It was late in 1994. In the Seagram Building on Manhattan's Park Avenue, a small brokerage firm called Westfield Securities had two grim-faced visitors. The two men had worked with Westfield in peddling stocks to the public. They were owed money. But they weren't paid--and now they had come to take over the firm. According to people familiar with the incident, one of the men was dark and stocky, about six feet tall. He walked up to the head of the firm, Salvatore J. Mazzeo, and jammed a gun against Mazzeo's head.
The man with the gun was a 37-year-old French-born stock promoter named Albert Alain Chalem. After the men delivered their "message," Mazzeo swiftly called for help from the only kind of authority figure who could help him deal with Chalem--an acquaintance in organized crime. For Chalem was not just a hothead with a gun. He was an associate of Mob figures prominent on Wall Street, including reputed mobster Philip C. Abramo. The trouble was resolved. But it required the intervention of a high-ranking member of organized crime to get Chalem to go away.
Well, Chalem has gone away now--and for good. On Oct. 26, he and a business associate, Maier Lehmann, were found dead of multiple gunshot wounds in a house in Colts Neck, N.J., a prosperous New York suburb. The killing was vicious, with Chalem--but not Lehmann--shot in the eyes, ears, and mouth. In the weeks since, the press has been rife with speculation as police and the FBI combed through the two's tangled business dealings. They ran Web sites. They sold stocks short. They had accounts at a defunct day-trading firm. They had business deals in Eastern Europe and Israel and were suspected of links to money launderers. But who wanted them dead? And why?
That question may never be satisfactorily answered. But BUSINESS WEEK has learned, from persons close to the investigation and others with knowledge of the men, that Chalem was a key link between the microcap world and organized crime. Investigators are probing links between Chalem and Abramo, who has been described by the FBI in court documents as a capo in the DeCavalcante crime family. Probers have linked Chalem and Abramo via their alleged mutual connection to two now defunct brokerages--A.S. Goldmen & Co. and Toluca Pacific Securities. Persons familiar with their activities during the mid-1990s say Chalem and Abramo allegedly manipulated the shares of a California high-tech company called Osicom Technologies. The shooting victims' dealings with a former Osicom director, Barry Witz, are also being probed by law enforcement.
The murders of Chalem and Lehmann, are a sign that the law enforcement campaign against Mob infiltration of the Street may be starting to draw blood--and that the Mob is striking back. The double homicide could seriously hamper future prosecutions if witnesses begin to balk. The slayings have already sent a chill through the microcap community, and with good reason. According to persons close to the inquiry, neither Chalem nor Lehmann acted as if they had anything to fear. Both men were planning a business trip that was abruptly canceled. They were, apparently, killed by somebody who was close enough to know their change in plans.
RED HERRINGS. Chalem's alleged Mob links are apparently immense. "He knew dozens of wise guys," says a former associate. Moreover, the purpose of the murder is clear. Persons with firsthand knowledge of Mob tactics say it was designed to deliver a "message." It was simple and crude--"Rats die," in the words of one person with intimate knowledge of Mob tactics. One or both of the men were either providing information to law enforcement or were perceived as doing so. There are evidently other potential witnesses out there. And somebody wants them to shut up.
The public character of the slaying is the key. If the victims were simply being killed for some "misdeed," the killers could have disposed of the bodies and thus avoided all the attention from the press and police. "If [the victim] is the only player, you just `whack' him--put him away," says a former official of the Organized Crime Task Force in New York. "Here, there is something ongoing, and you're educating the players that are left."
To be sure, Chalem and Lehmann were involved in a maze of business dealings, many with people with unsavory ties. The result has been an almost endless array of red herrings. For example, Lehmann is described by sources close to the probe as having had business dealings with people linked to Russian organized crime figures. He and Chalem also engaged in short-selling of stocks they believed were fraudulent, betting their prices would fall. Lehmann also fed information to elements of the financial press on his short positions and would boast of his knowledge of items scheduled to appear in the press.
MOB TRIAL. However, Lehmann's various enterprises were less likely to give rise to homicide than Chalem's. And organized crime experts note that the nature of the wounds seems to indicate that Chalem was the main target of the murderer. Persons familiar with the New York Mob deride press speculation that the location of the murders--a private home occupied by Chalem--precludes the possibility that the murders were carried out by "traditional" organized crime because of some kind of "Mafia code of conduct." Says one former law enforcement official: "They'll kill you in your bedroom."
The alleged Abramo-Chalem connection is being intensely probed by law enforcement. Abramo and five alleged associates are awaiting trial on multiple counts of stock fraud and racketeering. Abramo has pleaded not guilty to the charges, which were handed up by a federal grand jury in Tampa last June (BW--July 5). He is being held in prison without bail. Abramo's lawyer, Joseph H. Ficarrotta, did not return calls requesting comment.
The stakes in the Tampa case are serious indeed for the 54-year-old Abramo, who faces up to 20 years' imprisonment if convicted. Persons familiar with Chalem's activities say that he was not involved with the brokerage named in the Tampa case, Sovereign Equity Management. But Chalem might have been able to help prosecutors in other inquiries--involving other possibly Abramo-linked firms and stock promotions. Investigators are also examining the Westfield incident, which may provide other clues of Mob links to Chalem.
Abramo's alleged role at Toluca Pacific Securities Corp. was first reported in a December, 1996, BUSINESS WEEK cover story. But his alleged involvement with A.S. Goldmen has never been publicly revealed. Persons familiar with his activities maintain that Abramo held sway over Toluca in the mid-1990s, and was often seen in the company of Chalem--who, says one source, controlled more than 200 brokers at Toluca. According to a person with knowledge of the investigation, Abramo has been linked by law enforcement to A.S. Goldmen in the mid-1990s, at about the time Chalem was officially associated with the firm in National Association of Securities Dealers records. In July, a New York State grand jury in Manhattan handed up a 129-count indictment, charging Goldmen and 17 of its former principals with enterprise corruption. Neither Abramo nor Chalem were named in the indictment.
The alleged control of Osicom shares by Abramo and dealings between the two dead men and former Osicom director Witz are also being probed by investigators. According to a law enforcement official, stock records show that Osicom stock was directly controlled by Abramo and was transferred directly to Abramo's name. Witz's phone listing in Beverly Hills, Calif., is disconnected, and efforts to reach him were unsuccessful. An Osicom spokesman notes there is no current connection between Osicom and Witz, and the company knows of no investigation of Osicom and has no ties to Abramo or the two dead men.
Chalem had no shortage of associates--or enemies. After pressing his gun into Mazzeo's head, people familiar with the incident say, Chalem went to the Four Seasons restaurant to drink with his cronies. He could be savage, charming, or larcenous, depending upon the role that he had to play. His last role, however, is the one he will be remembered by--as the man who ventured into the world of wise guys on Wall Street and paid with his life.