Lobbyist’s Pal Set To Testify In Florida Fraud Case

By Seamus Mcgraw

Published December 16, 2005, issue of December 16, 2005.
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For two decades, Adam Kidan, failed Long Island businessman and disbarred lawyer, counted embattled super lobbyist Jack Abramoff among his closest friends.

But now, as part of a deal with federal prosecutors, Kidan, 41, is expected to testify against his longtime friend in a high-profile federal wire fraud case. Prosecutors allege that the two men conspired to fraudulently take control of a fleet of Florida-based casino ships from a Greek immigrant who was later executed, allegedly by three men.

All three of the accused killers had ties to Kidan, and at least one is allegedly connected to the Gambino crime family. Kidan has not been charged in connection with the slaying, but Kidan and Abramoff were both named by a federal grand jury in a six-count indictment in June for their alleged role in the SunCruz Casinos takeover. That case is scheduled to go to trial in Fort Lauderdale next month. Under the terms of the agreement, which was expected to be finalized Thursday, Kidan was to plead guilty and would likely see his sentence reduced from a maximum of 30 years to as little as five, according to his attorney, Joseph Conway.

Kidan’s plea deal comes just two weeks after another Abramoff associate, Michael Scanlon, agreed to cooperate in a wide-ranging and unrelated bribery probe allegedly involving Abramoff and the way in which he curried favor with Washington lawmakers. A guilty plea by Kidan could intensify Abramoff’s legal woes and may put additional pressure on him to cut his own deal with federal prosecutors, both in Florida and in Washington.

So far, Abramoff’s attorney said, his client has no plans to enter into a plea bargain with federal prosecutors in Florida.

“I’m continuing to prepare for trial,” said Neal Sonnett, who is representing Abramoff in the Florida case. “We’ll see whether or not this… will cause any kind of change in strategy.”

If the case goes to trial, Kidan is expected to provide critical testimony against his longtime friend and sometime business partner.

Kidan first met Abramoff nearly 20 years ago. At the time, Abramoff, then a graduate student at Georgetown University, was national chairman of the College Republicans. Kidan was a young undergraduate student at George Washington University. The men remained in touch. But, by all accounts, while Abramoff’s fortunes soared, Kidan’s soured.

In 1990 Kidan started a chain of bagel shops on Long Island. His business partner, Michael Cavallo (who has since died), was reputed to have had mob connections. It was during this time that Kidan struck up a friendship with Anthony “Big Tony” Moscatiello. A caterer by trade, Moscatiello is reported to have links to the Gambino crime family and to its former boss, John Gotti.

Kidan’s attorney, Conway, has declined to comment on the relationship between his client and Moscatiello, saying only, “It is what it is.” And according to various published reports, Kidan has denied knowing about Moscatiello’s links to organized crime.

It is clear, however, that by the early 1990s, mob-related characters were turning up often in Kidan’s life, sometimes with tragic results. In February 1993, for example, his mother, Judy, was gunned down and killed inside her home. At the time, she was living on Staten Island with her second husband, Samuel “Sami” Shemtov, a man whose business interests in New York and Miami included a string of sex shops.

Six years later, former Miami nightclub owner Chris Paciello — real name Christian Ludwigsen — admitted that he had driven the getaway car for a crew of young associates of the Bonanno crime family. They had targeted the house because they had heard that Shemtov kept large amounts of cash hidden there. Paciello remains in prison.

A year after the slaying, Shemtov successfully sued Kidan and his law partners, alleging that they had pocketed $250,000 from the sale of an electrical company, and another $15,000 that Shemtov had put up as a reward for information leading to the arrest of Judy Shemtov’s killers.

Kidan was subsequently disbarred. His bagel business was faring poorly, and he sold his interest. In the early 1990s, he had moved to Washington and opened a franchise for Dial-a-Mattress, a company for which he had provided legal services. After some initial success, that franchise also ran into trouble, and by 1995 Kidan and his business partners filed for bankruptcy. That was not the end of his financial bad luck. In 1999 he was forced to liquidate the assets of another failed business operation, an online service that sold and delivered mattresses.

A few months later, prosecutors allege, Abramoff threw his old friend a lifeline: The high-powered lobbyist had stumbled across a sweet opportunity, authorities have alleged.

Konstantinos “Gus” Boulis, a Greek national who had managed to turn a single sandwich shop into a business empire, had run into trouble with the federal government. Among his other holdings, Boulis owned SunCruz Casinos, a fleet of 11 gambling ships based in South Florida. But an obscure federal law prohibited noncitizens from owning U.S. maritime interests, and in 1999 federal prosecutors successfully pressured Boulis to divest. As part of the agreement, according to a report in the Weekly Standard, the feds agreed to keep the situation quiet so that Boulis could get market value for his interests.

Federal prosecutors allege that Abramoff agreed to pay Boulis $147.5 million for the fleet and its assets. Boulis’s maritime attorney worked with Abramoff at Preston Gates Ellis & Rouvelas Meeds. Because the firm prohibited its employees from entering into business deals with its clients, Abramoff kept the transaction secret from his bosses. And then he turned to Kidan, making him a partner in the deal.

But neither Abramoff nor Kidan, who by that time was reported to be nearly broke, had the cash, so they lied to lenders, authorities allege. According to the indictment against Kidan and Abramoff, the pair agreed to put up $23 million of their own money but instead put up nothing and falsified documents to make it appear as if they had given the $23 million. In fact, no money changed hands, and prosecutors have alleged that Boulis went along with the scam and in exchange, accepted an IOU and a pledge that he would retain an interest in the company.

The faked transfer became a subject of dispute between Boulis and Kidan. But it was not the only bone of contention between them, authorities allege.

Kidan and his silent partner, Abramoff, allegedly ran the company into the ground, while they each drew a $500,000 annual salary from the operation and spent lavish sums on other expenses. Kidan also paid $145,000 to a company owned by the daughter of his old mob-linked buddy from New York, Moscatiello, purportedly for catering. He funneled another $95,000 to a company run by Anthony “Little Tony” Ferrari and an employee of Ferrari’s named James “Pudgy” Fiorillo (Kidan later would say that Fiorillo provided security for him and SunCruz).

Soon the company was on the brink of bankruptcy.

The relationship between Kidan and Boulis became so contentious that during a meeting in December 2000, the two men traded blows. Kidan subsequently obtained a restraining order against Boulis.

Two months later, on February 6, 2001, Boulis was killed. Authorities said that a gunman in a black Mustang ambushed him as he drove his BMW not far from his Fort Lauderdale home.

It took four years before authorities made any arrests in the case. In September, prosecutors in Florida charged three men — Moscatiello, Ferrari and Fiorillo — with the murder of Boulis.

Lawyers for the three men could not be reached for comment. All three have denied any involvement in the slaying. But according to court papers released in November and detailed in published reports, two years before his arrest Moscatiello told police that he and his two associates had been watching Boulis. At the time, Moscatiello insisted he believed that they were doing it to build up evidence for a legal case to drive Boulis out of the SunCruz operation. After his arrest, however, Moscatiello later implicated Ferrari and Fiorillo in the slaying, claiming that Fiorillo told him that they had been acting on instructions from Kidan.

Kidan has not been charged in connection with the Boulis killing, and although investigators have said that the probe into the slaying continues, Kidan’s attorney insists that his client was not involved. “Mr. Kidan’s position from the get-go has been and remains that he had no involvement whatsoever in the murder and he did not know that any such murder was going to take place,” Conway said.

Still, it is likely that the arrests in the homicide case may have helped encourage Kidan to cooperate with federal authorities prosecuting the fraud case, sources familiar with the investigation said.

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