Insider Helps Feds Take Down Mob on Wall Street

Aug. 28, 2004 -- Lou Pasciuto was a street smart kid working at a gas station New York City's Staten Island who moved across the harbor to Wall Street and became a millionaire. But today the mob has put a price on his head because he came forward to tell the story of his deal with the devil and how he earned his money.

Pasciuto and his colleagues would target people who had no knowledge of the workings of Wall Street.

"They were buying nothing. They were putting money in a bank account and I was going and taking it out."

One of the victims of Pasciuto's scam was retired businessman Joseph Weresh of Phoenix. His monthly statements from Pasciuto showed blue chip stocks and big profits — all of it bogus. Before he died, Weresh lost more than $500,000 to Pasciuto's long-distance spiel.

"I think the caller liked it, you know? They were fascinated by it. You know, 'A guy from New York is calling on the phone. He is a spit throw away from the New York Stock Exchange.' … They would send their life savings to you, and entrust you with almost all their money."

Pasciuto ran his scam within blocks of the real Wall Street, where people who sell stocks to the public have to take a test to be licensed. Pasciuto had no license, but that was no problem for him. He had a friend take the test for him.

He had taken the test himself but had failed it, he said. "I didn't fail it because I wasn't smart enough to pass it. I just, didn't have the time to study. I was making money."

‘The Forrest Gump of Securities Fraud’

During his run on Wall Street, Pasciuto worked at 17 different fly-by-night brokerage houses.

He was trying to stay one step ahead of the FBI, which was trying to break up the mob's Wall Street operation.

Former FBI special agent Kevin Barrows, who was assigned to go after the mobsters and their biggest money maker, said the 20-something Pasciuto kept them busy. "We referred to him as the Forrest Gump of securities fraud, because he seemed to show up in all these very infamous places."