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Mafia and construction: profits without risk

MONTREAL - The Mafia usually didn't invest their own money in construction or real-estate deals, but they still walked away with a profit when the projects were finished, Quebec's corruption inquiry heard Wednesday.

The Charbonneau Commission is tackling the reach and role of the Mob in major real-estate deals and the influential role played by late Mafia boss Vito Rizzuto in some of those projects.

An inquiry investigator testified about organized-crime tactics when it came to the construction industry — a low-risk investment that reaped plenty of reward.

Eric Vecchio said Rizzuto and other mobsters were usually never front-line players with a direct financial stake. Instead, they stayed on the periphery, acting as consultants and deal-brokers while they picked up a piece of the profits.

"Organized crime take a profit from the construction industry," Vecchio said. "In the end, they don't really get involved, they don't invest any of their own money, but they take away a consultant's or arbiter's fee."

The probe heard the voice of Rizzuto, the Mafia don who passed away last December. The recordings were gathered by police about 10 years ago during their massive Colisee investigation into the Mob.

The conversations centre on Rizzuto's attempts to salvage a prestigious Old Montreal luxury condo project on de la Commune Street when developer Tony Magi risked not being able to finish it because of financial problems.

Beginning in 2002, some of Magi's partners urged Rizzuto to get involved. The Mafia boss saw an opportunity to make money in the role of arbiter, with many of the conversations focusing on negotiating between partners, finding financing and ensuring the project is completed.

Later wiretaps showed that Rizzuto was involved in several other projects, making calls to Magi even while he sat in jail in 2004.

Vecchio said the transactions were not an attempt to launder money, as might have been in the past.

"They were usually using other people's money, but money that was already laundered," Vecchio said. "We're no longer in an era of bags of money, basements filled with cash. The situation has evolved."

The initial calls were captured in 2002 and 2003, but in later calls, Nick Rizzuto Jr., Vito's late son, can be heard talking to Magi as he takes on a bigger role in his father's absence.

Magi and Nick Rizzuto Jr. were business partners and contrary to his father, the younger Rizzuto took on an active role in the business.

Rizzuto Jr. was gunned down in December 2009 near Magi's office in west-end Montreal. No one was ever arrested in his slaying.

Vecchio called the elder Rizzuto a "man of compromise" who was more interested in mediating and playing referee than relying only on violence.

The investigator said Rizzuto's ability to keep everyone happy explains his long reign in local organized crime. He had a reputation for being able to bring together different criminal groups — bikers, street gangs and the Mob — under one roof.

"Mr. Rizzuto always made sure there was enough cake for everyone to have a slice," Vecchio said. "Obviously, he never talked about how big the piece each one would get."

Vecchio is the final witness before the commission breaks after Thursday. It will resume April 8 — the day following the Quebec election.

Inquiry commissioners are to talk about party political financing and have said it would be inappropriate to discuss such matters publicly during an election campaign.

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