Hearing Aid History – Remote Sidenote

The Mafia, Whitey Bulger, and the Hearing Aid Industry: What Is the Connection?

The story related here is true, but is a story with no happiness to it.  This might seem a rather strange post for an Internet site devoted to issues related to hearing. However, one of the purposes of HHTM is to leave a record of the hearing aid industry and the people involved in it.  Few people are familiar with this story, and even fewer in the hearing aid discipline.  Yet it is a story that tangentially touches the hearing aid industry.

 

The Story

Figure 1.  Roger Wheeler, former Chairman of the Board and major stockholder in Telex Corporation of Tulsa, Oklahoma.
Figure 1. Roger Wheeler, former Chairman of the Board and major stockholder in Telex Corporation of Tulsa, Oklahoma.

Roger Wheeler, an American businessman and former chairman of Telex Corporation*, was murdered in his car while preparing to leave Southern Hills Country Club in Tulsa, Oklahoma, May 27, 1981, following his weekly golf game.  He was 55 years of age.  Wheeler was purportedly murdered for uncovering an embezzlement scheme that was going on at one of his businesses, that of World Jai Ali.

 

Background

In an attempt by the US Justice Department to take down the New England Italian Mafia – the Patriarca and the Angiulo crime families – the FBI recruited members of the Irish Mafia, James “Whitey” Bulger and Stephen “Rifleman” Flemmi, as informants.

Both men rose to the top of the underworld, helped by their corrupt connections inside the federal government and law enforcement.  Activity between FBI agents and these informants led to corruption among the FBI and police ranks in Boston – something that it took the Justice Department decades to uncover.  And, during the time Bulger and Flemmi were employed as informants, they committed, and were later charged with, 22 murders and several counts of racketeering, all committed with the knowledge of the Boston FBI.

In 2002, ex-FBI Agent John Connolly, who was Bulger’s “handler” as an informant, was sent to prison for ten years for obstruction of justice related to Bulger’s Mafia enterprise.  The arrest of H. Paul Rico in 1981 in connection with the mob-hit murder of Roger Wheeler, was among the last charges related to those dark FBI days, which covered a span of almost thirty years.

Figure 2.  Photos of James “Whitey” Bulger, Irish Mafia member, with images taken over the years, ending finally with his capture in Santa Monica, California in June of 2011, after 16 years on the run.  He was on the FBI’s most wanted list for 12 years.
Figure 2. Photos of James “Whitey” Bulger, Irish Mafia member, with images taken over the years, ending finally with his capture in Santa Monica, California in June of 2011, after 16 years on the run. He was on the FBI’s most wanted list for 12 years.
Figure 3.  Stephen “Rifleman” Flemmi, Irish Mafia colleague of Whitey Bulger.
Figure 3. Stephen “Rifleman” Flemmi, Irish Mafia colleague of Whitey Bulger.
Figure 4.  John J. Connolly Jr., a former FBI agent, after he was convicted of racketeering and obstruction of justice in 2002 in connection with his involvement and coverup of Mafia activities.

The Start of the Connection – Jai Alai

Jai Alai is an indoor game of Basque and Spanish-style racquetball, and at that time operated in the Florida cities of Miami, Tampa, Ocala, and Fort Pierce, and Hartford, CT.   Betting on the game was legal, and rumor circulated that the Jai Alai industry was Mafia connected.  Surveillance by the Connecticut state police confirmed that members of the Winter Hill Irish Mafia (John Martorano, Tom NcNeely, and Vincent Solomonte), suspected by the FBI of racketeering, illegal gambling, and murders, were meeting with John Callahan, the vice president of World Jai Alai (WJA).  Callahan was rumored to be interested in purchasing the Jai Alai operation in Hartford, but when he was warned by Boston police officers on the Mafia payroll that he was being watched, he resigned from WJA to pursue other business.

Debate heated up over potential buyers of WJA, and two pulled away their offers to purchase it after finding bullets and a dead fish – threatening Mafia symbols–near their doorstep.  WJA directors were desperate to find a buyer who did not have a criminal history or any Mafia connection.  First Boston Vice President David K. McKown was contacted to help find such a person.  It was McKown who approached Roger Wheeler, a successful businessman, with suggestions of lucrative profits and low capital to enter into the gambling business – and a “real money-making machine” if he purchased WJA.  Wheeler, already wealthy from investments in oil, minerals, and computers, was what World Jai Alai needed to expand its operations: a person with no criminal record, a favorite son of Tulsa, and former president of the city’s Christian Businessmen’s Coalition, among other positions. The fact that he was also wealthy was what brought him to the attention of McKown of First Boston Bank.

Wheeler’s interest was piqued further when McKown’s bank offered a $33 million loan to add to the $17 million that Wheeler fronted.  Gaming officials in Florida were skeptical about the bank’s loan stipulations, and Wheeler agreed to them reluctantly.  The agreement contained three questionable conditions: (1) a $1 million “finder’s fee,” (2) for the loan, Wheeler would have to keep Callahan’s business partner, Richard Donovan, as president, and (3) Wheeler was to keep former FBI agent Paul Rico as chief of security.  Wheeler was not comfortable with these stipulations, but felt confident that with his hard-driven, business savvy he could outfox the shady characters inside the gambling operation.

Figure 7.  H. Paul Rico.  Retired FBI agent who was a Vice President, and head of security for World Jai Alai (WJA).
Figure 7. H. Paul Rico. Retired FBI agent who was a Vice President, and head of security for World Jai Alai (WJA).
Figure 5.  Richard Donovan, President and CEO of World Jai Alai (WJA).
Figure 5. Richard Donovan, President and CEO of World Jai Alai (WJA).
Figure 6.  John Callahan.  Vice President of WJA (World Jai Alai), who was initially interested in purchasing the Hartford, Connecticut operation, until he learned that he had been under surveillance and seen with Mafia members.
Figure 6. John Callahan. Vice President of WJA (World Jai Alai), who was initially interested in purchasing the Hartford, Connecticut operation, until he learned that he had been under surveillance and seen with Mafia members.

Paul Rico, retired from the FBI, and employed as head of security for World Jai Alai, saw the perfect opportunity to engage in a skimming operation. He engaged his former confidential informants Whitey Bulger and Steve Flemmi, and operating under the Winter Hill Gang name, skimmed $10,000 per week from the World Jai Alai parking lot operation.

 

Wheeler Suspects Mafia Rip-offs

Shortly following Wheeler’s purchase of WJA, he suspected that profits were being taken from the Hartford Jai Alai operation

Regretting the stipulations to retain Donovan and Rico, Wheeler wanted to sell the Hartford operation, but had no way to eliminate Donovan and Rico.  Donovan offered to purchase it for $16 million, but Wheeler refused.  Then, when he made a deal with Burnham Investment Banking Firm to sell the Hartford operation, revenues mysteriously plunged tremendously.  Finally, in January 1981, he managed to sell the Hartford operation to Stan Berenson for $13 million.

Berenson, the new owner, told Wheeler that he’d uncovered a possible rip-off of profits, but suggested a more thorough audit. During a meeting with Chief Connecticut State Attorney Austin McGuigan, Wheeler and Berenson were told that a catering supervisor at the Hartford location reported  profit statements being sent to Florida, but showing high losses when the statements were returned.  When confronted about the losses, Donovan denied everything.  An audit of the entire company (WJA) showed profits taken and numerous irregularities with billing processes.  The complete audit showed that the WJA operations had lost millions, but there was no record as to where it had gone.  It was reported that Wheeler grew more suspicious of Rico (Rico often asked about Wheeler’s daily schedules), and considered having Donovan and Rico’s phone lines tapped, but was told this was illegal.

Following Wheeler’s death, the Hartford Courant Newspaper published an analysis of income from the Hartford operation, showing that it increased dramatically under Berenson’s ownership, in spite of less attendance and no price increases – a clear indication that profits had been siphoned away from Wheeler during his ownership.

Marked for Death

Figure 8.  Brian Halloran, Mafia member who was offered  $30,000 to kill Roger Wheeler, declined, and later offered to turn State’s evidence against the Mob, including information about the death of Roger Wheeler.  He, and the man who offered him the hit were both murdered.
Figure 8. Brian Halloran, Mafia member who was offered $30,000 to kill Roger Wheeler, declined, and later offered to turn State’s evidence against the Mob, including information about the death of Roger Wheeler. He, and the man who offered him the hit were both murdered.

As part of Wheeler’s attempt to sell the Connecticut operation, he planned on firing Donovan and Rico, despite the agreement to keep them.  It was later discovered that Callahan (the original president) offered $30,000 to Brian Halloran, a Mafia associate, to kill Wheeler, but he declined, taking “hush money” instead.  Following Wheeler’s death, Halloran reported to the Boston FBI that he was willing to inform on who was responsible for Wheeler’s death.  Soon afterward, both Halloran and Callahan were murdered.

Wheeler’s discovery and investigation into the thefts, created major problems for Bulger’s group.  This, in turn, led to five or six murders, two of which remain unsolved at least through 2001{{1}}[[1]] The hit at Southern Hills – golfer Roger Wheeler killed 20 years ago, Dave Kindred, Golf Digest, June 2001[[1]].

On May 27th, 1981, an employee at Wheeler’s Telex Corporation in Tulsa received a call asking if Mr. Wheeler was there.  When she said he was not, she was asked if he was playing golf today.  She politely answered, “Yes.”

Following his golf game at Southern Hills Country Club, Wheeler entered his car.  Nearby, two assassins sat in a car, and one, wearing a phony beard, sunglasses, and floppy hat, walked up and shot him in the forehead with a .357 magnum pistol.  The killer left four unspent .38 caliber shells on the victim’s body – a warning, investigators said, as to what could happen to his children.

However, even with Wheeler eliminated, Bulger was not convinced that the issue was over, especially because Wheeler was wealthy and had important connections.

Convictions

Almost 20 years later, on March 14, 2001, three members of the Winter Hill Gang – Whitey Bulger, Stephen Flemmi, and Johnny Martorano – were indicted for Wheeler’s murder.  This was due to the diligent efforts of Sgt. Mike Huff of the Tulsa police force, who worked on this case for over 20 years.  Martorano, in a plea agreement, confessed to the murder of Wheeler, in addition to 20 additional murders committed by the Gang.  He served just six years of a 15-year sentence.  Two other alleged Gang conspirators had died by the time the convictions were made.  Martorano’s cooperation led to an unprecedented prosecution effort resulting in nearly two dozen cold murder cases being solved and leading to other of Bulger and Flemmi’s henchmen cutting their own deals.  This also resulted in at least one FBI agent, John Connolly, being charged along with them, as a co-conspirator in federal racketeering.

Figure 9.  Tulsa, Oklahoma Sgt. Mike Huff, who doggedly worked on the Wheeler case for 22 years, often running into non-cooperation with the FBI and Chief State Attorneys.
Figure 9. Tulsa, Oklahoma Sgt. Mike Huff, who doggedly worked on the Wheeler case for 22 years, often running into non-cooperation with the FBI and Chief State Attorneys.
Figure 10.  John Martarono, the trigger man in the murder of Roger Wheeler.
Figure 10. John Martarono, the trigger man in the murder of Roger Wheeler.

Flemmi pleaded guilty to the murder of Wheeler and others, and at last report, was serving a life sentence{{2}}[[2]]Department of Justice Press Release (http://www.ipsn.org/characters/bulger/doj_flemmi_press_release.htm[[2]].
  H. Paul Rico, former head of security for World Jai Alai, was indicted for Wheeler’s murder, pled not guilty, and died of natural causes before he could be tried{{3}}[[3]]Former FBI agent Rico dies in hospital had pleaded not guilty in businessman’s  slaying
(http://www.boston.com/news/local/massachusetts/articles/2004/01/18/former_fbi_agent_rico_dies_in_hospital/), The Boston Globe Obituary, January 18, 2004[[3]].

Whitey Bulger became a fugitive and was on the FBI’s Ten Most Wanted list for 12 years, until his capture in Santa Monica, CA, on June 22, 2011{{3}}[[3]]Famed crime boss James ‘Whitey’ Bulger arrested in Santa Monica (http://latimesblogs.latimes.com/lanow/2011/06/whitey-bulger-arrest-santa-monica.html).  Los Angeles Times[[3]].

Author’s Note:  An excellent article titled “FBI Dark Secrets,” written by Clarence Walker, Investigative Reporter (Houston, TX), reports on this sad chapter in a long-running scandal of corruption and other misdeeds involving America’s most elite law enforcement agency – the FBI.  It chronicles the 1981 mob-hit murder of Oklahoma businessman, Roger Wheeler.  It is this story that identifies the limited connection to the hearing aid industry.

*Telex Corporation was the parent of Telex Communications and Telex Hearing Aids of Bloomington, MN.  Telex Hearing Aid Company was founded in 1936, and was sold and ceased to exist in the mid-1990s.  This author was employed at Telex Communications during the 1970s while Roger Wheeler was Chairman of the Board for Telex and met with him at times both in Minneapolis and in Tulsa.  In his position as Chairman of the Board, Wheeler supported, both in actions and funding, the Telex Hearing Aid Division.

About Wayne Staab

Dr. Wayne Staab is an internationally recognized authority on hearing aids. As President of Dr. Wayne J. Staab and Associates, he is engaged in consulting, research, development, manufacturing, education, and marketing projects related to hearing. Interests away from business include fishing, hunting, hiking, mountain biking, golf, travel, tennis, softball, lecturing, sporting clays, 4-wheeling, archery, swimming, guitar, computers, and photography. Among other pursuits.

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