Accusation and Acquittal

In 1982, Franco Della Torre, general manager of Consultfin SA at the time, introduced me to a prominent Italian industrialist, Oliviero Tognoli, who had been a client of the parent bank (and most other Swiss banks in Lugano). Tognoli was looking to utilize our services, which he did for 9 months. He was by no means our largest client; many high net worth Individuals entrusted us with their money, as well as other banks and investment houses. That same year, I was informed that the United States Federal Treasury was investigating the origins of Tognoli’s funds, in the USA. I immediately requested Della Torre to summon his client and his associates to ascertain the source of the funds. Tognoli assured us that the funds were completely clean and legal. So I decided to complete a still-pending transaction but to terminate the relationship with this group of clients who, in my opinion, were not worth any potential trouble with the US Treasury and Custom Department.

However, the investigation escalated and in 1984 an extradition request came from Italy, with a warrant of arrest on charges of money-laundering and Mafia-association. The Americans followed suit shortly after. I was subsequently arrested by the Swiss authorities, on behalf of Italy, but their extradition requests were refused. Instead I was subjected to legal proceedings, along with Rossini and Della Torre in Switzerland. The transaction in question was the purchase of gold bars worth $6m, for Tognoli, using the remainder of his money. This transaction formed the basis of my conviction in Lugano on the 26th of September 1985. At the time no law in Switzerland obliged us to establish the source of funds. The Know Your Customer (KYC) rule applied only to the identity of the client, but not the origin of funds. It is well documented that the edifice of Swiss banking was built on discretion and secrecy. In this case the funds had been linked, unbeknown to me, to the narcotics trade in the US, specifically the so-called Pizza Connection, a drug distribution network using pizza parlours in the States.

Under pressure from the US and without a money-laundering law, the Swiss authorities had to get creative. In order to convict us they had to shoe-horn our case into the Federal Law on Narcotics (article 19) which states that whoever ‘finances the illegal trafficking of narcotics or serves as an intermediary in its financing‘, is punishable by law. After a lengthy and tortuous interpretation of ‘financing’ and ‘intermediary’ to substantiate the conviction, I was convicted under the principle of dolus eventualis, or with eventual intent. The legal definition thereof is somewhere between intent and negligence. As I was not able to exclude the fact that this gold was not being converted into cash that could possibly find its way into the drug trade, I had made myself an accessory to a crime, and was therefore culpable. Which is a lengthy and tortuous interpretation, indeed. For which I was given 3 years imprisonment, of which one year was suspended.

Acquittal

While some substance could be made of this aspect of the allegations, I was acquitted of any Mafia-association. The reason for my acquittal was plain and simple: the original American investigation and warrant referred to a Vito Girolamo Palazzolo, son of Vito and born in Cinisi in 1946. I am Vito Roberto Palazzolo, son of Ludovico, born in Terrasini in 1947. For which there is an original 1984 FBI warrant. The US Federal authorities soon realized their mistake, which they admitted in writing. I produced documents proving that I was not the Palazzolo in question and yet, the label stuck. I was offered immunity by the AG of New York on all charges if I were to turn State witness. This I declined before even the Court case in Lugano took place. The sentence that was handed down by the court in Switzerland for my alleged financial “crime” was served in its entirety in a Swiss prison.

While the Americans respected the legality of the Swiss judgement and made no further applications to the Swiss judiciary, the Italian authorities did not. They reserved their right to retry the case, thereby duplicating the Swiss judicial proceedings. The result of which (from a trial carried out in absentia) was a two year suspended sentence for precisely the same facts presented in the Swiss court, and an acquittal of any Mafia-association charges. However, despite the conclusion of proceedings both in Switzerland and Rome a third warrant was issued, this time by Palermo in 1985, that would remain in effect for eighteen years. In all there were 9 attempts, by the Italians, to extradite me. This first Sicilian warrant was based on the same allegations and charges that had been presented in Rome. Palermo was challenging Rome’s competency to judge Mafia related cases. In this instance they were compelled to desist, but they persevered, however, with the drug related charges. Added to which a media campaign was launched against me, portraying me as a dangerous fugitive from justice.