On May 13, 1954, Costello was convicted on three counts of willful tax evasion — for the years 1947, 1948 and 1949. He was sentenced to serve five years on each of the counts, to run concurrently, and was fined $ 10,000 on each count — a total of $ 30,000. Costello appealed to the second circuit court of appeals, which upheld the 1948 and 1949 convictions but reversed the 1947 finding and reduced his fine to $ 20,000. Subsequently, the Supreme Court upheld the finding of the circuit court.

Frank was in prison when, Vito made his big move. True that a lot of Costello's powerful allies in the family were dead, deported, or incarcerated, but Frank still had loyalists in the family that still mattered, and he ordered them not to do anything, especially after Appalachian. He did not want anymore heat on the family then there already was.