Puerto Rico." But Dos Santos warned Peroff not to discuss the Bouchard case with Pinol. However, Peroff said, he was directed to keep in contact with Bouchard by telephone. Peroff said Customs Agent Pinol gave him equipment to record his calls with Bouchard (pp. 31, 32).

Peroff testified:

My instructions from Dos Santos were to maintain contact with Bouchard, record all conversations and report only to Dos Santos by the telephone. I believe he was re-recording these tapes as they were played back to him (p. 32).

Peroff said that during the period when he was with his family in San Juan he spoke frequently with Bouchard on the telephone and that the calls were recorded. Reflective of how much time he spent on the phone with Bouchard, Peroff said, were his April, May and June telephone bills totaling about $3,000 (p. 32).

Peroff said Dos Santos "from time to time" told him what to say to Bouchard in the telephone conversations (p. 32).

Peroff said Customs Agent Pinol took care of his rent but that was all. Peroff said he was not being paid anything for other living expenses. He said it was his understanding that he was "on a per diem basis with U.S. Customs" in Puerto Rico but "I did not receive this per diem allowance which necessitated me putting my own money out" (p. 32).

THE "DEBRIEFING OF FRANK JAMES"

Shorty after his April 16 arrival in Puerto Rico, Peroff made two trips. From April 25 through April 28 Peroff was in Montreal in pursuit of the Bouchard heroin inquiry. On May 2 and 3 Peroff was in New York meeting with law enforcement officials.

One of these officials-Thomas Fitzpatrick, Sr., the Customs Attache at the American Embassy in Ottawa-wrote a memorandum on his May 2 meeting with Peroff. Also attending the meeting were Customs Agent Richard Dos Santos and Sergent Paul Sauve of the Royal Canadian Mounted Police.

Entitled the "Debriefing of Frank James"-Frank James was a Customs code name for Frank Peroff-the Fitzpatrick memorandum described the events of Peroff's March 22 trip to Windsor, Ontario in the Lear jet and the transaction Conrad Bouchard had with John Fecarotta of Detroit.

The memorandum also described what happened during Peroff's April 25 trip to Montreal. The Subcommittee obtained a copy of Fitzpatrick's memo and it was made a part of the hearing record. This staff study will now review what Fitzpatrick had to say about the April 25 visit to Montreal.

Fitzpatrick described a confrontation between Peroff and a "John the Doctor" in which Peroff was accused of providing French police with the information that led to the arrest of Thomas Solarik on heroin charges in Paris February 8, 1973. "John the Doctor," Fitzpatrick said, was believed to be Raymond Shepherd of Vancouver, British Columbia. Shepherd, a major heroin dealer, claimed to have bought the French police file on the Solarik case. Shepherd demanded to know from Peroff why Peroff's name, address and picture were in

the file yet he had never been arrested or picked up for questioning. Peroff insisted he was innocent.

Fitzpatrick said, however, that Bouchard had faith in Peroff and, in any event, "John the Doctor" relented, apparently satisfied that Peroff was telling the truth. Accordingly, "John the Doctor" then proposed that perhaps Peroff's Lear jet could be used to smuggle out of France the remaining 40 kilograms of heroin left over from the thwarted Solarik project. Solarik had paid for the entire 50-kilogram shipment but he only had with him 10 kilos when police raided the room at the Rome Hotel, Fitzpatrick said.

"John the Doctor" was not alone in stepping forward with proposals for the use of Peroff's Lear jet. Other mob figures had ideas of their own.

One suggestion came from a man Fitzpatrick identified as Weiner Patek of Montreal. Patek proposed that Peroff's Lear jet be used to smuggle 20 kilograms of cocaine out of Bogota, Columbia and into Canada. Patek may have been the same Werner Patek, also known as "the Kraut," who was involved in the Solarik-Silverman heroin plot in Paris.

Peroff was also reported to have discussed a gold smuggling proposition with a Montreal diamond merchant. Next, Claude Lemoyne came forward with a smuggling idea, Fitzpatrick said. Lemoyne felt there was money to be made smuggling large groups of Chinese into the United States. In addition, Fitzpatrick said. Lemoyne claimed to have $800,000 in counterfeit American Express checks ready to be traded, as well as several stolen paintings for sale.

Finally, Lemoyne wanted Peroff's recommendation on finding a chemist who could operate a heroin laboratory in Canada. Wishing to avoid doing future business with French and Corsican groups in Marseilles, Lemoyne hoped to bring morphine base directly to Canada for processing. That way he could sidestep the Marseilles people, Fitzpatrick said. In connection with Lemoyne's last idea, Fitzpatrick noted that a Frenchman, George Younes, who had once been active in smuggling morphine base, was now living in Hull, Quebec Province.

The "go ahead" on the big heroin transaction seemed to hinge for now on the outcome of Bouchard's trial, Fitzpatrick said, adding that if a guilty verdict were returned Bouchard would want to use Peroff's Lear jet to escape. Fitzpatrick said the money for the 100-kilogram heroin deal "is being put up by interests in New York," persons who were working through Giuseppe (Pepe) Cotroni. Fitzpatrick quoted Peroff as saying, however, that Bouchard would prefer not to have to do business with "the Italians."

Fitzpatrick also noted that "tentative plans" called for Peroff to fly his private jet to Marseilles or Nice, France. Claude Lemoyne and Louis Cote were to accompany him. Once the three picked up the 100 kilograms of heroin, they were to fly back to a Florida airport located between Palm Beach and Orlando, possibly Melbourne or Merritt Island.

Peroff told Fitzpatrick that if Bouchard went to jail Giuseppe Cotroni and John Fecarotta would step in and run the 100-kilogram transaction.

DETROIT AGENTS QUESTION PEROFF

In his testimony before the Subcommittee, Peroff did not refer to the debriefing he attended in New York with Customs Attache Thomas Fitzpatrick, Sr., May 2. But, Peroff did remember another meeting with other federal officials.

Peroff said that while in New York on this trip he stayed at the Statler-Hilton and that his room at the hotel was the site of a meeting he had with Richard Dos Santos and two men whom Dos Santosidentified as being Customs agents detailed to a "strike force in Detroit." The two agents questioned him, Peroff said, while Dos Santos stood by. Peroff said the interview was recorded (p. 34).

Peroff testified that this was the first time that the name of Robert Vesco came up in discussions with federal investigators. He said Vesco's name was raised several times as he was questioned about a hotel that was owned by a man named D. K. Ludwig, about a large farm in the Bahamas which was to be purchased for smuggling operations and about the occasion when Peroff met Vesco at the Xanadu Hotel in the Bahamas.

Customs Agent Richard Dos Santos testified that such a meeting did take place May 3, 1973. He said Peroff was interrogated by Customs Agents John Verklan and Gary Liming in the Statler-Hilton for about two hours. Dos Santos said Verklan, the Customs representative on the Organized Crime Strike Force in Detroit, asked Peroff about criminal activities in the Detroit area, with particular emphasis on the flight Bouchard had made to Windsor, Ontario in Peroff's Lear jet (pp. 307, 308).

THE TRANSCRIPT OF THE STATLER-HILTON MEETING

The Subcommittee obtained from Customs a transcript of the recording of the May 3, 1973 interrogation of Frank Peroff by John Verklan and Gary Liming. The transcript was made part of the hearing record. The transcript has many phonetic spellings of names. Peroff's references to Robert Vesco are typed "Bestco."

The reference to "Bestco" occurred when Verklan asked Peroff about allegations that white businessmen, fearful of black rule, were moving their cash assets out of the Bahamas through illicit means. Peroff said this was not always the case, that if the white businessmen got on the right side of "Bestco" they had little to worry about. Peroff said:

...

you got to understand what that guy's done to put the money back in into the islands, I mean he has changed everything. If you can make your your deal with Bestco, you are safe-I mean you are cool-you have no problems there.

The transcript quoted Peroff as saying he had been to a meeting attended by crime figures and Bahamian leaders held on a large farm near Bimini where future economic ventures were planned. Representatives of "Bestco" were there and plans were made for turning the farm into a kind of headquarters for investments and "multi million dollar deals" with no Bahamian import tax, Peroff said.

According to the transcript given the Subcommittee, once Peroff raised the name "Bestco" and said "Bestco" was very influential in

Bahamian affairs, the Customs agents asked him no questions about just who this person "Bestco" was. In addition, the transcript, as given to the Subcommittee by Customs, contradicts Peroff's assertion that Customs agents asked him about Vesco. The transcript indicates that Peroff raised the name "Bestco" and Customs agents did not. However, the transcript, purportedly complete, is incomplete, beginning and ending abruptly and suggesting the possibility that sections of the interview were either not transcribed or, if they were, those sections may have been lost.

The transcript of the May 3 interview does provide other information related to the Bouchard investigation. Peroff said, for example, that when in March in 1973 he flew Bouchard, Claude Lemoyne and Louis Cote to Windsor they talked during the flight about those places in a Lear jet where heroin could be hidden.

Peroff told them that he could stash heroin in "a big electronic compartment" in the underside of the aircraft and in another vacant area in the nose of the plane. In the nose alone, he said, he could store 30 or 40 kilograms of heroin. Next, Peroff said, he could hide 200 kilograms beneath the floor of the cabin of the airplane. This last storage site would be the most difficult for Customs officials to detect, Peroff explained, because to get to it would require removing 70 or 80 screws. "No Customs guy is going to go out there with a screwdriver," Peroff said, unless, he added, the Customs man knew there was heroin aboard in the first place.

In the transcript, Peroff went on to say that the Windsor trip was Giuseppe Cotroni's idea, that Bouchard preferred not to deal in drugs with the Detroit group and would rather conduct these transactions through his contacts in New York. Bouchard went to Windsor only because Cotroni ordered it, Peroff said.

Noting something that struck him at the time-something that was also noted in the Customs surveillance report on the Windsor tripPeroff said that at first Bouchard would not let his briefcase "out of his hands" but that when he came back to the Colosseo Restaurant, to rejoin his associates for the trip back to the airport, he left the briefcase lying in the waiting taxi. Such security precautions aside, Peroff said, his understanding was that Bouchard had sold John Fecarotta five kilograms of heroin for $30,000 and, Peroff said, it could be that the briefcase had contained the heroin.

Customs Agent John Verklan also questioned Peroff about his tentative flight plan on the return from Europe in which the 100 kilograms of heroin were to be transported to North America. Verklan said that, fiving back from Europe, Peroff would probably go into Montreal. Peroff replied that Douglas McCombs. the Customs agent in Washington coordinating the effort, had instructed him not to fly to Canada but to land in the U.S.

Verklan questioned Peroff in this manner:

VERKLAN. You got a Lear jet. You are coming from France,
what's the first land fall you got to make for refueling?
PEROFF. Iceland. You probably go out of Shannon, you
know.

VERKLAN. Now second land fall, Bangor, Maine?
PEROFF. It depends on your winds.

VERKLAN. You have to make Canadian soil first, is that right?

PEROFF. Yeah, I guess so, Newfoundland.

VERKLAN. There is no way to make it without stopping in
Canada.

PEROFF. In the Lear-it all depends on the weather, on the
winds.

VERKLAN. Now, let's say you make Canada. As you see it now you would fly on to Detroit and Chicago, is that correct? PEROFF. Not necessarily. It really I've sort of left that open where that's going to be my choice.

VERKLAN. But that's where they wanted to go.

PEROFF, Yeah, I could probably fly to Florida.

VERKLAN. They will all be probably taken out in one place? PEROFF. My guess is yes. If you are going to take an airplane apart, and take the stuff out, you had better do it in a relatively private

VERKLAN. Then again if you make the borders and you are flying domestic you can leave it on the seat for that matter. PEROFF. That's right.

VERKLAN. It's safer to fly the heroin from New York to Detroit in your jet than it is to get it in a car and put in baggage or whatever.

PEROFF. Absolutely. There is no question about that. You have all the privacy in the world. No question.

VERKLAN. Now what is the plan? You'll come back yourself
with the stuff?

PEROFF. No, no. Lemoyne and Cote are my escorts.
VERKLAN. Okay. Lemoyne is the hit man.

PEROF, Yeah. both of them are. Cote and Lemoyne. I
hope I ain't the hit.

VERKLAN. In other words, they are riding shotgun is what it amounts to—

PEROFF. Exactly right. Lemoyne represents Connie [Conrad Bouchard] and Cote represents the money.

VERKLAN. What's the time table?

PEROFF. I thought it was going faster, but apparently they want to see if Connie's going in Canada before they give Connie the money.

VERKLAN. In other words, if he is going to be convicted on that charge

PEROFF. Yeah, well, he's planning even if he is convicted, number one, he is planning to escape, that's one.

VERKLAN. Did he say where?

PEROFF. Where he's going to go to, no.

As the questioning progressed, it became apparent that, in Peroff's view, Conrad Bouchard and Giuseppe (Pepe) Cotroni were reluctant partners in the heroin proposal. They were not very excited about doing business with each other. But Cotroni had the resources to finance the deal, Peroff said, while Bouchard had the contacts in France to supply the heroin. Peroff agreed with Verklan when he said, the "Cotroni group needs Bouchard for the French connection."