Rhode Island Bank-Crisis Suspect Led Double Life, Investigators Say

PROVIDENCE, R.I. - Joseph Mollicone Jr. was the picture of an influential, successful businessman with all the right connections.

He lived in a huge house in the heart of Providence's fashionable East Side, contributed to the campaigns of the winning political candidates and golfed regularly at the state's best country clubs.

But investigators say there was another side to the 47-year-old Mollicone, one which had ties to organized crime.

Driven to fortune and success, investigators suspect Mollicone also was a key figure in driving 45 of the state's small banks and credit unions to - and in some cases over - the brink of failure.

Investigators say he allowed his own Heritage Loan and Investment Co. - from which he is accused of embezzling $13.8 million as its president - to slip into insolvency, requiring its already reeling private insurer to bail it out and drain the reserve fund covering the other institutions.

Even South Kingstown Police Chief Vincent Vespia, for 18 years head of the State Police organized crime unit, said he was surprised and saddened when he learned of the charges against Mollicone, now a fugitive.

``I've known him to be a very good businessman who came from a very nice family,'' Vespia said. ``I'm saddened over what I've read.''

Raymond Moffett, Attorney General James O'Neil's chief investigator, said that publicly Mollicone was known as a man with ``impeccable credentials, an outstanding member of the community, in fact, he was revered in the community.''

Two months of investigations have shown a man who allegedly ran a scam lending operation off the books of his small neighborhood bank. Investigators charge Mollicone made loans in the names of people who now claim to know nothing of the transactions, then used part of that money for cash-strapped personal real estate ventures. They also have accused him of lending money to alleged bookmakers.

Paul Calenda, one of the Heritage depositors in whose name Mollicone allegedly recorded a $420,000 loan, told The Providence Journal-Bulletin he was ``in shock'' about the allegations.

Mollicone has been missing since Nov. 8, when his son drove him to Boston's Logan Airport. Investigators said he told his son he was taking a business trip to Newark, N.J., but they have found no evidence a plane ticket was purchased in his name.

State and federal warrants have been issued for his arrest and a worldwide search is under way.

What is known is that he was president of Heritage, a small two-branch bank in Providence's Federal Hill neighborhood. He also was first vice chairman of the private deposit-insurance fund to which Heritage belonged, Rhode Island Share and Deposit Indemnity Corp.

Both of those institutions failed and led Gov. Bruce Sundlun, within three hours of taking office earlier this month, to close the 45 banks and credit unions whose $1.7 billion in deposits were insured by the fund.

Unraveling the relationships among the insurer and its member institutions, whose presidents sat on RISDIC's board and controlled it, is a task that has been handed to at least three investigative teams.

Brian Andrews, state police captain, said his detectives also were investigating what role organized crime played in Heritage and its failure.

The bank was only a few blocks from a store where the late Raymond L.S. Patriarca, reputed head of the New England mob, held court. Andrews said police surveillance showed many people identified as organized crime figures frequented the bank.

Mollicone's father, the late Joseph ``Puppy Dog'' Mollicone Sr., was known to have a relationship with Patriarca, according to the tapes of wire taps the FBI maintained in Patriarca's office in the 1960s. But Vespia, the South Kingstown police chief, said there was never any evidence to indicate the two men were anything more than acquaintances, perhaps friends.

The younger Mollicone, though, admitted to state police an association with Luigi ``Baby Shanks'' Manocchio, whom law-enforcement officials believe is in a struggle for leadership of the New England mob, said Andrews.

``There were a lot of people associated with organized crime that did business with Heritage,'' Andrews said. Andrews said Mollicone developed a much different reputation in some circles from the squeaky-clean businessman image he so carefully cultivated.

``He did things that people can't get done at legitimate banking institutions,'' he said.