His brother Anthony Zito was identified in a 1992 Federal court case as a partner of Vittorio Amuso.

Shelters Investigated on Possible Mob Link

Mayor Rudolph W. Giuliani halted referrals of homeless people to a shelter in Brooklyn and another on Staten Island late yesterday amid mounting allegations that the shelters are connected to organized crime.

The Mayor announced yesterday that he was ordering the Department of Investigation to examine the ownership of Angels by the Sea, which operates shelters in the Sheepshead Bay section of Brooklyn and the Mariners Harbor section of Staten Island. The shelters receive $7.5 million a year from the city to house homeless families.

On Wednesday, Public Advocate Mark Green wrote a letter to the Mayor urging an investigation of what he said were ties between the shelters and the Lucchese crime family. The shelters are owned by the D&Z Holding Corporation, Mr. Green said. The president of the corporation, Anthony Zito, was convicted in 1971 of extortion and served time in prison.
Mr. Zito was identified in a 1992 Federal court case as a partner in the shelter with Vittorio Amuso, who the authorities say is the boss of the Lucchese crime family. Mr. Amuso is serving a life sentence on racketeering charges.

The Mayor said at a news conference earlier in the week that the Department of Investigation had not uncovered enough evidence to sever the city's ties to the shelters. But yesterday, after CBS's ''60 Minutes'' announced that it was preparing a segment on the shelter to be broadcast tomorrow night, the Mayor issued a statement halting the referrals of homeless people.
''The Mayor has asked the New York City Department of Investigation to reopen its investigation into Angels by the Sea homeless shelters,'' the statement said. ''Pending a complete review of all aspects of this matter, including costs, he has directed the Department of Homeless Services to stop all referrals to the facilities.''

The Brooklyn shelter, formerly known as the Bayview Motel, provides housing for 95 families; the Staten Island shelter holds 100 families. The city pays the company $7.5 million a year to house the families, which Mr. Green said made it one of the most expensive shelters per family in the city. About $2 million goes to D&Z every year in rent, Mr. Green said.
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The city has used the motel as a shelter since 1984. Mr. Zito told The Daily News in a 1985 interview that he began taking in homeless families because his conviction for loan sharking made him ineligible for a liquor license and he had difficulty attracting guests. At the time, Mr. Zito acknowledged charging $100 a night, the highest rate the city pays to hotels. In a 1993 interview with The Village Voice, Mr. Zito denied being partners with Mr. Amuso, but said he was familiar with Mafia figures because of their frequent visits to the Bayview's restaurant.

Mr. Zito and the former manager of the Bayview Motel, Judy Rossinow, were indicted in 1983 for failing to pay more than $100,000 in hotel occupancy taxes to the city, Mr. Green said. Although the charges were dismissed, Mr. Zito was forced to repay $140,000 to the city. Mr. Green said that Ms. Rossinow is now the president and chief executive of Angels by the Sea and earned $123,773 in 1995.

Neither Mr. Zito nor Ms. Rossinow could be reached for comment last night.

''In light of this evidence,'' Mr. Green wrote the Mayor, ''the city should perform an extensive audit of the city's substantial contracts with Angels by the Sea. Public dollars earmarked for the city's homeless population may be lining the pockets of a few individuals -- an especially disgraceful situation in light of recent cuts in homeless services.''