Insider Helps Feds Take Down Mob on Wall Street

ByBrian Ross and Jill Rackmill

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."

Barrows, who continues to investigate corporate fraud and computer crimes for the consulting firm Stroz Friedberg, said Pasciuto was very good at his game.

"He used fake names and went from place to place and was often paid in cash, it was very difficult to find his true identity. … He was a very big producer — meaning he was very good at what he did," Barrows said.

  The cash poured in, as much as $80,000 a week, and it was no problem finding places in New York to spend it. Pasciuto said the job gave him a life of "unlimited coke, unlimited money, and unlimited women."

  Most of the money was spent at a place called Scores, a so-called gentlemen's club, where Pasciuto found celebrities and sports figures who also fell for his line, like boxing champion Vinnie Pazienza.

 "Now when I look back thinking about it, I'm like these rat bastards were in there spending everybody's money, acting like big shots," Pazienza said.

Indeed. Pasciuto was a big man at Scores and all over New York. His cash was just as good as that of the real Wall Street brokers.

"We could spend six, seven thousand dollars there in one night, that's easy," Pasciuto said.

And when he ran out of money, Pasciuto said, "I'd go back and rob some more."

  But unbeknownst to Pasciuto, the FBI had decided he could be the man to help them bring down the mob on Wall Street, and agents were tracking his every move.

Barrows said agents armed themselves with as much information as they could possibly gather about Pasciuto. "I don't just mean the places he'd been and the stocks that he'd sold," Barrows said. "But I mean his personal relationships. What kind of pets he owned. His friends' pets' names. We felt that if we were armed with enough specific information … when we sat down and confronted him, there would only be one option and that option would not be to lie to us."


The FBI wanted the big fish in the mob who were active on Wall Street, like Sonny Francese, the boss of the Colombo family, and Phil Abramo of the New Jersey DeCalvacante family, men with whom Lou Pasciuto was pulling off lots of scams.

 "He was in a position to get to know a lot of gangsters and to know what a lot of gangsters were doing," Business Week reporter Gary Weiss said of Pasciuto.

Weiss, who first broke the story of the mob's infiltration of Wall Street, details how mobsters came to rule every aspect of Pasciuto's life in his book Born to Steal: When the Mob Hit Wall Street.

"He spent his entire adult life as a slave to these guys, as their property. And he just didn't want them to dictate his lifestyle anymore," Weiss said.

Pasciuto says his own master was Charlie Ricottone. "If anything went wrong," Pasciuto said, "we went to Charlie." Ricottone became Pasciuto's friend and protector, and ultimately his nightmare.

Pasciuto says Ricottone used his mob connections to protect him from other hustlers moving in on his business — but for a price. And that price, according to Pasciuto, seemed to go up every month.

 Pasciuto gave Ricottone a cut of his earnings every month, and when he didn't have the money, Ricottone roughed him up a bit.

The day finally came when Pasciuto had had enough.

"I just gave him the last, uh, $6,000 I was ever gonna give him — and I walked away. And I just knew, at that point, I would never give him another dollar — no matter what he did to me. I was done," Pasciuto said.

A few days later there was a knock on the door. It wasn't Charlie, it was the FBI. "It was five in the morning," Pasciuto said. "And you know, when I opened the door, I might have been almost kind of relieved that it was the FBI and not Charlie."

It was Barrows and a colleague who confronted Pasciuto. "My partner and I began to go through his entire life and we said, 'you know, these are the things we know. These are the things we intend to prove,' " Barrows said.

Six months later, the FBI moved in, in a big way, in what authorities called the biggest FBI takedown on Wall Street in history. Much of their case was based on information and cooperation Pasciuto gave the FBI.

"I had to tell them everything — from start to finish," he said. "Every Mafia guy. All the scams. All the people involved. Everything. And they got eight years of Wall Street from me."

Some of Pasciuto's close buddies were particularly hit hard. Benny Salmonese and Marco Fiore, and Pasciuto's protector, Riccotone, are now in federal prison. Through his lawyer, Riccottone says Pasciuto is a liar.

Pasciuto is also in a federal prison today. Despite his cooperation with the FBI, this May Pasciuto was given a 30-month sentence for his crimes on Wall Street. And he knows that he'll be vulnerable when he's back on the street with some of the men he helped send to prison.

"You know this guy is gonna get out of jail one day. And he is gonna know that I put him there. And then, you know, he is gonna come looking," he said.

And his fellow cons aren't the only ones who'd like to exact some revenge. There are investors like boxing champ Vinnie Pazienza, who lost more than $200,000. Pazienza said he has a message for Pasciuto. "I'd like, kick your ass, but you know what, it's not enough. You deserve much worse. But what goes around comes around, kid."

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