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March 05, 2005

Greg meets the Mafia...maybe

Ok, ok so I promised to write about my mafia experience... I guess I should do it since I said I would, but after this, no more war stories for a while.   Oh, unless I decide to tell you about my experiences with communists in Bulgaria. But thats another story. And so it all began...

when I was working as a consultant, mainly in recycling technology. I got a call from a long time friend who owned part of a very high tech compounding company in Conneticutt featuring FCM continuous mixer compounding equipment.  They had an investor firm named RWT, located in the next building in their industrial park, that ground up waste tires into a small rubber crumb and wanted the compounder to look into anything that could be done with it in the plastics industry. They hired me to do so.

At first, it was quite fun. I started with a couple of days contracted, and that led to a few weeks, which led to a few months. I came home and told my wife I had found the never ending contract. The consulting 'horn-a-plenty'. Every time I met with them I got more work.

They investor's founder was named Paul Cassavina, an older man with a fascinating background.  Very charismatic, he had a reputation as a business mogul who owned industrial parks, housing developments and multiple businesses.  He was said to have had a high ranking military background and had made a lot of money via connections he made in China and in the government.  Today, I'm not sure how much of this was true, but I do think most of it was.  It was never him saying these things, but it came from others who had known him for years. He was in fact, very soft spoken and gentile when meeting him. Also intelligent and with an in charge attitude.

I could write a book about this, but perhaps I can give the shorter version here...

After much research and a patent, a raw material was developed and initial commercialization begun. The material was named Typlax. It was a blend of rubber and certain plastics along with binding agents to bond the vulcanized rubber to the polymer better.

As an example, it was fully commercialized at Rubbermaid to replace a PVC footstool mat with Typlax that contained 66% scrap rubber, 14% scrap EVA and 10% scrap HDPE at a much lower cost.  Rubbermaid went on to buy several hundred thousand pounds of this for this application alone.

Meanwhile, money flowed. Whatever I needed I got. People were hired, plans were made. Development continued.  But the interesting thing was that the investor wasn't interested in OUR making Typlax other than as a part of a complete tire recycling turn key system from collecting tires to making a new raw material. And the cost for one of these turn key systems was about 33 million.

Almost everyone that was hired was Italian, at the time I didn't notice... honest

Also, many people involved were taking stock instead of salary. I was one of the few who did not, couldn't afford to.

Then RWT sold their first license to a group in Pennsylvania who had gotten VC money for this purpose. The deal was announced and was to close in two weeks. Many millions of dollars. 

A few days later at an RWT stockholders meeting there was some big blowup over stock prices. Seems RWT was selling stock at one price when it was listed for another, lower price.  Hmmm.

Then in a few days the local paper had the headline "RWT under SEC investigation"  This headline killed the VC deal quicker than you can wink.  The SEC first took the position that the entire thing was a phony pumped up idea simply to defraud investors and that no viable business existed. I took that rather personally!  After the investigation, including of my work, the SEC agreed that there was a real viable business there that had simply illegally sold stock improperly. And all they wanted was 3.5 million returned to investors.  So that's were the money flow had come from!

The SEC took the position that Cassavina was part of the mafia and pursued him vigorously.  I was dumbfounded! Mafia.. oh it 'was' a waste business. Yes, the managers are mostly older Italian guys. Hmmmm.

It also then came out that Paul Cassavina had done time in jail for pot distribution.  I spoke with him once after wards and he said ref pot, that he had been framed by the mafia and that the mafia was always after him to cooperate and that they were bastards, that he was innocent and that the idiot company stock lawyer had ok'ed the illegal stock sales as valid. Hmmm... maybe.

Paul Cassavina got sick and died sometime soon thereafter. I miss him. He was OK in my book.

Funny thing about the timing... had the SEC thing happened two weeks later, they simply would have been paid back, end of story.

And basically there ends the story, end of business, end of my friends compounding company, end of lots of jobs of friends, ends of savings invested by many and me back to looking for consulting clients.  I think of this often as I'll never know for sure the truth of what happened. It died with him.


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