Brokers, Bagmen, & Moles TRANSCRIPTS

 [00:00:00] Anjay: Previously on Brokers, Bagmen, and Moles.

[00:00:05] T-Bun: So when people make a lot of money, they're thinking there's gotta be corruption.

[00:00:10] Ray Pace: There were rumors that mob money was being laundered down there, all of that kind of stuff.

[00:00:15] Vincent Provenzano: I think they were going after my boss, Leo Melamed and Jack Sandner, and trying to get the guys up top and they never got that far.

[00:00:22] David Greising: Archer-Daniels-Midland, they brought a complaint to the FBI.

[00:00:40] Lewis Borsellino: The first day that these two traders showed up, and I think it was Peter Vogel and another guy, they literally were standing in front of me and I looked at him. I said, what are you guys doing? They go, oh, you know, we're, we're not new traders came from the Board of trade. You know, we know what's going on. We could, we could stand.

Here I go, listen me the only guys who stand next to me and in front of me is guys I've known since birth, or they've been around here for the last four years. I said, you guys can't stand here. Go over there.

[00:01:09] Anjay: That's Lewis Borsellino. He was one of the biggest futures traders in the world and the king of the mighty S&P 500 stock Index futures pit at the Chicago Mercantile Exchange.

[00:01:22] Lewis Borsellino: So they didn't argue with me. They went. Stood on the other side of the pit and literally a couple months later, the crash happened. It's the crash of 87.

[00:01:32] News: The law of gravity hit Wall Street today and financial markets around the world. The Dow dropped more than 500 points. From the opening bell the market was in free fall. As stock prices plunged even more than they did on Black Tuesday of 1929. Everybody we're trying to find a bottom, and I'm saying this has gotta be, this has to be the bottom.

[00:01:54] Anjay: October 19th, 1987, the American stock market suffered a massive collapse. Known as Black Monday, it was the biggest single day decline in stock market history and the S&P 500 futures pit was one of the epicenters of the crash. Most people panic when the stock market is tanking. But great traders like Lewis Borsellino, they smell blood in the water.

[00:02:26] Lewis Borsellino: That Monday, I'm in Switzerland, I'm sitting in Piaget and I'm gonna buy a watch for my wife cuz she wasn't happy that I was going with a bunch of guys to Europe.

[00:02:36] Anjay: Smart move.

[00:02:37] Lewis Borsellino: And I'm looking outside and I can see the ticker tape on the building. It must have been the Swiss bank building across the street, UBS or whoever it was. And I see it says the Dow is down 500. And I said that ticker tape's gotta be broke. And and the salesman said to me, he goes, oh, no sir, don't you know that? You know, or the market crash, you know, I like turned white and I'm, I'm leaving and I got the watch on my wrist the guy goes, where, where are you going?

I go, I, I gotta go, I gotta go make a phone call. He can, you know, can I have the watch back? And I, I threw him my credit card. I said, I'll be back. You know? So I get to the, I'm staying at the Belvedere Hotel in Switzerland and my brother calls me. He goes, Lou, you gotta come home. He goes, if you were here, you would've made 5 million. It's crazy.

He goes, the markets are crazy. I made a phone call to, to see if I could get a flight out, but the only way I could get back fast is I had to fly standby on the Concord one way. 1987, $15G.

[00:03:36] Anjay: For those of you who don't know, a Concord was a supersonic plane that went more than twice as fast as today's planes.

If you were flying a Concord in the eighties, you were a baller. The $15,000 he spent was well worth it because Lewis says he made $200,000 that day and another $400,000 the next day.

[00:03:59] Lewis Borsellino: Thursday morning is the famous trade. I'm long 500 and the thing's moving at a thousand at a crack. That's a, that's a half a million at a crack, you know.

I'll never forget it was Louis Hetchivitz. He across the pit, he goes, what are you doing? I go, seller. He goes, I'll buy 500. I sell him 500, and then I scalp this, that I take all my cards, I give ‘em to my clerk, I go, go find, figure out what I made. So she comes back in about 10 minutes and she goes, if these prices are right, you're up one, 1.4 million.

I made like 1.4 million in like 30 seconds or whatever it was, right? And I walked outta the pit and I went and threw up.

[00:04:36] Anjay: It was a good day for Lewis, as for those other two guys that tried to stand next to him in the pit a few months before.

[00:04:45] Lewis Borsellino: These two traders showed up, and I think it was Peter Vogel and another guy.

[00:04:50] Anjay: Those guys were Peter Vogel and Randy Jackson, and they were the undercover agents we heard about from Ray Pace and T-Bun in earlier episodes.

But what we haven't heard is that before the agents were in the currency pits with Ray and T-Bun, they were stationed in the S&P 500 futures pit with Lewis Borsellino.

[00:05:12] Lewis Borsellino: I saw 'em the first day when I told 'em they couldn't stand there, and then I saw 'em when they were in the paper. It came out after the crash that these guys lost about $500,000 in the crash.

[00:05:27] Anjay: We know that the FBI made some missteps in planning this investigation, but being in the biggest stock futures pit in the world during the worst market crash in decades. That's not a mistake. It's just really, really bad luck.

I'm Anjay Nagpal, and this is Brokers, Bagmen, and Moles.

[00:05:57] Lewis Borsellino: He used to tell me I turn the market. I deserve everything.

They don't want to listen to that. Then you violently tell 'em they're not standing where you're at. He went to jail because they hijacked two million dollars worth of silver. Give me the guy's name, gimme his address, and don't worry. I'll take care of this problem.

I get this subpoena, the FBI knocking at my door. They want me to come to a grand jury. I gotta keep this a secret for 25 years.

I lost concept of money didn't matter. There wasn't a check. I wouldn't pick up. There wasn't a thing I didn't buy. Um, you know, I, I met a girl one night who got her leather jacket stolen. She was crying. She goes, oh my jacket, I spent $400 on that jacket and she's crying, and I took $400 outta my pocket. I go, here's the 400. Stop crying, you know.

[00:06:59] Anjay: All I knew about Lewis before making this podcast was that he was a big shot trader with a tough guy reputation. He went to the same grade school as Stretch and his sons owned a bar with one of my friends, biggest small town in the world. We conducted this interview during the pandemic in an empty office building in abandoned downtown Chicago.

Lewis has a unique past and he knows that, so he addressed it upfront.

[00:07:30] Lewis Borsellino: As you know, uh, everybody, uh, knows my father was involved in organized crime.

[00:07:35] Anjay: In Chicago Lewis's Father Anthony Borsellino is pretty well known as an alleged hitman for the Chicago Mafia.

[00:07:44] Lewis Borsellino: It was a lifestyle that he was comfortable with because he had real strong constitution.

To this day, I've never met, uh, anybody with that kind of strong constitution. Not only physical, but mental, the mental constitution about what's right, what's wrong. Even though his, his, his, his conception of what's right and wrong, it just, this is just shades of gray. Right. And, and, and it wasn't, uh, like, you know, he didn't care about his family. It was like, he was a family guy. I mean, he just, this is what he did when we spent our summers in Lake Geneva. We spent our, as much as he can, and the way he provided for that was just a little different.

[00:08:23] Anjay: It's strange to think a man could be a professional hitman and come home and be a dad, but that's what it was like in the Borsellino family.

[00:08:32] Lewis Borsellino: Obviously it's a dysfunctional, uh, family when you're looking at things like that, but not from the point of love or the way we looked at each other, right? I think people grow up in Hollywood and their uncle is a famous movie star that's just normal to them, right? So to us, my dad's friends were all same sort of personality type, right?

[00:08:53] Anjay: Lewis didn't know all of this as a kid. He was born on the far south side of Chicago. His family moved up to Cicero when he and his brother were little, and then eventually they settled in a much nicer suburb called Lombard. That's where Stretch lived too.

[00:09:11] Lewis Borsellino: My dad used to to call us the gym shoe kids. I wanted you to be raised up as a gym shoe kid, a guy who lived in the suburbs, right, and wore gym shoes. And when it came time to go to college, you weren't saying if you're going to college, you're going where are you going to college.

[00:09:25] Anjay: And it was shortly after they moved that Lewis started to notice the wads of cash in his dad's pockets. The brand-new cars in the driveway, the Blackhawk season tickets. By the fourth grade, the source of all of it was no longer a secret.

[00:09:45] Lewis Borsellino: He went to jail because they hijacked two million dollars worth of silver. Can you imagine what that two million dollars worth of silver is worth today?

[00:09:52] Anjay: Lewis's father was gone for most of his childhood, and his mom worked as a secretary to pay the bills.

[00:10:00] Lewis Borsellino: How did that shape me as a, a human being? I knew what was right from wrong.

I knew I didn't want my dad's life. I knew, I saw the pain that our family went through. I saw the prejudices that, that come from that.

Uh, a family is a family and everybody has to deal with different things. So I, I think the question I, you know, I, I'm rambling…

[00:10:28] Anjay: His dad got out when Lewis was in high school and he saw his son graduate college. But that was the last great moment they shared together.

[00:10:38] Lewis Borsellino: He ended up, um, being murdered two days after I graduated college.

And it was, it was not, it was like, your life changed overnight. Right. My dad didn't come home. Two days later they find him, he's dead.

[00:10:55] Anjay: Lewis hadn't had time to process his father's death, let alone mourn when something unexpected happened.

[00:11:03] Lewis Borsellino: You gotta go through a wake, you gotta go through a funeral and, and then a week after the funeral, I get this subpoena or the FBI knocking at my door.

They want me to come to a grand jury.

[00:11:11] Anjay: And this was way before Lewis ever stepped onto the floor. So the FBI wasn't there to talk about the Merc. They were there to talk about his dad.

[00:11:24] Lewis Borsellino: I actually hired an attorney that was known to be an organized crime attorney, and the people, some people said, why are you doing this?

I go, because I want them to know that I don't know anything. I went to the grand jury and then he just told me, take the Fifth Amendment, which I did. And they showed me a bunch of pictures of people that I've known my whole life, right? Or known associates, of my father and I didn't know any of the answers.

So I got out the, out of the hearing room with the attorney and myself was on the, uh, elevator. And then the, uh, FBI guy says, you know, we can give you immunity. I go, why? I go, just leave me, you know, just leave me alone. My dad's dead. All I care about is me, my brother, and, and, uh, my mother.

That's it. I said, leave me alone.

[00:12:07] Anjay: The FBI left him alone after that, at least for a while. But what they didn't understand is that Chicago guys don't want their sons following them into the outfit. They wanted their sons to go to school and to have legit careers, and that's what Lewis was planning to do. He'd finished his undergrad and was studying for the LSATs, but he got into a fight that resulted in him being convicted of felony battery. Which meant that he couldn't practice law.

[00:12:42] Lewis Borsellino: I started driving a truck and it sort of was like a poetic irony in my life, right? Cuz my dad and uh, I used to say to him, I'll never do, I'll never do this right? And he never wanted me to do this right? He always wanted me to be something else.

[00:12:59] Anjay: I found myself relating to Lewis. Because my parents also came from nothing, and I too lost my father at a young age. Like Lewis, I wanted to make my dad proud. When I became a successful trader at such a young age, man it felt good. When you face the death of a parent so young, you wanna squeeze every last drop out of the time you have, but that attitude combined with lots of money, it can be dangerous.

My father wasn't an alleged hitman, but he certainly was flawed, and at the end of the day, I'm not sure it matters. Dads are dads and as kids you accept them and worship them, even if it means com compartmentalizing some of their behavior.

I went straight into trading after college, but Lewis took a more circular route.

[00:14:01] Lewis Borsellino: I was playing handball, like most people play racquetball. I was actually playing handball at a, at a local gym, the Duncan YMCA, and there was a guy named Lou Matta there. Lou Matta worked at the Merc and I, I started asking him about the futures and he said, why don't you come down there? You, you know you're gonna like this place.

[00:14:18] Anjay: This is such a classic Chicago story. First you're talking to a guy at the gym and the next thing you know, he's offering you a job. And as soon as Lewis actually got to the floor, he ran into another guy he knew.

[00:14:32] Lewis Borsellino: Maury Kravitz, who literally is a legend in many ways.

[00:14:37] News: At 47 Maury Kravitz has traded 10 times the gold owned by the United States government, more gold than anyone else in this country.

[00:14:44] Lewis Borsellino: When I first met Maury Kravitz, I told him I would call him a money master, and he said, rather, you should call me the man who dances between raindrops without getting wet.

[00:14:54] Anjay: Maury was a personal injury attorney when he first started trading at the Merc. Lewis's mom was his legal secretary, and Maury became a family friend of the Borsellinos.

[00:15:06] Lewis Borsellino: I've knew Maury since I was eight years old. I remember funny story, Maury had a problem with the CFTC and it was another trader had made some trades in the Mexican peso debacle, had parked a lot of money in Maury's account.

[00:15:22] Anjay: The details of the Mexican peso debacle aren't all that important, but parking money in someone's account is illegal. Maury definitely would've known the guy did it, but he wouldn't have planned on getting caught.

[00:15:37] Lewis Borsellino: And Maury's telling, you know, complaining to my dad what happened, and my dad said to him, gimme the guy's name, gimme his address, and don't worry. I'll take care of this problem for you. And Maury looked at me and said, well, I, I don't really need that, Tony.

So I just remember looking at it, uh, looking at my father and looking at Maury and I don't think Maury ever realized what that meant until my dad said, gimme his name and address.

[00:16:03] Anjay: If you didn't realize it. When a guy like Anthony Borsellino offers to "take care of someone." He's offering something much more persuasive than a friendly chat. Maury, however, had other powerful friends who could take care of things with more legal methods. Maury's law partner was none other than Leo Melamed.

[00:16:29] Leo Melamed: I am going to move the financial center of gravity out of New York at least ten feet.

[00:16:38] Anjay: For most of the ‘50s, they ran the law firm and traded at the Merc part-time. Then in 1957, They decided to give up their law practice and headed to the Merc full-time.

[00:16:55] Lewis Borsellino: You know, pre-19, I am not sure, like, I wanna say 75. It was illegal to trade gold in the US and he went around when he was at the Merc and he started going to all the, all the clearing firms and saying, Hey, if they ever trade gold, can I be your gold broker?

[00:17:12] Anjay: Maury anticipated that the Merc would one day trade futures on gold, and when it did, he had solicited all the big banks and investment firms to use him as a broker.

At one point, he handled 90% of the paper, or orders, that were coming into the pit. He was a one man monopoly. There were no rules against this because nobody ever had that kind of power before. He made more money than he knew what to do with. As for Lewis, he was enamored with Maury's power.

[00:17:51] Lewis Borsellino: So I tapped him on the shoulder and he looks at me.

He goes, you know, he had this really rough kind of voice. He was 5’5” or 5’5”2, and he said, Hey kid, what are you doing here? I go, I go, I got a job as a runner. He goes, What about school? I go, well, you know, I was gonna go to law school. He goes, I don't think I can do that now. He goes, be back here in two weeks.

You're gonna be my clerk. And that was the start of it.

[00:18:31] Anjay: The Chicago exchanges turned blue collar guys into millionaires practically overnight. But no matter who you were, everybody had to start out the exact same way: as a runner.

[00:18:44] Lewis Borsellino: I got a job as a runner and I was making 32 bucks a week or something like that.

[00:18:49] Anjay: Sound familiar? It's the same path as Tim T-Bun and pretty much everyone else took to make it to the big leagues, you had to withstand a year or two of hard work and minimal pay as an assistant to a trader. Then you had to figure out a way to buy or lease a high priced membership or seat on the exchange. It wasn't easy, but Lewis was up for the challenge.

[00:19:18] Lewis Borsellino: Trading is game day every day. I learned very fast how, how the markets function. Markets go up when there's more buyers than sellers and markets go down when there's more sellers than buyers and they have to re reach, uh, equilibrium.

[00:19:33] Anjay: He learned a few other things too.

[00:19:38] Lewis Borsellino: I learned a lot, right? I learned that Maury's uh, uh, broker number was 139. And why did I have to know what his broker number was? Because when the market got fast and I would get a buy and a sell, I would take it, match it together, put a price down, put it in my pocket. Endorse it to each other and write 139, which was technically illegal cause Maury was supposed to do that, but.

[00:20:02] Anjay: Even though it was illegal, it happened all the time because you learned pretty quick that if your broker wants you to do something, you do it even if it means bending the rules. From the beginning, Lewis had an intuitive feel for the floor. Unlike the FBI agents, he instantly understood the nuanced relationship between a local and a broker and what it took to be successful.

[00:20:33] Lewis Borsellino: The guys that were the bigger traders, the order fillers wanted the bigger traders next to them because if I get a a hundred lot or a 500 lot, I want a guy who's gonna take half that order down.

[00:20:43] Anjay: What he's saying is that the more a local trades AKA, the bigger his bankroll, the closer he's gonna get to the big brokers because that allows them to fill their orders more easily. This might sound confusing, but think about it this way: if you're selling Girl Scout cookies and you have a hundred boxes to sell, rather than going door to door selling one box to each house you visit, wouldn't you rather live next door to someone who will buy all 100 boxes?

[00:21:19] Lewis Borsellino: I don't want, you know, a hundred guys taking one, right? Because that the, that's a risk of an out trade, right?

[00:21:27] Anjay: Less paperwork means less risk of an error. Lewis spent his first six months learning from the master. And then he got a shot to stand in the pit. Maury bought a seat for $250,000 and then leased it to Lewis until he could pay him back.

[00:21:47] Lewis Borsellino: The way the territory works is you stand there and if somebody tries to take your spot, then you just make sure they nicely know that they can't stand there. And if they don't want to listen to that then you violently tell 'em they're not standing where you're at.

[00:22:05] Anjay: You can't just walk into a pit and stand by the biggest traders. You have to earn that privilege. We know FBI agents in the pits struggled to get next to big brokers, and it ultimately hindered their investigation. Luckily for Lewis, he was a quick learner.

[00:22:24] Lewis Borsellino: I wasn't used to people yelling and swearing at you and saying they were gonna beat me up. Like, you know, you're gonna eat that out trade, I'm, I'm gonna punch you in the face. And you know, when he said that and got his finger there, I just, and I said, okay, who's gonna punch who now? Right. And Maury told me, you know, you can't punch people out there. I go, I, they keep telling me they're gonna punch me, you know. So, I got the reputation for that, right?

I had the street, street knowledge.

[00:22:51] Anjay: Maybe he picked it up from his father, or maybe he learned it from Maury, but wherever he got it, this edge served him well in the pit.

[00:23:01] Lewis Borsellino: What happened to me as a kid and what, what happened to my father was extraordinary. Most people don't go through that. So what I really learned early age is you just cope and go forward, right? And so, so little things like, I think that's exactly why I, I became a great trader. Um, when everybody else was panicking, I didn't panic. I just, I just said and said, okay, how we gonna take advantage of what's going on?

[00:23:27] Anjay: He had to do well enough to pay Maury back for the seat he was leasing, plus make a living. And as a first-year broker, things were not looking great.

[00:23:39] Lewis Borsellino: It takes a good year for somebody to be in that pit, to be comfortable in their skin, to be able to buy and sell, right? You know, I wasn't doing well. I was debiting my account. I was getting eaten up alive with out trades.

[00:23:53] Anjay: We've already established that the challenge of being a broker is making too many mistakes while executing customer orders because those mistakes came out of your pocket.

Lew’s mistakes in the volatile gold pit were costing him more than he was making filling orders. His back was against the wall when an entirely new opportunity came knocking.

[00:24:17] Lewis Borsellino: The S&P pit opened up and it just became the largest contract in the world. That put Chicago futures on the market, on on the map. How does Chicago wrestle that away from the New York Merc?

[00:24:29] Anjay: Leo Melamed, that's how. But before Lewis could move to the new S&P pit, he had to run it by Maury.

[00:24:37] Lewis Borsellino: And I said to Maury, I said, Hey, if you don't wanna go with me, but I'm gonna go after all our customers and take 'em to the S&P pit. And he said, no, let's do it together.

So then we went and we built a deck in the S&P pit. We took all our same gold customers.

[00:24:52] Anjay: It was a good move. The huge pit held almost 500 traders and the S&P futures became the go-to tool for large money managers to hedge their exposure to the overall stock market. And for Lewis, that meant a chance to help out some old friends and family.

[00:25:14] Lewis Borsellino: I brought my brother, then I brought my cousins, then I brought our friends. I'll bet you the the first 25 guys that I brought, literally brought down to the Merc. I didn't take anything from them. I sponsored them, put 'em up, and if they went bad, it was on me. And guess what? Those 25 guys. They all brought another guy, or two or three. So there was a whole group.

In fact, in the S&P pit, they used to call our little section Little Italy. Right. And it was all our friends that, or cousins that we grew, you know, that came down to the Merc for us and we all became, you know, we were all good friends. It was a big deal and we're still friends to this day.

[00:25:51] Anjay: Ray Pace and his wife were part of the crew. T-Bun too. At the Merc, these kids became kings and Lewis was their leader. He developed a sixth sense for what was going on around him. So much so that he decided to be a local and to trade for his own account, and that's when he started to rake in the cash.

[00:26:18] Lewis Borsellino: It's, I used to call it being king of your environment, right. Like that was one of the things that I was very good at. I, I could stand in that pit. I could tell you who was long, who was short and who had big orders to fill. And, and it's why when I was in the pit, I was such a big trader.

[00:26:36] Anjay: But no matter how big Lewis got, he wasn't letting any trade, he thought was his, get away from him.

[00:26:44] Lewis Borsellino: A lot of those order fillers, they had to sell. They couldn't get to me, so they would just sell 'em to the guys next to 'em. Right. And I would get angry cuz if I saw it, I used to tell 'em, hey, I turn the market. I deserve everything.

[00:26:57] Anjay: And that's the way it was down there. Even when you were on top, you had to defend your territory because there was always someone who wanted what you had.

[00:27:09] Lewis Borsellino: I remember the first time I made $5,000 in a day and I thought, I gotta keep this a secret. For 25 years, it was capitalism at its purest.

[00:27:19] Anjay: Luckily for Lewis, the exchange floors in Chicago would fly under the radar and $5,000 would eventually feel like a rounding error. Lewis Borsellino was becoming a massive success story, and word was getting around.

[00:27:36] Lewis Borsellino: I'm at a wedding, a friend of my dad forever, you know, says, Hey, the old man wants to meet you. I go, what old man? He goes, Joey Aiuppa. I go, okay. So I go over there, these old, old Italian guy's gotta be in his eighties, you know, five foot five. And he goes, Hey kid, I've heard a lot of good things about you. He goes, and he, he volunteered.

You know, what happened to your dad was a mistake.

[00:28:03] Anjay: The man Lewis is talking about here is none other than Joey Doves Aiuppa, the leader of the Chicago outfit. Lewis's dad was actually killed by fellow mobsters because they thought he might have been stealing from the organization. And now just a few short years later, the head of the mafia was telling him that his dad's murder was an accident.

I don't know if he meant that literally, or just that it was tragic that it had to happen. But either way, that must have been heavy for Lewis.

[00:28:41] Lewis Borsellino: What did it matter? It didn't matter. My dad was dead still. Right. It didn't, it didn't matter if it was a mistake or not, but you know, I was always respectful and so on.

And so then he asked me, he never had kids, so he had a couple, he had a couple uh, uh, nephews and he said that his nephew wanted to come down to the Merc, and his name was Joey Aiuppa. So I said, yeah, I could help him, you know, I'll try to help him and get him through the, show him the ropes, how to get there, and so on and so forth.

And you know, he goes, oh, I, I appreciate it. So I meet his nephew, nice kid. We're still friends to this day, and he ended up coming to the Merc, become a clerk, ended up going to the lumber pit and ended up trading lumber.

[00:29:21] Anjay: Just as Maury had to show Lewis the ropes. Lewis had to teach the new guys the way of the floor.

[00:29:29] Lewis Borsellino: He always had a lot of visitors. His brother and him had like a Ticketron, like they used to sell tickets, right? So he'd be getting paged like three times a week and I'd be hearing Joey Aiuppa visitor, Joey Aiuppa visitor. Well now everybody knew that Joey Aiuppa, the name was, you know, tied to the, to the Chicago mob, right? So I walk over to the pit and I see Joey.

I go, Hey Joe, you know, I took a little heat, you know, sponsoring ya getting ya into the Merc. I go, but, you, you keep getting paged like five times a day. Do me a favor. See this guy right here, Sid Rabin. I go, yeah, page him when it's for you. And we were both laughing, but I mean, look, he was a legit kid, right? I was legit.

But it was still a, a problem of, you know, a perspective, right?

[00:30:13] Anjay: What a strange existence. One day, CNBC or CNN call you to hear your thoughts on the financial markets and on other days the calls were. Totally different.

[00:30:27] Lewis Borsellino: I'd get calls from guys I know that were bookies, and they would ask me about traders there.

Hey, you know this guy? Yeah, well, what's up? He goes, oh, he put a bet in for 40,000. I go, yeah, okay. He goes, can you pay? I go, I'm not answering that question because if he doesn't pay you, you're gonna ask me for the money.

[00:30:43] Anjay: A bookie was asking Lewis to vouch for someone, but Lewis understood that he'd be on the hook if something went wrong, so he was smart not to answer the question.

[00:30:54] Lewis Borsellino: I had no bad habits as far as drugs, alcohol, partying. You know what I think that the saying used to be? Show me somebody. Somebody who gets hooked on cocaine was God's way of telling you, you make too much money.

[00:31:07] Anjay: Lewis kept his behavior pretty clean off the floor and as he found out later, that was a very wise move.

[00:31:17] Lewis Borsellino: The first five years that I worked at the Merc, the organized crime strike force, and the IRS pulled all my trading records for no reason, but the reason was I must be laundering money for the mob, right?

[00:31:30] Anjay: There were always rumors that a goal of this investigation was to bust the outfit, trying to launder money on the floor.

But I never had a reason to believe them until now.

[00:31:43] Lewis Borsellino: Literally, the defense attorney told me that I was the number one target when they came down to the Merc.

[00:32:06] Anjay: Lewis Borsellino's assertion that the FBI was targeting him because of his ties to organized crime and potential laundering of money for the mafia. This was new information. I wondered where he heard it.

[00:32:21] Lewis Borsellino: It was a couple years later after the, the investigation. I sat down and the guy go, who was the defense attorney, he goes, I always wanted to meet you.

I go, why is that? He goes, well, he goes, I sat in on probably ten or twelve 302s where the FBI's in was actually. Talking to my clients about, you know, they were asking him questions about what's going on, and he goes, within minutes, the question always came up, do you know Lewis Borsellino? And you know Joey Borsellino?

And they would say, yes. Have you ever traded with them? Yes. Have you ever done a prearranged trade with them? They'd say no. They'd go, well, why not? And he goes, well, because they're good traders and you know, we've never had an opportunity and we don't know anything about them doing pre-arranged trading.

[00:33:06] Anjay: At this point, I was questioning everything I've learned so far.

[00:33:11] Lewis Borsellino: I was the number one guy that they were gonna stand by and they were gonna investigate me. And the Merc actually put, put a compliance offer stood behind me when I was filing orders.

[00:33:20] Anjay: Which means that the Merc was already keeping an eye on Lewis.

[00:33:25] Lewis Borsellino: No, I knew it right at the end of the day, and thank God I was good at what I was doing and I didn't trust people. So if I made a mistake, I ate it myself. I didn't a ask anybody to do that, right?

[00:33:36] Anjay: Lewis Borsellino was never charged with a crime. Not for ripping off customers either as a broker or a bagman, and not for laundering money for the mafia.

[00:33:48] Anjay: But what about his little brother Joey, a huge trader in his own right. For that, the FBI used their favorite little trick.

[00:33:58] Lewis Borsellino: They took him out to lunch and said that they have a, they got a bunch of tax losses and if you can. You know, if you make a lot of money, give it to me. I'll give it back to you in cash. I won't have to pay taxes on it. And so on.

And my brother just looked at him and said, yeah, well that doesn't sound, uh, let, that's legal.

[00:34:17] Anjay: Like Ray and T-Bun. Joey Borsellino says he didn't take the bait, but the FBI still watched the Borsellinos like hawks, and it was partly due to some very suspicious behavior.

[00:34:32] Lewis Borsellino: In the 302s, they go, we know Lewis Borsellino's and the Mafia and Joey, because when we see him come into the currency pits, like, uh, Jimmy and guys that we helped that were in the different pits, they would hug and kiss us. You know, like this is what we, we were raised like we hug and kiss each other right.

And until COVID we were still doing that right. But at the end of the day, they said, well, you know, they, everyone kisses Lewis and Joey. So that's sort of a sign of, you know, respect to that they're in the mafia.

[00:35:00] Anjay: I'm not a judge. But I don't think hugging and kissing your friends is probable cause for a criminal investigation.

[00:35:07] Lewis Borsellino: How about we were just friends? You know, I, I, you know, I brought guys on that I knew my whole life. You know, they'd call me up and say, Hey, we can come down, you know, you help us out, and so on.

[00:35:16] Anjay: Lewis confirmed my suspicion that the government was looking for something other than trading violations. So I wondered what could have possibly led the FBI's organized crime squad to the exchanges.

Other than lots of last names that end in vowels.

[00:35:33] Lewis Borsellino: The guys told me that that's what happened. That they were wiretapping bookies. A lot of their biggest players were commodity traders. And same thing with the drug addict, drug dealers. Well, what happened on those wire tapes. What they would hear and saying, Hey, how are you gonna pay for this?

Don't worry about it. I'll just steal it off the deck. I'll just steal it off the deck.

[00:35:54] Anjay: Steal it off the deck as in, steal it from a pile of customer orders.

[00:36:03] Lewis Borsellino: You hear that enough times, they wanna know what stealing off the deck means, right? So that's how they ended up putting traders in the pit. I learned that, you know, years later when I was talking to the defense attorney.

[00:36:18] Anjay: And that, says Lewis Borsellino, was the genesis for this investigation. While I haven't been able to confirm that story, it seems like the most plausible scenario so far. To recap, in episode two, T-Bun thought that the FBI started this investigation because a lot of traders were making tons of money. But again, the FBI does not investigate people just because they're rich.

In episode three, Ray mentioned there were rumors that brokerage firm ABS Partners was under suspicion for stealing clients by giving them kickbacks, but that was never confirmed. In episode four, reporter Bill Crawford and Leo's former employee, Vinny Provenzano, thought that the FBI was going after exchange leaders like Leo Melamed and Jack Sandner. But they weren't able to get that far.

Then in episode five, we learned the most accepted theory about the genesis of this investigation, that food giant ADM, or Archer Daniels Midland, and their CEO, Dwayne Andreas complained to the FBI. They were getting ripped off at the Chicago exchanges. This explanation doesn't add up, because ADM didn't trade in three of the four pits the FBI went to. Also, ADM was a bit crooked itself, so why would they want the Feds anywhere near them?

And just now, Lewis says, the real reason the government started this investigation is that while wiretapping bookies, they'd heard traders say they can steal from their customers to cover their gambling losses. On top of that, He told us he was the number one target of this investigation because they thought he was laundering money for the mafia.

But wait, there's more. He also told us FBI agents Peter Vogel and Randy Jackson tried to stand next to him in the S&P pit in 1987. That was months before they went into the much smaller pits, next to smaller traders like T-Bun and Ray Pace. The narrative that the FBI started it at the bottom and worked its way up. It's not true. They went for the big fish, the Borsellinos, right away.

This story is pretty complex, and the more people we talked to, the more twisted it got. The FBI were the only ones who could really set the record straight. But we'd reached out to them several times with no response. So I asked our senior producer, Danielle, if we really even needed the agents.

[00:39:25] Danielle: We gotta get one. Yeah, we gotta get one.

[00:39:27] Stretch: Gotta get one. It just blows the lid off this thing.

[00:39:29] Danielle: Yeah. We need an FBI agent, we need one of those.

[00:39:33] Anjay: The smartest decision I made while making this podcast was to surround myself with professionals like Danielle. Because eventually we heard back, and next week we'll talk to not one, but two of the agents, who jumped headfirst into this surprisingly dangerous assignment.

[00:39:57] Randy Janett: They were told, the guys in the corn pit, he's an FBI agent. They were gonna, uh, take Rick up to one of their cabins in Wisconsin.

[00:40:06] Mike Basset: With this much noise and with this much chaos, how can we possibly make, make criminal cases in here?

[00:40:14] Randy Janett: Why are you messing with us? We're small potatoes. Get the guys at the Board of Trade and the Merc.

[00:40:20] Randy Janett: Those are the real crooks.

[00:40:25] Anjay: Before you go. If you or someone you know might have a hot tip or just a funny story related to our show, we have a hotline for you. Call us at (646) 820-1452.

That's 646 820 1452. And please follow us on social media. Our handle is @entropymediaco. That's at Entropy Media Co where we'll be posting additional information about the case and awesome behind the scenes action.

This has been a production of Entropy Media in association with Stretch Productions.

This is Entropy's very first show, so if you've enjoyed it, please follow wherever you listen to podcasts and rate us there too. Every follow rating or even a personal recommendation to a friend or family member really helps.

I'm your host, Anjay Nagpal. Our showrunner and senior producer is Danielle Elliot.

Our producer is Jenn Swan.

Our executive producers are Tim Hendricks, Kevin "Stretch" Huff, and Dennis Stratton. Original music, sound design, and editing by Gerard Bauer.

Music clearances by Deborah Mannis-Gardner from DMG Clearances.

Production legal by Bruns, Brennan, and Berry.

Legal clearance/Fair use by Rachel Strom at Davis Wright Tremaine.

Fact checking by Delilah Friedler.

Show art by Rebecca Hendin.

And from Entropy Media, our in-house executive producer is Josh Fjelstad. Our head of operations is Nuna Eboe. Our project manager is Sebastian Perry. Our associate producer is Heidi Roodvoets. Our development coordinator is Simona Kessler.

And I wanna send a very special thanks to Laurie Morse and David Griesing.