Quebec's scandal of the century: how arson, fraud and murder caused panic in 1965

Payette

Francois Payette, 36, awoke at his impressive riverside mansion at 9029 Gouin W. one Saturday morning 9:30 in February 1966, strapped on his horn-rimmed glasses and embarked on his rounds collecting on money that he had lent out.  
   The Montreal lawyer went about his business and by 2:30 was ready to meet another borrower to take payment.
    The next time Payette was seen he was lifeless in his trunk with two bullets through his head and three others in the rest of his body.
   The five killer bullets flew from two different guns held by murderers who were never caught.

Payette's automobile of doom

   His was believed to be the eighth body that fell as a result of a calamitous fraud, bankruptcy and murder ring that wreaked havoc in Quebec and led Justice Minister Claude Wagner to the brink of panic, calling it the "scandal of the century" and leading the provincial police to torture suspects.
  Payette, who specialized in bankruptcy cases, was likely killed because he was ready to come clean to prosecutors concerning a $150,000 scam that saw a Quebec City lumber firm defrauded by a company that purchased merchandise and declared bankruptcy rather than paying the bill.
     Many gangs were involved in a variety of such scams but all roads pointed to crafty Quebec City businessman Moise Darabaner.
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Moise Darabaner

   In 1965 Moise Darabaner was a low-key mortgage broker manager and a commissioner of the Superior Court of Quebec for a dozen years. His best fishing pal was a top cop in the city and Darabaner oversaw one of the most important political events of his era, likely while ordering murders on the side. .
  Two year earlier Darabaner invited six Social Credit MPs to his Quebec City office where they renounced their party to join Lester Pearson's Liberals. The spectacular political coup cemented Pearson's wobbly government and doomed the So-Creds.
   Darabaner personally swore the members to a formal affidavit, which he sent it to the Governor General, making their switch official.
   In so doing he incurred the white-hot wrath of So-Cred whip Dr. Guy Marcoux, who led a campaign claiming the defections were the result of bribery and trickery. Marcoux penned a 24-page scathing attack on all involved in the "l'affaire des six."
   Darabaner had previously only made news once, in 1955, when he was ordered to remove the third floor from a half-dozen houses he had built in Quebec City in an area that only permitted two-storey buildings.
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Quebec saw an average of one arson per day in the mid-1960s, many of which were set for insurance fraud. A half dozen people died in such arson attacks and that also forced consumers to pay much higher rates for their insurance.
   In one case a hotel was torched in the town of Lac Frontiere, but the flames spread to a lumber operation and crippled the town's economy.
  The same criminal gangs would also organize profitable  bankruptcies, of which there were 8,500 in Quebec in 1964, leaving debts of $390 million.
   Many scams were simple: buy items on credit, resell them and declare bankruptcy without paying your debt.
   The soldiers of such scams included Ovila Boulet, an illiterate thug from Quebec City who pleaded guilty to torching 52 places. Jean Jacques Gagnon, an inveterate gambler, was convicted of two counts of murder. Andre Lamothe was also busted for murder while Andre Becotte was nailed for finding companies vulnerable to the lure of arson schemes.
 

Clowise from top left: Andre Lamothe, Ovila Boulet, Fernand Quirion and Jean-Jacques Gagnon

    Julien Gagnon, a friend of legendary criminal Lucien Rivard, supplied arsonists with a special gas that would hide the telltale odour of smell of the incendiary liquid used to set blazes.
   Darabaner would recruit such criminals through his criminal lawyer friends who rubbed shoulders with thugs on a regular basis.
   Darabaner would sometimes lend money for housing mortgages that he knew the owner would be unable to pay back. In one case he lent $4,000 to Cora B. Cyr for a house in Levis. When she was unable to make her payments Darabaner had the home torched and split the insurance money with her.
   Another frequent scam was to remove items from a property before torching it, so the arsonists could claim the lost goods while also keeping the lost goods. In one case a massive warehouse fire saw $1 million in canned food lost for flames only to reappear in a Quebec City warehouse.
   Arson gangs would also provide fake phone numbers for phony bank managers who'd provide solid credit references, a system that became increasingly elaborate and complicated.
    In some cases a company would buy lumber without paying and then declare bankruptcy. Then a sister company inherited the lumber and then built cottages with it which they'd then burn down for a double payoff.
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   Provincial Justice Minister Claude Wagner was highly irritated by the scams and appointed Gerard Laganiere special prosecutor. He, in turn, set up a system where various levels of police would share information and give him tips.
   The squad got lucky in June 1964 when anti-terrorist police searching for FLQ cells instead stumbled across files on fake bankruptcies worth $20 million.
   Armand Becotte became an informant and his gang was busted.
   Two months later the squad got another break when Rachel Smiley, 62, complained that Darabaner had been swindled her company Junior Holdings out of a $115,000 deposit for his promise to help her land government contracts.
    Cops put the squeeze on Darabaner's associate Gaston Constantin who was given police protection as a witness against Darabaner, who was charged with fraud in August 1965.
   Constantin told prosecutors that Darabaner had offered him $1,000 to kill Rachel Smiley, which he turned down. Darabaner then negotiated with another to do the job.
   Constantin also also fingered Darabaner as the culprit behind behind a March 1965 fire at a former longtime Quebec City wrestling palladium known as La Tour, which has since been turned into a government warehouse.
   In September Darabaner faced new charges stemming from these revelations and he eventually pleaded guilty and was sentenced to nine years in the pen.
   Darabaner was out after seven years and apparently returned to obscurity, although one report has him rearrested in 1973 and another suggested he was a gambling addict.

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   The body count throughout this mess was high,however, as potential witnesses against Darabaner dropped like rain, as seven bodies turned up, while Wagner said the real number was up to a dozen.
   The bodies of Alderic Bilodeau, whose hotel was torched, arsonist Redempteur Faucher and Paul Brie were found together in late September 1965 in Lotbiniere.
   One of Darabaner's close associates, Henri-Paul Chardonnet, was found dead in Ham South, 40miles from Sherbrooke a few weeks later.
   Others killed were Marcel Gingras, found in the woods in St. Ferdinand d'Halifax, Paul Nadeau in St. Nicolas and another whose name was not revealed in the Bois Francs region of the Eastern Townships.
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 In October 1965 provincial police questioned Louis Sicotte, an insurance adjuster from St. Lambert. They suspected him of being involved with the Darabaner crew and in their interrogation they managed to inflict what he later described as 16 broken ribs, a fractured pelvis, band many other injuries.
   He claimed in a lawsuit that 18 QPP officers were present for the torture inflicted at their McGill Street headquarters while he was denied the right to see his  lawyer.

Sicotte

   Sicotte denied any wrongdoing and police eventually brought him to a motel where they threatened to charge him with arson if he didn't sign a paper saying that he suffered the injuries in an innocent fall. He agreed to sign the papers but later recanted.
   A doctor eventually came to see Sicotte and he was hospitalized for two weeks.
   Sicotte was given a suspended sentence in August 1966 but was unable to work due to his injuries. 
   He sued for $250,000. The government claimed that the suit was laid too late and could not be heard.
  An inquiry was held into police conduct in connection with the investigation but Wagner declared that the investigation turned up no wrongdoing.