Hitting the Mafia
By Ed Magnuson Sunday, June 24, 2001
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The aging bosses seated at the defense table in the packed federal courtroom in lower Manhattan look harmless enough to be spectators at a Sunday-after noon boccie game. Anthony (Fat Tony) Salerno, 75, the reputed head of the Genovese crime family, sits aloof and alone, his left eye red and swollen from surgery. White-haired Anthony (Tony Ducks) Corallo, 73, the alleged Lucchese family chief, is casual in a cardigan and sport shirt. Carmine (Junior) Persico, 53, is the balding, baggy-eyed showman of the trio. Elegant in a black pinstripe suit, a crisp white shirt and red tie, the accused Colombo crime boss is acting as his own attorney. "By now I guess you all know my name is Carmine Persico and I'm not a lawyer, I'm a defendant," he humbly told the jury in a thick Brooklyn accent. "Bear with me, please," he said, shuffling through his notes. "I'm a little nervous."
As Persico spoke, three young prosecutors watched, armed with the evidence they hope will show that Junior and his geriatric cohorts are the leaders of a murderous, brutal criminal conspiracy that reaches across the nation. In a dangerous four-year investigation, police and FBI agents had planted bugs around Mafia hangouts and listened to endless hours of tiresome chatter about horses, cars and point spreads while waiting patiently for incriminating comments. They pressured mobsters into becoming informants. They carefully charted the secret family ties, linking odd bits of evidence to reveal criminal patterns. They helped put numerous mafiosi, one by one and in groups, behind bars. But last week, after a half-century in business, the American Mafia itself finally went on trial.

Assistant U.S. Attorney Michael Chertoff, whose bushy mustache could not hide his tender age of 32, addressed the anonymous jurors in calm, methodical tones. Chertoff charged flatly that the Mafia is run by a coordinating Commission and that the eight defendants, representing four of New York City's five nationally powerful Mob families, were either on this crime board or had carried out its racketeering dictates. "What you will see is these men," he said, "these crime leaders, fighting with each other, backstabbing each other, each one trying to get a larger share of the illegal proceeds. You are going to learn that this Commission is dominated by a single principle -- greed. They want more money, and they will do what they have to do to get it."

Across the East River in another federal courthouse in Brooklyn, a jury was being selected for the racketeering trial of the most powerful of all U.S. Mafia families: the Gambinos. Here a younger, more flamboyant crime boss strutted through the courtroom, snapping out orders to subservient henchmen, reveling in his new and lethally acquired notoriety. John Gotti, 45, romanticized in New York City's tabloids as the "Dapper Don" for his tailored $1,800 suits and carefully coiffed hair, has been locked in prison without bail since May, only a few months after he allegedly took control of the Gambino gang following the murder of the previous boss, Paul Castellano.

Gotti, who seemed to personify a vigorous new generation of mobster, may never have a chance to inherit his criminal kingdom. Prosecutor Diane Giacalone, 36, says tapes of conversations between Gotti and his lieutenants, recorded by a trusted Gambino "soldier" turned informant, will provide "direct evidence of John Gotti's role as manager of a gambling enterprise." If convicted, the new crime chief and six lieutenants could be imprisoned for up to 40 years.

The stage has thus been set for the beginning of two of the most significant trials in U.S. Mob history. Finally realizing the full potential of the once slighted Racketeer Influenced and Corrupt Organizations Act, federal prosecutors are trying to destroy Mafia families by convincing juries that their very existence is a crime, that their leaders should be imprisoned for long terms and that, eventually, even their ill-gotten gains can be - confiscated. Success in the New York cases, following an unprecedented series of indictments affecting 17 of the 24 Mafia families in the U.S., would hit the Mob where it would hurt most. Out of a formal, oath-taking national Mafia membership of some 1,700, at least half belong to the five New York clans, each of which is larger and more effective than those in any other city.

"The Mafia will be crushed," vows Rudolph Giuliani, the U.S. Attorney for the Southern District of New York, who has been leading the major anti-Mafia crusade and who takes personal affront at the damage done by the Mob to the image of his fellow law-abiding Italian Americans. Declares G. Robert Blakey, a Notre Dame Law School professor who drafted the 1970 RICO law now being used so effectively against organized crime: "It's the twilight of the Mob. It's not dark yet for them, but the sun is going down." Insists John L. Hogan, chief of the FBI's New York office: "We are out to demolish a multiheaded monster and all its tentacles and support systems and followers."

More cynical, or possibly more realistic, law-enforcement authorities doubt that these grand goals can be achieved. But they nonetheless admire the determination and the sophisticated tactics that the current prosecutors are bringing to a battle that has been fought, mostly in vain, ever since the crime-breeding days of Prohibition. Even the doubters concede that the new campaign is off to an impressive start.

From 1981 through last year, federal prosecutors brought 1,025 indictments against 2,554 mafiosi, and have convicted 809 Mafia members or their uninitiated "associates." Many of the remaining cases are still pending. Among all criminal organizations, including such non-Mafia types as motorcycle gangs and Chinese and Latin American drug traffickers, the FBI compiled evidence that last year alone led to 3,803 indictments and 2,960 convictions. At the least, observes the FBI's Hogan, all this legal action means the traditional crime families "are bleeding, they're demoralized."

In Chicago, where the "Outfit" has always been strong, the conviction last January of four top local mobsters for directing the tax-free skimming of cash from two Las Vegas casinos has forced the ailing Anthony Accardo, 80, to return from a comfortable retirement in Palm Springs, Calif., to keep an eye on an inexperienced group of hoods trying to run the rackets. The same skimming case has crippled the mob leadership in Kansas City, Milwaukee and , Cleveland. The New England Mafia, jolted by the convictions in April of Underboss Gennaro Anguilo, 67, and three of his brothers, who operate out of Boston, is described by the FBI as being in a "state of chaos." Of the major Mob clans, only those in Detroit and Newark remain relatively unscathed.

But the muscle of organized crime has been most formidable in New York City. Prosecutors have been attacking it with increasing success, but expect to score their biggest win in the so-called Commission case (dubbed Star Chamber by federal investigators). Chertoff and two other young prosecutors handling their first big trial will have to prove that a national Commission made up of the bosses and some underbosses of the major families has been dividing turf and settling disputes among the crime clans ever since New York's ruthless "Lucky" Luciano organized the Commission in 1931. Luciano acted to end the gang warfare that had wiped out at least 40 mobsters in just two days in September of that year. Before that, top gangsters like Salvatore Maranzano had conspired to shoot their way into becoming the capo di tutti capi ("Boss of Bosses"). Maranzano, who had organized New York's Sicilian gangsters into five families, was the first victim of Luciano's new order.

For more than two decades the Mafia managed to keep its board of directors hidden from the outside world, until November 1957, when police staged a celebrated raid on a national mobsters' convention in Apalachin, N.Y. In 1963 former Mafia Soldier Joseph Valachi told a Senate investigating subcommittee all about La Cosa Nostra, the previously secret name under which the brotherhood had operated. After the Mafia had been romanticized in books and movies like The Godfather, some mobsters became brazen about their affairs. In 1983 former New York Boss Joseph Bonanno even published an autobiography about his Mafia years.

Reading that book, A Man of Honor, helped Giuliani realize that the little understood 1970 RICO act could be used against the Mob. "Bonanno has an entire section devoted to the Commission," Giuliani recalled. "It seemed to me that if he could write about it, we could prosecute it."

Bonanno, 82, seems to have had second thoughts about what he triggered. The aged boss has left his Arizona retirement mansion to serve a contempt-of-court sentence in a Springfield, Mo., federal prison rather than give testimony in the Commission trial. The mobster turned author, says one investigator, "is hearing footsteps."

Brought to bay in a courtroom, the Mafia bosses have adopted an unusual defense: rather than fight the Government's efforts to prove the existence of La Cosa Nostra, they admit it. "This case is not about whether there is a Mafia," thundered Defense Attorney Samuel Dawson. "Assume it. Accept it. There is." Nevertheless, he told the jury, "just because a person is a member of the Mafia doesn't mean he has committed the charged crime or even agreed to commit the charged crime." Dawson depicted the Commission as a sort of underworld businessmen's round table that approves new Mafia members and arbitrates disputes. Its purpose, he insisted, is "to avoid -- avoid -- conflict."

Much more sinister conspiracies will be described by Government witnesses in the trial. The prosecutors will contend that the Commission approved three murders and directed loan-sharking and an extensive extortion scheme against the New York City construction industry. The killings involve the 1979 rubout of Bonanno Boss Carmine Galante and two associates. Bonanno Soldier Anthony Indelicato, 30, and alleged current Bonanno Boss Philip (Rusty) Rastelli, 68, are accused of plotting the hit, with the Commission's blessing, to prevent Galante from seizing control of the Gambino family. (Rastelli, already engaged in a separate racketeering case, will face trial later.) The jurors will see a videotape of Indelicato, who is a defendant in the Commission case, being congratulated shortly after the killings by high-ranking Gambino family members at its Ravenite Social Club. "Watch the way they shake hands, watch the way they are con gratulating each other," said Prosecutor Chertoff.

The crux of the Government's case, however, is more prosaic than murder. It details a Commission-endorsed scheme to rig bids and allocate contracts to Mobinfluenced concrete companies in New York City's booming construction industry. Any concrete-pouring contract worth more than $2 million was controlled by the Mob, according to the indictment, and the gangsters decided who should submit the lowest bids. Any company that disobeyed the bidding rules might find itself with unexpected labor problems, and its sources of cement might dry up. The club dues, actually a form of extortion, amounted to $1.8 million between 1981 and 1984. The Mob also demanded a 2% cut of the value of the contracts it controlled.

The key defendant on this charge is Ralph Scopo, 57, a soldier in the Colombo family, and just as importantly, the president of the Cement and Concrete Workers District Council before he was indicted. Scopo is accused of accepting many of the payoffs from the participating concrete firms. Scopo's lawyer admits the union leader took payoffs, but he and the other attorneys deny it was part of a broader extortion scheme. Since the Mafia leaders own some of the construction companies, said Dawson, the Government was claiming "that these men extort themselves."

Although the Commission trial involves four of New York's five Mob families, a more recent murder plot has prevented the Gambino family from being represented. Former Gambino Boss Paul Castellano and Underboss Aniello Dellacroce had been indicted. But Dellacroce, 71, died last Dec. 2 of cancer. Just 14 days later Castellano, 72, and Thomas Bilotti, 45, his trusted bodyguard and the apparent choice to succeed Dellacroce, were the victims of yet another sensational Mob hit as they walked, unarmed, from their car toward a mid-Manhattan steak house.

Law-enforcement agents are convinced that Gotti, a protege of Dellacroce's, helped plot the Castellano and Bilotti slayings to ensure his own rise to the top of the Gambino clan. No one, however, has been charged with those slayings. The Castellano hit may not come up at the racketeering trial of Gotti, his brother Eugene and four Gambino associates. But two other murders and a conspiracy to commit murder are among 15 crimes that the Government says formed a pattern of participation in a criminal enterprise. The defendants are also accused of planning two armored-car robberies, other hijackings and gambling, and conspiracy to commit extortion.

The major evidence in the Gotti case was provided through a bugging scheme worthy of a James Bond movie. In 1984 Gambino Soldier Dominick Lofaro, 56, was arrested in upstate New York on heroin charges. Facing a 20-year sentence, he agreed to become a Government informant. Investigators wired him with a tiny microphone taped to his chest and a miniature cassette recorder, no bigger than two packs of gum, that fitted into the small of his back without producing a bulge. Equipped with a magnetic switch on a cigarette lighter to activate the recorder, Lofaro coolly discussed Gambino family affairs with the unsuspecting Gotti brothers. Afterward he placed the tapes inside folded copies of the New York Times business section and dropped them in a preselected trash bin. Lofaro provided the Government with more than 50 tapes over two years. Says one admiring investigator: "You can't help wondering how many sleepless nights he spent knowing that if caught he would get a slow cutting job by a knife expert."

The increasing use of wiretaps and tapes, says another investigator, is "like opening a Pandora's box of the Mafia's top secrets and letting them all hang out in the open." Both top Mafia trials will depend heavily on tapes as evidence, as have numerous RICO cases around the country. The FBI's bugging has increased sharply, from just 90 court-approved requests in 1982 to more than 150 in each of the past two years. The various investigating agencies, including state and local police, have found novel places to hide their bugs: in a Perrier bottle, a stuffed toy, a pair of binoculars, shoes, an electric blanket, a horse's saddle. Agents even admit to dropping snooping devices into a confessional at a Roman Catholic church frequented by mobsters, as well as a church candlestick holder and a church men's room. All this, agents insist, was done with court permission.

An agent posing as a street hot-dog vendor in a Mafia neighborhood in New York City discovered which public telephone was being used by gangsters to call sources in Sicily about heroin shipments. The phone was quickly tapped, and the evidence it provided has been used in the ongoing "pizza connection" heroin trial against U.S. and Sicilian mobsters.

The agents were even able to slip a bug into "Big Paul" Castellano's house on Staten Island some two years before he was murdered. Ironically, they heard Castellano apparently complaining about Sparks Steak House, the site of his death. "You know who's really busy making a real fortune?" Big Paul asked a crony. "(Expletive) Sparks. I don't get 5 cents when I go in there. I want you to know that. Shut the house this way if I don't get 5 cents." In Mob lingo, authorities speculate, he seemed to be warning that the restaurant would be closed if it did not start paying extortion money to the Gambino family.

In Boston, FBI agents acquired details on the interiors of two Mafia apartments in the city's North End. With court approval, agents picked the locks early in the morning and planted bugs that produced 800 hours of recordings. The monitoring agents learned fascinating tidbits about Mob mores. Ilario Zannino was heard explaining how dangerous it is to kill just one member of a gang. "If you're clipping people," he said, "I always say, make sure you clip the people around him first. Get them together, 'cause everybody's got a friend. He could be the dirtiest (expletive) in the world, but someone that likes this guy, that's the guy that sneaks you." They heard Zannino and John Cincotti complaining about a competing Irish gang of hoods. Said Cincotti: "They don't have the scruples that we have." Zannino agreed. "You know how I knew they weren't Italiano? When they bombed the (expletive) house. We don't do that."

A major break in the Commission case came on a rainy night in March 1983 when two agents of the New York State Organized Crime Task Force carried out a well-rehearsed planting of a tiny radio transmitter in a 1982 black Jaguar used by "Tony Ducks" Corallo. In a parking lot outside a restaurant in Huntington, N.Y., on Long Island, one agent carefully opened a door, pressing the switch that would otherwise turn on the interior lights. Another helped him spread a plastic sheath over the seats so that rain would not spot the upholstery. With a stopwatch at hand, they quickly removed the dashboard, installed the bug, replaced the dash and closed the car door. The operation took 15 minutes.

For four months the bug transmitted intimate Mob conversations between the Lucchese boss and his driver, Salvatore Avellino, to agents trailing discreetly in various "chase cars," which rebroadcast the signals to a recording van. "It was the most significant information regarding the structure and function of the Commission that has ever been obtained from electronic surveillance," declared Ronald Goldstock, chief of the Organized Crime Task Force. After building his own case against the Lucchese family for a local carting-industry racket, Goldstock alerted Giuliani to the broader implications of using the evidence to attack the Mob's controlling Commission.

Where federal agents and local police once distrusted one another and often collided in their organized-crime investigations, a new spirit of cooperation is proving effective. In New York, state investigators have been invaluable to the FBI in probing the Mob, and some 150 New York City police are assigned full time to the New York FBI office.

The current wave of Mob trials has benefited as well from the number of former gangsters who have proved willing to violate the Mafia's centuries-old tradition of omerta (silence) and provide evidence against their former partners. Racket victims are less fearful than before of testifying. Nationwide, says Giuliani, "we've got more than 100 people who have testified against Mafia guys." To be sure, many witnesses are criminals facing long sentences; they have a strong self-interest in currying favor with prosecutors.

That is a point that the defense lawyers attack forcefully. "I can't tell a witness in jail to come and testify for me and I'll give him his freedom," Persico told the Commission jury. "The Government can do that. They're powerful people . . . Not me." Persico, a high school graduate who learned legal tactics working on appeals during some 14 years behind bars, is described by his longtime attorney, Stanley Meyer, as "the most intelligent fellow I have ever met in any walk of life." His unusual self-defense role also gives him a chance to come across as an unsinister personality to jurors. Persico's strategy, says one court veteran, "is brilliant, if it works." But he runs a risk: his questions must not convey knowledge of events that an innocent person would not possess.

The Commission trial is not expected to produce a turncoat as high ranking as Cleveland Underboss Angelo Lonardo, the top U.S. mobster to sing so far. He learned how to be a turncoat the hard way. Charged with leading a drug ring, Lonardo was convicted after a lesser hood, Carmen Zagaria, testified about the inner workings of the Cleveland Mob. Zagaria described how the bodies of hit victims were chopped up and tossed into Lake Erie. Lonardo, who wanted to avoid a life sentence, then helped prosecutors break the Las Vegas skimming case.

John Gotti is haunted by the deception of Wilfred ("Willie Boy") Johnson, a Gambino-family associate. Caught carrying $50,000 in a paper bag in 1981, Johnson invited New York City detectives to help themselves to the cash. They charged him with bribery. After that Johnson, who hung out at Gotti's Bergen Hunt and Fish Club, kept the cops posted on how the rising star was progressing. He also suggested where bugs might be placed.

The most loquacious turncoat may be James Frattiano, 72, once the acting boss of a Los Angeles crime family. He not only confessed publicly to killing eleven people but also wrote a revealing book, The Last Mafioso, and has taken his story on the road, testifying at numerous trials. All this public testimony means that the Mafia is losing what Floyd Clark, assistant FBI director in charge of criminal investigations, calls a "tremendous asset: fear and intimidation. That shield is being removed."

The willingness of some hoodlums and victims to defy the Mob is partly due to the existence of the Federal Witness Security Program, which since it started in 1970 has helped 4,889 people move to different locations and acquire new identities and jobs. At a cost to the Government of about $100,000 for each protected person, the program has produced convictions in 78% of the cases in which such witnesses were used. For some former gangsters, however, a conventional life in a small town turns out to be a drag. They run up fresh debts and sometimes revert to crime.

A more significant reason for the breakdown in Mob discipline is that the new generation of family members is not as dedicated to the old Sicilian-bred mores. Some mafiosi may have been in trouble with their families already. "Often, they're going to be killed if they don't go to the Government," says Barbara Jones, an attorney in Giuliani's office. Others feel that a long prison sentence is too stiff a price to pay for family loyalty. The younger mafiosi, explains one Justice Department source, "are much more Americanized than the old boys. They enjoy the good life. There's more than a bit of yuppie in them." Contends RICO Author Blakey: "The younger members are a little more crass, a little less honest and respectful, a little more individualistic and easier to flip."

The combination of prosecutorial pressure and the slipping of family ties may be feeding upon itself, creating further disunity and casting a shadow over the Mob's future. Certainly, when the old-timers go to prison for long terms, they lose their grip on their families, particularly if ambitious successors do not expect them to return. Younger bosses serving light sentences can keep operating from prison, dispatching orders through their lawyers and visiting relatives. They may use other, less watched inmates to send messages. Prison mail is rarely read by censors.

Still, the convicted dons run risks. The prison pay phones may be legally tapped. When the feds learned that the late Kansas City boss Nick Civella was directing killings from Leavenworth prison in Kansas, they bugged the visitors' room and indicted him for new crimes.

But can prison bars really crush the Mob? Giuliani contends that as the Italian-American community has grown away from its immigrant beginnings, La Cosa Nostra has been losing its original base of operations and recruits. Pointing to the relatively small number of "made" Mafia members, Giuliani says, "We are fighting an enemy that has definable limits in terms of manpower. They cannot replenish themselves the way they used to in the '20s, '30s and '40s." The Mafia seems aware of the problem: U.S. mobsters have been recruiting hundreds of loyal southern Italian immigrants to run family- owned pizza parlors, help with the heroin traffic, and strengthen the ranks. Experts point out that the Mafia remains a wealthy organization that collected at least $26 billion last year. The Mob has deep roots in unions and labor- intensive industries such as building construction, transportation, restaurants and clothing. In many industries, says Ray Maria, the Labor Department's deputy inspector general, "the Mob controls your labor costs and determines whether you are reputable and profitable."

Repeated prosecutions alone will not put the organization out of its deadly business. Veteran observers of the Mob recall the prediction of the imminent demise of the Chicago Outfit in 1943 when its seven highest hoods were convicted of shaking down Hollywood movie producers. The bell of doom seemed to be tolling nationwide in 1963 when Joseph Valachi's disclosures set off an FBI bugging war against the families. In 1975 the most successful labor racketeering prosecution in U.S. history was supposed to have cleaned up the terror-ridden East Coast waterfront from Miami to New York. None of those highly publicized events had lasting impact.

Still, today's zealous prosecutors have a new tool that gives them a fighting chance to take the organization out of organized crime, if not actually to rub out the Mob. The same RICO law that allows prosecutions against criminal organizations also provides for civil action to seize their assets, from cash to cars and hangouts. A prime example of this technique was the action taken in 1981 against Teamsters Local 560 after it was shown to have been dominated by New York's Genovese family. A civil suit led to the discharge of the local's officers. The union was placed under a court- appointed trustee until free elections could be held. While such suits have been attempted against organized-crime figures only ten times, top Justice Department officials concede they have underestimated the leverage the law can give them. They vow to follow up the convictions they have been winning with civil suits against the family leaders.

The crusading Giuliani admits that the old practice of locking up a capo or % two "just helped to speed the succession along." But by striking at all levels of the Mob families and then "peeling away their empires," Giuliani insists, "it is not an unrealistic goal to crush them." Perhaps. But first there are two new and potentially historic courtroom battles to be fought. For the Mob, and for an optimistic new generation of federal crime fighters, it is High Noon in New York

(FORTUNE Magazine)
By Roy Rowan REPORTER ASSOCIATE Andrew Kupfer
November 10, 1986
(FORTUNE Magazine) – COVER STORY THE 50 BIGGEST MAFIA BOSSES Meet the men who manage a $50-billion-a-year business that reaches into almost every U.S. city. They face familiar problems: aging leadership, less dedicated younger employees, increased foreign competition. And now the feds are trying to wreck their profit centers. CRIME PAYS. Annual gross income from the rackets will probably exceed $50 billion this year. That makes the mob's business greater than all U.S. iron, steel, copper, and aluminum manufacturing combined, or about 1.1% of GNP. These figures, compiled for the President's Commission on Organized Crime, include only revenues from traditional mob businesses, such as narcotics, loan-sharking, illegal gambling, and prostitution. They do not include billions more brought in from the mob's diversification into such legitimate enterprises as entertainment, construction, trucking, and food and liquor wholesaling. The industry that runs this huge part of the economy comprises crime families, not companies. Wharton Econometric Forecasting Asssociates, in a study prepared for the President's Crime Commission, found that the mob's hold on the economy stifles competition and siphons off capital, resulting in a loss of some 400,000 jobs, an increase in consumer prices of 0.3%, a reduction in total output of $18 billion, and a decrease in per capita disposable income of $77 a year. Since organized-crime members cheat on taxes, the rest of the population will pay an estimated $6.5 billion more to the Internal Revenue Service this year. The organization chart of a crime family or syndicate mirrors the management structure of a corporation. At the top of the pyramid is a boss, or chief executive. Below him are an underboss (chief operating officer) and a consigliere (general counsel). Then follow ranks of capos (vice presidents) and soldiers (lower-level employees who carry out the bosses' orders). Like corporations, crime groups often rely on outside consultants (see box, page 34). For this story FORTUNE interviewed FBI agents, leaders of federal organized- crime strike forces, and local law enforcement officials across the U.S. On their assessment of the wealth, power, and influence of the crime bosses, FORTUNE has ranked them from 1 to 50 on the facing page. In spite of its clout, organized crime is an industry in crisis. The leadership is old, and the next generation of managers seems to lack spirit, dedication, and discipline. ''Today you got guys in here who never broke an egg,'' a New Jersey Mafia leader complained in a conversation bugged by the FBI. Another reported that a disrespectful underling had addressed him by his nickname. The FBI says that the Mafia membership is shrinking. To bolster the lower ranks, the bosses have been recruiting tough young trainees from Sicily, called ''Greenies.'' The Mafia, the largest and best-established crime organization, is up against forceful new competition from Asian and Latin American underworld groups that specialize in heroin, cocaine, and marijuana (see box, page 38). These drug smugglers and dealers not only have destroyed the monopoly that the mob once had but also have put some Mafia veterans in the uncomfortably subservient role of acting as their distributors. The most serious challenge comes from federal law enforcement officials, who are now effectively using the 16-year-old Racketeer Influenced and Corrupt Organizations (RICO) statute to prosecute mobsters. G. Robert Blakey, the Notre Dame law professor who drafted the 1970 law, says that it usually takes prosecutors some time to recognize the force of new legislation. Recent indictments under the RICO statutes have brought about half the 50 most important crime members to trial, including No. 1, Tony Salerno, godfather of the Genoveses, the strongest Mafia family. Salerno is a defendant in the so-called Commission trial in New York. The government is trying to convict him and six other members of the Mafia's national ruling council, the Commission, of being part of a racketeering enterprise. Most of the accused sit stone-faced and silent in the courtroom. But Carmine Persico (No. 6), the basset-eyed boss of the Colombo family, is acting as his own lawyer.
Pressure from law enforcement agencies is forcing the mob to change some of its management techniques. Members of the Commission used to gather in large ceremonial ''sitdowns'' to settle their business problems. The FBI's extensive use of wiretaps and electronic bugs have made sitdowns prime surveillance targets, and these meetings have become less frequent affairs. The Mafia leaders are even reducing business lunches and dinners in their old public hangouts. Wherever possible, bosses use couriers to pass along their orders. Mafia chieftains are also trying to snuff out disputes, which can flare in public and attract further FBI attention. But their voracious appetite for money usually defeats such nonadversarial policies. The Mafia has always been able to surmount its other problems, overpower its adversaries, and outrun the feds. Even if the Commission members are jailed, their operations will continue. Bosses behind bars are not powerless. Their ''access to telephones is virtually unlimited,'' assistant FBI director Oliver Revell told a Senate committee in 1983. The late Nick Civella, he pointed out, ''was running the Kansas City mob from federal prison.'' If the Commission members' prison terms are long or if they die in jail, new leaders will rise in each family to take their place. Their replacements, whose names appear below them on the top 50 list, may turn out tougher still. The culture of organized crime -- based on greed, tenacity, and discipline -- remains strong. Mob members call each other ''wise guys,'' and so-called wise-guy rules define a strict code of conduct. For one thing, a member who vouches for someone who ultimately betrays the organization takes the hit -- usually before reprisals against the stool pigeon. For another, if a fixer takes a mob payoff, he must produce precisely what he promises. No excuses or refunds are accepted. The crime industry is organized geographically. Though the mob's grasp reaches most major cities -- Seattle is an exception -- two-thirds of the Mafia's membership is concentrated in New York and Chicago. The Commission adjudicates territorial disputes, settles business conflicts, and even passes on execution sentences. Five sometimes-warring Mafia families control New York City -- the Genoveses, * Gambinos, Luccheses, Bonannos, and Colombos. Induction into these families involves a swearing-in ritual that calls for the taking of a secret oath and the giving of a drop of blood. In Chicago a single Mafia organization called the Outfit runs matters with less friction. There the initiation rite is consummated like a business deal, with a handshake. The Outfit also influences mob activities in Milwaukee, Kansas City, Phoenix, Las Vegas, and Los Angeles. According to the FBI there are only about 1,700 sworn, or ''made,'' Mafia members. For each member, the government figures there are ten ''associates.'' Wharton Econometric Forecasting Associates estimates that the average annual income for an individual organized-crime member was about $222,000 between 1979 and 1981. Of course, the haul for the top 50 crime bosses would be much higher. The forecasters used data from the FBI as well as income statistics from the IRS -- gross income from tax returns and average unreported income from criminal and civil cases. Wharton also estimated that associates made an annual average of $61,000 over that period. Associates advance to full membership in the organization by loyally carrying out orders and by being willing to kill. According to the Wharton study, some 265,000 people are employed in businesses run, at least in part, by organized crime. Underworld leaders often reinvest their swag, kickback money, or bribes in legitimate enterprises. Such diversification is less risky than expanding an illegal operation. Furthermore, benign business can camouflage much criminal activity and reduce the danger of prosecution for income tax evasion. In doing business with law-abiding companies, mob leaders have learned to cash in on their notorious reputation without automatically resorting to violence. Fraud and intimidation are their favorite tactics. Says Steven J. Twist, chief assistant attorney general of Arizona: ''The dangerous thing about organized crime today is it has become semilegitimate.'' A common racketeer strategy is to control a union so that it willingly signs cut-rate ''sweetheart'' contracts with mob-run companies and threatens to strike competitors. Underworld leaders have used unions to influence and infiltrate many legitimate businesses, from warehouses to nightclubs. Wharton forecasters figure that the involvement of organized crime tends to push prices up between 0.5% and 2% in these and related industries, such as food and liquor distribution. A corrupt union is a profit center. It offers almost unlimited opportunities for extortion through the use of ''ghosts'' (fictitious workers) and ''no- shows'' (employees who do not come to work) and the threat of slowdowns. Mob- controlled unions and labor-leasing companies supply security guards for nuclear power plants, garbage collectors for most New York City office buildings, and truck drivers for Shell Oil, Coca-Cola, and International Paper, among many others. ''A union can be used instead of a gun or a baseball bat,'' says Edward McDonald, chief of the Organized Crime Strike Force in Brooklyn. ANTHONY SALERNO, 75, whose name appears first among the top 50, heads an underworld conglomerate with enterprises on both sides of what for him, at least, is an indistinct line separating illegal from legitimate business. Known as ''Fat Tony'' (''Too fat to flee,'' chide his underworld cronies), he presently resides at the Metropolitan Correctional Center in Manhattan, next door to the U.S. Southern District Court, where he and other alleged Commission members are on trial. Salerno's power does not stem solely from his position as head of the 300- member-strong Genovese family. Even before he became boss in 1980, Salerno made more money than most Mafia chieftains, mainly by skimming from casinos in Nevada and the Caribbean. Skimming is taking cash off the top of gambling proceeds before they are reported as taxable revenues. Law-abiding casinos take pains to prevent skimming; in mob-controlled casinos the practice is encouraged and widespread. The easiest way to skim is to simply walk into the counting room and take the money, a casino operator was overheard by the FBI to say. A recent indictment charges Salerno and his cohorts with operating a number of illegal gambling joints for betting on numbers and sports. In addition, they make ''extortionate extensions and collections of credit'' -- that's how the Justice Department defines loan-sharking. Salerno is accused of using ''threats and beatings to force victims to pay illegal interest and to repay loans.'' Crime boss No.1 also has thriving business interests in New York City's construction industry. According to Justice Department disclosures in the Commission case and in another racketeering indictment, between 1981 and 1985, Salerno and his colleagues imposed a 2% Mafia tax on New York City contractors pouring concrete for all superstructures costing more than $2 million. They ran a cartel that rigged bids for supplying the concrete. The cartel decided in advance which company would submit the winning bid. Other companies were forced to put in bids that were unacceptably high. The 2% tax alone produced $3.5 million in profits for the Mafia on the 72 construction jobs the government investigated. That's only a fraction of the buildings that have gone up in New York's recent real estate boom, for which the mob supplied concrete. One witness told the President's Crime Commission that the mob has inflated Manhattan construction costs by as much as 20%. Salerno, according to the indictment, ''is a hidden partner'' in a covey of companies that bid on the concrete construction work. Together they have won contracts worth more than $71 million from ten big construction jobs, including Trump Plaza, a luxury apartment building on Manhattan's East Side. The government charges that bidding on these projects was further rigged in favor of Salerno's companies through collusion with two ready-mix firms: Certified Concrete Co. and Transit-Mix Concrete Corp. Both are owned by Edward J. ''Biff'' Halloran, who is better known for the midtown hotel Halloran House, which he once owned. He denies any collusion. Any contractor who dared bid against the mob cartel faced a cutoff of ready- mix or problems with its delivery. The federal indictment charges that Salerno also holds sway over Teamsters Local 282, whose members drive concrete delivery trucks. A punishment for recalcitrant contractors: delays and other, more serious labor problems. Salerno's hand in union affairs reaches right to the top. The Justice Department charges that it was he who ''selected'' Roy Williams to lead the International Brotherhood of Teamsters in 1981 and then ordered union officials to elect him president. Williams was imprisoned for conspiring in 1979 to bribe Howard Cannon, then a U.S. Senator from Nevada. Even so, federal prosecutors say that Salerno continues to hold ''effective control'' of the union under the current president, Jackie Presser. Tony and his wife, Margaret, often relaxed at their estate in Rhinebeck, New York. For the five years that ended last December, they were a two-income family. The government charges that Marathon Enterprises, a New Jersey food- processing company, paid Margaret ''brokerage fees'' on sales of hot dogs and other delicatessen foods to supermarkets, sports arenas, and street vendors. She received these payments even on sales to such reputable companies as Chock Full O' Nuts (restaurants), Pathmark (supermarkets), and Canteen Corp. (vending machines). The Justice Department claims that Genovese soldiers arranged the kickbacks by threatening Marathon with ''force, violence, and fear of economic loss.'' For all his wealth and power, Salerno operated modestly before being arrested. His office was not in one of the gleaming midtown Manhattan towers whose construction costs he had driven up, but in the Palma Boy Social Club, in a storefront in teeming East Harlem. For a long time Salerno attended to business at the Palma or puttered around his Rhinebeck estate without encountering much trouble from the feds. His principal worry was his weight, and he spent weeks at fat farms trying to slim down. The plump times ended after the FBI planted a bug in the Palma Boy Club, which produced much of the evidence for the racketeering charges Salerno now faces. Even if he is convicted and sent to prison, Salerno will probably continue his unchallenged control of the Genovese family. CHICAGO'S BOSS, Anthony Accardo, 80, boasts that he has never spent a night in jail. Like many a chief executive lately, he was called back from retirement (at the Indian Wells club near Palm Springs, California) when the organization he had long headed faced a sudden management crisis: The leadership of the Chicago Outfit was packed off to jail early this year. Accardo's renewed position raises him to No. 2 on the list. Accardo is reputed to have been a machine-gunner for Al Capone, and he is called ''Joe Batters'' by his Mafia cronies because of the baseball bat he formerly used for persuasion. He has always been a master of strategic planning. His formidable Outfit is a racketeering combine that runs everything from diaper services to funeral parlors; its efficiency is envied throughout the Mafia. Accardo was the architect of the intricate power plays that made the Outfit the dominant force in the rackets from the Great Lakes to the Pacific over the past decade. Now, with a cadre of couriers winging back and forth from Chicago to California, he functions as the chairman of the board. His operations chief in Chicago is Joseph Ferriola, 59, a disciplined underboss who survived heart bypass surgery last year and is No. 20 on the list. Ferriola's organizational skills are well known. In the Seventies he muscled back into the fold the bookies in Chicago who had tried to be independent. Discipline is the Outfit's guiding management principle. The Chicago mob imposes a ''street tax'' on all illegal activities and on some legitimate ones as well. Bookies, hookers, narcotics peddlers, even owners of bars, restaurants, and parking lots pay from 10% to 50% of their gross revenues, depending on the profitability of their operations and the amount of protection required to keep them running. Another city with a street tax is Philadelphia. But organized-crime leaders there have not been very effective in collecting it -- not even after the so-called Docile Don, Angelo Bruno, was murdered in 1980 and replaced by the violence-prone Nicodemo Scarfo (No. 43) in a prolonged 18-death gang war in the City of Brotherly Love. The Outfit maintains especially tight discipline over its internal security. Chicago insurance executive Allen Dorfman, a sophisticated money manager, pioneered the use of union welfare and pension funds to finance an underworld bank in the 1960s. First he funneled loans from the Teamsters' Central States pension fund to several casino-hotels in Las Vegas. Then he showed Accardo and associates how to establish health care organizations in which participating doctors and dentists gave the Outfit kickbacks after overcharging union patients. Dorfman, who personally received kickbacks for processing the Teamster loans and insurance claims, knew too much about the Outfit's finances. He was gunned down in a suburban Chicago parking lot in 1983. Beginning in 1970 strongman Anthony Spilotro was stationed in Las Vegas to monitor casino skimming and to see that the money flowed smoothly back to his bosses in Chicago. Known as ''Tony the Ant'' because of his squat, close-to- the-ground appearance, he did not keep an appropriately low business profile, operating out of a Las Vegas hamburger joint called the Food Factory. From there he dabbled in real estate and set up sidelines to control burglary, fencing, and prostitution on the Strip. But Spilotro failed to keep the skimming operation well disciplined. Some of the men he supposedly controlled turned up as government witnesses, resulting in the January conviction of Chicago's former ruling duo, Joseph Aiuppa (No. 21) and John Philip ''Jackie'' Cerone (No. 30). Imprisoned with them were seven other gang leaders, including Carl DeLuna (No. 33), the Kansas City mob's comptroller, whose meticulously kept financial records were uncovered by the FBI (see facing page). Last June, Tony Spilotro and his brother Mike were found buried in an Indiana cornfield. Investigations suggested they had been garroted and may have been buried alive. In any case, they were victims of wise-guy rules: They had not prevented the guys from spilling the beans, so they suffered the consequences. ''There's no way Spilotro could have been killed without Accardo's approval,'' says Patrick Healy, executive director of the Chicago Crime Commission. Spilotro's execution may lead to the disintegration of an important peace- keeping pact, hatched by Accardo in 1977, that ceded authority in Las Vegas to the Outfit in Chicago and gave Atlantic City to New York Mafia families. Former FBI agent William Roemer, who spent 23 years tailing Accardo and his cohorts and now is a consultant to the Chicago Crime Commission, says the deal had a grandfather clause. ''According to the 1977 agreement, the Eastern mob could keep what it had in Las Vegas, but it couldn't start anything new. Spilotro was there to enforce the edict.'' In the confused aftermath of Spilotro's death, competition from New York is challenging the Outfit's hegemony in Las Vegas. Federal and state authorities as well as the Las Vegas police have detected a resurgence of Eastern mob activity, particularly by the Genoveses. ''The Outfit's beat up real bad,'' says an undercover cop. ''Not just in Chicago, but here in Las Vegas. The New York guys are taking advantage of it.'' Police say that Vincent ''Chin'' Gigante (No. 19), a Genovese capo, is seizing much of the power previously held by the Outfit and dispensed through Spilotro. Gigante is gigantic, a hulking former boxer who fits the Genovese rough-and-tumble style. He serves on what amounts to the Genoveses' three-man executive committee, with Tony Salerno and Louis Manna (No. 38). The aftershock of Spilotro's assassination and the vacuum it has left in Las Vegas have hurt the Outfit's reputation on the West Coast. Other mobsters have taken to calling its California operatives the ''Mickey Mouse Mafia.'' This doesn't bode well for West Coast boss Peter Milano (No. 46), who is supported by Accardo in Los Angeles. When a franchise operated by the Outfit turns sour, it can prove terminal for any field representative connected with it. What is happening on the West Coast may be a mild precursor of things to come in Chicago. The aged Accardo has heart disease, and when he dies the Outfit may find itself in turmoil. % AMONG THE MAFIA'S aging executives a true yuppie has emerged. Michael Franzese (No. 18), the son of convicted bank robber and Colombo chieftain John ''Sonny'' Franzese, is a fast-talking 35-year-old businessman and handsome father of five. He put together a cartel that produced feature movies (including the horror film Mausoleum and a youth- gang musical called Knights of the City), ran a discotheque, sold and repaired automobiles, operated construction firms, and achieved a near monopoly of independent gasoline sales on Long Island. Mike seemed to strive to shed the reputation of his father, telling the press last year: ''Absolutely, I know people that my father associated with. That doesn't mean I have to do business with them, or have to be part of any type life they're alleged to be in. It's all nonsense.'' A 28-count, 99-page federal indictment tells another story. The government accuses young Franzese of ripping off more than $5 million in tax fraud, insurance fraud, fraudulent loans, and the fraudulent operation of two auto dealerships. The victims of his car sales scam included General Motors, Mazda Motors of America, and Beneficial Commercial Corp. Investigations also reveal that he cheated New York, New Jersey, and Florida out of hundreds of millions in gasoline taxes. The gas tax scam was accomplished through what federal prosecutor Jerry D. Bernstein calls a ''daisy chain of phony companies.'' Some 20 Franzese oil and gas distributors would make paper sales of gasoline from one company to another until the whole tax bill was owed by one firm known as the ''burnout company.'' It consisted only of a mailing address, a telephone, and a corporate principal who was an illegal alien. The burnout company, in turn, sold the gas to retailers with an invoice marked ''all taxes paid.'' Then the burnout company would declare bankruptcy, and Franzese would create another daisy chain. In spite of his clean-cut image, Mike Franzese inherited his father's business tactics and violent ways. According to Bernstein, one of his goons broke the head of a competitor with a ball peen hammer. And an auditor who questioned Franzese's books was threatened by a Franzese associate: ''You don't know who you're bleeping with. We'll cut your heart out.'' Franzese told a friend who could implicate him in the gasoline tax scam that the man's son would be murdered if he didn't vanish beyond the reach of U.S. courts. The man fled to Panama. Four months later he returned in federal custody to testify % against Franzese. In March, Franzese agreed to plead guilty to racketeering and conspiracy charges, accept a prison term of ten years, forfeit assets worth $4.8 million, and pay an additional $10 million to the states defrauded in the gasoline tax scam. He was able to persuade the Justice Department that he couldn't possibly come up with the $14.8 million if he was stuck behind bars -- not even after selling his various houses and signing over his movie rights. An extraordinary deal was struck. Before going to prison, Franzese was permitted limited freedom under the guard of deputy U.S. marshals. The surveillance costs were to be paid by Franzese, who was soon seen (and to the embarrassment of the government, filmed by an NBC-TV news crew) scurrying around Hollywood with his posse in tow. The farce ended when Franzese, reverting to form, gave a bad check to the U.S. Marshals Service to pay for his guards. A federal judge sent him off to prison. The investigation of Franzese's affairs revealed yet another crooked business -- the 700-member Allied International Union, a large labor union of private security guards. Its members worked in sensitive spots as diverse as nuclear power plants and gambling casinos. Allied International had been a joint venture of the Genoveses, Gambinos, and Colombos. But when the Genovese and Gambino partners died, it became exclusively a Colombo operation. Before Allied International came under Franzese's wing, Daniel Cunningham, a builder in Smithtown, Long Island, thought he had bought control of the union from one of the Genoveses for $90,000. Cunningham saw a way to get rich. He took $134,000 a year in salary and expenses and put his wife, ex-wife, and girlfriend on the union payroll. Cunningham admitted trying to call a guard strike against five nuclear power plants along the Eastern Seaboard, including Three Mile Island, and threatening to strike the Atlantic City casinos. He was indicted for embezzlement, racketeering, and bribery in 1981.
Testifying last year before the President's Commission on Organized Crime, Cunningham explained that when he attempted to sell control of the union to Mike Franzese after going to jail, the latter responded: ''Why should I buy something I already own?'' Cunningham reported that he was replaced by one of Franzese's sidekicks, who promptly shifted the union's pension fund to a Virgin Islands insurance company that granted Franzese a home mortgage free not only of interest but of principal payments as well. . GARBAGE COLLECTION, which depends on union control, has been a favorite Mafia target. Mob leaders tried unsuccessfully to infiltrate this business in Chicago, Des Moines, and other cities, but succeeded in the New York area, where municipal governments provide garbage pickup just for houses and apartments. Restaurants, hotels, nightclubs, even the United Nations do not get the city's Sanitation Department services; private companies, called carters, do the job. The carters allocate customers among themselves, buying and selling client businesses for from $2,000 to $2 million each. What the carters are buying is the right to overcharge. Peter Reuter, senior economist with Rand Corp., figures that the allocation scheme inflates private garbage collection prices from 35% to 65% in New York. The harder prosecutors pursue the racketeers, the more notorious the garbage business becomes and the less attractive the business is to legitimate competitors. Says Reuter: ''That is the value of a bad reputation.'' The only competition is among Mafia families vying for the business. On Long Island the Luccheses and the Gambinos struck a deal to split garbage collection payoffs from various carters. Anthony Corallo (No. 3), the Lucchese boss who is standing trial with Tony Salerno, controlled the employers' group, Private Sanitation Industries Associates Inc. James Failla (No. 36), a Gambino capo, held sway over the garbage truck drivers as overseer of Teamsters Local 813. Every three months Corallo had to pay Failla $50,000 for his cooperation. Corallo, called ''Tony Ducks'' because of his previous success in ducking subpoenas, and Salvatore Avellino, his chauffeur-enforcer, thought the best way to eliminate payments to Failla was to start a rival Teamsters local. Through a bug planted behind the dashboard of Avellino's Jaguar, the New York State Organized Crime Task Force overheard him telling a friend how such a rival union could be organized and used: ''Let's take a son-in-law, somebody, put them into the (union) office; they got a job. Let's take somebody's daughter, whatever, she's the secretary. Let's staff it with our people.'' Then, so his listener fully understood how the new union's leaders would dispense with a dissident, Avellino added: ''and when we say go break this guy's balls . . . they're there, seven o'clock in the morning to break the guy's balls.'' Avellino went on to detail how profitable a union could be in overcharging / for phantom garbage: ''This is what he (Corallo) tells me. A strong union makes money for everybody, including the wise guys . . . because the envelopes (of money) . . . are bigger and better . . . 2,000, 5,000, 10,000, 20,000, 30,000, 50,000 . . . I can't even carry them.'' Corallo did not start a Teamster local to rival the Gambino one. But he controls others, notably Teamster locals 295 and 851, whose members play a key role in the $4.2-billion-a-year air freight business at New York's Kennedy Airport. His union clout helped block the proposed $63-million merger in 1983 of Air Express International and CF Air Freight, a subsidiary of Consolidated Freightways. According to Air Express's labor contract, the company had to continue the existing Teamster pact, even if it merged. That was unacceptable to Consolidated. Corallo's men offered to abrogate the contract for $500,000 in cash. Both companies balked at the shakedown and abandoned the merger plan. Corallo's extortion attempts were usually more successful. Six air freight companies operating at Kennedy -- Air Express, Union Air Transport, Kamino Air Transport, Schenkers International Forwarders, Three Way Corp., and Hi's Airport Service -- funneled more than $1.1 million to the Corallo mob between 1978 and 1985. FBI wiretaps on the home phone of Corallo's airport overseer revealed the payoffs. Paul Vario (No. 32) and three other Corallo lieutenants pleaded guilty. IN MANY CITIES mobsters use Teamster connections to shake down legitimate companies. In Detroit, Vincent Meli (No. 41) captured the entire steel- hauling business with the connivance of crooked Teamster officials in Local 124. His trucking company, Trans-Steel, obtained such favorable contracts that it did not even pay drivers fringe benefits. Meli drove all his competitors out of business. ''I know of no other industry in the area where organized crime has achieved such control,'' says Craig Woodhouse, an investigator for the Department of Labor. Mafia entrepreneurship took a different tack in Scranton, Pennsylvania. There Eugene Boffa, an associate of the local Mafia boss Russell Bufalino (No. 12), organized what he called a ''labor leasing'' business. The President's Commission on Organized Crime reported that to get the new venture off the ground, Boffa gave ''bribes and kickbacks'' to ''corrupt Teamsters,'' including President Jackie Presser. Boffa established 30 labor-leasing companies to provide truck drivers to such giants as Shell Oil Co., Continental Corp., Coca-Cola, American Cyanamid, Crown Zellerbach, and International Paper. The labor-leasing scheme worked like this: The client ''corporations would fire all of their drivers and Boffa would rehire them at a reduced wage,'' the President's Commission reported. In return, Boffa received fees ranging from 7% to 10% of the drivers' gross wages. Then he handed over 50% of his share to boss Bufalino. The surest way to get ahead in the Mafia is to kill. That explains the sudden rise to prominence of John Gotti (No. 13). As a petty crook, Gotti had the humiliating habit of getting caught, usually as a result of sloppy bravado. Though he is only 46, he has served prison terms of one year for attempted burglary and four years for stealing truckloads of clothing at Kennedy Airport, and he is on trial for hijacking armored trucks. Law enforcement authorities say he arranged the execution last December of Gambino boss ''Big Paul'' Castellano and his bodyguard outside Sparks Steak House in Manhattan.
THE PRESS portrays Gotti as the new boss of the Gambino clan and the reincarnation of Al Capone. His custom-tailoring, his black Mercedes 450 SL, his wisecracks in court, even his carefully coiffed pompadour made him a sudden sensation. But his superstar status is more image than substance. He claims to be a distributor of phonograph records. His experience is really as a loan shark, hijacker, and hit man. He does not seem qualified to run the Gambino family's complex businesses, which range from meat and poultry sales to a garment industry trade association. Besides, if he is sentenced to the maximum 45-year prison term, his newly acquired and self-proclaimed control over the Gambino family would evaporate.
The President's Commission on Organized Crime reported that the Gambino meat and grocery operations are so vast that legitimate food producers feel compelled to deal with them. Paul Castellano, Gotti's victim, ran Dial Poultry Co., a large distribution company in Brooklyn, now managed by his sons Paul Jr. and Joseph. Big Paul's cousin Peter Castellana Sr. is listed as sales manager of Quarex Industries, another wholesale company with sales of more than $100 million. Frank Perdue, who heads the famous $840-million-a-year chicken processing company, used Dial Poultry to distribute his chickens. Perdue's relationship with the Castellanos, as the President's Commission put it, shows that some legitimate businessmen turn to ''organized crimeconnected companies'' to gain a competitive edge. Initially, Perdue told the President's Commission, he was reluctant to have anything to do with Dial because of Paul Castellano's notoriety as a Mafioso. But when Perdue saw Dial as a way of expanding his sales, he recalled, ''I started saying to myself, 'Why shouldn't I have some of that business?' '' As his sales to Dial increased, Perdue sought Big Paul's help in fighting a union-organizing campaign at his processing plant in Accomac, Virginia. Perdue explained: ''I just thought, you know, they have long tentacles, shall we say, and I figured he may be able to help.'' By long tentacles, Perdue said that he meant ''Mafia'' and ''mob'' connections. Castellano, who said, ''Accomac is a long way from Brooklyn,'' did not do anything to help Perdue. The Mafia's net income, the gross revenues less such overhead costs as salaries, transportation, entertainment, and payoffs, is conservatively estimated at $30 billion a year by the President's commission. But the profits present a bit of a problem. Much of the money comes in $10 and $20 bills; making a big purchase with, say, hundreds of pounds of greenbacks could be incriminating. Before this dirty money can be safely spent or pumped into legitimate businesses, it must be laundered. One solution is to employ clandestine couriers to transport the cash to banks in the Bahamas, Switzerland, or Hong Kong. But an easier way was the system used by Gennaro Angiulo (No. 34), the silver-haired under-boss in Boston. Workers in Angiulo's North End headquarters merely stuffed the money into brown grocery bags and walked three blocks to a branch of the First National Bank of Boston. They returned with cashier's checks. Even though Angiulo acquired an oceanfront estate in suburban Nahant and a $320,000 yacht to go with it, his bucket brigade of deposits drew no special attention. The myriad transactions occurred despite a federal regulation passed in 1970 that required all banks to report cash receipts of $10,000 or more. In 1981 the U.S. government deployed agents to eavesdrop on Angiulo's operation. The inquiry resulted in racketeering charges against Angiulo and deep trouble for the Boston bank. Angiulo's associates purchased cashier's checks totaling $8.3 million between 1979 and 1982, according to the federal investigation. The bank failed to report 105 checks bought for $1.8 million in cash, as well as some $1.2 billion in foreign cash transfers, unrelated to Angiulo. The bank pleaded guilty and was fined $500,000. Angiulo was fined $120,000 and sent to prison for 45 years. At his trial it was disclosed that the FBI, using wiretaps, had overheard the following admissions: ''We buried 20 Irishmen to take this town over,'' bragged Angiulo. ''We are bookmakers. We're selling marijuana. We are illegal here, illegal there. Arsonists. We are everything.'' ''Pimps,'' added a sidekick. ''So what!'' snapped Angiulo, unwilling, it seemed, to omit one division from his complete catalogue of businesses.
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Good to finally read that Fortune article. Thanks MrJustsayNo.

No Problem !

I no its stupid but if carmine persico walked out the fed pen tomorrow wouldnt he be the strongest mafia guy on the street. Ive been seeing his lawyers are still trying to flip ths commission case cause in 1979 when carmine galante was whacked hes wasnt the official boss maybe the underboss or street but that was tom dibellas final vote and greg scarpa told the fbi. He even told them in nov 1980 dibella stepd down n the bosses in nyc crowned carmine persico.

Supposedly he has a good chance since i think 16 mobsters had theyre cinvictions overturned due to Greg Scarpa,Lin devecchio,Joe Massino,Pistone etc... I feel bad for the colombos still on the street trying to stay low and rebuild after being decimated due to Carmine and the Rest of the Persico curse over the last 35 years plus ! Persico,No matter how sick or whatever he claims would certainly no doubt try and go rite back to business in some capacity ! That would be interesting Andrew Russo, Theodore Persico and Carmine all out on the street together !!

@pmac


Nah, it's absolutely imperative that the top mob guy in NY be Barney Bellomo, lol just kidding....