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"would not intercede on behalf of the informant with any law enforcement agencies."

The April 16, 1973 memorandum also stipulated that Customs Agent Richard Dos Santos would "be the sole person the informant would contact for direction."

PEROFF'S UNPAID BILLS IN ROME

Now that Customs had paid his bills at the New York Hilton, Frank Peroff and his family could depart through the lobby of the hotel in good conscience, knowing their obligations had been met. On their departure from Rome a month earlier they had not left such a clean slate. When the Peroffs flew out of Rome headed for the United States March 16, 1973, they left behind some $10,000 in unpaid

bills.

Olaf S. Bonde, general manager of the Cavalieri Hilton Roma, wrote to the American Embassy in Rome May 2, 1973 to complain that Frank Peroff and his "family of 10 persons" stayed at his hotel during the month of September of 1972 and ran up a bill of $4,280.04. A copy of Bonde's letter was made part of the hearing record.

Bonde said Peroff promised to pay but "we never had the pleasure of receiving any check from him." Bonde said Peroff's last known address was on Via Corrado Barballo in Rome but "he is no longer there and left no forwarding address."

Peroff's landlady at the Barballo villa also was asking the American government to help her locate the Peroff family. Mario Cozzi, the Customs Attache in Rome, wrote Richard Dos Santos in New York June 20, 1973 to report that the landlady, Mrs. Gina C. Sarao, was holding Peroff's unpaid electric bill and an $800 phone bill. In addition, Cozzi said, Peroff owed the Euromobilia Company of Via Pontina $1,000 in furniture bills.

The next item on the claims list, Cozzi reported, was $4,000 Peroff owed the Overseas School in Rome where his children had been taught. Finally, Cozzi said, Peroff still owed the Esso Corporation for fuel used to heat the villa. Moreover, Cozzi said, the maid at the villa was still "looking to be paid."

Cozzi sent these bills on to the New York office with the understanding that they would be passed on to Peroff. A copy of Cozzi's letter was obtained by the Subcommittee. It is not known whether Olaf Bonde, Gina Sarao, the Peroffs' maid or the other creditors ever got their money.

THE ISSUE OF THE WARRANTS IS RAISED

Even as he allegedly agreed April 11, 1973 to the 20-point stipulation with Customs officials, Frank Peroff was a wanted man, the subject of two warrants for his arrest in Florida for passing bad checks. The existence of the warrants was known at the highest levels of the U.S. Customs Service and officials there apparently were not concerned about them.

George C. Corcoran was then Customs Attache in Paris. He had worked with Peroff earlier in the year in Europe on the counterfeiting and narcotics cases. Corcoran was in Washington at Customs head

quarters April 11 and attended a meeting that day at which the Peroff warrants were discussed (p. 208).

Corcoran, now promoted to Assistant Customs Commissioner for Investigations, testified before the Subcommittee May 30, 1974 (pp. 177-355). He said that those attending the April 11 meeting included himself, Harold Smith, the then Assistant Commissioner for Investigations; and Special Agents Paul Boulad and Richard Dos Santos (p. 209).

Corcoran said the main purpose of the meeting was to work out some resolution with Peroff on his expenses. But the warrants were talked about. Corcoran testified:

During that [April 11, 1973] discussion the fact that there were warrants outstanding against Peroff came up. The decision was made that we would continue not to notify Florida authorities and have him arrested and that we would attempt to settle that matter after the investigation was completed (p. 209).

VII. THE PEROFFS IN PUERTO RICO

THE WIFE AND CHILDREN GO FIRST

One of the understandings in the 20-point agreement of April 11, 1973 between Frank Peroff and the Customs Service was that Peroff himself would go to Canada to serve in a "catalytic capacity to generate speedier movement" in the Bouchard case. In turn, Mrs. Peroff and the children were to move from New York to San Juan, Puerto Rico where the Customs Service would house them for two months at a cost not to exceed $550 a month. Peroff was to provide his family with spending money;

In his testimony before the Subcommittee, Peroff said Customs. agents did send his family to San Juan but they did not send him to Canada. Instead, he said, they had him move into a hotel at New York's Kennedy Airport for five or six days. Then, Peroff said, he was dispatched to Puerto Rico himself. He said Customs Agent Richard Dos Santos directed him to go, saying, "Get some sun" (p. 31). Files from the Custom Service New York office indicate that Peroff did go to Puerto Rico but not under quite the same circumstances Peroff described.

JUDY PEROFF DISLIKES SAN JUAN APARTMENT

The Peroffs, very particular about where they lived, had sharp differences with the Customs Service over what constituted suitable lodging. They rejected the Customs' apartment in New York in March and moved in to the New York Hilton. Something similar occurred a month later in San Juan.

Arriving in Puerto Rico April 13, 1973 without Frank, Judy Peroff and the children were met at the airport by Customs Agent Octavio Pinol. He had gone to some lengths to find them a place, Pinol told the DEA-Customs inquiry. Mr. Cardona at the Villa Cristobal Apartments came up with what Pinol felt were nice quarters. But Judy Peroff didn't think so. Pinol said:

They got an apartment with three bedrooms, with the liv ing room and a big couch. I received this family on about 11:30. I brought her there and she didn't like it, saying "I don't want this apartment. You bring me to a hotel," and we started an argument there. I called Richard Dos Santos that night and he convinced her to stay there for a couple of days until we get a new apartment.

Dos Santos wrote a memorandum to his boss, Albert W. Seeley, in which he reported on the events that were set in motion when Judy Peroff found the Villa Cristobal not to her liking. A copy of this memorandum was made part of the hearing record.

In the memo, Dos Santos said the first call from Octavio Pinol came to him about 11:30 the night of April 13. Pinol continued calling, the last call being at 1 a.m. Dos Santos said Pinol was so distraught by

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Mrs. Peroff's complaints that he became "dispirited and dejected." Pinol even offered to put up the Peroffs in his own home but there wasn't enough room there.

Dos Santos said the next morning he went to see Peroff at his room in the International Hotel in New York. Now Frank Peroff was complaining about the Villa Cristobal as apparently he had spoken with his wife during the night. Dos Santos said Peroff also complained that Customs should be continuing to pay his hotel bill there in New York. Peroff, who only a week before had met with Commissioner Acree to lodge a criticism of the Service, threatened to take similar action, Dos Santos said. Dos Santos reported that Peroff

... said he was told he could go over my head if he was unhappy with my decision and I advised him that the buck stopped with me for the time being.

Returning to his office, Dos Santos spoke with Peroff on the phone. Peroff was now saying he wanted to go down to Puerto Rico himself to find more agreeable quarters for his family. Dos Santos told him he could but reminded him that Customs would pay no more than $500 a month rent on the new place and that Octavio Pinol and his coworkers in the San Juan Customs office "would not act as moving men" for the Peroffs. In addition, Dos Santos said, Peroff was instructed to keep the New York office advised of his whereabouts at all times and was to be "ready to return to New York at a few hours notice."

On April 16 at 11:45 a.m., Peroff, still in New York but about to depart for Puerto Rico, called Dos Santos. Dos Santos recalled that Peroff explained he had found an apartment in Isla Verde, Puerto Rico and that the landlady, a Mrs. Weiss of Connecticut, wanted a twomonth lease with the $500 a month rent paid in advance.

Dos Santos said he told Peroff that Customs would not agree to those arrangements. Peroff then asked Dos Santos if Customs would provide him transportation to drive over to Connecticut and sign the lease with Mrs. Weiss. Dos Santos said the answer was no. Dos Santos said, "Peroff replied that Customs did not want to help him." Dos Santos told Peroff that "Customs would meet its obligations." Peroff flew to Puerto Rico April 16.

THE PUERTO RICO PERIOD WAS SIGNIFICANT

Frank Peroff, his wife Judy, their five children and their poodle lived in Puerto Rico from April of 1973 until July 17, 1973. Their stay on the Caribbean island came at an important stage in the development of the Bouchard narcotics inquiry, for it was during this time that Conrad Bouchard seemed determined to move forward, in league with Peroff and the executive jet, in a massive heroin transaction. Officials believed the Bouchard heroin deal might be as large as 200 kilograms. This would be a major drug seizure and an important step forward in the government's heroin control effort.

In addition, in Conrad Bouchard, a major narcotics dealer in his own right, federal agents hoped to be led to a more powerful mobster, Giuseppe (Pepe) Cotroni, and possibly Pepe's brothers, Vic and Frank Cotroni. Agents believed that Cotroni was involved in the Bouchard plan and in Cotroni they would have a principal in the major organized crime element in Canada.

Finally, during the Puerto Rico period, Conrad Bouchard told Peroff on the telephone that Robert Vesco, or Vesco's Canadian associate, Norman LeBlanc, would put up $300,000 to finance the heroin buy.

Anyone who was reading the newspapers in the summer of 1973 knew that Robert Vesco was a millionaire, a dealer in high finance, a big contributor to President Nixon's re-election campaign and an alleged swindler who was charged with looting an international mutual fund of more than $200 million. But no one had ever accused Vesco of being a dope peddler. Drug agents were cautious about believing Bouchard's words about Vesco. But neither did the authorities discount what Bouchard said. Thus, the investigation, potentially more explosive than ever, went forward.

Frank Peroff, the informer, the man whose private jet Conrad Bouchard was trying to build a crime around, was the key to it all. But Frank Peroff, crucial as he was, was turning out to be a difficult, hard to manage, frustrating and costly person for the law enforcement agents to deal with. A strained relationship developed between them and Peroff. When he was not given his way, he threatened agents that he would report them to their bosses. Peroff, one agent reported, claimed he would go to the President of the United States if necessary to have his own way.

The personality problems with Peroff coincided with a sweeping shakeup of the federal drug enforcement agencies. A new super agency was created, absorbing hundreds of drug investigators from the Customs Service, the Bureau of Narcotics and Dangerous Drugs, the Office of National Narcotics Intelligence and the Office of Drug Abuse Law Enforcement.

The Bouchard case, and Frank Peroff along with it, got caught up in the reorganization. Peroff's control agent, the investigator closest to him and from whom he received guidance, was a Customs agent. But under the new set-up he was made a subordinate to a former BNDD agent. Both men had different ways of doing things.

Peroff, for his part, could never reconcile himself to the new man in charge. For example, Peroff assumed that his total involvement in the heroin plot-indeed, the only reason Bouchard invited him in—was because Peroff had access to an executive jet, an aircraft which could be used to smuggle large supplies of heroin. But, with the government reorganization, the word came down to Peroff that he was to carry out his activities for Bouchard in a commercial airliner. Peroff objected strongly. Distrust grew.

Accordingly, as the changeover in federal jurisdiction occurred, there was an element of uncertainty as to who would be deciding the direction of the Bouchard inquiry. Similarly, expense money owed Peroff, already late, was delayed even further, leading Peroff to be less manageable than ever, contributing to his growing sense that maybe the government was not as anxious to go ahead on the Bouchard case as he was.

PEROFF TOLD TO KEEP IN TOUCH WITH BOUCHARD

Peroff testified that Customs Agent Octavio Pinol, who worked in San Juan, was "assigned to oversee the well being of my family in

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