To the merchants who line the rough-and-tumble streets of New York City's diamond district, he is known as Steve "Yorakim" -- Hebrew for green, the color of money. But to prosecutors in Manhattan, as well as Miami, Atlanta, Los Angeles and Providence, Stephen Anthony Saccoccia is known as one of the country's biggest, savviest and most wanted money launderers for Colombia's drug cartels. That is, until shortly before Thanksgiving weekend, when hundreds of government agents mounted a simultaneous five-state assault on Saccoccia's organization, arresting and indicting 50 people and seizing millions of dollars' worth of businesses, houses, cars and cash that had allegedly been used to wash as much as $750 million in narcotics proceeds.
The smashing of Saccoccia's empire is actually the third major drug-money % laundering indictment in the precious-metals and diamond industry in as many years. The first phase of what the Federal Government calls Operation Polar Cap involved the 1988 breakup of a $1 billion money-laundering scheme for the Medellin cartel through a Los Angeles jewelry mart. "Saccoccia was in a position to step right in after we knocked out Polar Cap One," says U.S. Attorney Lincoln Almond of Rhode Island. "We were onto him from the git-go."
The end came last week in Geneva, where Saccoccia, 35, was arrested with his wife (and reputed confederate) Donna, carrying $500,000 in cash. Yet that is mere pocket change for precious-metals traders, whose enormous cash transactions make them ideal fronts for laundering. "A precious-metals dealer may buy and sell hundreds of millions of dollars of gold in a year in numerous transactions, show a minimal profit, produce limited business records that appear legitimate and not raise suspicion," explains Dennis Fortune, a money- laundering expert and 24-year IRS veteran.
In Saccoccia's operation, say prosecutors, hundreds of thousands of dollars flowed into dummy shops in Manhattan's jewelry district each day from nationwide drug couriers. The cash was bundled into duffel bags or gold- shipment crates and driven by Brink's or Loomis armored trucks to the Saccoccia Coin Co., an unobtrusive storefront in Cranston, R.I. (pop. 76,000), or to a second location in Los Angeles. Thereafter, most of the money was subdivided, deposited in U.S. banks -- ranging from Rhode Island's modest Fleet/Norstar to Bank of America -- and then converted into cashier's checks made out to dummy firms. Next the money was moved electronically to foreign banks and eventually to the Colombians. Saccoccia skimmed off up to 10% of the proceeds.
The racket apparently grew with astonishing speed. Saccoccia started as a decent enough kid, collecting coins while in high school in Cranston until he dropped out in 1973 to open his coin shop. By 1980, with the price of gold soaring, the boy wonder enjoyed a statewide reputation. "He was fencing ((buying and reselling)) all the stolen gold in the area," recalls a local federal agent. "Kids were busting into houses left and right, stealing precious metals and lining up outside his store." By the time he pleaded guilty in 1985 to tax evasion, Saccoccia was reputedly a key moneymaking "associate" for New England's Patriarca Mafia family. After a brief stint in jail, say investigators, he started his laundering business in 1988. (