High Crimes

The graying couple in matching black suits and expensive shoes who step up to the hostess podium at the Bay Tower restaurant are here to celebrate, and they are not about to wait for a table. Besides, it's a perfect night for a special occasion, a crisp autumn Tuesday with a technicolor sunset filling the clear sky. The air has that silky, Champagne feeling, full of possibility.

“We have a reservation,” the man intones through an impossibly locked jaw. He mentions he's a doctor. “It's our 25th anniversary so we'd like a table near the window if possible.” One step into the embarrassingly large, 33,000-square-foot, two-level restaurant and it's clear that that's not going to be a problem. Five tables are filled, most with graying couples just like this one. The men are dressed in Brooks Brothers suits, the women have perfectly coifed conservative bobs, and together they look like they'd be more at home in 1983 than 2003.

So does the room. A musician taps out tired, strangely discordant songs (“Mrs. Robinson” slides into the theme from Gone with the Wind) on a grand piano in a corner near the empty dance floor. The orange and gold carpet is rubbed bare from nights of dancing years ago, and most of the waitstaff stands by idly, leaning on the bar near the door to the kitchen.

Though it's been a while since the dance floor at the Bay Tower has been crowded, or the wait for tables has been counted in months, there is something that still draws diners here: the view from 33 floors above the heart of the Financial District, the North End, and the harbor. It's captivating, especially on a night like tonight.

This is what attracted a young, unknown chef from Rhode Island to show up one day at the restaurant's door, to push his way in with a little bit of mystery and a lot of charm, and to climb all the way into the general manager's job in a matter of months. By the time this tale of greed, drugs, embezzlement, and lies was complete, two men had been arrested and a legendary Boston businessman was reeling. It's a story that began in the shady underground right beneath the well-heeled shoes of Boston high society. And it left the chandeliers at one of the city's most storied dining institutions in jeopardy of going dark for good.

This is where they would come, in its heyday 20 years ago, the rich and the wannabes, diners who saved up to make a special trip to the skyline dining room. Its owner, real estate developer Gerald Blakeley, had made his fortune building office parks along Route 128 in the '50s and '60s while at the helm of the Brahmin real estate firm Cabot, Cabot & Forbes. He was a shrewd businessman with a beautiful and impossibly accomplished wife, Dr. Tenley Albright, an Olympic gold medal-winning figure skater and Harvard-educated surgeon. Blakeley bought the Ritz-Carlton in the 1960s and built 60 State Street topped off by the Bay Tower Room a decade later, by which time the couple was at the peak of Boston society, socializing with everyone from Ronald Reagan to Mikhail Gorbachev.

When Blakeley opened the Bay Club in 1970 at 28 State Street, across Congress Street from what is now the Bay Tower, it was simply a quiet place with a great view that served only lunch. Without a bar or lucrative dinner service, though, the Bay Club was losing money. After a few years Blakeley and his team opened the restaurant in the evenings to the public for dinner and dancing and soon it was paying for itself — and inspiring Blakeley to think bigger. A few years later, he built 60 State Street and had plans for a custom-designed restaurant on its top five floors with dramatic views of the city.

“I saw a restaurant in Seattle like it, and it had a beautiful view,” Blakeley recalls. “I love Boston. This is where I grew up. And I wanted to offer the view for Boston.” Blakeley even had the romantic notion of a glass ceiling, so diners could dance under the stars. Then came the 1974 film The Towering Inferno, with a horrific scene of a fire ripping through an office building with a glass ceiling, and city officials quickly nixed those plans. Still, when the Bay Tower Room moved to its current home in 1978, it brought to Boston the urban elegance of New York's Rainbow Room.

With Blakeley's Ritz-Carlton management running the place, the Bay Tower Room built a reputation for its impeccable service, free-flowing single malts, and perfectly prepared steaks and lobsters. The parties were grand, splashed with Champagne and celebrities. “Jack Lemmon comes from Boston, and Walter Matthau gave him a party for his 60th birthday,” Blakeley says, recalling an affair at the restaurant in 1985. “Channel 7 televised it, and when they interviewed [Lemmon], he said, 'I know all the hot spots from Rome to Paris to London to New York, and without any question the Bay Tower in Boston is the most romantic spot anywhere.' After that you had to wait three months for a reservation.”

On another night, Julia Child came for dinner and was so impressed she asked to meet the chef.

Blakeley, however, told friends he was tired of the restaurant business. In 1983 he sold the Ritz to Atlanta hotel developer William B. Johnson and tried to add the Bay Tower to the package. But the building was too far from Newbury Street, and too disconnected from Johnson's plans for the Ritz. The deal went through, but the Bay Tower Room was left behind, and without the Ritz to manage it, the polish began to dull.

Born IN 1972 in Fall River, Paul Diogenes grew up on the tough streets of Providence's Federal Hill with his older sister, Donna. Their mother, Maria, who had left Portugal with her young daughter, soon met and married the man who would be Paul's father. She worked long hours to support her family, and both children shared her work ethic, holding down restaurant jobs as teenagers. “Everything we had, we worked for,” Donna says. “Paul was not lazy. He worked hard. But he was a misguided kid who got into trouble. He never had an adult role model.”

Donna worked her way out of the neighborhood, eventually marrying a chef named Mark Sapienza, who was running the kitchen at Boston's Le Meridien Hotel. They settled in Stoneham. But her brother struggled. Caught up in the fast life around him, he was embarrassed about his Portuguese heritage and tried to hide it by saying anything to fit in. “He was surrounded by snakes, and he wanted to be happy,” Donna says. “He always wanted to please other people.”

That would change, however, as Diogenes bounced from one cooking job to another at restaurants around Rhode Island. “Food was really the only thing I knew,” Diogenes told Boston magazine in an exclusive interview. “I love the creativity you can have with it.” By his midtwenties, he was running with his sister a breakfast place in North Providence. His legal troubles began in 1992. He was charged with forgery in a credit card scheme, but not convicted. He avoided jail time, but in 1996 served five months for marijuana possession. Nine months later he was back in jail for forgery and counterfeiting. When he was released, says Donna, she hoped her brother would get his life back in order. He took a job at a Brazilian pizza joint and started dating Stella Ruiz, a single mother with a small child. When Ruiz became pregnant, Donna asked her husband to help Paul with his résumé and introduce him to some restaurant contacts in Boston. But before Diogenes could turn things around, he was in cuffs again, charged in 1999 with obtaining money under false pretenses. He admitted his guilt and avoided jail.

Three months later, though, Sapienza's help paid off and Diogenes landed a job as a sous chef at the Bay Tower restaurant (the name had been changed in 1996 to reflect an expanded function business). Diogenes presented himself as a graduate of the culinary institute at Johnson and Wales University. He said he had owned two successful restaurants in Rhode Island and had sold them for millions, and had worked at London's Claridges Hotel, a credential actually cribbed from his own brother-in-law's résumé. None of this appears to be true. Johnson and Wales says it has no record of Diogenes, and the restaurants he claims to have owned either never existed or were open for only a few months at most. “I never paid my tuition at Johnson and Wales, so they're not going to acknowledge me,” he says when asked about his background. He insists he did run two places that he sold “for a decent amount of money,” but denies ever having claimed to work in London. “The Bay Tower made up my bio,” he says. “They needed a high-profile chef and I wasn't so high profile.”

Nevertheless, within a year Diogenes had climbed from sous chef to executive chef to general manager. He was soon driving a Mercedes, closing deals, and promoting himself. The success was intoxicating. He hosted parties for the Bay Tower staff in what he called the Sopranos Room. Everyone ate for free. “I became somewhat of a celebrity chef because of the Bay Tower,” he says. “It was great. It was exciting.”

But not everyone was impressed. Diners started to complain about the food, while at least one employee grumbled about Diogenes's management style. “I've met Diogenes dozens of times,” says one local restaurateur. “He didn't have the class of the place where he was working.”

By the late '90s, Blakeley had spent the better part of 20 years searching passively for a buyer for the Bay Tower, while pouring hundreds of thousands of his own dollars into it. The pressure was intense; the restaurant had gone through eight general managers by the time Diogenes was promoted in 2000.

Finally, that same year, a buyer emerged. The Back Bay Restaurant Group, which runs 36 restaurants ranging from Abe & Louie's to Papa Razzi, had grand plans for a renovation that would erase the Bay Tower's '70s-era decor and bring in a decidedly modern look. “We had no interest in running it the way it was, in the condition it was in,” Mark Hartzfeld, the restaurant group's executive vice president and chief operating officer, said at the time. But the deal fell through in August 2001 when the Bay Tower's management refused to halt its functions business for the duration of the renovations, saying the events were too lucrative.

Then came September 11, and the restaurant business tanked. “You couldn't give away a seat in a tall building,” says one restaurateur familiar with the Bay Tower. The worsening economy led companies to scale back their lavish parties to quiet receptions with cocktails and no food. If the downturn left most restaurants in Boston bleeding, the Bay Tower was hemorrhaging — precisely because of its million-dollar view.

In January of this year, Diogenes told Blakeley he wanted to buy the restaurant. He was convincing, too, promising to raise the cash and turn the place around. Relieved to have found a new buyer, Blakeley verbally agreed to split the restaurant's operating costs until the sale was finalized. Diogenes was now on the line to support a sinking business that hadn't been profitable in six years.

Police documents show the first cash infusion came in February, when Blakeley pumped $160,000 into the restaurant's operating accounts. For his part, Diogenes put in a certified bank check and cash totaling $70,000. At the beginning of March, he added another $30,000 — but this time in the form of a personal check from his own account. It bounced. Still, Diogenes and Blakeley signed an agreement transferring the stock to Diogenes in March. A few days later, according to a complaint filed with police, Diogenes used fake credit documents to convince John Ryan, the owner of a downtown restaurant called the International, to loan him $70,000.

The deal was inching along, but the restaurant was eating up most of Diogenes's money as Blakeley gradually pulled out. While they waited for the liquor license to be reassigned, a final step in transferring the property, Diogenes gave the restaurant another $10,000. This time, however, police say the arrangements were more complicated. Court records show Diogenes took out a certified check for $45,000 and had the restaurant pay him back $35,000. He followed that up with a $167,000 personal check. But that bounced, too.

Undeterred, Blakeley pumped in more of his own money to keep the restaurant afloat. Diogenes told him that the bounced checks were the bank's error, and produced what he said was a letter from Fleet explaining that the restaurant would be credited. The letter was riddled with spelling and grammar mistakes, but no one questioned it. Asked if the letter is a forgery, or if Fleet actually gave him the document, Diogenes pauses. “Good question,” he says. “You'll have to ask my attorney about that one.” His attorney did not return repeated calls.

In the midst of all the jockeying to cover the bills, Diogenes managed to produce another document he said was from Fleet that promised him a line of credit if he purchased the Bay Tower. “He was telling everyone he owned the place,” says Boston police detective Steven Blair, lead investigator on the case.

Including his own brother-in-law. Mark Sapienza had worked hard to gain respect as the executive chef at the Meridien. Diogenes lured him to the Bay Tower with the promise of stock options and free rein over the kitchen. “I had always wanted to own my own restaurant. I thought, 'I can only move up from here,'” says Sapienza. “I was excited. I wrote my own mission statement; I had plans for the staff, for the menu.” Still, Sapienza knew from his own experience what it took to become an owner of a restaurant, and Diogenes's meteoric rise left him curious. “I did think to myself, 'How can you go from a cook to an executive chef to a general manager at a place like the Bay Tower?'” Sapienza says now. “I thought, maybe he's a great entrepreneur.”

At the beginning of May, Diogenes continued his pattern, police documents show, writing huge personal checks that would bounce, then following those up with even bigger checks so the restaurant would have to pay him money back. It was a textbook check-kiting scheme, but no one at the Bay Tower caught on. And the sale was nearly completed.

With the same phony Fleet letter he allegedly had used to fleece John Ryan, Diogenes managed to secure a loan commitment from Integrated Mortgage Solutions in Lincoln, Rhode Island. The loan officer never bothered to double-check the credit letter, or Diogenes's background, for that matter, when he issued Diogenes the paperwork he needed to buy the restaurant. The elusive liquor license was to be transferred on June 24. But someone finally did pay attention. On June 19, Bay Tower's longtime controller, Kathryn Whiffen, noticed that five checks were missing from the restaurant's supply, and that one had been cashed for $17,000 that day at the FleetBank branch downstairs. Whiffen alerted Diogenes.

A few days later, Diogenes showed Paul Hague, Bay Tower's president, what he said was the missing check, claiming to be as baffled as anyone as to who had stolen it. It had been made out to someone named Larry Meitz, who Diogenes said he didn't know. But Whiffen was skeptical. The next day, June 24, records filed in court show, she got her own copy of the $17,000 check from Fleet and saw that it had been cashed not by Larry Meitz, but by Gary Meier, a contractor who did work on kitchen equipment and air conditioning at the restaurant. Meier had also cashed another of the missing checks for $11,000.

The group notified officials at Fleet, who sent an investigator to the Bay Tower on June 26. It was quickly learned that Meier not only had cashed the $17,000 check, but also had used some of the proceeds to get two certified bank checks for a total of $7,000, made payable to Paul Diogenes. Blakeley and Hague asked Diogenes to meet with the Fleet investigator. When confronted about Meier and the checks, Diogenes said Meier had a gambling problem and that he had loaned the contractor thousands in cash over the past few years, all of which Diogenes said had been paid back.

But when Fleet investigator Barbara Minkwitz asked Diogenes about the certified bank checks Meier had purchased in his name with the stolen money, Diogenes claimed they had been cashed by his brother-in-law, Mark Sapienza.

Minkwitz contacted Sapienza later that day, and things started to unravel for Diogenes. Earlier that summer, Sapienza told the bank investigator, Diogenes had hosted a party at a Providence restaurant to celebrate his daughter's first communion. The whole family attended, running up a spectacular bill. But when it came time to pay the bill, the restaurant refused to accept a personal check. Diogenes asked Sapienza to pick up the $2,000 tab, promising to pay him back.

The check Diogenes gave Sapienza bounced. Sapienza asked for a money order and Diogenes gave him one — likely from the stolen Bay Tower money. Blakeley and Hague called Diogenes back in for another meeting, this time on Thursday, June 26, and in the company of Minkwitz and two Boston police detectives.

Diogenes arrived, took one step into the room, and did a U-turn. “I left my briefcase at the secretary's desk,” he told the group. Instead of returning, he hurried out, slipping down 33 floors in one of the building's high-speed elevators and slinking past the security guards out onto State Street as fast as he could. “I see a badge on one guy's belt, and they say they have questions about the checks. I went to my attorney,” Diogenes says now. “I don't talk without my attorney present. I didn't know what the hell was going on.”

The detectives, meanwhile, ran a background check on Diogenes and uncovered his long record of convictions in Rhode Island and five outstanding arrest warrants in Massachusetts for charges ranging from larceny to drug possession.

On July 1, police arrested Gary Meier, who told them all about the checks for $17,000 and $11,000. He said he had spent most of it on buying drugs and placing bets with bookies for Diogenes. He also said that even he believed Diogenes owned the Bay Tower restaurant. Later that day, police went to Diogenes's Rhode Island house and left word they'd keep coming back until they got him. He turned himself in a few hours later. “They're not true,” Diogenes says of the charges against him. “I will be exonerated. There may be question marks, but there's no evidence.” Both Meier and Diogenes have been released on bail and are due back in court this month.

Blakeley fired Diogenes the day before his arrest, and then Sapienza. The chef had worked at the Bay Tower for eight days. Having left his plum position at the Meridien, he was looking for a job again. (He has since found one at the Boston Harbor Hotel.) At the time of the arrest, Suffolk County prosecutor David Bradley said the initial charges against Diogenes might be “the tip of the iceberg.” Sources close to the investigation assert Diogenes may have stolen as much as $650,000, and unpaid suppliers are already filing lawsuits. One, Boston SeaFarms, claims Bay Tower owes it more than $122,000, but Bay Tower's accountants can find records for only about $1,200 in unpaid bills.

As for the sale of his restaurant, Blakeley remains optimistic that a buyer is just over the horizon framed so perfectly by those floor-to-ceiling windows. But optimism is hard to come by now that the wild ride of the past year is over. “I'd like to see Diogenes in prison for years,” Blakeley says. “It's been very difficult, disillusioning. It's just hard to believe someone would do this.”