How the Mafia really makes its billions
The story of Toni Lo Manto
So, what do the Mafia do all day? Yes, I know, don Corleone sits in his office as his daughter gets married and doles out favours to various suppliants. Tony Soprano has people whacked, or even does some whacking himself. But that is just the highlights. Don Corleone’s official business is the import of Genco Puro Olive Oil, and Tony Soprano is in waste disposal. In my own world, the Santucci family export lemons to the United States, along with wine and cheese, and import car parts for assembly in Sicily, though their ‘real’ business is cocaine. And don Calogero di Rienzi is a landlord and property developer, though the latter is a way of laundering the money made from cocaine.
The Italian police have just arrested 47 people for what they are calling a maxi-fraud concerning fake invoices and VAT; and this time the sums are the sort of sums you would expect. Apparently the amount of tax avoided is 1.3 billion euro. Moreover, the state has sequestered up to 520 million euro in property so far.
It gets more interesting. The man behind the fraud is called Toni Lo Manto, who is a longstanding Mafioso, but who has no criminal record. He himself tells us, thanks to the ever-informative wire taps, that he started out under Riina, but in those days he was just a street criminal. It was only when Riina was removed from the scene that he was able to become a businessman, or move from what Americans call blue collar crime to white collar crime.
But just what did the fraud involve? This is where my head begins to ache. The news source I am following explains it thus.
“The fraud involved the introduction of goods on the national market at very competitive prices and usually involved further steps in which the goods were sold, always below cost, to other Italian companies involved in the circuit with the sole purpose of making it more difficult to identify the scheme and its final beneficiaries, represented by the broker companies, i.e. the companies actually operating which, by purchasing the product with the application of VAT, claimed the corresponding credit from the Treasury.
“The final effect was to resell the goods on the domestic market, taking advantage of the artificially competitive purchase price, or resell them abroad, often to the same EU companies that had originated the commercial chain by originally selling to the missing trader, so that the carousel would start again. The damage to the European Union consisted of the VAT indicated in the invoices issued by the "shell companies", which had purchased the goods without applying the tax and which placed them on the national market, applying it instead to the buyer, without however paying it to the Treasury, but distributing it among the accomplices of the fraud. The discovered fraud involved 269 missing traders, 55 buffers, 28 broker companies and 52 foreign conduits for a total volume of subjectively false invoices equal to 1.3 billion euros, in the four-year period 2020-2023 alone.”
I have read this over several times, and do not quite understand it, I am afraid to say. But I think what it means is this. First the use of a ‘carousel’: the goods go round and round and round, are sold on and on, so that the accountants cannot keep up, and cannot trace the ultimate beneficiary. That is the first thing, and it is the cardinal manoeuvre when it comes to money laundering - keep the money moving, so the accountants are always several steps behind. The second wheeze was to get the buyers to pay the VAT, but not passing this on to the treasury, but the fraudsters keeping it.
So what does this tell us? Firstly that Toni Lo Manto was not just, as he claimed to be, an innocent exporter of oranges to Brazil. Far from it. He had an army of brokers and accountants working for him, and shell companies set up in places as diverse as Singapore, South America and Switzerland. But my guess is that Toni became a powerful if crooked businessman because of his background in blue collar crime: that is where the seed money originally came from, that is what got him into the business of money laundering, and, above all, that is what made people want to do business with him - his reputation established on the streets of Palermo. He was clearly not a man you want to cross, and therefore a man whose desires in business found many collaborators.
Toni Lo Manto has a very impressive hinterland. First of all he was the friend, indeed godson, of Lorenzo Tinnirello, the killer from corso dei Mille, sent down for life for about a hundred murders and for the Mafia massacres of 1992. He came from Brancaccio, Palermo, but had contacts with the Nuvoletta clan in Naples, indeed finding a wife in that family. Lo Manto’s father was disappeared at some point in the 1980’s, so he comes from a traditional Mafia family. Lo Manto was also friends with Francesco Guttadauro, the favourite nephew of Matteo Messina Denaro, as well as Girolamo Bellomo, the husband of Lorenza Guttadauro, and nephew of the late boss’s lawyer. Bellomo, however, was a bit of a liability as when Lo Manto took him to nightclubs in Milan, he behaved badly, or so Lo Manto told Guttadauro.
Lo Manto’s original business experience was in drug dealing. “In a 2021 conversation, fifty-year-old Lo Manto admitted to having worked with drugs together with Salvatore Alfano, and the head of the Noce district Salvatore Lo Manto (and it was precisely by investigating the Noce Mafia that the police first came to hear of Lo Manto), along with Salvatore Albamonte and Tonino Lo Nigro, well-known names in the drug sector. ‘How much money I enabled them to make… you can’t begin to understand how much…’ he said.” But the other thing he boasts of in the tapes is ‘doing public relations’, something that Riina never bothered with, to his cost.
I have to say that I am a little cheesed off with Toni Lo Manto, a real life Mafioso who resembles my fictional Mafioso rather closely. It is odd that a purely imaginary character like don Calogero could so resemble a real life character - but there you are!