Saturday, February 11, 2012

Canadian Organized Crime and Florida Land Development

WINNIPEG FREE PRESS- APRIL 14, 1952
EDMONTON, April 14 (CP) —Hon. N. E. Tanner, mines minister, has announced the first entry of Quebec mining interests into the Alberta oil picture. Quebec mining interests are financing Marigold Oils limited, which has an interest in 10,612 acres of oil rights in the Barrhead area, about 60 miles northwest of Edmonton. The group financing Marigold includes:
  • East Sullivan Mines limited,
  • Louvicourt Goldfields corporation,
  • Bibis Yukon Mines limited,
Eric Cradock and Bryan W. Newkirk.
So, who were those guys?


Mr. Wintermeyer: —Mr. McNamara was a defence witness, so to speak, at closed hearings on February 11, 1960, and on February 17, 1960, before the Deputy Provincial Secretary to show cause why the Centre Road club's provincial charter should not be cancelled on the ground that it was being used for illegal gambling.

Perhaps the hon. Provincial Secretary will remember the fantastic story Mr. McNamara told at those hearings about how the president of the army, navy and air force veterans association had conducted an investigation into allegations against the club and had given it a clear bill of health and how he took his position in the club to keep an eye on things because it had been more or less forced on him as the decent thing to do. And perhaps the hon. Provincial Secretary can explain why no cancellation was ordered for months and that, in fact, the charter was not dissolved until June 14, 1960, after Robert Wright was arrested and everybody knew the jig was up.

Perhaps Mr. McNamara can explain how the vice-presidency of the gamblers' mining company was forced on him in February of 1961, several months after it was known that everything had not been so decent at the Centre Road club after all.

Mr. Speaker, one of the characteristics of organized crime demonstrated by the New York crime commission was the use of violence. The commission said that beatings and even murder were the consequences of the presence of organized crime in a community. There has been evidence in Ontario that physical violence and murder are associated with the activities of gamblers. I will cite several cases:

On March 21, 1961, Max Bluestein, a convicted gambler, was savagely beaten by a number of men in the Town Tavern in downtown Toronto. He was beaten with brass knuckles, iron bars and fists. He was knocked down and kicked and a broken bottle was ground into his mouth and face. According to reports, Mr. Bluestein was beaten by a group of men acting for rivals who wanted to share the enormous profits of Bluestein's illegal gambling enterprises in Toronto.

Mr. Speaker, let me outline a little of Mr. Bluestein's background. In December of 1960 he was convicted along with Sam Binder of operating a common gaming house in the Lakeview club on Bathurst Street near Eglinton Avenue. Magistrate Addison in passing sentence of a fine of $15,000, or four months in jail estimated Mr. Bluestein's Lakeview club did an annual volume of gambling in excess of $13 million with a profit to Mr. Bluestein of more than $1 million. Mr. Bluestein obviously could pay the fine but it was reported in the press that he chose to go to the Ontario Reformatory at Mimico because paying the fine would cause him an income tax problem. While at Mimico a trusted lieutenant told him that rivals wished to take over four large floating crap games which Mr. Bluestein controlled in Toronto hotels. At this point Mr. Bluestein decided to pay his fine in order to gain his freedom and the opportunity to meet the challenge to his gambling empire. It was curious that when Mr. Bluestein came to pay his fine, it was discovered that a clerical error in the court record made him liable only for a fine of $4,000 and not $5,000.

It was reported in the press at the time of Mr. Bluestein's beating at the Town Tavern that almost half of the hundred people present had been invited to witness what subsequently took place. This was a public demonstration to the gambling fraternity of Toronto that violence would be used to capture and control illegal betting here. Despite the fact that a hundred persons were in the tavern no one came forward to give evidence to the police. The tavern's hat check girl and doorman, as well as the customers were thoroughly intimidated.

One month later, after the police held in camera hearings with 12 witnesses, warrants were issued for men— for four men— on a charge of assault causing bodily harm. These men were Jack Weaver, Frank Marchildon, Fred Gabourie and John Papalia. The first three, arrested April 23, 1961, have already been identified as convicted gamblers and members of various social clubs convicted or suspected of being gaming houses. The fourth man, Johnny Papalia of Hamilton, gave himself up to police on May 12, 1961, 48 days after the Bluestein beating and at a time when the New York State police had a warrant for his arrest in connection with the largest narcotic ring ever uncovered in the United States.



Mr. Papalia was a member of the veterans club, he was convicted of beating Max Bluestein and is now serving a sentence of 13 months in an Ontario reformatory.

Mr. Speaker, the New York crime commission pointed out that the three principal fonts of revenue for organized crime were illegal gambling, trafficking in narcotics and labour racketeering. In Johnny Papalia we have a direct link between the gamblers and the dope pedlars. The New York District Attorney charged 20 men, four of them Canadians, as being part of the conspiracy which smuggled drugs worth $150 million on the black market into the United States in the course of the past several years.

Of the 20 charged several left the United States forfeiting bail of $20,000 to $50,000 each. One man was murdered in Brooklyn, New York, last summer, another tried to commit suicide, a third was declared insane, and unfit for trial. A fourth was Alberto Agueci of Toronto, whose beaten, strangled and burned body was found last week near Rochester, New York. Some of the men charged in New York have been identified by federal narcotics authorities in the United States as members of the Mafia.

Another characteristic of organized crime as revealed by the New York State commission was that of extortion. Do we have examples of extortion in Ontario, Mr. Speaker? Last April, Toronto Daily Star columnist Pierre Berton published stories about gangland beatings of Toronto stockbrokers who refused to pay protection money. Beatings have been reported in Hamilton. Gwyn Thomas in the Toronto Daily Star on April 10, 1961, reported that beatings and shakedowns had been going on in Toronto for the preceding two years. Attempts to corrupt law enforcement authorities is another characteristic of organized crime.

I have already related the extent to which gamblers corrupted the Ontario Provincial Police anti-gambling squad. Gamblers have also attempted to corrupt magistrates in the Toronto area. It has been widely reported, Mr. Speaker, that Magistrate Fred Thompson was threatened some few years ago on the day before he was to hear a case against a well-known gambler. Magistrate Thompson reported this to the hon. Attorney-General. It would be interesting to know what the hon. Attorney-General did about it.

It has been reported that an attempt to bribe Magistrate Addison with $50,000 was made prior to the trial of another well-known gambler. It would be interesting, Mr. Speaker, to know what steps, if any, the hon. Attorney-General took in this matter.

I have cited the murder of Earl Atwood in connection with the Roseland club, and no doubt the hon. Attorney-General is familiar with that case. I wonder if he is familiar with the case of Peter "Scrit" Mitchell, one of the gang in the old Ramsey club. According to evidence in court Mitchell held his position in the organization by reason of his alleged ability to provide the club with political protection. According to evidence his position became somewhat tenuous and he is said to have talked too much. It is no secret, Mr. Speaker, that Scrit Mitchell disappeared suddenly and has not been seen for a long time. I wonder if the hon. Attorney-General would know where Mitchell is.

Mr. Speaker, physical violence, extortion, intimidation, bribery and attempted bribery, drug trafficking, and even murder, have all accompanied the growth of illegal gambling in Ontario. They are the inevitable corollary of organized crime. In recent years, however, a new and equally frightening aspect has appeared to this relationship between professional gambling and other illegal activity. It is the use of illegal gambling revenues to promote fraudulent stock deals. I will not weary the House with the complicated details of any particular case. Instead I would simply cite some cases of record in which evidence of syndicate money has been found.

There was the case some two years ago of Shoreland Mines Limited, a dormant Toronto firm. There was the case of Manor Securities Limited in the Maritimes. There was the investigation and report of the acting administrator of The Securities Fraud Prevention Act in New Brunswick last year into the activities of Canam Investments Limited, and of a number of related companies and individuals. This investigation found links with racketeers in Toronto and New York.

If time permitted I could show the House an association between some of these racketeers and some of the professional gamblers I have named earlier in my remarks. I have cited the shakedown and attempted shakedown of certain stockbrokers. It is no great secret, Mr. Speaker, that the culprit here, certainly one of the culprits, was Johnny Papalia. It is no great secret that the stockbrokers concerned were really so-called stockateers, the high pressure brokers and dealers who live on the fringes of securities law. At least two of the men coerced by Papalia were frequent visitors at the Centre Road veterans club.


I had occasion to mention Eric Cradock and J. B. Ryan [Joseph Bernard Ryan], the operators of the James Bay goose club. They are associated in Cradock Holdings Limited, Toronto, and both have poor records, to say the least, with the Ontario securities commission. Cradock offices were once used by Jack Weaver and Fred Gabourie for a big backend booking operation.

I can cite the case of Jaylac Mines Limited, a stock promotion which resulted this month in the cancellation by the Ontario securities commission of the registration of two Toronto stock dealers. The commission identified one Ivan Gordon as a representative of Jaylac interests who disappeared in 1960 following the removal and probable disappearance of all Jaylac's liquidated assets. Here again a detailed examination would reveal an association with ventures in which professional gamblers were and may still be involved.

If for no other reason, Mr. Speaker, a Royal commission is necessary to discover and expose the use of illegal gambling revenues in the participation of professional gamblers and their associates in fraudulent stock promotions.

I now come, Mr. Speaker, to the fifth and final question. The New York crime commission found that one of the characteristics of organized crime is its penetration into legitimate business. What evidence is there that this has happened in Ontario? I could give the House a number of references but I will detail only one because it is a classic example of what has happened and what can happen.

Rent-a-Plane Service 

On June 27, this year the chief of police of Metropolitan Toronto told a meeting of law enforcement officers in Buffalo that a questionable group of men were operating an airline service from Toronto to the United States and the Caribbean area. Mr. Mackey said that although no criminal activity had been discovered the airline would be watched closely because of the ease with which private aircraft can cross international borders and evade customs inspections and regulations.

Mr. Speaker, the name of that airline is Airgo Limited and it was run for a considerable period of time by Vincent Feeley and Joseph McDermott. Airgo Limited was incorporated by federal charter on August 11, 1958. The original owners were a Toronto lawyer and his brother-in-law who allegedly were interested in operating a rent-a-plane service at Toronto Island airport.

On July 3, 1959, the Air Transport Board issued a licence authorizing Airgo Limited to operate a flying training school and a commercial passenger and freight service in Canada. This licence became effective when the federal Department of Transport issued an operating certificate on August 21, 1959. On September 15, 1959, the Air Transport Board issued another licence to Airgo Limited authorizing it to make flights to and from the United States. This became effective when the federal transport department issued an operating certificate on October 13, 1959. Mr. Speaker, on October 19, 1959, six days after Airgo Limited was in business to make flights to the United States, the owners sold the airline to two Toronto lawyers who said they were acting for undisclosed principals. Those lawyers were David Humphrey and Hugh Locke of the firm of Humphrey and Locke. The deal was consummated in the lobby of a downtown Toronto bank when Mr. Locke handed over a large sum of cash money to one of the original owners.

Mr. Speaker, in the course of their investigation of Feeley and McDermott on other matters the police executed a search warrant for the law offices of Humphrey and Locke, and it is no great secret that among the other documents seized was a record of meetings in those offices concerning Airgo business. This record shows that those present at the meeting were Hugh Locke and his accountant, Charles Philips, the operations manager of the airline and Vincent Feeley. The Aviation Directory of Canada, a private publication which compiled its listings on the basis of information supplied by the airlines themselves, also listed David Humphrey as vice-president and Hugh Locke as secretary of Airgo Limited for 1960 and 1961.

Nor is it any great secret, Mr. Speaker, that police seized a document in the law offices of Humphrey & Locke drawn up in May of 1960. This document is a conditional sales document whereby David Humphrey, Hugh Locke, Joseph McDermott and Peter Fielding agreed to sell Airgo Limited to Robert S. Wong, subject to the approval of the Air Transport Board and other conditions. Peter Fielding is an alias used by Vincent Feeley and Robert S. Wong is a manager at Toronto Island airport. The deal apparently fell through but the document is at least indicative of the substantial financial interest in Airgo Limited by Vincent Feeley and Joseph McDermott.

I can also tell the House that Feeley and McDermott were frequently seen about Airgo's offices at Toronto Island airport, and that they identified themselves to the employees as the owners and operators of Airgo Limited. Further I can say that George Reid, the trusted lieutenant of Feeley and McDermott in gambling club operations, was placed on the Airgo payroll after the Centre Road veterans club closed down.

Joseph McDermott took a chattel mortgage for $20,000 on certain aircraft when Airgo Limited was sold to the present owners some time last winter. Yet despite all this evidence of participation by Feeley and McDermott in the ownership and control of Airgo Limited for a period of over one year there is no record with either the Air Transport Board or the federal Department of Transport of the sale of the airline from the original owners in October of 1959.

In August of 1960, and I point out, Mr. Speaker, that this would be shortly after Robert Wright was arrested and the gamblers had discovered the police had had an undercover agent in their midst, the Air Transport Board did receive a vague letter from Humphrey and Locke indicating there had been a transfer of ownership, not to Feeley and McDermott, but to the current owners.

Clearly, Mr. Speaker, a serious evasion of law occurred in this case. Federal regulations provide that the air transport board must be informed of any sale or transfer of stock exceeding five per cent of the total stock, and must approve such sale or transfer. Failure to do so can mean cancellation of the airline's licence and legal prosecution. Clearly, the regulations were violated in this case and there can be little doubt the law was evaded in order to conceal Feeley and McDermott's participation in Airgo Limited.

I shall say nothing, Mr. Speaker, about why they wanted to run an airline, nor shall I say anything about the present ownership of Airgo Limited. Chief Mackey's statement can speak for itself. But I do suggest most strongly, Mr. Speaker, that here again is the type of illegal activity requiring investigation by a Royal commission.

Mr. Speaker, this speech has been long and full of detail. The material is complex and technical. For those reasons it presents a special difficulty for the hon. members of the House to grasp all its meaning readily and easily. I am also aware that much of the material is sensitive in nature. However, I want to emphasize, Mr. Speaker, that I have made no charges of culpable wrongdoing against any person. I have not made and I do not now make any judgment about the legal or moral guilt of any man. What I have done is to present in this House a number of facts which I am convinced demonstrates that organized crime exists in Ontario and requires investigation.

I believe that the only satisfactory investigation can be that of a Royal commission.

The characteristics of organized crime which were demonstrated by the New York State crime commission are all manifest in Ontario. I think it is obvious that an investigation of organized crime by the department of the hon. Attorney-General would be in the nature of an internal house cleaning.

That is needed, but it is not sufficient. I think it is obvious that a Royal commission, independent of government, is the only adequate device for investigating organized crime.

Mr. Speaker, I believe that this Royal commission should be headed by a Justice of the Supreme Court of Ontario. He should be aided by a counsel who will be empowered and directed to investigate all aspects of the problem of organized crime. The commission's terms of reference should require investigation into the extent of organized crime in Ontario; the link between professional gamblers and their counterparts and associates in the United States; the records of the department of the hon. Provincial Secretary in its handling of social club charters; the failure of the department of the hon. Attorney-General to carry out government policy and to enforce the laws relating to gambling; the link between illegal gambling and other criminal activity; especially links with trafficking in narcotics; the penetration of legitimate business by professional gamblers; the contamination of our processes of law enforcement by attempts to influence courts and their operation; and finally the use of legal fronts for illegal activities.

The commissioner and chief counsel should be assisted by adequate staff of trained investigators. The commissioner should have the power to subpoena witnesses and to hear their testimony under oath and if necessary at times in camera. The commission should also be empowered to hold public hearings if deemed advisable as a means of bringing home to the general public the nature and scope of the menace which organized crime presents. The commission should be required to prepare a report of its findings for presentation to this House.

Mr. Speaker, I and my party will not be satisfied with anything less than the type of commission and inquiry which I have outlined. I appeal directly to the hon. Prime Minister (Mr. Robarts), to appoint such a commission and to give it terms of reference that encompass the matters I have enumerated. I wish to assure him and all the hon. members of the House that if the present government does not undertake to appoint such a commission and to direct it to undertake such an inquiry, the next Liberal government will do so at the earliest opportunity.

Applause. 


~~~~~~~~~~~~~~~~~

Lethbridge Herald - 12-1-1961
Challenges Political Leader
TORONTO (CP) — Joseph Ryan, general manager of the Edmonton Eskimos football club,
Thursday challenged Ontario Liberal Leader John Wintermeyer to come outside the legislature and repeat remarks he made about Mr. Ryan and stockbroker Eric Cradock.
Mr. Wintermeyer in a speech on gambling to the legislature Wednesday said Joseph McDermott of Port Credit, whom he identified as a notorious gambler, was host to a group of Detroit men at a Moosonee-area hunting club owned by Mr. Cradock and Mr. Ryan.


Mr. Wintermeyer also said that Mr. Ryan and Mr. Cradock were associated in the firm of Cradock Holdings Limited, Toronto, "and both have poor records, to say the least, with the Ontario Securities Commission."


~~~~~~~~~~~~
Winnipeg Free Press - June 10, 1961
Ont. Men Face U.S. Drug Trial

TORONTO (CP)— Three Toronto men Friday were ordered extradited to the United States
to face trial on charges that they were involved in a ring that smuggled millions of dollars
worth of heroin into the country from Italy.


Judge Robert Forsyth directed that Alberto Agueci, 59, his brother, Vito, 41, and Rocco
Scopolletti, 26, be sent to jail for at least 15 days pending possible application before the
Supreme Court of Ontario to decide the merits of the case. A lawyer representing the
U.S. justice department told the court the drug smuggling operation, which involved 110 pounds of heroin valued at between $14,000,000 and 822,000,000, began in 1958.


Part of FBI Report

An Italian baker from Brooklyn, N.Y., in a sworn statement read in court, told how heroin
was sewn into quilted blankets and brought from Italy on boats which he met in New York.
Some of the drugs were hidden in false trunk bottoms. The baker was described as the man
who named the Agueci brothers and Scopoletti as being part of the operation.


Ed Reid wrote about these cases in The Green Felt Jungle and in this issue of the weekend supplement:



 Click on the image you would like to enlarge.



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