Former special agents who once served their country in the fight against mobsters, terrorists and fraudsters often have second careers in the security or investigation departments of big companies and law firms.
However, jumping into the private sector is not without its pitfalls for one-time G-men. As much as they are prized assets by corporate America for their training, experience and contacts, the good reputation of these former agents also can be cynically exploited by employers with sharp practices or shady reputations as a cover to deflect any suspicion into wrongdoing.
For example, Assistant Director Louis Nichols -- J. Edgar's No. 2 man -- left the FBI in 1957, and took a plum job making $100,000 a year at Schenley Industries which mob lackey Roy Cohn allegedly secured for him, and Louis Rosensteil, the company's president, was suspected of ties to Genovese mobsters Meyer Lansky and Frank Costello. And former special agent H. Paul Rico left the Boston field office in 1975 to become security head at World Jai Alai, and then was indicted for his alleged role in a 1981 murder as a tool of Winter Hill boss Whitey Bulger although Rico died in 2004 before the charge against him was resolved.
Indeed, in May 1962 while staying at the Volney Hotel in New York City, Meyer Lansky was recorded on a wire describing how the G-men could be co-opted in the private sector as "racketeers" and the "new mafia":
They're nothing but racketeers, every one of them. After five years they get out, get on a big corporation's payroll. Now what happens, you and I . . . let's say I work for IBM. You came. They say [redacted] is doing the same business. He has no FBI guys working for him. Pop, they chop his legs off. They find him with a sweetheart, they find him with this, they find him with that. This thing's gonna get an investigation. It's a new mafia.
The potential pitfalls for former agents joining the civilian life came to the forefront recently for U.S. Congressman Michael Grimm, a Republican from Staten Island, NY, who spent a decade as a special agent with the FBI until leaving the agency in 2006. Grimm then opened a restaurant on the Upper East Side called Healthalicious with partner Bennett Orfaly, and federal prosecutors now allege that Orfaly has personal ties to reputed Gambino capo Anthony "Fat Tony" Morelli who "is serving a 20-year prison sentence for racketeering and extortion in an elaborate tax fraud" as reported by Alison Leigh Cowan for The New York Times:
"Mr. Orfaly maintains constant contact" with Mr. Morelli in prison, [Assistant U.S. Attorney Anthony] Capozzolo told the court, noting that Mr. Orfaly "has visited him and engaged in telephone conversations."
One unidentified source claims that Morelli is "like an uncle" to Orfaly as reported by Mitchel Maddux and Dan Mangan for the New York Post.
Orfaly is not accused of any wrongdoing, and Grimm previously sold his interest in the restaurant and insists he was unware of Orfaly's supposed ties to Morelli. In the absense of any evidence to the contrary, Grimm should be entitled to the benefit of the doubt on his claims of ignornance. In any event, many citizens probably are not thrilled with the idea that a special agent who worked undercover assignments targeting the mob after leaving the FBI became involved with a business partner who allegedly has a personal relationship with a reputed mobster. It's just not the prettiest picture.
Another former agent got employment at a law firm which subsequently was indicted. Steve Bursey spent 27 years at the FBI, and among his assignments was serving as the contact agent for undercover agent Joe Pistone who infiltrated the Bonanno crime family as Donnie Brasco. Immediately following his FBI retirement in 1997 Bursey joined the class action law firm Milberg Weiss to head its investigations department. In 2006 the law firm was indicted by federal prosecutors for an alleged decades-long scheme in which serial plaintiffs were illegally paid kickbacks out of the attorneys' fees for filing their shareholder lawsuits. Several heavy-weight partners were convicted for their roles and sent to prison, and the firm itself -- now known simply as Milberg LLP -- settled the criminal case by paying a $75 million fine and hiring a compliance monitor for two years according to a Department of Justice press release: "the settlement with Milberg reflects the seriousness of what was probably the longest-running scheme ever conducted by a law firm," said United States Attorney Thomas P. O’Brien, and "the monetary payment will punish the firm for allowing this conduct to occur."
Among those convicted for their roles in the scheme was the firm's founding partner Mel Weiss, and Bursey wrote a May 1, 2008 letter to the sentencing judge pleading for leniency on behalf of the crooked lawyer which provides the following:
I have reported to Melvyn Weiss for most of my eleven year tenure with the firm. It has been a privilege to work for him and he has allowed me to assemble a collection of fact-finding talent that is the envy of every law firm in this country. Our methods and effectiveness are so well regarded that the plaintiffs' bar actually refer to it as the "Milberg model."
During my time here, I have conferred with Mr. Weiss on many occasions. At no time have I ever been asked to do anything which could be even remotely considered improper or unethical. He has, without exception, always put the interests of the investors and consumers ahead of everything else. His dedication to the mission has led me to develop a respect, admiration and affection for him that has only been rivaled by one other man in my life, my father.
On a personal note, I know that Mr. Weiss has, on numerous occasions, provided financial and/or moral support to many employees of the firm, such as paying for medical procedures. Unsolicited assistance was rendered quietly and without fanfare. People here, especially the support staff, adore Mel and it was particularly moving to see their reaction when he expressed his remorse for what happened – a lot of tears followed by a standing ovation.
I hope that this unique man, with his love of this country and passion for helping people, can be placed in a situation in which he is able to continue to put his talents and generosity to use.
U.S. District Judge John Walter apparently was unmoved by Bursey's letter, and gave Weiss 2 1/2 years on his racketeering conviction as reported by Edvard Pettersson for Bloomberg:
The kickback scheme enabled Milberg to become an extremely successful and profitable securities law firm, Walter said before sentencing Weiss. The lawyer's continued participation in the scheme, after he knew the government was investigating, made it difficult to show leniency in spite of the many letters of support written on his behalf, Walter said.
Bursey and the others remaining at the firm were not involved in any wrongdoing but the optics of a former agent at a law firm which otherwise was thick with corruption may not have inspired a lot of confidence among all the good citizens who once paid his public salary. The federal investigation into Milberg Weiss commenced in 1999 -- two years after Bursey gained employment there -- but unflattering press about "professional plaintiffs" had been written about the firm going back to 1992 as reported by Peter Elkind for Fortune magazine. Indeed, Milberg Weiss was seen by many as the principal target of Congress in its passage of the Private Securities Litigation Reform Act of 1995 to address some of the perceived abuses in the lawsuit industry. Given Bursey's FBI background one reasonably may ask whether he ever entertained any suspicions about the kickback scheme prior to the indictment against his employer and several of its partners.
Milberg Weiss has been the subject of controversy beyond its use of professional plaintiffs. For example, in 1999 a federal jury found that Milberg Weiss "had abused the legal process to discredit" the reputation of consulting firm Lexecon Inc., and awarded the injured company $45 million in compensatory damages as reported by Melody Peterson for The New York Times:
Before the jury could decide whether punitive damages should be added to that amount, the two sides talked through the night, reaching the $50 million settlement yesterday morning. The settlement takes the place of the $45 million jury verdict. ''The biggest and most powerful class-action plaintiff's firm was found liable for abuse of process,'' said Alan N. Salpeter, a lawyer at Mayer, Brown & Platt in Chicago, which represents Lexecon. ''This sends a message that lawyers should not abuse the law.''
Apparently "at the trial, several Milberg Weiss partners testified," and "after the verdict, one juror was quoted in the press as saying that the 'Milberg Weiss lawyers were not truthful'" according to a case summary ("Lexecon Wins $50 Million Settlement From Milberg Weiss") by Mayer, Brown & Platt.
FBI agents see a lot in their work but once they leave the protective cocoon of the Bureau for civilian life maybe that's when they fully appreciate just what a wild world it is.