Guilty Plea Saves Feds An Embarrassing Trial

By FRANK DAVIES Herald Staff Writer

A prominent businessman has admitted delivering $4.6 million in drug cash, entering a guilty plea in a deal that avoids a messy trial for federal prosecutors whose chief witness was a notorious scam artist with possible CIA ties.

Franco Nocito, 50, who runs a New York investment firm with major interests in the Caribbean, pleaded guilty earlier this month to one count of money-laundering conspiracy. As part of the plea deal, he faces a maximum of five years in prison for a crime that often results in 10 to 20 years.

In addition, prosecutors dropped drug-trafficking charges with a maximum penalty of life imprisonment that were part of a 1994 indictment against Nocito.

``We're hopeful the sentence will be even lower than five years,'' said Nocito's attorney, Ed Shohat. He would not elaborate on the issues that may come up July 24 during sentencing before U.S. District Judge Ursula Ungaro-Benages.

Vulnerable witness

Nocito's guilty plea means Assistant U.S. Attorney William White won't have to rely on a key witness, Vincent Carrano, who has at least five fraud convictions and shadowy connections to U.S. agents the government did not want disclosed in a public trial.

Carrano once staged a phony robbery of his bullion vaults in California to hide embezzlement, tried to sell bonds for a nonexistent gold mine in Costa Rica, and played both sides in the Nicaragua civil war in the 1980s.

A state prosecutor in California called Carrano, now in his 60s, ``a flimflam expert.'' But a federal prosecutor helped him avoid prison in a 1986 fraud case, vouching for Carrano as a government informant who provided ``information about matters which affect national security.''

Prosecutors and spokesmen in the U.S. attorney's office Monday did not return phone calls from The Herald.

In court papers and hearings in recent months, it was clear that Carrano presented problems for the government. He was the witness who could testify about Nocito's drug-cash deliveries for two Colombian suppliers, but his past also exposed him to uncomfortable questions.

Claims of CIA connection

Nocito claimed that his involvement in money laundering was prompted and extended by Carrano, who assured him that his CIA connections protected them. Carrano, while a fugitive from fraud charges, was accused by Nicaraguan officials of working for the CIA.

Prosecutors said Carrano had helped the Drug Enforcement Administration as part of an undercover operation that had penetrated a Colombian drug network. Federal agents were trying to lure high-level traffickers out of Colombia for capture.

The DEA paid Carrano $36,500 for information. Carrano also admitted he had kept $265,000 from drug proceeds in 1992.

Prosecutors didn't want to reveal some information about Carrano. In December, Ungaro-Benages took the unusual step of ordering the government to disclose Carrano's ties to the CIA.

Assistant U.S. Attorney Karen Rochlin responded, ``In a public fashion, the prosecution is not now at liberty to state affirmatively that the informant has never had a relationship with the CIA, or to explain what measures have been taken to make that determination.''

Rochlin also said that to properly evaluate documents, the judge would need ``to have access to material in the possession of the CIA which the government cannot present in public.''

Partied with Giuliani

Prosecutors said they had evidence about Nocito's money laundering without Carrano. DEA agents caught Nocito delivering drug money in 1992. For a while, he cooperated with DEA agents, admitting he made numerous deliveries -- including $1.6 million in Houston and $421,000 in Miami to an undercover agent.

In his plea deal, Nocito admitted making six deliveries of drug cash totaling $4.6 million.

In the 1980s, Nocito operated a large timber company in Washington state and several businesses in California. He conferred on economic issues with President Reagan and California Gov. Pete Wilson, and partied with Luciano Pavarotti and Rudy Giuliani before Giuliani became New York City's mayor.

Nocito has been out on $1 million bond for two years, operating Commerce Capital Finance Corp. in New York, with interests in fashion showrooms and real estate. Last year he was allowed to travel to Nassau to conclude an $8 million real estate deal on the island of Antigua.