I the undersigned Lawyer Mario Molo, a Swiss citizen with legal offices in Bellinzona, Canton of Ticino, Switzerland, issue the following affidavit regarding the position of Vito Roberto Palazzolo, who was born on 31.07.1947, an Italian citizen, resident in Franschhoek, South Africa.
1)I was appointed as Mr Vito Roberto Palazzolo legal representative at the beginning of June 1989. On the 26 September 1985, the Criminal Court of the Canton of Ticino (Switzerland) handed down a sentence of three years imprisonment against him, for the aggravated violation of Federal Law on narcotics. This judgement was contested and was therefore not final.
In the above judgement, the Court charged that Mr Palazzolo had taken part in the transfer of US$ 6 million from the United States to Switzerland after the month of September 1982, acquitting him instead on the charge of having participated in the transfer of an overall amount of US$ 28 million from the United States to Switzerland from the end of 1981 to the month of September 1982.
This trial, labelled by the press as the “Pizza Connection”, saw Mr Vito Roberto Palazzolo charged together with another three Swiss citizens, and was the first case of money laundering heard in our country.
Taking into account that until 1 August 1990, Swiss legislation had no specific criminal provision for sentencing these illegal activities, the Criminal Court had to apply Federal Law in relation to narcotics, where article 19 cpv.1 states that whoever “finances the illegal trafficking of narcotics or serves as an intermediary in its financing” is punishable. Switzerland adopted this criminal provision subsequently to the ratification of the New York Convention on narcotics in 1961.
A lengthy interpretation of the concepts of “financing” and “intermediary” were required in order to substantiate the sentence, because the illegal activity carried out by Mr Palazzolo was only that of having organised the transfer of money from the United States to Switzerland on behalf of clients that were implicated in drug trafficking, without him having being directly involved in the trafficking itself, and without the transferred money being invested to finance the purchase of drugs.
As far as the subjective aspects or the intent were concerned, the Criminal Court of the Ticino Canton ascertained that until the 30 September 1982 Vito Roberto Palazzolo did not act knowingly or intentionally, because even though he harboured doubts and concerns, he did not know that the transferred money could have come from the retail sale of drugs, nor that his clients could have been traffickers. At the time, he therefore had neither the knowledge nor the intent to contribute to the trafficking of drugs (page 100). It was only later, at the beginning of October when Mr Palazzolo was informed by a Director of E.F. Hutton and Co. Inc. that the FBI were investigating the movement of money, that the Court alleged that Mr Palazzolo had acted with eventual intent in arranging the transfer of US$ 3 million that had already been deposited with Hutton, and another US$ 3 million, which had been collected but not yet deposited with Hutton.
Eventual intent (dolus eventualis) is therefore a legal interpretation, pitched between intent and negligence. Even if someone does not want to participate in financing the trafficking of drugs, he acts with eventual intent if he considers it possible that the transfer of money could have brought about a similar result, and nonetheless proceeds with the transfer of money.
Taking into consideration Palazzolo’s doubts regarding the uncertain origins of the money, the Criminal Court of the Ticino Canton stated that after the alarm was sounded by the FBI investigation, Mr Palazzolo could no longer discount the possibility that the money was linked to drug trafficking, especially when one considers that once he began investigating the origins of the money and his clients’ background, Palazzolo himself was threatened by the latter and compelled to transfer the money that he had already received.
Taking these threats seriously, Mr Palazzolo had the accounts with Hutton in New York closed, and transferred the US$ 6 million to Switzerland, organising for the delivery of these funds to their owners. These transactions took place between the end of 1982 and the beginning of 1983. These funds, however, were not used to finance the trafficking of drugs, nevertheless, the mere possibility that they could have been used for this purpose, was considered sufficient to convict Palazzolo (judgement, page 94), who from that moment on, could no longer believe his clients were completely removed from the trafficking of drugs (judgement, page 112).
Vito Roberto Palazzo nevertheless broke off relations with his clients, whom he suspected of being Mafia, and was no longer involved in the transfer of money. He was arrested on 20 April 1984, this being over a year after he had ceased performing any illegal activity.
Finally, as far as Vito Roberto Palazzolo’s character is concerned, the Court considered that:
“He originates from an aristocratic family of Palermo which, as far as can be established, is not involved in Mafia associations. The same examining Magistrate did not consider that Palazzolo was associated with a Mafia organisation, but as will be seen, as a businessman who in his international dealings of trading in precious objects and currency, and the trustee management of other persons assets, will certainly have had contact with drug traffickers.”
(Judgment Criminal Court 26.09.1985 pages 53 and 54).
One also needs to emphasise that the Criminal Court recognised that Palazzolo had committed these criminal acts under particular psychological conditions of extreme anguish (pages 108 and 121), caused by the serious threats that he had received on his life. Palazzolo did not therefore have freedom of choice, but violated the law because he was forced to do so.
2)The judgment of the Criminal Court of the Ticino Canton was appealed by the Public Prosecutor and by Vito Roberto Palazzolo.
At this point, it is necessary to explain that there are three levels to the judiciary in Switzerland. The first being the Criminal Court, which can decide freely on matters and the application of law. The other two levels, namely the Cassation and Criminal Revision Court, and the Federal Court at the highest level, are both restricted to the verification of facts used in the Criminal Court, their function being only to ascertain whether criminal law has been correctly applied to these facts.
Several points in the first level court’s judgment were amended by the Cassation and Criminal Revision Court with judgment handed down on 11 April 1986, in terms of which Palazzolo was charged with the transfer of an additional US$ 1,5 million that had not been considered relevant by the first level court, and for the violation through negligence of the federal law on narcotics for his part in the transfer of money totalling US$ 28 million carried out before the month of October 1982, and which the first level court had not considered punishable. The penalty was therefore increased from 3 years to 5 years and 6 months.
3)Vito Roberto Palazzolo submitted an appeal against this judgment to the Swiss Federal Court. Proceedings were suspended until a revision procedure pending in relation to the conviction for the aggravated violation of Federal Law on narcotics, referring to the US$ 1,5 million included in the judgement of 11 April 1986 in the previous point, had been finalised.
The review application was upheld and the Criminal Court in the Ticino Canton (Switzerland) acquitted Vito Roberto Palazzolo on this charge in terms of judgement dated 9 August 1989, and reduced the penalty of imprisonment from 5 years and 6 months to 5 years.
4)The Federal Court could then proceed with examining the appeals presented by the Public Prosecutor and Vito Roberto Palazzolo against the Cassation and Criminal Revision Court’s judgement of 11 April 1986. With judgement handed down on 6 January 1992, the Federal Court acquitted Vito Roberto Palazzolo on the charge of violating Federal Law on narcotics based on a negligent act in relation to the US$ 28 million financing, and referred the case back to the Cassation and Criminal Revision Court for a new decision on sentencing.
5)Judgment handed down by the Court of Cassation and Criminal Review on 5 November 1993 amended their previous judgement of 11 April 1986, and partially upheld the appeal submitted by Vito Roberto Palazzolo, convicting him to 3 years and 9 months imprisonment. It deducted the entire period of preventative custody that he had served, and ordered him to pay a fine of 20.000 Francs. It further ordered his expulsion from Swiss territory for a period of 5 years from the date that judgement had been handed down.
6)Sentence handed down by the Cassation and Criminal Revision Court for 3 years and 9 months imprisonment in terms of the judgement of 5 November 1993, became final on the 3 May 1994 when the Swiss Federal Court dismissed the appeal submitted by Vito Roberto Palazzolo.
7)Vito Roberto Palazzolo who was ultimately released on 1 October 1989 unduly served a period of extra imprisonment of 1 year, 9 months and 27 days, as a result of the final sentencing of 3 years and 9 months; even when taking into account the interruption to his serving of sentence from 26 December 1986 until 31 January 1988.
Palazzolo subsequently lodged an application claiming damages for unjust imprisonment against the Canton of Ticino, and with judgement handed down on 12 December 1997, the Judge President of the Criminal Canton Court reversed the attachment of most of the funds that had previously been frozen by the Public Prosecutor of Lugano on 1 February 1988.
(Lawyer) Mario Molo