West Van promoter snared in anti- Mafia roundup
Robert Papalia, under arrest in Milan, among 17 men charged in Italy
Italian police have arrested West Vancouver stock promoter Robert Papalia in Milan and charged him with associating with Mafia figures.
The arrest on Tuesday was part of a campaign by Italian authorities to dismantle a financial empire allegedly run by Canada’s top Mafia boss, Vito Rizzuto of Montreal.
Rizzuto is in prison in the U. S. for three gangland slayings, but according to Italian authorities, he still runs a network of Mobrelated companies.
Some of those companies are listed on European and North American stock markets, “ including one registered in Vancouver to develop business projects linked to gold mines in Canada and Chile,” according to the National Post.
This appears to be a reference to Infinix Ventures Inc., a Vancouver- based company that has been closely linked to Papalia and his twin brother, Anthony. Like most of their recent stock deals, the company’s shares are quoted on the loosely regulated OTC Bulletin Board in the U. S.
On Tuesday, police conducted a series of raids in Italy and France, seizing 22 companies, freezing $ 689 million worth of assets, and charging 17 men, including Papalia.
“ We have seized many companies and hundreds of millions of euros all around the world because we believe that behind these companies is Vito Rizzuto,” Silvia Franze, an investigator with the Direzione Investigativa Anti- Mafia in Rome, told the Post.
In May 2007, Rizzuto pleaded guilty in U. S. District Court in New York to being present at the 1981 gangland killings of three disloyal Bonanno crime family captains, made famous by the Hollywood movie Donnie Brasco.
He admitted he had been there, but had only yelled “ It’s a holdup” while others did the shooting. He is expected to serve just five years in the United States, and another three years in Canada under supervised release.
Even though Rizzuto is in jail, Italian authorities issued a warrant for his arrest. They also issued warrants for Rizzuto’s father, Nicolo, and three other men — Paolo Renda, Francesco Arcadi, and Rocco Sollecito — all of whom are in Montreal awaiting trial.
Another Canadian businessman — Felice Italiano of LaSalle, Que. — was arrested in his Rome hotel room just before he was scheduled to fly home to Canada. In the 1990s, Italiano was arrested in connection with one of Canada’s largest drug seizures, although charges were eventually dropped.
The Post reported that, according to legal documents filed in connection with the case, Rizzuto sought to “ manage and control the economic activities connected to the acquisition of contracts in public works” and “ commit a series of crimes — killings, international drug trafficking, extortion, frauds, smuggling, stockmarket manipulation, insider trading and criminal transfer of securities.”
Details of Robert Papalia’s alleged involvement are not known, but his specialty, and that of his brother, has been stock promotion.
Born in Italy and raised in Montreal, the Papalia twins attracted police and regulatory attention early in their careers. In 1974, the Montreal Exchange delisted their company, Pacific Nickel Mines, for allegedly using company funds to buy shares of a Toronto Stock Exchange company.
The brothers then went to England, where they got into more trouble. In 1977, they were arrested by Scotland Yard in connection with an alleged plot to defraud investors through their company, Metals Research S. A., which claimed to have a gold mine on Texada Island ( a property that would be repeatedly featured in later promotions). After lengthy court proceedings, they were acquitted of all charges.
Meanwhile, Anthony Papalia was charged in Vancouver with defrauding Continental Securities of $ 51,000. He was convicted in 1982 and sentenced to two years less a day, but the appeal court overturned the conviction and ordered a new trial. Rather than re- try the case, t h e C rown dropped the charge.
In 1986, the Papalias took control of Vancouver Stock Exchangelisted American Westwater Technology Group and the stock rose to a high of $ 9.75 on the basis of its proposed acquisition of some medical technology and an interest in a car distributorship.
RCMP alleged in search warrant documents that the brothers had been manipulating the company’s stock price. In December 1988, Robert was charged with issuing a false prospectus, but that charge was eventually dropped.
In 1990, the Papalias joined the board of VSE- listed Rhyolite Resources, once again promoting the Texada property. However, the VSE refused to reinstate the company for trading due to the Papalias’ history, so the brothers moved to the U. S. over- thecounter markets.
One of these deals was Crys- Tel Communications Ltd., an OTC Bulletin Board company which proposed to offer long- distance telephone services over the Internet. The stock peaked at $ 4 US in January 1999, then fell apart.
According to documents obtained by The Vancouver Sun, Anthony Papalia — who was then in regular contact with Vito Rizzuto — was an active trader of Crys- Tel stock through Lines Overseas Management, a controversial Bermuda- based brokerage firm used by many Vancouver promoters.
Robert Papalia was also heavily involved in another bulletin board company called Nano World Projects Corp. In August 2004, the SEC barred him for life after he was found to have issued a series of false and misleading statements about Nano World’s business affairs. The B. C. Securities Commission similarly banned him.
Meanwhile, Infinex Ventures, under the control of Howe Street promoter Mario Aiello, proposed to acquire some technology from Nano World. However, in April 2003, Infinex cancelled the deal, perhaps due to the SEC’s investigation into Nano World.
Control was ostensibly passed to Montreal promoter Michael De Rosa, but this did not break the connection with the Papalias. In May 2004, Infinex acquired an option on the Papalias’ Texada property.
A month later, the stock peaked at $ 2.30. The company later acquired a Chilean property, but the shares have since slumped to 46 cents.
West Vancouver stock promoter Robert Papalia was arrested in Italy in connection with a probe into Mafia figures.