March 28, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

Embezzler used Fleet loan as cover

PROVIDENCE, R.I. — Joseph Mollicone Jr. used a loan from the state’s largest bank to cover up his embezzling of millions of dollars from the Heritage Loan & Investment Co., according to a published report.

The Providence Sunday Journal reported that Mollicone was embezzling money in 1987. But he used a loan from FleetNorstar Financial Group Inc. to fool state bank examiners when they looked at Heritage’s records.

Mollicone has been missing since Nov. 8, 1990, when his son drove him to a Boston airport. He is accused of embezzling $13.8 million from Heritage and is blamed for triggering the state’s banking crisis.

Mollicone is believed to have had ties to organized crime and Colombian drug dealers.

The Sunday Journal reported that Heritage Loan could have been closed in 1987. In April 1987, two officials from the state Department of Business Regulation went to Heritage to conduct a surprise bank examination.

But Mollicone had been tipped off and postponed the examination by arranging construction work at the bank. Investigators say Mollicone had already embezzled $2 million from Heritage and used the examination delay to concoct $2 million in phony loans, the newspaper reported.

To help cover up his actions, Mollicone went to Fleet for money.

Mollicone told Michael Patch, Fleet’s commercial loan officer, that he needed the money to pump up the balance sheet to make the bank more attractive to potential investors. Mollicone then used the money to buy a Fleet certificate of deposit in Heritage’s name, the Sunday Journal reported.

When bank examiner Dennis Ziroli returned to Heritage, Mollicone showed him the $3.5 million CD but did not tell him it was just a loan. Fleet said it did not know that Mollicone was going to use the money to deceive examiners.

But Ziroli’s team still wrote a scathing review of Heritage for their superiors. The review said Heritage, even with the $3.5 million from Fleet, did not have enough cash on reserve, the Sunday Journal reported.

It also said Heritage’s loans were dangerously delinquent, its records were sloppy and Mollicone was inattentive. It recommended that Mollicone find a banker to run Heritage.

The state waited three years before returning to Heritage. Ziroli said he was reassigned, the Sunday Journal reported.

In June 1990, a state Department of Business Regulation examination was averted when Joseph Bellucci, a friend of Mollicone’s who ran the Rhode Island Share and Deposit Indemnity Corp., ordered RISDIC to send in its own team.

Bellucci turned to Kenneth Proto, vice president for examinations. Proto owned 1,000 shares of stock in Ronzio Inc., a Mollicone pizza business, but said that did not compromise his regulatory responsibility.

The state did not close Heritage until November 1990.

The Sunday Journal also reported that Mollicone had an elaborate network of political and business contacts.

Mollicone, through a subsidiary loan company, lent $100,000 to Secretary of State Kathleen Connell. When the state took over Heritage it found that Connell and her husband, Gerald, had not repaid the loans.

Gerald Connell has since been convicted of money laundering and Kathleen Connell said she is repaying the loan.

Mollicone also lent money to Rep. Frank J. Fiorenzano, D-Providence; Senate Majority Leader John Bevilacqua’s mother-in-law; John C. Simmons, then a member of the Convention Center Authority; and Mathies J. Santos, a high official in the administration of former Republican Gov. Edward D. DiPrete, the Sunday Journal reported.

Mollicone also was a political contributor to DiPrete. Mollicone’s partnerships won seven leases from the DiPrete administration that would yield Mollicone and his partners more than $24 million over 10 years.

Mollicone also bought property from Sen. John Orabona, D-Providence, and Rep. Robert Bianchini, D-Cranston, the Sunday Journal reported.


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