By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
By Ryan Yousefi
By Kyle Swenson
On a clear hot afternoon this past July, Chris Paciello, né Ludwigsen, loaded his 50-foot yacht with friends and aimed the bow north up the Intracoastal. Then he gunned the engine and sped off into a day filled with promise as bright as the subtropical sun overhead.
The 28-year-old had no reason to believe twilight would soon fall on his achievements. At the time his two clubs, Liquid and Bar Room, were easily the most popular locales on the South Beach nightlife circuit. He had signed exclusive Miami contracts with the East Coast's hottest DJs, so even during the dreaded summer months his dance halls were drawing crowds and turning a profit. Paciello and his partner Ingrid Casares planned to expand into Palm Beach County in the fall. Their restaurant, Joia, remained popular. He was at the peak of his entrepreneurial career, and he hadn't even turned 30.
But evidence of another side of the club owner was on the boat that afternoon, in the form of an apparently crooked Miami Beach cop named Andrew Dohler. To protect his budding empire, Paciello had lured Dohler on to his payroll in April 1998. The move seemed to pay off when Dohler provided classified police information on rival club owners and tipped Paciello to pending city raids to catch underage drinkers and drug dealers.
Paciello had even suggested the cop quit his job and help run his clubs. The boat ride was meant to impress the detective with the possibilities that lay ahead. That became clear when the vessel approached the dock at Dox on the Bay restaurant in North Miami Beach, and the entourage disembarked. There, waiting to dine with Paciello and his friends, was Alphonse "Allie Boy" Persico, acting head of the Colombo crime family.
The Miami Beach police memo that describes the events of that July day gives no detail of the conversations that followed. The reputed don's lawyer, Barry Levin, says at most Paciello and Persico are casual acquaintances. Some South Beach observers who declined to be named say the two were seen dining at Joia.
With friends like this, Paciello must have thought he could reign over South Beach for years. In the eyes of law enforcement, the Paciello story is just the latest chapter in a long history of mob business on the Beach, dating back to Al Capone, who bought a house on Palm Island in the 1920s, and the notorious S&G syndicate's takeover of gambling at big hotels during the 1950s. Only the soundtrack has changed, it seems, from big band to Sinatra to techno.
Five months after the Dox on the Bay boat ride, federal prosecutors in New York hit clubland's dark prince with a five-count racketeering, robbery, and murder indictment for a string of crimes committed in 1992 and 1993, when he allegedly ran with a Bonanno crime family crew. (Details of Paciello's unsavory past were described in New Times's feature story, "Goon Over Miami," on December 23.) The feds contend Paciello's mob connections and background helped him attain such success on the Beach.
At a Miami bond hearing in December, Howard Srebnick, one of Paciello's lawyers, stood outside the federal courthouse and claimed the government had gone after his client because he had "made something of himself." Paciello's other lawyer, Roy Black, told the press that Paciello may have grown up on the mean streets of Brooklyn, may even have known some tough characters back then, but he was no mob affiliate. In fact Srebnick tried to buff his client's reputation to a noble shine by saying Paciello was targeted "because he didn't turn his back on people he grew up with. He didn't commit crimes with them either."
Although the federal charges stem from years ago, a review of the court record shows Paciello hardly left his connections behind in New York. Just ask Dohler. The detective, a transplant from the New York City Police Department, was merely posing as a corrupt cop. At the time of the cruise to Dox on the Bay, he was investigating whether Paciello's businesses were mob fronts. The Florida Department of Law Enforcement, the FBI, the IRS, the U.S. Attorney's Office, and the State Attorney's Office were all working with Miami Beach police on the case.
As a result of the probe, state prosecutors plan this week to charge Paciello with bribery and unlawful compensation for rewarding Dohler with cash, dinners, and gifts.
On January 11 Dohler's bosses named him Officer of the Year for his work on the Paciello case. In a letter of commendation, Beach police brass congratulated the cop for his ability "to obtain detailed intelligence as to the financial status of PACIELLO'S businesses and his personal property holdings ... and link PACIELLO to traditional Italian organized crime."
With a trial date approaching in the New York case and Florida investigators still scrutinizing Paciello's finances, it appears the club mogul will be fighting for his freedom for some time to come. He has not been able to meet the $15 million bond set by a federal judge in New York, which would have allowed him to stay at his mother's home in Staten Island under house arrest. One reason is that his partner Casares, who pledged to help free him, has not anted up her full share of the bail. And the newest frontiers of their mini-empire, Bar Room in South Beach and Liquid Room in Palm Beach, are on the market. Insiders say the asking prices are steep, and the clubs aren't likely to close anytime soon. Even Liquid's downstairs area has been subleased, and the boat Paciello took to Dox on the Bay is up for sale.
Meanwhile Persico, who splits his time between his Broward County home and New York City, is due in a Miami federal courtroom this week on charges of illegal shotgun and pistol possession.
In Parkland, Florida, 50 miles north of the Miami courthouse, Carlo Vaccarezza heard about Paciello's arrest with mild interest. After all, it's been years since they did business together. "I wish him the best, and I hope he gets vindicated," Vaccarezza says in a lilting north Italian accent, about the young man from New York he met six years ago. "Time will tell." Then Vaccarezza politely declines further comment.
The native of Genoa, Italy, has reason to wish Paciello well against the feds. In 1992 the government seized Vaccarezza's posh Manhattan eatery Da Noi (roughly translated from Italian to "our place"), and alleged the establishment was a money-laundering operation for John Gotti, head of the Gambino crime family. Da Noi's corporate name, the 74th and York Restaurant Corporation, "exists merely to provide the appearance that John Gotti and other Gambino family members have a legitimate income," the government's complaint stated. Gotti, of course, was convicted in April 1992 of racketeering and murder, and sentenced to life in prison. Vaccarezza was never personally charged. The case against the restaurant was dismissed after Gotti's conviction.
By then Vaccarezza had divested himself and headed south, where the weather may have been hotter but the climate was significantly cooler for a friend of Gotti. Casting about for a new business venture, Vaccarezza found 1203 Washington Ave.
The location has been a revolving door for mob-connected businessmen. Between 1992 and 1996, three businesses opened and closed there. Entrepreneur Al Baker Livingston, Jr. (a.k.a. Al Baker), a convicted mob money launderer, opened Mario's East of South Beach restaurant there in the 1992. Vaccarezza and several partners picked up the lease from him in 1993 and opened Mickey's Place, in partnership with actor and Miami Beach High alum Mickey Rourke. The two had become friends in New York and attended Gotti's trial together. Paciello took over the lease from Vaccarezza's partners in 1995 to open his first nightclub, Risk, which burned down later that year.
Baker is in some ways the most interesting of the trio. He is a garrulous impresario with Baroque tastes; the Miami Herald once did a story on the $110,000 rotating bed in his home. After trying to make a go of Mario's and failing, he opened a luxurious nightclub in North Miami Beach called Façade, which had financial problems almost from the beginning. In 1993 Baker's landlord evicted him. But before the space could be rented, someone demolished the interior with a chainsaw. Baker then materialized in Fort Lauderdale, where he opened Baccarat Nightclub and Restaurant. It was there, in partnership with Thomas Ruzzano, an associate of the Genovese crime family, that he laundered at least $100,000 for the mob.
Meanwhile Vaccarezza and his thespian partner Rourke were trying to re-create a little bit of Brooklyn in South Beach. They decorated the joint in a boxing-club motif, and Vaccarezza proudly hung a picture of his friend Gotti on the wall. But Vaccarezza, whom associates describe as very casual in dress, didn't fit in with the South Beach fashion scene. And police charged Rourke in 1994 with resisting arrest after a melee outside the club. The place faltered.
Enter Paciello, at the time a 23-year-old fresh from New York's club scene. If prosecutors are right, his heists during the previous two years, along with his wise-guy connections, provided the money for his South Beach investments. His partner at the time was a prominent underground promoter from New York, an early pioneer of the techno music scene and a confessed drug dealer named Michael "Lord Michael" Caruso (who is now a government witness against Paciello). Soon after Paciello met with Vaccarezza, Risk replaced Mickey's.
Risk enjoyed a brief season of popularity before the crowds began to thin. On April 2, 1995, just after Caruso abandoned his partnership with Paciello to return to New York, the building caught fire. Miami Beach investigators officially traced the cause of the blaze to a cigarette left smoldering on a seat. Police, however, have always suspected arson.
Recently New Times contacted a source who, on condition of anonymity, recounted meeting three friends of Paciello in 1996. One of them boasted about the trio's purpose for coming to South Florida from New York. "He said the three of them -- Frankie, Paulie, and Justin -- were brought down for the fire at Risk," the source says. Two others who are familiar with the scene, but decline to give their names, confirm a trio with those names worked for Paciello at Risk and then Liquid. The two have no knowledge of a planned fire.
James Walden, the federal prosecutor in Brooklyn, filed court papers Friday claiming that a witness told police: "Ludwigsen arranged for the arson of ... Risk."
Paciello and Caruso garnered a $250,000 insurance settlement as a result of the blaze. In 1995 they opened Liquid nightclub at the corner of Española Way and Washington Avenue.
About the same time, Vaccarezza retreated to the Ocala area to open a thoroughbred-training facility called Break of Dawn Farms. He had long wanted to work with horses, but in the early 1990s, New York gaming officials had denied him a license to own thoroughbred race horses because of his alleged association with organized crime.
Vaccarezza is sensitive about the allegations that he was allied the mob. In 1992 he sued the New York State Racing and Wagering Board to reverse the license ban, but was denied. And in 1995, when WPLG's (Channel 10) Rad Berky aired a report that termed Vaccarezza a "Gambino soldier," the former restaurateur sued for libel. The case was recently settled for undisclosed terms.
The horse farm defaulted on several loans and went into bankruptcy in 1995. And Vaccarezza reapplied for his license in New York in 1998 but was again turned down.
Gerry Kelly fidgets nervously while sitting on a velvet couch in the VIP section of his new club Level. With a deft flip of the wrist, he opens his cell phone and tells his assistant to hold all his calls. His tone is uncharacteristically clipped. Kelly, an Irish fashion designer who came to South Beach six years ago from Spain, has helped a succession of clubs make it in this fickle market. He has survived, personally and professionally, by being overtly gracious. He almost never utters a bad word about rivals or colleagues, including Paciello and Casares, whom he worked for until last fall. In fact immediately after Paciello's arrest, Kelly wished only the best for his former boss. "I consider him a friend," Kelly said. "I tell you, from my heart, I thought he brought something special into this city."
But Kelly is not saying that now. Miami Beach police recently invited him to their station and revealed that Paciello had targeted his former employee for revenge. The cops contend Paciello hatched a plan September 29 to have Kelly arrested, and Kelly's partner in Level, Noah Lazes, beaten up. "I knew absolutely nothing about the threats," Kelly says. "I thought it was idle gossip. I left on good terms with CP Ventures [Paciello's company]. In my resignation letter I wrote that it was an honor and a pleasure to work for both him and Ingrid."
Paciello hired Kelly, who had run Shadow Lounge, in fall 1998. Paciello wanted him to market and manage his two clubs. By all accounts Paciello labored hard running his clubs, but he needed help. And he got it with Kelly, who is known as a workhorse. While Casares was flitting around the country hobnobbing with celebrities and attending fashion shows, the Oscars, and VH1's music awards, Kelly put in long hours ordering liquor, placing ads and trying to keep the clubs going. And last summer, about the time Paciello was introducing Detective Dohler to Persico, Kelly was watching his hard work pay off. Although South Beach's hot months are supposed to be the down season for the club because the idle rich and the models flee to the Hamptons and Europe, in 1999 things were rocking.
"It was a peak time of business," Kelly says. "We had record-breaking sales." Among the summer's highlights were a sold-out July 4 party at both clubs and a June masked ball at Bar Room thrown by Paciello and Casares in honor of Kelly's birthday. "I was very, very happy there," Kelly recounts.
Then as summer eased into fall and South Beach's monied crowd returned, competition moved in. Clubland's reigning boss suddenly became uneasy. A successful Chicago company, Big Time Productions, bought the Cameo Theatre, located across the street from Liquid, and announced plans to transform it into a dance hall called crobar. Then in September Lazes offered Kelly a partnership in Level. Kelly says he invited Paciello and Casares to join the project, but they declined.
Outwardly Paciello took the loss of his right-hand man graciously, with a smile and a handshake. But in the privacy of his office, prosecutors say he conspired to retaliate. The man Paciello turned to for help, Detective Dohler, was taping their conversations.
At the time Paciello was urging Dohler to transfer to the Special Investigations Unit (SIU), which handles narcotics cases. Paciello hoped use Dohler to obtain information and intimidate other club owners. The two apparently had discussed setting up Kelly at a previous encounter.
Dohler: When we talked about me getting into SIU, that's got to open up some doors for you.
Paciello: Of course, of course. You getting in there could help me a lot. We could put some pressure on those clubs, and also I'll know when there's pressure on me. It works both ways. We could really put some pressure on [the other club owners].
Dohler: This [Kelly], what do you want to do? I know what you're saying, I know exactly what you want. How far do you want to go?
Paciello: This fucking [Kelly], he's got a bad drug problem; he's always got drugs on him. He always drives drunk. You can arrest him.... I really want to hurt this guy good and I'll take care of you big-time. [Kelly denies taking drugs or driving under the influence.]
Paciello: I'm telling you ... we got to get [Kelly's partner Lazes's] head fucking broken in. We got to get him beat up. I got to get him whacked.
Dohler: As long as it's done on the Beach.
Paciello: Right, but if something happens to that kid right now, [the police] are going to be so far up my ass. But not if [Kelly's busted for drunk driving or drugs]. It's normal shit. He gets beat up, I'm fucked."
Police didn't inform Kelly of the threat, but began tailing him around the clock.
Paciello was right to worry about the competition. Since opening, crobar has begun a successful Sunday gay night in direct competition with Liquid. And Level initiated a soul and funk-theme night to go up against Liquid's Monday night mainstay, Fat Black Pussycat. Between Paciello's arrest and the formidable competition, Liquid is hemorrhaging patrons, nightlife observers say.
Perhaps the ultimate humiliation: As South Beach's king of clubs sits in a New York jail unable to meet bail, Liquid employees last week were selling furniture to raise cash.
Paciello's lawyers are trying to make sure his social prominence and good deeds work to his advantage in the upcoming trial. At the Miami bond hearing, attorney Howard Srebnick told the court that Paciello has donated to dozens of charities and held fundraisers at his clubs. The lawyer aims to cast prosecutors as petty and vindictive government agents out to get an honorable man.
That's funny, says one law-enforcement source close to the case. "When we started this thing and his name came up, we had no idea who he was," comments the source, who asked to remain anonymous. "It was only afterwards, when the press started going nuts, that we figured he was a big deal."
But the press adoration of Paciello highlighted an important aspect of the young entrepreneur's purported role: He represented much-needed new blood for the Mafia. Two decades of intense federal pressure had broken the spine of traditional Mafia businesses, and wild-eyed hoods from Eastern Europe and South America have outgunned La Cosa Nostra. So now the dons are pinning their hopes on smart, business-savvy young men to maneuver their assets into the future, says the law-enforcement source, who adds, "This guy Paciello, he was the future of the mob."
The pressure apparently was a burden on Paciello. He confided his concerns to Det. Andrew Dohler in an October 31 conversation. At the time Paciello was depressed about the struggle to keep his clubs competitive.
Dohler: How's everything else going?
Paciello: Oh, bullshit. All the shit going on this year.
Dohler: What's the matter?
Paciello: There's fifteen clubs opening. Million and millions they're putting into these clubs.... Warsaw, Cameo, Glamsham. God, I mean nonstop.... Ah, fuck everyone.
Dohler: At least you got [Joia]. These clubs come and go.
Paciello: That's right. Bar Room ain't goin' nowhere. Joia's doin' well, and Liquid's doin' all right as long as I can hang in there. It's rough.
Then Paciello let slip a mysterious phrase. His lawyers claim it is an innocent reference. Prosecutors say it is an allusion to his rowdy thug days in New York, when he earned the nickname Binger, allegedly because of his propensity to binge on violence.
Paciello: I'll tell you the truth. I feel like putting on my costume -- going trick or treatin.' You understand?
Dohler: Yeah, I hear you. There might be a time and place for that, things get bad enough. As long as we do it here, I'll take care of the [police] reports.
Paciello: I'm tellin' ya. I gotta come out of fucking retirement. I've become a big pussy down here. A big sucka.