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Mystery Outlives 'Sicilian Gatsby'

Luigi DiFonzo lived a don's life in Orange County. Now he's dead, but questions surrounding the massive investment scheme he allegedly ran live on.


On the last night of 1998, Luigi DiFonzo descended the spiral staircase of his mansion in Laguna Niguel and beheld the wealth and power before him.

Millions of dollars had poured into his investment firm, DFJ Italia Ltd., and they flowed through every inch of his 14,000-square-foot hilltop castle. Italian marble covered the floors. The cabinets contained crystal glasses etched with his initials. The pool table was mounted on carved wooden lions.

As DiFonzo descended the staircase, DFJ associates leaped forward and, in an exaggerated gesture of fealty, kissed the heavy, rectangular ruby-and-diamond ring on his left hand. Tall, with deep eyes, a full beard and a massive chest, DiFonzo carried himself regally as he moved through the guests.

It was a defining moment for DiFonzo, son of a gas station attendant, whose colorfully incongruous life--accused conspirator in the infamous Purolator vault heist, twice-jailed felon turned man of letters, FBI informant--brought him, finally and fittingly, to Orange County, where he would play out his most grandiose caper.

From a white skyscraper atop the Irvine Art Museum, DiFonzo and a former prison cellmate raked in $45 million from hundreds of investors nationwide, among them football star Eric Dickerson and fashion model Kim Alexis, according to authorities. DFJ's pitch was nothing special--the promise of high returns on investments in foreign currencies was as old as fraud itself in Southern California.

But even in a hotbed of white-collar scams, few had seen the likes of someone as beguiling as DiFonzo. The man depicted in dozens of interviews, court records and personal letters seemed to have lived five or six lives, a lawless Zelig who adopted a more fantastic persona in each incarnation. Atop DFJ, he occupied the most out-sized fantasy of all--one he had been constructing all his life.

"He was the don, the prince," said Thomas Casey, the U.S. bankruptcy trustee who is sorting through the wreckage of DFJ Italia.

Since DFJ's collapse in March, investors have become obsessed with unraveling the mysteries of its alleged mastermind.

Lisa Valle, whose family lost $75,000, knew she'd been had the moment she finished DiFonzo's biographical work, "St. Peter's Banker." But the revelation that the same man behind the book and DFJ also had worked with the FBI to investigate organized crime left her angry and grimly determined.

"I don't expect to get my money back, but I need to know the truth," she said. "Were they [the FBI] protecting him instead of the people he was ripping off?"

DiFonzo's sudden death in August has only provoked more questions. He was found in bed, lying in the shape of a cross, his reading glasses folded neatly on a pillow above his head. Four prescription drug bottles stood on a night stand.

Sheriff's deputies collected two notes to his fourth wife, Brenda: one a despairing ramble scrawled in purple crayon; the other a short, tender letter that begins "Cara mia" and confesses eternal love.

A coroner's report concluded that DiFonzo, 52, committed suicide. But his wife and others who knew him say nothing could dim his driving belief that he would always reinvent himself.

"He had a demented lust for success, a hunger that distorted everything," said Jesse Kornbluth, a New York writer who worked with DiFonzo on his first book. "Luigi was a fantasist from the word go, a Sicilian Gatsby."

Rough Childhood in Massachusetts

His beginnings were anything but opulent. The eldest in a family of three boys and a girl, he had a bruising childhood in Fall River, Mass. His parents fought constantly and his father beat him.

"Tiny, tiny lips, they bleed and bleed and bleed/You say it can't be you, it's because of me/Broken arms, broken knees, tell me why this must be/Am I too little for you to see?" DiFonzo wrote in "Too Little to See," a poem he drafted as a 10-year-old and revised years later.

The beatings left DiFonzo with a rage so intense that, as a grown man, he was repeatedly accused of lashing out with his fists and other weapons. They also left pain so deep that a visit to a home for abused kids made him weep, tears rolling out from under his black wraparound sunglasses.

Bright and facile, DiFonzo could have succeeded legitimately, even his enemies say. But what took over was the Luigi who ached to erase the boy in the poem who cowered in a closet--the Luigi who idolized tough guys and scam artists, then became one himself.

By 26, DiFonzo had been run out of Chicago after bilking 2,000 investors in a commodities-trading scam. Later that same year, 1974, he was charged with taking part in what was then the biggest cash crime in U.S. history: a $4.3-million heist from Purolator Security, a Chicago armored-car company.

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