Martin said a Secret Service agent in Orlando, Robert Connelly, arranged for Peroff to meet a short time later in London with other agents. Peroff was to pay for his own airfare.

On March 24, 1972, Martin and the chief of European operations, Frank Leyva, met Peroff in London. Martin said Peroff gave them information about the alleged counterfeiter, John Sidney Barnes, an Englishman, and added that Barnes and other persons-most of whom Peroff named-were involved in a wide variety of illegal activities in Europe with the use of stolen and counterfelt securities. Martin told Senators that he went on this interveiw of Peroff because he happened to be in London at the time and no other agent was available to accompany Leyva at the meeting (p. 860).

Martin said in his memorandum that Peroff asked if the Secret Service would pay his expenses while he served as an informant in Europe. Martin said he told Peroff that the Service would not pay his expenses but, at the conclusion of the case, a reward would be paid, the size of which would be determined by the value of the information Peroff had provided.

Martin said he then arranged for Peroff to meet with Inspector Robert Wilson of the Forged Currency Squad, Scotland Yard. However, Martin said, while Peroff did meet later with Scotland Yard, "no tangible results were obtained from his [Peroff's] assistance." Martin said that in July of 1973 Scotland Yard raided the plant where Peroff's bogus $50 bill had been printed. But, Martin said, none of the persons named by Peroff "could be associated with the activity."

LEYVA RECALLS BARNES CASE

Frank Leyva, chief of Secret Service operations in Europe, prepared a memorandum for the Subcommittee January 7, 1974 in which he related his dealings with Frank Peroff. The memorandum was made a part of the Subcommittee hearing record.

Leyva said that at a March 24, 1972 meeting in London attended by himself, Harris Martin, Scotland Yard officers and Peroff it was understood that Peroff would work with Scotland Yard on the Barnes counterfeit case. Leyva returned to Paris.

However, Peroff called Leyva from London on March 27, 1972 to say he would not work with Scotland Yard anymore. Leyva said he surmised that Peroff had made this decision because Scotland Yard "wouldn't meet his terms."

On April 30, 1972, Peroff came to Leyva's office in Paris and displayed a bogus $100 bill. Leyva said Peroff claimed the counterfeit. note was from the John Sydney Barnes collection and that he had been offered the opportunity to dispose of $200,000 by one of Barnes' associates, Keith Jeffries.

Later on May 11, 1972-Peroff again met with Leyva, this time in the hotel in Paris where Peroff was staying. Leyva said that at this meeting Peroff told him he had not accepted the Barnes money from Jeffries because it was of "poor quality" but the Barnes organization was putting together "an offer of better notes." Leyva said Peroff was confident he could now purchase a large amount of the Barnes phony money.

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Leyva said that on May 18, 1972 he received a call from Peroff. Now in Sweden, Peroff said he had been working hard on the John Barnes counterfeit case, had been travelling widely and absorbing considerable expenses. Leyva said Peroff told him he was planning a visit to Paris in two days to work out "financial arrangements" with the Secret Service. Leyva said he replied that "there would be no such talks since we did not make it a practice to keep anyone on a retainer basis."

Leyva said he did not hear from Peroff again until January of 1973 and that contact was in connection with another case. In his memorandum, Leyva made no further reference to the John Barnes counterfeiting case.

POSTSCRIPT ON THE BARNES CASE

Harris J. Martin, head of the Secret Service counterfeit division, said that when Scotland Yard raided the plant where the bogus currency was being printed that no one associated with the facility had been previously identified by Peroff. Nonetheless, information provided by Peroff in the John Sydney Barnes case was considered valuable enough to justify continued inquiry.

In a report filed in Rome June 19, 1973, Customs Attache Mario Cozzi said both principals in the inquiry-John Barnes and Keith Jeffries should be made the subjects of a "7-category case" "to insure appropriate Customs examination on any future arrivals in the United States." The Subcommittee obtained a copy of the Cozzi report and it was made part of the hearing record.

Cozzi wrote that Frank Peroff "appeared to be very well versed” in the activities he accused Barnes and Jeffries of being involved in such as passing counterfeit money and phony stocks and trafficking in the "controlled currency of new African nations, i.e., Zambia, etc."

Cozzi went on to say that investigators had gone to the trouble of tracing Barnes' and Jeffries' whereabouts. He said that Barnes, a British subject, and his wife, Jane, stayed at the Holiday Inn in Rome from November 28 to December 1, 1972 and that Jeffries, also an Englishman, was at the American Hotel in Rome December 23 to 25, 1972.

IV. PEROFF WORKS ON TWO NEW CASES

THE PEROFFS MOVE TO EUROPE

In the spring of 1972, Frank Peroff, his wife Judy and their five. children-Debra Dee, Mindy Jo, Bambi Lee, Susan and David-left their home in the exclusive Spring Valley section of Orlando and moved to Europe.

Peroff told Senators that he wanted to make a new life for himself. He said he wanted to go straight, to be an honest man whom his wife and children could look up to. But things didn't turn out the way Peroff hoped. He testified:

When I left Florida, my real intention was to stop becoming a criminal. Unfortunately, I wasn't strong enough to do that. I kept going on with illegal activities, although probably not as strongly as I had while I was in the United States (p. 114).

Peroff said he "became involved in various business schemes, both legal and illegal, throughout Europe ." But the returns on these various pursuits must have been good. For their first three months in Europe the Peroffs lived in a well appointed villa in Nueva Andalusia, a town on the Costa del Sol in Spain. Then, Peroff said, his work required that he live in Italy so, in the summer of 1972, he moved his family to Rome where they resided in a large house at 16 Via Barballo (p. 11).

PEROFF'S CHANCE MEETING WITH "LOUIS"

For the next six months or so, Frank Peroff went about his business in Rome. Then one day in early January, as he was walking by the Excelsior Hotel, Peroff had a chance meeting with a man he knew to be an employee of Conrad Bouchard. Peroff said the man, known to him as "Louis," told him that Bouchard was out of jail. Louis went on to say that Bouchard was very anxious to get in touch with Peroff and had been for some time.

Peroff testified that Louis quickly took him to a telephone and placed a call to Bouchard in Montreal. Peroff told Senators that this was the first time he had spoken with Bouchard since the Canadian racketeer's heroin arrest some 12 months before. Bouchard, Peroff said, was "very glad" to have his former colleague from the Bahamas on the phone. Bouchard "showed a large amount of enthusiasm," Peroff said (p. 12).

Over the next few days, Bouchard from Montreal and Peroff from Rome talked to each other several times. Peroff said that during one call Bouchard introduced him to a man he later came to know as Tom Solarik. About a week went by, Peroff said, and then he received a call from Tom Solarik. Solarik introduced him to another man, Mike

Silverman. Peroff said Solarik and Silverman were calling from Amsterdam. They said they were coming to Rome and asked him to make reservations for them at the Excelsior Hotel. They arrived the next day, Peroff said. Subcommittee inquiry established that Silverman was also known as Nikolaye Silbermann (p. 12).

PEROFF JOINS SOLARIK AND SILVERMAN IN CRIME

Peroff said he met with Solarik and Silverman for about two hours. They said they had a half million dollars in counterfeit $100 and $50 bills and wanted Peroff to help them convert the bogus currency to real cash. Solarik and Silverman said they did not work for Conrad Bouchard but that they had been involved in criminal acts with him. In one of these activities-a recent narcotics transaction-Bouchard had made a mistake that had cost them $40,000. Now, by referring them to Peroff, Bouchard was trying to relieve his indebtedness, the two men told Peroff.

Peroff explained to Senators:

In an effort to pay them [Solarik and Silverman] back, Bouchard had told them I would take this counterfeit money and convert it into good funds. Bouchard knew well my ability to perform in this field of crime. Because of this commitment on Bouchard's part, they had invested money in the purchase of this counterfeit money (p. 13).

Peroff said Solarik and Silverman had with them about $28,000 in counterfeit money when they arrived in Rome. Following their first meeting, Peroff said, the two men returned to Rome with another $450,000 in counterfeit. Peroff said he accepted the bogus money, agreed to try to dispose of it and stashed it away in his home (p. 14).

PEROFF GOES TO SECRET SERVICE

By his accepting of the phony currency, Peroff had become a party to a crime. And, he said, the more he thought about it, the more fearful he became. Peroff already suspected the Roman police had him under surveillance for other questionable deals he was involved in. In addition, he said, a "very complicated currency transaction" he was trying to work out with the Government of Zambia was at an uncertain stage and he thought Zambian officials might try to have him killed. In any event, he felt the Zambians were watching him and he felt the Roman police might be watching him too. With the arrival in Rome of Solarik and Silverman, Peroff said, he became more convinced than ever that people were following him around. This was not the time to get mixed up in a big counterfeiting deal, he concluded, as he explained to Senators:

I was becoming increasingly worried and it reached a point where I was very much convinced that I, in fact, could be arrested at any time. . . I was almost certain at this point in time that my house could be searched and that if it was searched all of this counterfeit money would be discovered (pp. 13, 14).

Peroff remembered the Secret Service agent, Frank Leyva, he had met in London in March of 1972 and in Paris the following April in connection with the John Barnes counterfeit case. As chief of Secret Service operations in Europe, Leyva had his office in Paris. Peroff said he called Leyva there. He said he told Leyva that he had nearly a half million dollars in counterfeit currency and that he was willing to turn the bogus money over to Leyva. In return, Peroff said, he asked Leyva to fabricate a set of circumstances that would make it appear to Solarik and Silverman and everyone else that Peroff was not the informant. Peroff said Leyva agreed to the plan and referred him to the U.S. Customs Attache at the American Embassy in Rome, Mario Cozzi.

Peroff explained to Senators what he was thinking when he went to the Secret Service when he did :

I felt that by calling Mr. Leyva that, if in fact, my house was searched and the currency discovered, his knowledge of this money would protect me from any criminal prosecution. My motives were purely selfish in this regard (p. 14).

PEROFF WORKS WITH U.S. CUSTOMS SERVICE

Mario Cozzi, the U.S. Customs Attache in Rome, and Frank Peroff held a series of meetings over the next few days, Peroff said. He said they discussed the counterfeit deal involving Solarik and Silverman. Peroff said they also discussed Peroff's knowledge of how persons were able to obtain fraudulent Panamanian and Canadian passports. Peroff said Cozzi had him go to London to place orders for such passports (p. 15).

Meanwhile, Solarik and Silverman had left Rome and gone to Paris. Peroff said he talked with them by phone. Then, he said, they returned to Canada. Peroff said that while Solarik and Silverman were in Canada, he was in London working on Mario Cozzi's fake passport assignment. Cozzi called him there, Peroff said, and told him to travel to Paris to meet with Frank Leyva of the Secret Service and with U.S. Customs personnel. Peroff said Leyva also called him to say the same thing (p. 15).

In Paris, Peroff said, he checked into a hotel near the American Embassy Annex and awaited further instructions. The annex, D-Building, is at 58 Bis rue La Boetie.

BNDD and Customs records reveal that Peroff told Federal agents as early as January 15, 1973 that Solarik and Silverman were in Europe to deal in narcotics as well as counterfeit money.

AGENTS EXPAND INQUIRY TO DRUGS

It was February of 1973 now-about a month had passed since his chance meeting with Louis outside the Excelsior in Rome and to Peroff it became apparent that American law enforcement agents believed that in the Solarik-Silverman-Bouchard connection they were on to something significant. In Frank Leyva's Paris office, Peroff was introduced to several agents with the U.S. Bureau of Narcotics and Dangerous Drugs (BNDD) and two Customs agents, Vernon Pitsker