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June 30, 2018

40-YRs AFTER THE KING’s DEATH, THE FBI’s “OPFOPEN” AGENTS TALK ABOUT PHIL KITZER & FRED PRO STEALING ELVIS PRESLEY’s LOCKHEED JETSTAR!

OPFOPEN KITZER PRO PRESLEY

NEW YORK — Shaking off a laugh, FRED PRO got serious for a moment. “How much can we trust these guys,” he asked, referring to JIM WEDICK and JACK BRENNAN … both sitting at the table? He was talking to PHIL KITZER. They were having drinks in the Sheraton Essex lounge located on Central Park South in New York City.

KITZER and PRO were “international” swindlers whose scams netted millions. Not just common thieves, but top-notch con men, whose exploits were well known to authorities in Europe and the United States. Scheming, you might see them sipping wine in a French restaurant overlooking the Blue Danube or having lunch on the Spanish Riviera in Malaga. Yet despite their reputations, only KITZER had a criminal record.

Charged with looting $4 million from policyholders in AMERICAN ALLIED INSURANCE, prosecutors said KITZER was the “mastermind,” in a massive criminal conspiracy that involved senior bank officials and insurance executives in two states, and the Minnesota Insurance Commissioner. The Indictment charged KITZER and 16-close associates. Newspapers in Minneapolis and Chicago said testimony in the 14-week trial talked about “bribery, backroom deals, and political treachery.” But KITZER claimed differently, 8-days on the witness stand, he said the case had little to do with “fraud,” but was instead a “vicious” attack by party apparatchiks, angry with him for opposing the Democrat-Farm Labor Party’s political platform, circa 1965-66. KITZER said former Governor KARL ROVAAG, Attorney General ROBERT MATTESON and U.S. Attorney MILES LORD, later appointed a U.S. District Court Judge, conspired to get him.

But deliberating only 2-days, in a stinging rebuke to the Justice Department, on June 23, 1967, KITZER was “acquitted” on all charges, as were three close associates, including Minnesota Insurance Commissioner CYRUS MAGNUSSON. Jurors said the Government failed to prove its case. At the behest of prosecutors, U.S. District Court Judge EDWARD J. DEVITT “dismissed” the case against the remaining 13-defendants. Courtroom observers credited KITZER with the “win,” saying he skillfully handled prosecutors’ questions during six-days of grueling cross-examination.

Departing Miami enroute to New York, KITZER said PRO was a “bust” out expert, whose specialties included “preying” on businesses being reorganized under bankruptcy protection. Skilled at manufacturing “bogus” expenses, submitting fraudulent invoices and liquidating assets, he said PRO would divert cash until a company went belly-up. Where he went, financial ruin always followed. And despite angry creditors, he lived well. Residing in Palm Beach on beach front property, KITZER said PRO liked to cruise the Caribbean and made frequent trips overseas. Asked about “failed” businesses left in his wake, PRO liked to tell attorneys he wasn’t good at managing cash flow.

Similarly, operating a network of offshore banks, KITZER sold “bogus” securities, and “laundered” transactions for crime figures in United States and Europe. But unlike PRO, he always demanded “cash,” and didn’t put money into extravagant trappings … assets creditors could seize. He warned PRO setting up shop on Central Park South made him an attractive target for the FBI. Per chance, he bought property, KITZER made sure it was mortgaged to the hilt or held in someone else’s name.

Swirling his drink, PRO again inquired, “Are you sure we can trust these two guys?” Without assurances he was reluctant to speak in front of the two men.  KITZER grinned, ordering another drink.

It was KITZER’s network of offshore banks that enabled PRO to take control of businesses being reorganized under bankruptcy protection. That was his scam. Sometimes for just pennies on the dollar, he would buy a company using securities provided by KITZER. Once taking control of the company, he would substitute assets. Con men call it, “bootstrapping,” purchasing a company with its own assets. And as CEO, PRO always made sure he was paid well.

Just twenty-four hours earlier, KITZER, WEDICK & BRENNAN were at the SHERATON FOUR AMBASSADORS, in Miami, sharing a suite overlooking Biscayne Bay. Leaving Florida, KITZER called PRO, telling him, he was headed to New York City. He said he was setting up another vehicle, a new offshore bank and wanted to get together.

Hearing PRO’s concern, KITZER laughed. He didn’t like to mince words. Over the years, he and PRO made a lot of money. In Cleveland, months earlier, talking about a scam, KITZER stopped in mid-sentence asking who was going to initiate the “conspiracy?  Take the first ‘overt’ act?” The comments drew “pained” expressions, but it was trademark PHIL. He liked being blunt.

“Yeah, they can be trusted,” KITZER replied, looking at PRO. “They’re going to facilitate your next scam.” He said WEDICK and BRENNAN were going to be bank officers in the new FIRST NATIONAL CITY BANK OF HAITI. “Well,” PRO responded, demeanor changing. “Always pleased to meet someone in the business,” hoisting his drink in salute.

Relaxed now. KITZER and PRO traded barbs, each teasing the other about past schemes and who was best. Each story topped the last. But PRO changed his deportment when the topic of offshore banks came up. He credited KITZER with teaching him everything he knew about “bank” paper. Said he was the “best,” the “master,” when it came to “bogus” securities and closing deals. And at KITZER’s insistence, later agreed, when it came to money, he “paid” KITZER, and “not” the other way around.

But KITZER also had to concede PRO pulled off some spectacular frauds mentioning PARKER WEST and the GLASSIC MOTOR CAR COMPANY, in Palm Beach, and the REL-REEVES CORPORATION, in Boynton Beach, an $18 million telecommunications giant formerly owned by DYNAMICS CORPORATION of AMERICA. And working with mobsters in the GAMBINO crime family, defrauded the IVERSON BYCYCLE COMPANY causing stockholders to lose $44 million.

Talking about swindles, PRO said included in his list of ten best scams was ripping off ELVIS PRESLEY, the King of Rock. KITZER agreed, adding PRO had a panache for dramatics. Laughing, spilling his drink, KITZER said, “Wheels up,” an excited PRO called him from PRESLEY’s Lockheed JetStar. “We got it,” he said, “We got it.” Departing Memphis International, KITZER said PRO called him at home using the plane’s sky phone. He repeated PRO kept screaming, “We got it.” Arriving in New York, PRO used the jet to secure a $1 million loan.

KITZER said PRO had real “cojones” taking the jet.  But reminded him, they needed his bank to close the deal. Both men “reeled” about the scam. PRO said he used the jet for about six-months, flying everywhere, taking money.  He said the jet “opened” a lot doors.  Made it easy to get introductions.

Always living in the moment, KITZER and PRO didn’t worry about scams blowing up. Nor did they worry about law enforcement. PRO liked to call agents “lettermen,” while KITZER dismissed the FBI as an occupational hazard.  But in three short months, tragically, newspaper headlines said the King of Rock was dead. The victim of a heart attack.  But neither KITZER nor PRO were concerned … worried about being prosecuted. Not the crime nor the fact they took PRESLEY’s jet concerned them.  Both men thought authorities would chalk it up as a bad business deal.  Place the blame with PRESLEY’s father, VERNON, since his business acumen was known to be suspect. But unbeknownst to the two men, PRO’s suspicions were dead on. BRENNAN and WEDICK were FBI undercover agents. KITZER and PRO were in serious trouble.  The Justice Department had launched an “unprecedent” undercover operation and both men were targets.

A true crime drama, “CHASING PHIL,” by DAVID HOWARD [CROWN (OCT 2017)] is the story of FBI undercover agents, JIM WEDICK and JACK BRENNAN, infiltrating the world of PHIL KITZER, a globetrotting swindler, who authorities said fleeced millions selling “bogus” securities and laundering money for Organized Crime [OC] figures. Described in some circles as the world’s greatest con, Justice Department officials said KITZER operated at the “highest levels of international banking and swindling.”

Writing for THE WALL STREET JOURNAL [WSJ], JIM DRINKHALL once told readers, “No article on offshore bank thievery … [was] complete without at least a passing reference to … legendary con man PHILLIP KITZER.” In a piece captioned, “PAPER PIRATES: Con Men Are Raking in Millions … Setting Up … Caribbean Banks,” DRINKHALL said KITZER pedaled “at least $100 million” in bogus securities, adding “[his] downfall came … [when] he took-in two protégés … nicknamed … ‘Junior G-men’ … [unaware] they were FBI agents.”

Framed in exotic locales, CHASING PHIL details for the first time, the FBI’s efforts to conduct a White-Collar Crime [WCC] sting in case code named, “OPFOPEN [an acronym for Operation Fountain Pen], Major Case #1,” circa 1976-78, that targeted OC figures in the US and Europe, and members of Geneva, Switzerland’s famed underworld using FBI undercover agents. Also included are efforts by agents to investigate/prosecute members of the GAMBINO crime family looking to take over the BROOKHAVEN MORTGAGE SERVICE COMPANY, in [Melville] Long Island, New York wanting to use the company’s $150 million loan portfolio to make street loans and fund drug operations.

The case also details the true origins of the FBI’s famed ABSCAM case and MEL WEINBERG, the confidential source whose information caused six members of Congress and one US Senator to be prosecuted for soliciting “bribes,” in exchange for supporting legislation favoring an Arab Sheik.

Learning about the two undercover agents in CHASING PHIL, WARNER BROS PICS secured rights to produce movie with ROBERT DOWNEY JR. producing/possibly staring as PHIL KITZER, with DAVID BAR KATZ writing the screenplay.

In December 2017, JIM WEDICK and author DAVID HOWARD were invited to attend a book signing event held at the MOB MUSEUM, in Las Vegas.  The affair was held inside the KEFAUVER court room exhibit that replicates the KEFAUVER COMMITTEE HEARINGS held by the US Senate investigating Organized Crime [OC] and chaired by Senator Estes KEFAUVER, circa 1950-51. Renovated several years ago, at a cost totaling almost $45 million, the MOB MUSEUM is housed in the old courthouse where the hearings were held when SEN KEFAUVER and his committee took testimony in Las Vegas.

ABOUT THE AUTHOR:

In the FBI for almost 35-years, Mr. WEDICK’s career includes being an FBI undercover agent, case agent, and later responsible for the FBI’s corruption squad in Sacramento, California. His experiences include initiating the FBI’s “OPFOPEN” investigation that targeted globe-trotting conmen and Organized Crime [OC] figures using “offshore” banks to launder money, issue bogus securities and conduct fraudulent transactions; brief undercover roles in the ABSCAM probe where members of Congress were later prosecuted for soliciting bribes; and prosecuting the sons of New York mobster JOE BONANNO in operation code named, “SKINBURN,” responsible for defrauding hundreds of thousand dollars from businesses in California and Utah.

Following a successful 3-year undercover probe in operation dubbed “SHRIMPSCAM” by the news media involving the California State Legislature, in 1994, he received the FBI Director’s Award for prosecuting 5 California lawmakers on RICO and corruption charges and his performance was cited in the U.S. Congressional record. Because the investigation involved a complicated “undercover” scenario using “bogus” legislation that required the specific approval of the FBI Director, he was nominated for the Attorney General’s Award and was featured in a LOS ANGELES TIMES SUNDAY MAGAZINE article captioned, “The G-Man, the Shrimp Scam and Sacramento’s Big Sting: FBI Agent JAMES WEDICK’s Undercover Operation Netted 14 Public Officials. But Has It Changed the Way the State Legislature Works?” by MARK GLADSTONE and PAUL JACOBS, dated December 11, 1994.

In 1996-97, amid allegations suggesting Fresno area officials were seeking “bribes” in exchange for favorable zoning changes, code named, “REZONE,” Mr. WEDICK prosecuted 17-defendants, including county officials, lobbyists and businessmen … all charged with violations of RICO and corruption statutes … again securing convictions.

And because auditors suggested Medicaid Fraud had become the crime du jour amongst White Collar Crime [WCC] thieves, during period 1998 thru 2001, he launched 3-Health Care Fraud Initiatives prosecuting 324-medical providers with defrauding funds totaling in excess of $228-million. The successful FBI Initiatives attracted the attention of broadcast and print journalists alike, including MIKE WALLACE on 60 MINUTES and the LA TIMES who did a nine-part series detailing the fraudulent abuse of California’s Medicaid Program.

In April 2004, Attorney General JOHN ASHCROFT congratulated Mr. WEDICK on his retirement from the FBI commenting his investigations into White Collar Crime, Organized Crime and Public Corruption were “models” for other agents to “emulate.”

For more information see JAMES J WEDICK’s profile here: https://fbiretired.com/agent/wedick/

You can also follow JAMES J WEDICK on Twitter and LinkedIn.

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