By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
The first step in the developing plan was to deposit the funds to be laundered in a government-controlled account at a bank in Voorhees, New Jersey, about 90 miles north of Atlantic City. Berger, through his many gambling trips, was acquainted with the bank's chairman, and he introduced Gray personally. The account was opened in Berger's name because, as Gray explained, he wanted no paper trail leading to him.
In two trips to New Jersey with Gray, nearly $800,000 worth of investors' money -- in cashier's checks and money orders averaging about $10,000 each -- was deposited in the Berger account. In one trip with Lekavich, more than $100,000 of investors' money was deposited in a series of transactions for which Berger was paid $28,000 as his laundering fee.
Gray and his associates had been unsuccessful in cashing the checks in London. But after Berger managed to cash the checks in New Jersey, they were satisfied with his services. Berger, meanwhile, regaled his new pals with stories about guys getting "whacked" or having their knees broken or their faces doused in battery acid. "Usually people wouldn't ask who you knew," says Berger. "But they'd see me with these guys, and they figured these were my friends."
Between trips to the New Jersey bank, Berger and his targets gambled and dined and generally behaved like wealthy men-about-town. Gray would later tell federal investigators that Berger furnished him and his lawyer with prostitutes at the TropWorld, where Berger had arranged for a set of suites. Norm had joked on the ride in from the airport about a "seven-foot-tall prostitute," and women who had already been paid arrived at their rooms that night. The next day, Berger asked him, "How was your night?"
Meanwhile, Norm did a fine job of keeping up appearances, introducing his targets to guys with names like Joey C, hugging guys in Mafia-style greetings, and gambling at the high-dollar tables. Lekavich, who later pleaded guilty to federal charges in the peso-scam case, told federal agents the "IRS must have deep pockets," because he saw Berger lose more than $20,000 one night and $50,000 another night. IRS Special Agent Bonnie Vannett, who was one of two agents supervising Norm on the trips, said she watched him gamble more than her annual salary on a single night at the TropWorld. Norm's gambling funds were not provided by the government, she said. He appeared to have his own sources.
Berger was separated at the time from his wife in Texas, and in addition to maintaining a modest apartment in Dallas he had rented an apartment on the New Jersey shore with a 50-year-old widow named Dolores Pomilio. She introduced herself to Gray as a former girlfriend of Nicky Scarfo, the swaggering, violence-prone Philadelphia mob boss who was jailed in 1988.
It was an act, but she looked the part. "Dolores Pomilio dresses with her skirt up to her knish, half her tits sticking out. She prances -- she doesn't walk," Norm says, adding that Pomilio was interested in him because "she needed a lollipop." Not that Norm did anything to discourage her from thinking he was actually wealthy. One time he took her to Florida and went house shopping in Fort Lauderdale's Bermuda Riviera section. Berger told the real estate agent he was considering purchasing one house they had looked at, which was listed at $700,000. He said he would be paying cash.
"I was supposed to be going with Norm," Pomilio told a private investigator later. "In fact, he gave me a ring." After Norm went back to his wife, Pomilio thought of selling the ring and had it appraised. "It wasn't even a diamond," she said. "It was CZ [cubic zirconia, a fake diamond]...I thought, 'That son of a bitch!'"
Norm says these days that it was all an act, that Pomilio was not even his girlfriend. "I met her at the Top of the Trop," he says, referring to a club at the hotel where he usually stayed. "I think I banged her that night. But that was it."
After the Atlantic City trips, the IRS phased Berger out of the investigation and replaced him with an undercover IRS agent actually in the government's employ. Berger told Gray he was being promoted to "capo" and would be busy with other mob matters. "Norm worked best making the introductions," says Webster. "He was in his eyes the star government witness, when he was in fact the introduction. His bravado...was important, but most of the subsequent transactions took place once the IRS agent took over."
By that, Webster meant another series of bank transactions -- taking the money from Atlantic City, depositing it in a fake business account in Reunion Bank in Dallas, then running it through a bank account in Toronto that happened to be operated by the Canadian Mounties. In all the shuffling, the government let most of the money from the cashed checks flow back to Gray. It was never recovered.
Gray and his wife spent lavishly on cars, houses, and things such as "$4,000 lunches at Cabaret Royale. There was ostentatious wealth, lots of traveling," recalls Webster. In all, the government recovered about $3.3 million in investors' funds, Webster says, and the yearlong undercover operation yielded a well-documented case against Gray, his wife, and several associates. They were charged with conspiracy, money laundering, and wire fraud. Gray was convicted of 27 counts and sentenced in October 1991 to 12 years in prison. Marty Weisberg, a New York attorney who worked with Gray, was acquitted.