FBI agent Mr David Rupert told the Special Criminal Court in Dublin yesterday that he had discussed setting up an offshore bank off Florida after his businesses in New York state had been seized by a bank because he defaulted on a loan.
Mr Rupert said he had discussed the idea of using high-speed hovercraft taxis going to and from offshore gambling boats with Diego Silva, a man who claimed to have connections with former Chilean dictator Gen Augusto Pinochet and former Panamanian dictator Gen Manuel Noriega.
He also brought a man named Guy Scalzi to Florida to discuss the project but Scalzi and Silva got drunk and he never saw Scalzi again. "The downfall was nobody had any money. When everybody found out nobody had any money, that was the end of the project," he told the court.
The former trucking company boss said that he moved to Florida in 1985 with his wife, Julie, to "lick his wounds" after his businesses were seized by a savings and loan bank in New York state.
They rented a $350-a-month one-bedroom condo on the beach at Treasure Island and his wife worked for a bank.
Mr Rupert (51), is the chief prosecution witness in the trial of alleged "Real IRA" leader Mr Michael McKevitt. The court has been told he received $1.25 million (€1.7 million) after agreeing in 1994 to infiltrate dissident republican groups for the FBI and later for the British Security Service (MI5).
Mr Rupert has told the court that during meetings with Mr McKevitt, the Co Louth man told him of plans for a new terrorist campaign in Britain and requested material from the United States for bomb-making.
It was the seventh day of the trial of Mr McKevitt (53), Beech Park, Blackrock, Co Louth, who has pleaded not guilty to membership of the IRA between August 29th, 1999, and March 28th, 2001, and to directing its activities between March 29th, 1999, and October 23rd, 2000.
Cross-examined by Mr Hugh Hartnett SC, for Mr McKevitt, Mr Rupert denied that he was "lying low" in Florida to avoid lawsuits after the collapse of his businesses. "I wasn't lying low, I was enjoying the sun," he said. "I did nothing for a year because I was licking my wounds from losing my businesses."
Asked why he had left New York state, Mr Rupert said it was "30 below zero" there and if he had stayed in the community after losing his businesses, he would have "got beaten up on".
He had moved his wife to Florida because she was being leaned on by her father who was a stockholder in the bank with which he was in dispute and he wanted to keep her away until things were sorted out.
Asked by Mr Hartnett who paid for him to lie on a beach in Florida, sipping a cocktail and smoking a cigar, Mr Rupert replied that the suggestion was "improper and wrong".
"When I was in Florida I would have had for all intents and purposes no money," he added to which Mr Hartnett said: "I withdraw the cigar."
Mr Rupert said he had come up with the idea of setting up an offshore gambling operation while he was "licking his wounds" and had discussed it with his next-door neighbour, an attorney and Diego Silva.
Silva claimed to have connections with Gen Pinochet and to be a friend of Gen Noriega and he had suggested setting up a Bank of Panama on the offshore boats. Mr Rupert said he met Silva at the office of an attorney who was also interested in the project but he could not recall the attorney's name or address.
He then spoke to a friend of his in the trucking business in New York who mentioned a Guy Scalzi from Syracuse and who knew about gambling. Asked by Mr Hartnett if he had described Scalzi as a "a mob lieutenant", Mr Rupert said: "I don't recall that. I could have."
Mr Rupert was asked about how he reconciled Mafia lieutenants with his moral teachings and he replied: "I had no knowing association with mob lieutenants."
Asked if Scalzi looked like a "mob lieutenant", Mr Rupert replied: "I have no idea. That would be like asking what a republican would look like, but they come in all shapes and sizes."
When it was put to him that his proposed Bank of Panama operation on the offshore boats was to launder crime money, Mr Rupert said: "It never got beyond an idea and few discussions."
The trial continues today.