions, and two Goldin audits blast­ing a $750,000-a-year loss of revenue be­cause of the Ancorp deal (the last one in 1980), the MTA remains one of Ancorp’s final customers. It has not bid on any renewal of its MTA lease, however. Di Domizio has recently left, as have Amtrak and all but two other city newsstands. One of those two is at the Grand Hyatt, whose owner Donald Trump was listed as a ref­erence on the Ancorp city application and who is described as the “secured party” on Ancorp’s most recent Dunn and Brad­street financial report.

The seven subway luncheonettes that Ancorp turned over years ago to Dano are also in real jeopardy. Indeed, were it not for a bizarre set of delays and turn-abouts in Supreme Court Judge Andrew Tyler’s courtroom, Dano would be out. Like his parking lots without counters, Dano’s luncheonettes are sometimes run without cash registers. Since he is operating under contracts requiring him to pay a percen­tage of his gross receipts to the MTA, his missing registers make it just about im­possible for anyone to determine what he really owes. Goldin and MTA audits piled contract violations (and $42,000 a year in shortchanging the MTA) atop Family Heritage. Tyler took eight months to decide, three months after his decision to issue an order, and then stayed his own eviction. Cohn is personally pursuing a motion to reargue the case and Tyler is now contemplating that.

Should they lose here and with the final Heliport parking lot, Cohn and Dano may be just about out of the concession business. Rick Mazzeo appeared at his sentencing with a lump on his head and said he’d been mugged while driving a limo. He is facing a continuing federal and state probe and the pressures on him to cooperate will mount. Their cash appar­ently disappeared as rapidly and as easily as it accumulated.

Cohn stressed with me how insignifi­cant his own involvement with these con­cessions was. But Dano’s were the only businesses known to be housed inside Saxe, Bacon & Bolan. You could reach Dano’s office in the Newark airport by dialing Roy Cohn’s switchboard. These were not clients who pay fees and can shop elsewhere. This was the cash heart of the Cohn world and it is evaporating. ■

Research assistance by Maria Laurino, Janna Moore, and Barbara Turk