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II. PEROFF'S BACKGROUND

Opening their preliminary inquiry into Frank Peroff's charges, Subcommittee Investigators Philip Manuel and William Gallinaro interviewed Peroff extensively and looked into his background. They found that Peroff had a police record, was a friend and business associate of known criminals, had ties with organized crime, was an admitted thief and trafficker in stolen securities and, since 1972, had been a confidential informant for several federal law enforcement agencies including the U. S. Customs Service, the Secret Service, the Bureau of Narcotics and Dangerous Drugs and later the Drug Enforcement Administration.

Franklin Peroff-he has no middle name-was born August 1, 1936 at Fordham University Hospital in the Bronx, New York. His father, Sam Peroff, a native of Rumania, came to the United States in the early 1920's. A retired clothier, the elder Peroff now lives in North Miami Beach, Florida. Frank Peroff's mother, Minnie Furer Peroff, a native of Minsk in the Soviet Union, died in 1960. Frank Peroff has a brother, Murray Holiday Peroff of Miami, and a halfbrother, Philip Peregosky of New York.

Peroff dropped out of the High School of Music and Art in New York in 1953 and joined the Navy. He was given an honorable discharge in 1956 although he had faced a court martial for breaking into an infirmary in search of drugs he could sell on the street.

As a civilian, P'eroff was arrested on a misdemeanor charge of breaking and entering in Fort Lauderdale, Florida, in 1959. He made restitution and the charges were dropped.

The Subcommittee was interested in Peroff's mental health. Peroff testified that when he left the Navy he had done "a little bit of drinking" but had settled down after "a few talks" with a psychiatrist. Peroff said that today he is a non-drinker and has been for several years. Peroff said that in 1968 he suffered from "ulcerated colitis" and there was a possibility that he would have to have a colostomy, a surgical procedure affecting the colon. Fearful of the consequences of this kind of surgery, Peroff said, he received counseling from a psychiatrist in about seven or eight sessions "to quite me down." (Pp. 130, 131.) Peroff, 6 feet tall, weighs 270 pounds.

Peroff married Judy Deane Orr, then 18, in Fort Lauderdale on January 14, 1960. They have five children, ranging in ages from 14 to 7. Peroff was charged in 1965 with five counts of bankruptcy fraud. He was indicted in Miami and arrested in New York. Prior to trial, three counts were dismissed and Peroff received a directed verdict of not guilty on the remaining charges.

Peroff told the Subcommittee that the 1964 charges came about when an enterprise he owned, the Miami Clothing Mart, went out of business and he filed for bankruptcy. Peroff said that as owner of the

NOTE.-Page references refer to the official stenographic transcript.

clothing shop he had associated with criminals, served as a fence for stolen goods and took part in several fraudulent financial schemes.

Since the 1964 arrest, Peroff said, he had been arrested five or six times on various state charges for which warrants were issued in Florida. The warrants were based on charges of grand larceny, fraud, possession of a weapon, writing worthless checks and traffic violations. Peroff was not convicted on any of the charges.

A man with a talent for business enterprises, Peroff has worked at a variety of commercial pursuits, several of which, he claimed, were legitimate. Others, he said, were not legitimate. Peroff said he owned or managed construction companies in Florida, sold furniture in New York, manufactured kitchen equipment in Washington, D.C. and managed, co-owned or sold supplies for car wash establishments in Northern Virginia, Maryland, Florida and Oregon. Peroff said that while involved in these enterprises he occasionally took part in questionable or illegal transactions, some having to do with fraudulent

and stolen securities.

Another enterprise Peroff entered into was the leasing of private aircraft. He used this aircraft to smuggle contraband out of the Bahamas and into the United States and Canada. Operating out of Orlando, Florida in the late 1960's and into 1972, Peroff worked at his Bahamian smuggling activities while, at the same time, he went into more reputable pursuits such as land ventures.

In his testimony before the Investigations Subcommittee May 17, 1974, Peroff stressed his assertion that in his dealings in the Bahamas, in Florida and elsewhere, he had won the reputation for being a person with ready access to private aircraft to be used for illegal purposes. Peroff put it this way:

... over the years I have been able to use private aircraft in the furtherance of certain criminal activities. I gained the reputation in certain criminal circles as a person who had the capabilities to fly in and out of the United States, Canada and elsewhere, undetected (p. 11).

Peroff said that while in the Bahamas in 1970 he met Conrad Bouchard of Montreal. Conrad Bouchard was a major figure in the Canadian underworld. His criminal activities included smuggling, counterfeiting and stolen securities.

Peroff said he entered into frauds involving stolen securities and counterfeit currency with Bouchard. Peroff said his dealings with Bouchard were halted temporarily in 1972 when Bouchard was arrested in Montreal for narcotics violations.

For the purposes of this investigation, the relationship Frank Peroff established in the Bahamas in the early 1970's with Bouchard is important. In working with Bouchard, Peroff was able to convince the Canadian racketeer that he was trustworthy. It was this trust that proved valuable for Peroff as he switched sides, becoming an informant for law enforcement agencies in Europe, Canada and the United States.

III. THE JOHN BARNES CASE

PEROFF AS INFORMANT

It was in his role as a confidential informant for the U.S. Drug Enforcement Administration (DEA) that Frank Peroff came upon information that led him to report to agents that Robert Vesco and his associate, Norman Le Blanc, were to finance a $300,000 heroin transaction. Peroff arrived at this information in the summer of 1973 in the midst of his negotiations involving a narcotics deal with the Canadian racketeer, Conrad Bouchard.

But, by this time-by the summer of 1973-Peroff was not a newcomer to informant work. He had been performing informant services for Federal enforcement agencies since March of 1972. The first information he passed on to Federal agents was in the form of a counterfeit $50 bill he had obtained in England, in early 1972.

Peroff, at this time a resident of Orlando, Florida, had taken possession of the counterfeit currency during a trip to England and the Continent. He made this trip to make arrangements for his family to join him in Europe and live there permanently. While the actual move did not take place until the spring of 1972, the Peroffs' decision to take up residence in Europe seems to have coincided with the arrest in early 1972 in Montreal of Conrad Bouchard. The Royal Canadian Mounted Police (RCMP) arrested Bouchard for trying to smuggle into Canada 33 pounds of pure heroin January 15, 1972.

Peroff told Subcommittee staff that he had taken the counterfeit currency to the FBI in New York. From there, he said, he was referred to the U.S. Secret Service, the Federal agency charged with responsibility for counterfeit investigations. Agents listened, Peroff said, as he described the criminal organization in England which was printing and trying to distribute the bogus money. Peroff said he offered to help the Secret Service break the counterfeit ring.

A short time later, back in Orlando, a Secret Service agent contacted him. Arrangements were made for Peroff to meet other agents on his next trip to Europe. Accordingly, Peroff said, in March of 1972, in London, in a room in the Brittania Hotel, he did meet with Secret Service and Scotland Yard officers.

At that time, Peroff said, he provided more information to the law enforcement agents. In the course of this exchange, Peroff said, he became acquainted with one of the agents, Frank W. Leyva, chief of the Secret Service European operations. Leyva's office was in Paris. When Peroff told Subcommittee staff of his first informant activities with Federal agents, investigators sought to check the accuracy of what he was saying.

CONNELLY RECALLS PEROFF MEETING

Robert Connelly was the resident agent for the Secret Service in Orlando when Peroff decided to turn over to the Government the coun

terfeit $50 bill he had obtained in England. Subcommittee Investigators Manuel and Gallinaro interviewed Connelly in Orlando January 25, 1974.

Connelly said that in approximately early 1972 he was contacted by Secret Service Agent Jack Holtzhower of the Counterfeit Division in Washington, D.C. Holtzhower told Connelly of Peroff's having gone to the New York office of the Service with information and evidence that could be useful. Holtzhower directed him to talk to Peroff, Connelly said.

Before contacting Peroff, Connelly checked with the Orlando County Sheriff's Office and the Orlando Police Department and found that Peroff had an arrest record and criminal history but, Connelly noted, he found no outstanding warrants on Peroff. Connelly said he did not check Peroff's past with the Florida Department of Law Enforcement (FDLE) because he did not think it was necessary to do so. After interviewing Peroff and viewing several counterfeit bills Peroff displayed for him, Connelly concluded Peroff could help the Secret Service and advised his superiors in Washington accordingly. Connelly said he was then directed to assist Peroff with flight reservations on a trip Peroff was planning to Europe. Connelly said he was to try to arrange a flight for Peroff which would enable him to meet in London with Secret Service and other law enforcement agents. Connelly said he did make arrangements for such a meeting.

Connelly said Peroff called him several times from Europe after the London meeting. In his first call, Peroff complained about the way he had been treated in London by Frank Leyva and Harris Martin of the Secret Service and by Scotland Yard personnel. Connelly said Peroff continued to call from time to time, the last call being from London or Spain about a month after Peroff had left the U.S. Connelly said he had not spoken with Peroff since the final telephone call.

MARTIN RECALLS BARNES CASE

Harris Martin, the special agent in charge of the Counterfeit Division of the Secret Service, dealt with Peroff in early 1972 when Peroff became an informant. Martin described his agency's dealings with Peroff in a January 18, 1974 memorandum prepared at the request of the Subcommittee. The memorandum was made part of the hearing record. Martin, now Deputy Assistant Director for Administration in the Secret Service, testified before the Subcommittee June 14, 1974 (pp. 851-877).

In the memo, Martin said that Peroff had gone to the office of the Federal Bureau of Investigation in New York with information about a counterfeit money plot. The FBI referred Peroff to the Secret Service. Martin said Peroff appeared in the Service's New York office March 13, 1972.

Presenting a bogus $50 bill, Peroff told Secret Service agents that he had obtained the currency recently from John Barnes in London. Martin said Peroff was of the opinion that the supply of counterfeit was unlimited. Martin said Peroff offered to help the Secret Service locate the plant where the money was being printed.

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