West Van pro­moter snared in anti- Mafia roundup

Robert Pa­palia, un­der ar­rest in Mi­lan, among 17 men charged in Italy

Vancouver Sun - - Businessbc - BY DAVID BAINES

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.

WARD PER­RIN/ VAN­COU­VER SUN FILES

West Van­cou­ver stock pro­moter Robert Pa­palia was ar­rested in Italy in con­nec­tion with a probe into Mafia fig­ures.

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