Skip to main content

Bad Dream The Casinos, the Mob and the Missing Millions

It was a vision to cap a remarkable career. Deal-making smarts had taken Michael DeGroote from hardscrabble immigrant roots in Ontario farm country to the stature accorded a billionaire and benefactor par excellence.
His new venture, hatched in his late 70s, was to invest in Dream Corporation, whose partners were bent on founding a new Las Vegas in the Dominican Republic.
But those partners became more interested in squeezing each other out than in running the business. Things turned violent. Soon, Mr. DeGroote's millions were gone and his dream had turned into a nightmare.
Michael DeGroote may have been in the twilight of a successful career, but the deal maker couldn't resist Dream Corporation's vision of a new Las Vegas in the Dominican Republic. Little did he suspect that the owners he backed would soon be at war — and that the godfather himself would enter the fray

When Michael DeGroote stepped up to the lectern at McMaster University last May 23, he cemented his position as one of Canada’s most generous philanthropists. In his distinct gravelly voice, the now 81-year-old billionaire, who made his fortune in trucking and waste management, announced to a graduating class of medical students that he was giving their school another $50-million – bringing his family’s total contributions to the Hamilton university to more than $175-million.

The surprise announcement sparked gasps, whistling and a standing ovation.

But at the same time as Mr. DeGroote was being heralded for his largesse, thousands of kilometres away another of his investments was caught up in an entirely different commotion: mounting evidence that the philanthropist had been defrauded, and an underworld war involving Canada’s most powerful and feared Mafia family.

In 2011, Mr. DeGroote served as the sole investor in a casino company trying to capture a swath of the gaming industry in the Dominican Republic. There were three owners of that company, Dream Corporation, and when relations between those three deteriorated, the Mafia inserted itself into the conflict, a joint investigation by The Globe and Mail and CBC’s the fifth estate has found.

This battle erupted in a number of ways, in the form of lawsuits filed in Ontario Superior Court and violence in the streets of Santo Domingo, the Dominican capital.

Video and audio evidence, as well as interviews, show that as the dispute escalated, Vito Rizzuto, the godfather of the Montreal Mafia, inserted himself into the affair, and members of his criminal network helped protect and manage the casino chain.

Mr. DeGroote, who responded to questions through his lawyers, said that he was not complicit in any way in the involvement of the Mafia into the dispute. And there is no suggestion he was.

The philanthropist has never had “any association of any kind” with Mr. Rizzuto, his lawyer William McDowell said in a Jan. 13 letter.

photo
Photo: Dream’s casino in Santo Domingo is one of the gambling businesses acquired by Dream Corporation during its Dominican expansion between 2011 and 2012. (Harvey Cashore/CBC)

In 2012, Mr. DeGroote launched a lawsuit against the owners of Dream – brothers Antonio and Francesco Carbone, and Andrew Pajak – alleging they misappropriated portions of $112-million he lent for the acquisition of more than a dozen casinos, about 200 sports betting parlours and 1,100 lottery terminals. Several Ontario Superior Court judges have ruled in favour of Mr. DeGroote and the many motions he has filed as part of the suit. Mr. Justice Frank Newbould declared in November, 2013, that the trucking magnate has “established a strong case in fraud” against the Carbones and Mr. Pajak.

“Mr. DeGroote has been targeted by a series of unscrupulous people, as the court decisions reflect,” his lawyer said. “He has been the victim of wrongdoing at every stage of this matter.”

In a bid to demonstrate that they have been miscast as the villains in this plot, the Carbone brothers have mounted an aggressive defence. Armed with surreptitiously recorded audio, surveillance footage, e-mail and other documents, they’ve launched a scorched-earth litigation strategy. Two judges have deemed their recordings inadmissible and unreliable. Another has called them irrelevant to their defence of Mr. DeGroote’s claim of fraud.

Through interviews with a combination of sources – including organized-crime experts, individuals in the Dominican Republic, officials from Dream Corporation, and some criminals – The Globe and Mail and the CBC have corroborated key information contained in the recordings. What that information shows is the ways in which the Mafia exploits conflict, and how organized crime intersects with business.

The story of Dream Corporation is a complex case study in the power of capital and the perils of venturing into high-risk jurisdictions in search of profit. It is also a cautionary reminder that there is far more at stake in an investment than simply making or losing money.

The Dominican Republic has all the characteristics – lax regulations, poor law enforcement, corruptible public institutions – that make for a hazardous business environment. But the country, which shares an island with Haiti, has another distinct feature that renders the gambling industry that much more dangerous: a selection of Canadian Mafiosi who consider the Dominican a second home.

The Deal

“Whatever they’re telling you [inaudible], I raised all the capital.”— Andrew Pajak recorded by Boghos Alexanian
Part 2

The story of Dream Corporation starts with a wedding and a godfather – but not that kind of godfather. It was at the marriage of his goddaughter in the fall of 2010 that Mr. DeGroote ran into Andrew Pajak, a man he had called a friend for 40 years.

In the 1980s, when Mr. DeGroote was already a well-established titan of Canadian business, Mr. Pajak was a high-rolling real-estate developer who was married, at the time, to a former Miss Toronto.

But now, Mr. Pajak explained, he had moved into the gambling business. He was working for a gaming-technology company with two brothers, Francesco Carbone, who is now 47, and Antonio Carbone, now 39. The trio were manufacturing sleek, screen-based gaming machines designed to offer much more than the passé thrill of pulling a slot-machine handle.

The company had already identified an opportunity in Jamaica. A nightclub and gambling facility, the Vegas Flamingo, was on the cusp of opening in Montego Bay, and the Carbone-Pajak team was hoping to fill it with its machines.

After touring the trio’s Toronto-area office and visiting Jamaica with his chief financial adviser, Mr. DeGroote was convinced they were on to something; he provided their company with a $5-million loan on Dec. 1, 2010.

It was not uncharacteristic for Mr. DeGroote to latch onto shiny new investment opportunities. As Canadian Business magazine once put it, “DeGroote’s real love – and talent – is buying more companies.”

photo
Photo: Michael DeGroote, seen in a Toronto hotel room in 2006, amassed a fortune in trucking and waste disposal before investing in the Caribbean casino business. (Deborah Baic/The Globe and Mail)

Mr. DeGroote, who emigrated from Belgium with his family as a teenager, dropped out of high school to work on tobacco farms in order to help support his family. In his 20s, he bought a small trucking outfit, Laidlaw Inc., which he gradually built into a $5-billion company with school-bus and waste-disposal operations as well as its original business. He sold his stake to Canadian Pacific in 1988 for $500-million.

Laidlaw itself, built by a string of acquisitions, illustrated Mr. DeGroote’s love of the deal. Over the decades, he has also sunk capital into the taxi industry, the CFL’s Hamilton Tiger-Cats, home-security systems, a trust company, car dealerships, and oil and gas exploration. He collects companies the way some people collect stamps. In a 1997 interview with the Financial Post, he compared his latest venture at the time to owning an animal. “I love it,” he said. “It’s great to have pets to play with.”

By the time the opportunity presented by Mr. Pajak and the Carbones came up, Mr. DeGroote might have been content to rest on his laurels. Long having resided in Bermuda, he had been made an Officer of the Order of Canada in 1990 and, via his first large donation to McMaster, become the first person to put his name on a business school in Canada, in 1992. And he’d had headaches too: In 1993, he and others had paid $23-million to the Ontario Securities Commission to settle allegations of insider trading of Laidlaw shares. There was no admission of wrongdoing.

Yet Mr. DeGroote not only went for the gambling play in 2010; he quickly upped the ante. His initial returns were good, and he made further investments. The revenue reports he received from Jamaica showed that the machines generated profits of $1.7-million in their first four months of operation.

A little more than a month after the Vegas Flamingo opened, Mr. DeGroote and the trio turned their attention to the Dominican Republic, setting their sights on full-service casinos. Despite suffering from a chronic pain condition that he likens to “living in hell,” Mr. DeGroote braved the Dominican Republic’s notoriously dangerous and unmaintained roads in January, 2011, with Antonio Carbone to scout possible acquisitions.

Shortly after, the Carbones and Mr. Pajak formed the Dream Corporation and went on a shopping spree. They bought all kinds of casinos: beachside gambling houses that feature a few card games and a handful of slots, as well as full-sized casinos outfitted with all manner of wagering. All this was financed with Mr. DeGroote’s money, which he sent to the trio in instalments, in exchange for interest payments and a share of the profits.

“I am not an owner of Dream. I'm strictly a creditor.”— Michael DeGroote cross-examination (p. 138)

The structure of the deal kept Mr. DeGroote at a distance from the company. Even though Mr. DeGroote was the sole investor, Mr. Pajak and the Carbones were the owners. “I am not an owner of Dream. I am strictly a creditor,” he would later say in a cross-examination.

Nevertheless, Mr. DeGroote was in dangerous territory. His money was being used to purchase assets from questionable businessmen. Among them was a Dominican national who had once been indicted by the U.S. Drug Enforcement Agency for his alleged role in laundering the profits of a Mexican drug cartel.

Money laundering – taking the profits from crime and funnelling them through another business to make them appear legitimate – is rampant in the Dominican Republic. A year before the Carbones and Mr. Pajak began snatching up casinos, a U.S. State Department official warned that the country was stumbling toward narco-state status.

“Unless the country’s leaders show that crime is not profitable, real concerns exist that both security and democracy in the DR could be undermined as they were in Colombia,” wrote Richard Goughnour in a 2009 diplomatic note released by WikiLeaks. Mr. Goughnour cited the country’s casinos as “important vehicles” for this crime.

But the country’s reputation did not scare off the trio, whose Dominican acquisitions would be the start of something bigger. The ultimate goal of their blistering expansion, it seemed, was to create a Caribbean gaming empire and to take the company public.

photo
Photo: Andrew Pajak walks toward the Ontario Superior Court of Justice in Toronto in 2014. Michael DeGroote's interest in the Caribbean gambling play was sparked when he ran into Mr. Pajak, a friend, at a 2010 wedding. (Darren Calabrese for The Globe and Mail)

The gaming world was unfamiliar ground for Mr. DeGroote, but he and Mr. Pajak had known each other for decades.

Law-enforcement officers had known him differently. Four former investigators – two with the Toronto Police Service and two from the RCMP – said in interviews that Mr. Pajak was known to police as someone who is close with mobsters. One of those sources called Mr. Pajak “a mob associate of the first degree.”

In a secretly recorded conversation that has been entered into the court record by the Carbones in response to Mr. DeGroote’s lawsuit, and obtained by The Globe and Mail and the CBC, Mr. Pajak was heard saying, “I arranged to take care of all – of a lot of – the Mob’s money, investments. Because I do everything straight.”

Mr. Pajak, who declined to respond to numerous requests for comment for this story, does not have a criminal record.

There is little on the public record that explains how Mr. Pajak and the billionaire became acquainted. In an examination-for-discovery proceeding, Mr. Pajak testified that he and Mr. DeGroote “go back a long way from the disposal business.”

One of the former investigators identified Mr. Pajak as an official with the Super Group, a onetime Toronto-based company whose waste-management wing, Super Disposal, was the subject of a sweeping organized-crime investigation in the early 1980s.

Super Disposal was described by prosecutors in 1982 as “one mass of criminal activity.” There is nothing on the public record to indicate that Mr. Pajak was implicated in that probe.

But Mr. Pajak was only one-third of Dream.

Very aggressive businessmen

“Because one thing – one thing you said right is they fight to the end. I am ready to fight to the end.”— Antonio Carbone
Part 3

Antonio Carbone speaks with a confidence that belies his background as a house painter. Often decked out in a trim suit set off by a hockey-puck-sized Louis Vuitton belt buckle, he paces while he speaks, draws out syllables for effect, and inserts dramatic pauses – often while he’s taking a long drag on the cigarette that seems permanently affixed between his fingers.

photo
Photo: Antonio Carbone, partner in Dream Corporation with his brother Francesco and Andrew Pajak, leaves Toronto’s Superior Court in 2014. (Darren Calabrese for The Globe and Mail)
photo
Photo: Francesco Carbone worked in tandem with his younger brother in a series of businesses. (Darren Calabrese for The Globe and Mail)

Francesco is less loquacious than his older brother. When he does speak, his tone is more measured.

Despite their differences in age and manner, the brothers tend to act in unison, sometimes finishing each other’s anecdotes.

They grew up in Woodbridge, a suburb north of Toronto, and have moved in lockstep throughout their working lives, moving from one industry to another. They started out with a house-painting business and then shifted to tobacco distribution. They sold their own brand of cigars and flavoured cigarillos under the name Don Carbone. They had only recently moved into slot-machine manufacturing when, with the backing of Mr. DeGroote, they became casino executives in 2011.

The brothers credit their smooth transition into the gaming business to two things: their work ethic and the example of Howard Hughes, whom Antonio idolizes and credits with cleaning up and corporatizing Las Vegas. “Our vision here was to create Las Vegas in the Caribbean,” Antonio Carbone said. “Brand-new facilities, proper uniforms, English-speaking dealers, English-speaking bartenders, the proper Las Vegas look and feel.”

“We bought 12 casinos in 13 months and refurbished them. I don’t think it’s ever been done in history,” he said. “Dream dominated the country overnight.”

But there is another factor besides ambition and vision that launched the Carbones into the casino business. Although neither man will admit it, they had recently run an online bookmaking service. The Carbones’ website, known as DCSC.com or the Don Carbone Sports Book and Casino, was once part of the Platinum Sportsbook group, a network of betting websites that was first linked to organized crime in a 2004 shooting and was eventually dismantled by police in 2013.

The cast: The origins of Dream

portrait
Michael
DeGroote
portrait
Peter
Shoniker
portrait
Andrew
Pajak
portrait
Bruno
Pisani
portrait
Gianpietro
Tiberio
portrait
Francesco
Carbone
portrait
Antonio
Carbone
portrait
Alex
Visser
portrait
Vito
Rizzuto
portrait
Santiago
Valverde

The Don Carbone Sportsbook had ceased to exist by March, 2010, archived Internet records show, and the Carbones were not implicated in any way in the 2013 police operation. Indeed, the Carbones deny any involvement with DCSC.

“Antonio Carbone - Presidente... Francesco Carbone - Tesorero...”— DCSC Corp. Panama AGM

And the only explanation they have offered for the abundant documentary evidence to the contrary – which includes the appearance of their names on the incorporation records – is that someone must have used their names and forged their signatures to create companies they knew nothing about.

In court filings, Mr. DeGroote has said he was told the brothers were “experienced gaming operators.”

In the summer of 2011, he would learn that they had attracted police attention.

In the early stages of Dream’s Dominican expansion, the Carbones pleaded guilty in a Toronto courtroom to possession of illegal firearms. The charges stemmed from a search warrant that had been executed on the head office of their tobacco business in 2009.

Provincial revenue agents executed the search, alleging the brothers had been evading taxes by underreporting sales. That particular allegation never held up, but as the investigators scoured the warehouse for books and ledgers, they uncovered two illegal handguns: A .32 calibre revolver was found locked in a filing cabinet next to Antonio’s desk, and a loaded 9-mm semi-automatic pistol – its serial number filed off – was located in a backpack under Francesco’s desk.

The search had other consequences: The seizure of the Carbones’ books and records eventually led to the Bank of Montreal’s obtaining a court-appointed receiver to recover what it could of $10-million in loans.

As for the guns, the brothers say they acquired the weapons for protection after Francesco received five bullets in the mail along with an unsigned note promising that there were more bullets destined for his skull. Police investigated, but were unable to charge anyone. The brothers say they suspect a rival in the tobacco trade was behind the threat.

“It was business-related,” Antonio Carbone said. “We have always been very aggressive businessmen.”

In July, 2011, Mr. DeGroote’s chief financial adviser, Jim Watt, received an e-mail from an associate of Mr. DeGroote, warning him about the gun charges. The Carbones say that Mr. DeGroote was unfazed. The following month, in August, Mr. DeGroote and the trio agreed to a credit facility of nearly $92-million.

By late 2011, a number of red flags were raised for Mr. DeGroote’s team of advisers. First, in September, Jamaica’s Vegas Flamingo closed, a development that the Carbones blamed on a falling-out with one of their partners there.

In November, that disgruntled partner wrote to Mr. DeGroote’s financial adviser, Mr. Watt, and said that the actual profits at the Vegas Flamingo had amounted to about 7 per cent of the figures that Antonio Carbone had reported to the billionaire.

The next month, it was suggested to Mr. DeGroote that another Carbone company had run afoul of the U.S. justice system. An official with Jamaica’s gambling regulator wrote to a lawyer for Mr. DeGroote, and explained that a website operated by DC Entertainment — a Carbone brothers company that supplied the Vegas Flamingo with slot games — had been “shut down … by the United States Federal Bureau of Investigation and the Department of Homeland Security.” (Neither the FBI nor Homeland Security could elaborate on this episode.)

Nevertheless, as per his August agreement with the trio, over the next five months Mr. DeGroote provided the Carbone brothers and Mr. Pajak with the remainder of the funds used to create the Dream chain – some $64-million.

In early 2012, Mr. DeGroote began asking for a comprehensive audit of Dream’s books and records, while continuing to send the funds. He eventually involved PricewaterhouseCoopers and his lawyers in his demands.

The Carbones dismissed many of these warning signs, and told Mr. DeGroote that the whistle-blower from Jamaica was “a liar.” They responded to the audit requests by saying they would release the books at Dream’s fiscal year-end. That year-end turned out to be elusive – because, the Carbones say, they were overwhelmed by the pace of growth. First they moved it to May 31 – on their accountants’ advice, they said. Next, it was moved to Aug. 31. Then, Mr. DeGroote was notified by the Carbones’ lawyer that they were moving it a third time – and that he would have to wait an additional 120 days after this new date to learn the results.

That was enough for Mr. DeGroote. He sued the brothers and Mr. Pajak.

As the fissure between the Carbones and their sole investor deepened, a divide between Mr. Pajak and the Carbones also began to form.

The cast: Things fall apart

portrait
Michael
DeGroote
portrait
Peter
Shoniker
portrait
Andrew
Pajak
portrait
Bruno
Pisani
portrait
Gianpietro
Tiberio
portrait
Francesco
Carbone
portrait
Antonio
Carbone
portrait
Alex
Visser
portrait
Vito
Rizzuto
portrait
Santiago
Valverde
  • The Carbone's side
  • Mr. Pajak's side
  • Mr. DeGroote, the lender

Although the brothers owned 85 per cent of Dream’s shares – with Mr. Pajak owning the remaining 15 per cent – they had given their shares to Mr. Pajak, in trust, shortly before Mr. DeGroote began advancing the company the Dominican funds.

This structure allowed the Carbones to comply with a Dominican law that forbids anyone with a criminal record from having anything to do with a casino licence.

All the squabbling and suing, combined with the Dominican Republic’s elastic rule of law, laid the groundwork for a new reality: The ownership of Dream seemed to be up for grabs. The discord was a beacon for gangsters and ne’er-do-wells, who descended on the Caribbean island looking to place their chips on the winning side.

The Double Cross at the Ritz

“I’m going to go to war for you. ... I’m going to go to DR, where I’m going to carry a gun with a licence. And I’m going to change everything in their world.”— Alex Visser in a conversation he secretly recorded
Part 4

On May 10, 2013, two men took the elevator up Toronto’s shimmering Ritz-Carlton hotel to a condominium owned by the DeGroote family. They were met by Michael DeGroote, who complained that he had been “robbed” by the Carbone brothers. “They shouldn’t be in business … slimebags,” the billionaire told his guests, in the first of two conversations that were recorded without Mr. DeGroote’s knowledge. Copies of those recordings were entered into the court record and obtained by The Globe and the CBC.

photo
Photo: Former Crown attorney Peter Shoniker, who would consult for Dream partner Andrew Pajak, leaves his home in Toronto's Rosedale neighbourhood in 2004. (J.P. Moczulski/The Globe and Mail)

One of his guests – Peter Shoniker, a former Crown attorney and criminal-defence lawyer who had pleaded guilty to money laundering in 2006 after he was caught up in an undercover RCMP sting – was the son of someone who had been close to Mr. DeGroote: Mr. Shoniker’s late father, Eddie Shoniker, had chaired the Ontario Highway Transport Board, which regulates the trucking industry, at a time when Laidlaw was one of the biggest players in the industry.

The elder Shoniker, a onetime fundraiser for Ontario’s Progressive Conservative party, had gotten to know Mr. DeGroote, and the billionaire thought highly of him. So he responded positively when Eddie’s son, Peter, contacted him through an intermediary, Mr. DeGroote later said in a sworn statement.

Peter Shoniker explained to Mr. DeGroote that he had been consulting for Mr. Pajak at Dream, that he was familiar with the company’s books, and that he could help Mr. DeGroote prove that he had been defrauded. That revelation gave rise to the meeting.

The man accompanying Mr. Shoniker introduced himself to Mr. DeGroote as Alex Visser.

He was large and loud, with dark black hair, and was surprisingly fresh-faced for someone who claimed to be 60.

photo
Photo: Alex Visser told Mr. DeGroote that the Carbone brothers had defrauded Mr. DeGroote and offered to gather evidence against them. (Supplied photo)

He said he was a former soldier – he didn’t specify for which country – who had been hoodwinked by the Carbones in a casino deal gone wrong in Montenegro.

Mr. DeGroote wanted to know where his money had gone, and Mr. Visser said he could help him. Using contacts he had in the Dominican Republic, he was prepared to gather up witnesses and affidavits for Mr. DeGroote to prove that the Carbones, in building Dream, had paid less for casinos than they reported, and had pocketed the difference.

“I’ll bring you everybody from their organization,” Mr. Visser said. “You ask me to do whatever... I’m at your disposal, Mike.”

Mr. DeGroote was adamant that he wanted Mr. Visser to speak with his lawyers at the Bay Street powerhouse McCarthy Tétrault. But Mr. Visser was dismissive of the idea. He aggressively pressed the billionaire – repeatedly asking Mr. DeGroote to look him directly in the eyes – to unleash him on the Carbones. The exchange seemed to exhaust the billionaire; at one point he had to lie down.

“I’m going to make sure the Carbones can’t even sell chestnuts on the corner of the fucking street,” Mr. Visser said.

DeGroote: “Well, hopefully they’ll be in jail by then.”

Visser: “Fuck jail. Jail’s too nice.”

Mr. Visser said he needed $500,000 and Mr. DeGroote’s complete confidence. He described how he would need to pay certain Dream officials to procure their evidence and testimony. “I’m looking you in the eyes and I’m not wavering. … When I tell you you’re going to need $5,000 to pay off the head of security for a statement, you’re going to give him $5,000.”

Mr. DeGroote replied, “I cannot buy evidence.”

But Mr. Visser prodded the billionaire, trying to get him to yes. They discussed the possibility of giving Mr. Visser an ownership stake in the company once Dream was no longer controlled by the Carbones.

Eventually, Mr. DeGroote agreed to wire Mr. Visser $250,000, and promised to pay him an additional $250,000 if he could come up with proof that he had been defrauded.

“I’m ready to go to war,” Mr. Visser said.

“You’ve got to do it quietly.”

“I’m stealth. I’m the shadow of the shadows. You hired me to be your shadow … You’re a man that can take care of me.”

The discussion continued the next day at the Ritz. Mr. DeGroote said he had spoken with his lawyer, who had advised him that he shouldn’t “dare do it.”

Mr. DeGroote said he didn’t want Mr. Visser to do anything for now, but nonetheless agreed to retain him for possible work in the future.

DeGroote: “Give me your wiring instructions, where to send the money to.”

Visser: “Okay.”

DeGroote: “No strings attached. I am not buying anything right now. But you’ll keep it in mind in the future. I am going to send you $150,000 Monday morning for nothing.”

He explained that, before he could deploy Mr. Visser, he needed to discuss the matter with his lawyers in more detail: “When I get things straightened out with the lawyers, how to do it, then we’ll be in touch. Then we’ll make it a deal. I have to do it right or I can’t do it at all.”

Unbeknownst to the octogenarian, Mr. Visser was one of many identities utilized by the intense man standing before him.

photo
Photo: Clockwise from top left: Mr. Visser’s Bosnian passport under the name Željko Žderić, his Croatian passport under the name Pavle Kolić and his Canadian passport under the name Sasha Vujacic. Each passport indicates a different place of birth. (Supplied photos)

Crown attorneys and police across Ontario know Mr. Visser as a con artist named Zeljko Zderic, with a record of dozens of criminal convictions for, among other crimes, fraud, assault and uttering threats. He’s also known to carry a Croatian passport with the name Pavle Kolic, as well as a Canadian passport with the name Sasha Vujacic. (In the underworld he is simply known, like a criminal rock star, as Sasha.)

The billionaire was also unaware that his new acquaintance was recording these conversations – and that at some point in the days after their meetings, he would give the Carbones snippets of his first exchange with Mr. DeGroote.

The brothers filed the recordings in response to Mr. DeGroote’s suit, arguing that there was a conspiracy to derail their business. Mr. DeGroote responded by saying that after the meeting he had received legal advice that paying for affidavits or evidence would be illegal, so he never sent Mr. Visser any money. He also sent Mr. Visser a letter four days after the meeting stating that the deal was off. “It is not my desire to interfere in the running of the business,” he wrote.

(Judge Newbould of the Ontario Superior Court ruled in November, 2013, that Mr. DeGroote’s discussion with the gangster did not undermine his claim of being defrauded by the Carbones. “A huge amount of money appears to have been misused, and it is understandable that without any reports that he was entitled to, [Mr. DeGroote] would try to obtain evidence from someone who would know the situation in the Dominican Republic,” the judge stated.)

Relying on Mr. Visser also proved to be damaging for the Carbones. Given their shared penchant for recording conversations, it should have come as no surprise to them that Mr. Visser was also wired up when negotiating with one of them. Mr. Visser would later claim that in one of those recorded conversations Francesco Carbone discussed the idea of engaging him to murder Mr. Pajak.

Starting in late July, a lawyer for Mr. Visser entered into talks with Mr. DeGroote about handing over Mr. Visser’s recordings. They were unable to reach an agreement because Mr. DeGroote refused to pay for evidence, the billionaire said in an affidavit.

But on July 30, Mr. Shoniker agreed to go to the Ritz to play the recording of the alleged murder discussion for Mr. DeGroote; he arrived with Mr. Visser’s son. What Mr. DeGroote heard showed how dangerous this venture had become.

Visser: “What do I have to make Pajak look like? Like just a shooting, or just like a … But can we whack him in the Dominican?”

Francesco Carbone: “No.”

Visser: “We can’t kill him in the Dominican?”

Carbone: “It’s worse, bro.”

Visser: “Why?”

Carbone: “It’s worse there. Because it’ll fucking hit every fucking paper … the fuck you kidding? Bro, you’re fucking destroying me. It will be a catastrophe. Think about it. Fucking here it’s a regular fucking builder – big fucking deal. Over there it’s the president of Dream Corporation.”

Now it was Mr. DeGroote’s turn to pull a fast one. Unbeknownst to Mr. Shoniker, Toronto police officers were hiding at the Ritz, also listening in. They swooped in, seized the computer and took Mr. Visser’s son and Mr. Shoniker in for questioning, according to two sources present for the meeting.

Mr. Visser’s response was to flee the country.

A little more than a week later, the police charged Francesco Carbone and Mr. Visser with counselling to commit murder. (Mr. Visser was charged under the identity of Zeljko Zderic, but the charges were dropped two weeks later.) Mr. Carbone surrendered his passport – which meant he could no longer travel to the Dominican Republic.

In December, five months after the arrest, the charges against Mr. Carbone were also dropped. As is its standard practice, the Crown did not publicly explain the decision. Mr. Carbone has since launched a malicious-prosecution lawsuit against Toronto police and the Attorney General’s office. As for the contents of the recording, he says, “I believe the tape was spliced and cut.”

The cast: The man who played both sides

portrait
Michael
DeGroote
portrait
Peter
Shoniker
portrait
Andrew
Pajak
portrait
Bruno
Pisani
portrait
Gianpietro
Tiberio
portrait
Francesco
Carbone
portrait
Antonio
Carbone
portrait
Alex
Visser
portrait
Vito
Rizzuto
portrait
Santiago
Valverde
  • The Carbone's side
  • Mr. Pajak's side
  • Mr. DeGroote, the lender

Not surprisingly, Mr. Pajak was not pleased when the news reached him that one of his partners in Dream had allegedly discussed trying to have him murdered. Now the two sides were officially at war. On Sept. 5, the Carbones served Mr. Pajak with papers demanding that he return their shares; he refused.

In a secretly recorded conversation, reputedly made by Boghos Alexanian, a Dream employee loyal to the Carbones, Mr. Pajak told Mr. Alexanian to have the locks changed at the Dream office north of Toronto. Mr. Pajak asked whether the brothers had bugged his office, and told Mr. Alexanian that they needed to ensure the brothers “can’t infiltrate us.”

Three days later, on Sept. 11, 2013, in another conversation secretly recorded by Mr. Alexanian, Mr. Pajak said he was outraged by how the brothers had treated their sole investor, the man he brought in on the venture. “I swear to God that I – I’d like to put a fucking gun right down their mouth and blow their fucking heads off. And they’re trying to – they’re hoping they can kill this guy because of the stress … he’s 80 years old. Honest to God.”

But for reasons that he has not explained, Mr. Pajak did not sour on Mr. Visser – one half of the supposed conspiracy to have him murdered.

photo
Photo: Alex Visser fled Canada after police seized a recording of him and Francesco Carbone allegedly discussing a plot to murder Andrew Pajak. He later landed a job at Dream; he is seen at right in security-camera footage from a Dream casino in November 2013. (Supplied photo)

A little more than a week after Francesco Carbone’s arrest, Mr. Visser was captured on a Dream casino surveillance camera touring one of the chain’s casinos – not as a tourist looking for a roulette game, but as a future employee of Dream.

Having deftly played every angle and every person in the dispute, Mr. Visser had finally settled on which side he’d align himself with – Mr. Pajak’s team.

But there was far worse news contained in the security-camera footage.

As Mr. Visser strolled the casino floor, he was not alone.

That guy… from the other province

“If Vito wanted to call me, he should have called me.”— Antonio Carbone
Part 5

When U.S. marshals deported Vito Rizzuto to Montreal in late 2012 after he served a five-year term for his participation in the murder of three men, he returned to a city that was more leery of him than ever.

The Quebec government’s Charbonneau Commission had revealed the mob’s latest accomplishment: thoroughly corrupted public institutions and grossly inflated costs for taxpayer-funded infrastructure projects.

If there was a single person who symbolized that rot, it was Mr. Rizzuto, the godfather of the Sicilian Mafia in Canada. Thanks to Justice France Charbonneau’s inquiry, the public would finally have a chance to hold him accountable.

So when he was spotted at Pierre Elliott Trudeau Airport less than four months after his return, it sparked a flood of press coverage and concern: Was he trying to avoid testifying?

His destination – on this trip and many others in 2013 – was the Dominican Republic. It had long been a destination retreat of choice for Mr. Rizzuto; he had a home there. And, in addition to other business he was conducting, an opportunity in the casino industry had suddenly presented itself.

photo
Photo: Vito Rizzuto, the Godfather of the Montreal Mafia, inserted himself into the power vacuum at Dream when its partners feuded. He is seen (right) talking to Alex Visser in security camera footage from a Dream casino. (Supplied photo)

On Aug. 14, 2013, footage and photographs obtained by The Globe and the CBC show, Mr. Rizzuto led the way as he and Mr. Visser surveyed the floor at Dream’s Punta Cana location. In other undated footage, Mr. Rizzuto is wearing a Nike golf shirt and faded blue jeans, while observing a card game.

Exactly what prompted Mr. Rizzuto to become involved in the battle for Dream is unclear. But the secretly made recordings, cross-referenced with interviews and other documents, show that he began asserting himself in a significant way in September.

Back in the suburban Toronto office of Dream, Mr. Pajak was captured on an audio recording. It contains only Mr. Pajak’s side of a telephone conversation, in which he is anxious to meet someone he will not identify by name. The recording was made on Sept. 11, according to an affidavit sworn by Mr. Alexanian, the now-former Dream official loyal to the Carbones.

“And I am just waiting to meet the guy we talked about from – you know, that other province.”

In mid- to late September, Mr. Rizzuto held meetings with Mr. Pajak and Mr. Visser at Casa de Campo, a luxury resort in the Dominican Republic, according to two people who said they witnessed those meetings. One of the sources, who agreed to be identified for this story, is Peter Shoniker, the former lawyer who initiated Mr. DeGroote’s conversations with Mr. Visser.

Three other sources interviewed for this story, none of whom were present for the Casa De Campo meetings, said they had knowledge of Mr. Rizzuto and his family inserting themselves into the dispute between Mr. Pajak and the Carbones.

Mr. Pajak did not respond to numerous requests for comment.

photo
Photo: Mr. Visser’s Croatian passport under his alias, Pavle Kolić. (Supplied photo)

One of the first developments that followed those meetings was a transfer of power. On Sept. 30, Mr. Pajak granted power of attorney over the affairs of Dream’s subsidiaries to Mr. Visser, who now was operating under another one of his aliases – Pavle Kolic.

Perhaps feeling emboldened, Mr. Visser left several voice-mail messages for Antonio Carbone, making it abundantly clear what team he was now representing. In one of those messages, he asked, “Can you imagine if someone attacked your family, your wife or something – would you not answer the phone, too? Like, come on. You’re a big boy. You don’t live in some gated community, buddy.” He added, “You can’t keep on fucking everybody in the Dominican, and the old man.”

Mr. DeGroote would later say in a cross-examination that he had argued against Mr. Pajak’s latest hire when he learned of it. But Mr. Pajak insisted on it, saying, according to Mr. DeGroote, that he needed to “just use him for some things.”

“I asked Mr. Pajak about him and Mr. Pajak thinks he’d [been] doing a good job for him … because he’s putting out fires while he’s not there and there’s a lot of fires burning,” Mr. DeGroote’ testified.

photo
Photo: Mr. Pisani (left) is seen with Mr. Rizzuto in a photograph that was taken in the fall of 2013. This photo hangs on the wall of Prego Ristorante in west-end Toronto. (The Globe and Mail)

Back in Toronto, a recording and an interview show, Mr. Rizzuto continued to involve himself in the Dream dispute.

In November, Antonio Carbone alleges that, over two days, he was summoned to three meetings with Mr. Rizzuto to discuss the conflict and how they might bring about a peaceful resolution. Mr. Carbone alleges that the first meeting was arranged by Bruno Pisani, a 75-year-old long-time associate of Mr. Pajak. Mr. Pisani was sentenced to 10 years in a United States federal prison in 1980 after he was convicted of importing and trafficking heroin in New York State.

The cast: The Godfather takes an interest

portrait
Michael
DeGroote
portrait
Peter
Shoniker
portrait
Andrew
Pajak
portrait
Bruno
Pisani
portrait
Gianpietro
Tiberio
portrait
Francesco
Carbone
portrait
Antonio
Carbone
portrait
Alex
Visser
portrait
Vito
Rizzuto
portrait
Santiago
Valverde
  • The Carbone's side
  • Mr. Pajak's side
  • Mr. DeGroote, the lender

(Mr. Pisani did not reply to multiple requests for comment, but in another surreptitiously recorded conversation, Mr. Pisani discusses “the day we met – me and you with V,” which is how Mr. Rizzuto is often referred to by members of the underworld. Mr. Pisani has also not been shy about publicly displaying his friendship with Mr. Rizzuto. On the wall of Prego Ristorante, a west-end Toronto establishment, hangs a photograph of Mr. Rizzuto with his arm wrapped around Mr. Pisani. The photo was taken in the fall of 2013, and Mr. Rizzuto is tanned, having just returned from the Caribbean.)

But Mr. Rizzuto’s alleged mediations did not work. What happened next was anything but peaceful.

The battle in Santo Domingo

“All these guys from Montreal, they have no business in my business…”— Antonio Carbone
Part 6

In the early-morning hours of Dec. 19, 2013, a corporate takeover of a different sort was attempted in the heart of Santo Domingo. More than a dozen Dominican nationals, many dressed in T-shirts and jeans, swarmed Dream’s head office. When the police arrived, they discovered that the men were there to take the company by force.

Mayhem ensued. One by one, the attackers were shoved out of the building. Punches were thrown. Television news outlets reported that gunshots were fired. Cameras captured images of a young invader with blood splattered all over his T-shirt.

It became unclear who was there to uphold the law and who was there to break it; both a police sergeant and an army sergeant were arrested in the aftermath of the incident, the national police force said in a statement.

Observing it all unfold from the street, the force’s Gen. Rhomel Lopez tried his best to explain the situation to baffled reporters. “There is apparent litigation between … businessmen who both call themselves owners of the company.”

Safeguarding the building that day was someone who looked out of place amid the other defenders. This burly, light-skinned man was captured on camera knocking down one of the would-be occupiers with a single punch.

That man is Gianpietro Tiberio. In the Dominican press, he was referred to as “a representative of the president, Mr. Andrew Pajak.” But at the Charbonneau Commission he was identified as a member of the Montreal Mafia.

The episode suggested that Mr. Rizzuto’s soldiers were firmly in place. Among them was Stacey Richard Krolik – or Rick the Russian, as he is known on the street – said Santiago Valverde, who was one of Dream’s first employees and one of the men who was arrested that day.

photo
Photo: Gianpietro Tiberio, a recognized member of the Montreal Mafia, looks on (upper right) during a broadcast on Dominican radio that argued Andrew Pajak's side of the internal dispute at Dream. (Courtesy Radio Station Z101)

It has never been confirmed who engineered the raid. Allies of Mr. Pajak point to the Carbones, but the brothers deny any involvement. Dominican news reports pointed the finger at a former high-ranking police official, but he also denied any role.

Nine days before the raid, one of Mr. Rizzuto’s chief rivals in the Montreal underworld emerged as a possible player in the conflict. A representative of the Carbones in the Dominican signed a legal document that allowed Patrizio D’Amico – who had been described as “crazy” by a Rizzuto loyalist caught on a police wiretap – access to facilities owned by the Carbones. But the Carbones say they had no knowledge of this, and there’s no evidence to show that Mr. D’Amico played any role in the failed raid.

It is unlikely Mr. Rizzuto had much to say about the episode. Four days after the raid, on Dec. 23, he died of lung cancer in a Montreal hospital. One Carbone associate called it “a Christmas miracle.”

Still, the struggle continued – not just on the legal and extralegal fronts, but also in the Dominican media. In February, lawyers for Mr. Pajak appeared on a radio show, challenging earlier claims made on the airwaves that the Carbone brothers were the rightful owners of Dream. Mr. Tiberio attended with the lawyers. He said nothing on the show, but posed for a photograph.

Epilogue

“Where did the money go? Where’s it being shipped to? Where are the accounts? Who got the money and where did it go?”— Michael DeGroote recorded by Alex Visser
Part 7

As the chaos was unspooling in the Dominican, the Ontario courts were trying to figure out what happened to Mr. DeGroote’s money. KPMG was appointed by the Ontario Superior Court as a limited-purpose receiver following Justice Newbould’s ruling in November, 2013. The firm found that most of the accounting records it sought at Dream had been destroyed or withheld, or perhaps had never existed.

Mr. Pajak and his management team blame the Carbones – and vice versa. Among other irregularities, auditors can’t account for $21.7-million supposedly spent on renovations.

“Revenue originally reported to DeGroote in respect of the Jamaican operations was 15 times greater than the revenue for such operations reported to the Jamaican regulators.”— Second report of the limited purpose receiver (p. 13)

The auditors analyzed revenue data given to the Jamaican gambling regulator, and determined in a November, 2014, report that the sales figures provided to Mr. DeGroote were “15 times greater.” As a result, Mr. DeGroote’s legal team has concluded in its most recent court filings that the money he received from the Vegas Flamingo – the profitable portent that preceded his Dominican misadventure – was “sourced from his own funds.”

“... as a result of Mr. Pajak's representations, Mr. DeGroote was prevailed on to provide emergency funding of approximately USD $2.4M, ostensibly to save Dream from collapse.”— Email from Eric S. Block to Ronald Flom (p. 1)

It must have been bitter news for Mr. DeGroote, who at the beginning of the year had advanced $2.4-million in “emergency funding” to Dream, at the request of Mr. Pajak, after the battle in Santo Domingo. He is suing Mr. Pajak, but provided the funds because Mr. Pajak told him they were needed “to save Dream from collapse,” said one of Mr. DeGroote’s lawyers, Eric Block, in a letter to all the parties in the dispute.

The billionaire is arguing that the evidence that he was defrauded is so overwhelming that he is entitled to what is known as a summary judgment – a decision without a trial – concerning the Jamaican portion of his original loan.

“Management also appears to have been unqualified or at the least very disorganized.”— Appendix F — Sonco Report (p. 434)

As for the Dominican Republic, which is where more than $90-million of Mr. De Groote’s loans were supposed to have been spent, the courts also appointed a chief restructuring adviser last June to assess the viability of the business. The adviser enlisted a gaming expert, Anthony Novac, who concluded that, though Dream has debts of about $17-million, portions of the company are salvageable. Mr. Novac added a few qualifications, noting that rescuing the company would require investing in better management. He said the existing team “appears to have been unqualified or at the least very disorganized.”

The question of who actually controls the casinos is as murky as ever. The Carbones and Mr. Pajak continue to battle each other in the courts. Mr. DeGroote is battling both. Some casinos are being operated by a Dominican-court-appointed administrator, some by Mr. Pajak’s team. Others have been shut down by landlords because of unpaid rent.

The cast: The raid on Dream

portrait
Michael
DeGroote
portrait
Peter
Shoniker
portrait
Andrew
Pajak
portrait
Bruno
Pisani
portrait
Gianpietro
Tiberio
portrait
Francesco
Carbone
portrait
Antonio
Carbone
portrait
Alex
Visser
portrait
Vito
Rizzuto
portrait
Santiago
Valverde
  • The Carbone's side
  • Mr. Pajak's side
  • Mr. DeGroote, the lender

What role the Mafia is playing, if any, has also become less clear. In November, one of Mr. Pajak’s managers, Ed Kremblewski, spoke with reporters outside Dream’s office in Santo Domingo. Asked about Mr. Tiberio and Mr. Krolik – the two Montreal men who were there on the day of the chaotic scene at Dream headquarters – he acknowledged they had worked for the company, but said “these guys have nothing to do with us … they’re all gone.”

The end of this saga remains uncertain for Mr. DeGroote, who declined repeated interview requests because he wanted to concentrate, he said, on his lawsuit. He did provide this statement, in a letter from his lawyer: “Frankly, I sincerely regret that I ever agreed to invest in this venture. Indeed, I am embarrassed by it, especially after a lifetime of growing successful businesses.”

Comments on this article have been disabled for legal reasons.

theglobeandmail.com