Excerpts from “The Brotherhoods” by Guy Lawson & William Oldham describing the story of the T-bills.
Before long, Casso came to Kaplan with a proposal for an enormous score. Casso said he found a man who worked for a company that acted as a depository for Treasury bills, or “T-bills”, as they were known. T-bills were interest-paying certificates of debt issued by the federal government and marked as payable to the bearer. Identification had to be provided to cash the bills but simple possession was considered legal proof of ownership, making them extraordinarily liquid. (This was before the shift to electronic handling of such securities.) Casso’s contact had observed that the depository company took inventory of its stock of T-bills according to a routine. He said that there was an interval of time between scheduled inventories when he could steal the T-bills unnoticed. “The bills wouldn’t be reported until they took inventory again. The plan was to cash the bills in the interim. They would be stolen but they wouldn’t be reported as stolen. In other words, they wouldn’t be ‘hot’. If a security was hot its value plummeted.”
The amount of money involved could run millions, if Kaplan could find a method of turning the financial instruments into money before the depository noticed the T-bills were missing. Kaplan called Joe Banda and asked to meet with him. Kaplan explained the problem and opportunity and suggested that he give Banda the serial numbers and photocopies of a couple of bonds. Banda lived in the Hasidic section of Williamsburg in Brooklyn, a densely populated area where many observant Jews dress in traditional garb. Within a few days Banda came to Kaplan and said he had found a jeweler in his neighborhood who thought he would be able to cash a stolen T-bill. The jeweler had a contact who would take the stolen T-bill and sell it overseas.
In the Hasidic community there was a paperless but highly structured method of transferring money similar to the “hawala” remittance system used in South Africa for centuries. The funds were transferered by a trusted third party so there were no wire records or other evidence showing large sums had been moved. Payments to the third party came in the form of percentage points of the sum transferred. Once the T-bill was sold in London, a phone call would be made to NY and the proceeds would be paid out locally, less the fee charged. There would be no way of tracing the money back to the jeweler, or Banda, or Kaplan, or Casso and the Lucheses. In theory, Kaplan wanted to test the system before he commited to attempting a large score. Kaplan told Banda he would get one T-bill worth half a million dollars and see if the method worked. Banda and the jeweler and the third party would take half the proceeds. Kaplan and Casso would get the other half—if the scam came off.
Casso received 2 stolen bonds from his contact in the depository. He wanted to do the test run with both $500,000 T-bills. Kaplan only wanted to use one. Determined to make sure the stolen T-bill wouldn’t be stolen again, Kaplan demanded a meeting with Banda’s contact. To avoid the possibility that they would be able to identify each other if the deal went wrong and law enforcements caught either of them, Banda arranged for the two to meet in a parked car. Banda’s jeweler contact sat in the front seat, looking straight ahead. Kaplan got in the backseat of the car. Kaplan couldn’t tell for sure, but it appeared the man was dressed traditionally. Kaplan told the man that he wanted to know his name, and address and where he worked befire he handed over the T-bill. Kaplan said he didn’t want to know it himself. The man was to tell Banda, who would hold the information himself should the need arise to find the jeweler. The jeweler gave his identity to Banda. Kaplan handed the man the envelope containing the 500,000 T-bill marked “pay to bearer”. The man said he was going to travel overseas, to London, to cash the instrument with his banker contact.
Less than a week later, Banda gave Kaplan $130,000 in cash, and a few days later he added $120,000. Elated, Kaplan and Casso were now ready to make an astonishing sum of money. They intended to steal $10 million worth of T-bills and cash them all at once. “A chance like that had to be hit once and for all the marbles. It would be one of the biggest heists in history. Kaplan & Casso were world class scammers. They were within inches of the kid of money that would change there lives. But life in the mob was more complicated than that. No matter how cunning Kaplan and Casso were, no matter how sophisticated and careful, they were sailing in a ship of fools. Their great T-bill scam was undone by a wiseguy named Leo “Zip” Giammona, a made Luchese.
Before doing the deal with Banda’s man, Casso had received two stolen bonds. Kaplan had managed to cash one. The other Casso gave to Leo the Zip, who was going to try his own method of cashing the T-bill. After Kaplan succeeded CXasso told the Zip not to do anything with the T-bill. But it emerged that Giamonna had already attempted to cash it, giving it to a guy he knew who worked in a bank in Brooklyn. The man had tried to cash the insatrument, a clumsy, oafish endeavor. An investigation was under way. The element of surprise was now gone. The bonds were now “hot”.
Leo the Zip Giammona was murdered driving northbound on West 3rd Street in Brooklyn in one June morning by two hoods. The method of execution came straight out of the pages of pulp fiction. The hit men filled the back of a blue 1977 Chevrolet Malibu station wagon with flowers. One of the hoods drove. The other hid under the flowers. When the station wagon pulled up alongside Giamonnas Toyota, one of the hitman rose from the flower bed with a shotgun and let five rounds of buckshot fly, blasting through Giamonna’s window, killing him instantly. “The motive was dressed up as a heroin deal gone bad. Giamonna was a made guy in the Lucheses, with connections in the Gambinos through his wifes family, so Casso needed to have a good reason to sanction a hit. Leo the Zip owned a place called Café Sicilia in Bensonhurst, a front for his involvement in a ring importing large amountsof heroin from Italy. When Giamonna got in a dispute over the heroin, Casso took the opportunity to take revenge.
As the T-bill scam unraveled, Joe Banda came to Kaplan and said that the banker in London was being questioned by Interpol. Kaplan was upset. Banda told Kaplan that the deal had become more complicated than they anticipated. Banda’s jeweler connection was supposed to take the T-bill to London himself. But he hadn’t. The first jeweler had approached another jewel and had him take the T-bill to London. The first jeweler didn’t tell Banda about the change of plans. Banda learned about it when the first jeweler told him that the banker in London had not been paid the 100,000 promised to him. It seemed the second jeweler had pocketed the money. The banker had no reason to protect the first jeweler or the second. The London banker had called the second jeweler and told him that Interpol was investigating the T-bill. The banker was talking to Interpol, Banda said. Banda believed there was a good chance the second jeweler would cooperate as well.
Kaplan decided to put a contract out on the second jeweler. Kaplan reasoned he would be certain to snitch on the first jeweler, who would snitch on Joe Banda. From Banda the trail would lead to Kaplan and Kaplan was most emphatically not going to return to prison. Kaplan didn’t tell Banda he was going to kill the second Jeweler. He asked Banda to get his name, home address, work address for the second jeweler. He also wanted to know the kind of car he drove and the license plate number. Kaplan said he wanted to put a scare into this guy—shake him up and let him know that it was a bad idea to talk to authorities. If they grabbed the man, Kaplan said, he would know he could be grabbed—or killed.”
Within days, Banda gave Kaplan the information. Kaplan called Frank Santoro Jr. and told him he needed some “work” done. He asked if Santora would be willing to murder for hire.
”Without a doubt” Santora said. “I’ll talk it over with my cousin. There will be no problem. It can be handled.”
Santora came back shortly thereafter and said he talked to his cousin and they agreed to take a contract—Santora, his cousin and his cousin’s partner.
”Would you take twenty-five thousand for this?”Kaplan asked. He was in financial difficulty at the time so he asked if he could spread the payment out. “I could pay it ten, ten, and five, every week for three weeks.”
”Don’t worry about it.” Santora told Kaplan. “That’s fair.”
Kaplan gave Santora the particulars regarding the second Jeweler. His name was Israel Greenwald. He lived in suburban Long Island with his wife and two young daughters. Kaplan left for a business trip to Arizona to survey his troubled real estate investment in scotssdale. Santora and the Detectives Caracappa and Eppolito took Greenwald’s address and drove to Long Island to find his residence. “Israel Greenwald already knew he was in trouble. He was a diamond dealer who traveled frequently. He was under investigation by C-3, the FBI squad specializing in the theft of negotiable securities-which was a big business for criminals at the time. The FBI was looking at thefts from three different financial institutions in New York City. When Greenwald cashed the T-bill in London a source for the IRS contacted them and they in turn contacted C-3. Kaplan’s fear was well founded, but not for the reasons he suspected. His free-floating anxiety was his early warning system. Greenwald was already a marked man from both sides.
Greenwald had been stopped at customs when he flew back to New York from London after cashing the T-bill. He was subjected to a secondary search. He had no cash on him; the money had already been transferred. Greenwald had been told that he was under investigation for trading in stolen securities. The FBI wanted Greenwald to cooperate. He said he wanted to talk to an attorney. The next day he agreed to talk. He told the FBI that he had been given the T-bill by the first jeweler. This jeweler had told him that the T-bill belonged to a man who was trying to hide his assets from his wife during contentious divorce proceedings. Greenwald believed that the $500,000 was not stolen, and he was being paid to help squirrel money away.
A lie to Greenwald had undone the scam. The first jeweler’s story meant that Greenwald genuinely didn’t know he was fencing a stolen T-bill-so why should he pay the banker in London one hundred grand for cashing a legit T-bill?
No charges were laid against either jeweler. As fears among the conspirators rose about the T-bill investigation, the first jeweler came to Greenwald and warned him not to talk to police. He said the deal was “a mafia sort of thing.” Greenwald passed along to the FBI what he had heard. The FBI asked him to tape-record a conversation with the first jeweler. Following FBI instructions, Greenwald went to see him that day. Greenwald was carrying a tape recorder in his coat pocket. In the middle of their conversation the tape recording stopped. The first jeweler patted Greenwald’s chest and found the tape recorder. “At least that was what Greenwald told the FBI. By now, it was unclear who to believe in the whole ordeal. The FBI didn’t have a case but they knew something was going on.
On a winter morning in February 1986 Israel Greenwald rose early, dressed, and kissed his schoolteacher wife goodbye. Thirty four years old, a devoted father, Greenwald walked his daughter Michal to her bus. As he left, he stopped and turned back for a final kiss. It was the last time his family would see him.