"Goodfellas" is based on the Nicholas Pileggi book "Wiseguy," but not everything in the movie is the same as in the book. And since Pileggi's source was Henry Hill, you have to take everything Hill told him with a ton of salt. So, the Billy Batts story as portrayed in the film may not have happened that way.
I tried another source: "Mob Star: The Story of John Gotti," by Gene Mustain and Jerry Capeci. The closest I came to "Billy Batts" was William Battista, known as "Billy." In the film, Batts was with the Gambinos and had just gotten out of prison after a six-year stretch when he had his fateful encounter in Henry's bar. In "Mob Star," Billy Battista was recruited into the same Gambino crew at the same time as Gotti. He was a hijacker at first: in a job that got him noticed, he waited until a truck driver went on his coffee break, then hot-wired the truck and drove off with $75k of new clothes--somewhat like the scene in the beginning of the film that shows Henry and Tommy taking off with a truck when the driver went for coffee in a diner. Later, according to Mustain and Capeci, Billy Battista was into gambling, and handled some of Gotti's action. They imply that he finally turned government informant. They imply, but they don't flat-out state, that he was "Source BQ," an informant that prosecutor Diane Giacalone exposed in one of Gotti's trials. They conclude that, "William Battista, age 53, the old Brownsville-East New York hijacker-bookmaker who never appreciated Gotti's bully ways, hasn't been seen since." I infer that "Billy Batts" was a fictional character loosely based on Battista. You can draw your own conclusions.