Sunday, August 25, 2002

Living the high life without getting caught

Friends of ours: Tony Centracchio, John "No Nose" DiFronzo, Al Capone, Sam Carlisi, James Marcello, Michael Spano Sr., James "Jimmy I" Inendino, Anthony Accardo
Friends of mine: Thomas Tucker, William Galioto, John LaGiglio

TV mobster Tony Soprano runs the Bada Bing strip club and a garbage hauling firm.

Real-life mobster Tony Centracchio, who died last year while facing charges he oversaw a video gambling empire, was slightly more diversified. Over the years, Centracchio, who lived in Oak Brook, owned a jewelry shop, a carpet store and an abortion clinic, sources say.

Why the different businesses? To hide the ill-gotten cash.

Successful mobsters such as Centracchio need legitimate ways to explain the good life they're living. The kind of life that includes nice houses, fancy cars, big vacations, private schools for the kids. Centracchio oversaw an illegal video gambling operation that pulled in more than $22 million over two decades, the feds say, and he could hardly just throw all that money into a savings account. The Internal Revenue Service, if not the folks next door, might ask questions.

Legitimate businesses provide a quiet way for mobsters to hide money, make more money (a good restaurant will turn a profit for a devil as readily as for an angel) and, when opportunity calls, blend the legit with the illegit. Centracchio's jewelry store sold legally purchased jewelry as well as the stolen stuff, authorities said.

In all, the Chicago Outfit rakes in an estimated $100 million in pure profit each year, law enforcement sources say, and while that's nowhere near what Al Capone took in--more than $1 billion a year in today's dollars--it's a hefty amount that has to be put somewhere.

John "No Nose" DiFronzo, for instance, put some of his money into a car dealership, authorities said.

As for Capone, he spread his wealth around. The bill for his suites at the Metropole Hotel in the 1920s ran him $1,500 a day, according to one biography. He burnished his public image by feeding thousands of people through soup kitchens. When it came to spending his loot, he was flashy. Which may have been his downfall. When Capone was finally sent to prison, it was not for bootlegging, but income tax evasion.

Chicago's street gangs, as described last April in the first installment of the Chicago Sun-Times Crime Inc. series, follow in Capone's spirit. Flooded with cash from illegal drug sales, street gang leaders have invested in ostentatious suburban homes, private jets and vanity motion pictures about their lives. But the Chicago mob, often called the Outfit, will have little of that. It prefers a lower profile, the better to stay out of jail.

Chicago mobsters buy car dealerships and limousine companies. They start up construction companies, private investigation firms and car washes. They buy strip clubs, dirty bookstores and restaurants. They start trucking companies--a natural for them, given their long ties to the Teamsters union. And, in one of the mob's more extravagant moments, it even bought a golf course in Wisconsin, with dreams of opening a casino. That particular mob dream was behind an insurance scam that on Friday brought down Cicero Town President Betty Loren-Maltese and six others. A jury brought in a verdict of guilty against the seven.

While the mob simply buys its way into many businesses, it strong-arms its way into others. About 10 years ago, for example, the owner of a west suburban pest control company racked up a $6,000 gambling debt. The businessman, hooked on video poker, couldn't pay it back, so he took out a juice loan from a man who worked for Centracchio, former Stone Park chief of detectives Thomas Tucker, court documents show. Tucker, ironically, also was responsible for overseeing the very video poker machines the man blew his money on.

For the juice loan, the businessman had to pay $300 in interest. Not per year or per month. Per week. At one point, the business owner told Tucker he couldn't pay back the money, so Tucker gave him a five-month reprieve--with a price. Tucker and two other men demanded to buy into the man's business for a low price, then eventually bought him out altogether for a pittance. The onetime business owner wound up working for them.

Once a wise mobster owns a business, however, he tries to pretend he doesn't own it, usually by putting it in the name of someone he trusts. That way, if the feds haul him in and convict him of a crime, the business is safe from being seized by the government, or at least safer than if it were in his name.

The late mob boss Sam Carlisi and top mobster James Marcello, who is now in prison, bought real estate through a former Chicago cop, William Galioto, who is Marcello's brother-in-law, to hide their ownership, the feds believe.

Galioto's name came to light most prominently in 1995 when Mayor Daley scotched a low-interest city loan to him and his partners to build a West Side movie studio. Galioto has denied any wrongdoing. But for a really vivid picture of how the mob launders money, one needs to look no further than Loren-Maltese, alleged Cicero mob chief Michael Spano Sr. and a handful of their pals, who were found guilty Friday of running an insurance scam that siphoned more than $12 million out of the town.

Two of the key players were Spano and his business partner, John LaGiglio. They ran a trucking firm and knew zip about insurance. But that didn't stop them from starting up Specialty Risk Consultants, an insurance company that had one big customer, the Town of Cicero.

LaGiglio had dreams of going after the insurance business of other trucking firms, strip clubs and bars owned by his buddies, but the Town of Cicero was the only client necessary, authorities said. The town kept paying and paying, no questions asked.

LaGiglio didn't actually own Specialty Risk Consultants, not officially. The IRS was on his tail for back taxes, and if it became known that he owned a profitable insurance business--bam, here comes the IRS with its hand out. So LaGiglio's parents owned the business, at least on paper, the feds say.

To run the business, LaGiglio hired a guy named Frank Taylor, who knew insurance and, more importantly, was a crook himself. Over the years, Taylor has had a hand in everything from pornography to financial fraud. But Taylor had his own tax problems, making it difficult for him or LaGiglio to be seen getting salaries.

So they played the name game again, the feds say, this time setting up a company called Plaza Partners. The "partners" in Plaza Partners were the wives of LaGiglio and Taylor.

Every week, giving some reason, Specialty Risk Consultants would shift cash to Plaza Partners, prosecutors say. Then the wives would collect their weekly paychecks from Plaza Partners and hand the money right back to their husbands, the feds say.

Plaza Partners wasn't the only shell company set up to hide the money being stolen from Cicero. There was also Specialty Leasing Inc. It was a car leasing company.

Customers--some of the defendants and their families and friends--set their own payments, with Cadillacs being the favorite vehicle. And there was Specialty Financing, a loan company.

Here's how it worked, according to the feds:

No collateral?

No problem!

You don't want to pay all the loan back? No problem!

Spano's son-in-law got a $40,000 loan.

Didn't pay all of it back.

The brother of top mobster Marcello, Michael, got a $16,000 loan for a boat.

Didn't pay all of it back.

In all, nearly $2 million of Cicero's money went to Specialty Finance, IRS investigators estimate. And millions of dollars more were funneled through various other shell companies, making it possible for Spano to buy a Wisconsin vacation home, for the LaGiglios to buy an Indiana horse farm, and for that purchase of the Wisconsin golf course, the feds allege.

Attorneys for the alleged key players have disputed the prosecutors' version.

Loren-Maltese didn't know about any theft from the town, her attorney says. And where was the bribe to her to allow such thievery?

Other defense lawyers have emphasized that key government witnesses have cut deals for reduced sentences or lied under oath before.

One of the oddest cases of mob money laundering involved a friend of Spano's, loan shark James Inendino. Inendino goes by the nickname "Jimmy I," which stands for his last name, and for ice pick, which he reportedly once used on a man's eye.

In the early 1990s, according to court documents, Inendino helped launder millions of dollars in cash belonging to the late Outfit boss Anthony Accardo.

Why so much cash? Accardo, who was once Al Capone's bodyguard, had stashed it in his River Forest house, apparently for decades. Some of the money was so old--dating back to the Capone era--that the mobsters apparently feared it might no longer be accepted as legal currency.

Thanks to Steve Warmbir

Sunday, August 18, 2002

A century of Chicago mob bosses

Here's a thumbnail history of Chicago's mob leaders. Dates are approximate.

1910
"Big Jim" Colosimo (1910 to 1920). Chicago's vice lord runs brothels and nightspots, shot dead in 1920 at his popular restaurant. Death cleared way for Capone

1920
Johnny Torrio (1920 to 1925). Reserved boss, eschews violence, retires in 1925 after a fouled-up hit leaves him barely alive.

1925
Al Capone (1925 to 1932). Made Chicago mob famous. Perhaps the most successful mob boss ever, the subject of countless books and movies, done in by the IRS for tax evasion.

1932
Frank Nitti (1932 to 1943). With help from Jake Guzik, rebuilds the Outfit after Capone's departure. Commits suicide after he's indicted in 1943.

1943
Paul "the Waiter" Ricca (1943 to 1950). Has a son who's a drug addict and decrees no Outfit member can have anything to do with narcotics trafficking.

1950
Tony "Joe Batters" Accardo (1950 to 1957). Considered the most capable Outfit leader ever. Never spends significant time in jail. Always plays key role as adviser, but facing a tax case, he officially hands reins over to ...

1957
Sam "Mooney" Giancana (1957 to 1966). Attends the infamous Apalachin, N.Y., meeting that draws national attention to organized crime, draws even more focus on the Outfit with his flamboyance, shared a girlfriend with JFK, flees country for eight years, slain in 1975 at his Oak Park home.

1966
Sam "Teets" Battaglia (1966). Tough leader who is convicted in federal court same year, dies in prison.

1966
John "Jackie" Cerone (1966 to 1969). Considered one of the smartest underworld figures, a strong leader, then the feds pinch him.

1969
Felix "Milwaukee Phil" Alderisio (1969 to 1971). The mob killer is an unpopular leader, then he's convicted of bank fraud.

1971
Joseph "Joey Doves" Aiuppa (1971 to 1986). A Cicero mobster who ran gambling and strip clubs and grows into the job, with help from Accardo, Gus Alex and, later, Cerone. He is convicted of skimming profits from a Las Vegas casino.

1986
Joseph Ferriola (1986 to 1989). Heads the Outfit for only a few years before succumbing to heart problems.

1989
Sam Carlisi (1989 to 1993). Protege to Aiuppa and mentor to James "Little Jimmy" Marcello. Carlisi and his crew are decimated by federal prosecutions.

1997
John "No Nose" DiFronzo (1997 to present). Called mob boss by Chicago Crime Commission, but other mob watchers disagree.

The new 'Outfit'

Friends of Ours: "Singing Joe" Vento, Mario Rainone, James "Little Jimmy" Marcello, Al Capone, Anthony Accardo, Sam Giancana, Jospeh "Joey Doves" Aiuppa, Frank Nitti, John "No Nose" DiFronzo, Joe "the Builder" Andriacchi, Sam "Wings" Carlisi, Angelo "the Hook" LaPietra, Thomas & Christopher Guliano, Anthony Giannone, Ronald Jarrett, Anthony "the hatch" Chiarmonti, Anthony Spilotro, William Galioto, Joseph Lombardo
Friends of Mine: Anthony "jeeps" Daddino

In a secretly recorded conversation between two Chicago mobsters, the late "Singing Joe" Vento croons a love song of sorts about a top Outfit leader.

"You know the guy we met?" Vento asks mob enforcer Mario Rainone.

"Yeah," Rainone says.

"You think he's a nobody?" Vento asks.

"No, I know he's somebody," Rainone says.

"You better believe he's f------ somebody," Vento says.

That somebody is James Marcello.

From Chauffeur to Heir Apparent James "Little Jimmy" Marcello has climbed his way to the top of organized crime in Chicago through murder and mayhem, law enforcement sources say. But Marcello’s biggest edge in getting the top job may simply be his age - he's only 58, a full 15 years younger than the gray old men thought to be running the show while Marcello waits to get out of prison.

At the moment, "Little Jimmy," as Marcello is known, is sitting in a federal prison in Milan, Mich., serving out his 12-1/2-year sentence for racketeering, extortion and illegal gambling. But when he gets out next year, mob watchers say, he's expected to take on a big new job--head of the Chicago Outfit.

But if Marcello is a somebody, he's still not a really big somebody--and he never will be--at least not when compared with the infamous men who ran the mob before him, powerful hoods like Al Capone, Anthony Accardo, Sam Giancana and Joseph Aiuppa.

Marcello is doomed to be a lesser mob boss because the Chicago mob itself today is less of a power, squeaking along with much less money, far fewer members and a fraction of its old political influence.

Top 10In Capone's day, his boys raked in more than $100 million a year--more than $1 billion in today's dollars. Today, the Chicago Outfit pulls in just $100 million, according to law enforcement estimates.

In the 1980s, the Chicago mob had roughly 200 "made" members, each of whom ran his own various illegal businesses. Today, according to the FBI, the mob is down to about 50 made members--not enough hoods to fill up a small prison cellblock.

And in the mob's heyday, the tentacles of organized crime in Chicago, like organized crime families across the nation, reached deep into labor unions, city and suburban police departments, city halls and the Statehouse.

The mob at its most powerful was impressively diversified, drawing hundreds of millions of dollars from loan-sharking, pornography, bookmaking, prostitution, extorting legitimate businesses, looting union pension and insurance funds, ghost payroll jobs in government, burglary, profit skimming at casinos, robbing jewelry salesmen, bankrolling drug dealers and whatever else somebody could dream up to grab a buck.

Who's the MOB BOSS lite of the Chicago underworld?

For generations, there was seldom any question. Capone was the man. Then Nitti. Then this guy or that guy. Some were unfamiliar names to the public, but ask anybody paying attention—the cops, the U.S. Justice Department, some punk breaking into houses trying to make his Outfit "bones" - and they could tell you exactly who was boss of the mob. No longer. If there is a top boss now, he's more of an underworld boss lite. Law enforcement sources, disagreeing even among themselves, say one of these three men is in charge.
(Some mob experts believe Lombardo runs the mob now. He's 73. Other mob watchers say John ''No Nose'' DiFronzo runs the show. He's also 73. Still others say it's Joe ''the Builder'' Andriacchi. He's 69.)
Today, the mob is still into a lot of that stuff, at least along the edges, but it relies heavily on a single source of income--illegal gambling. The Chicago Outfit is simply too decimated to be doing much more, brought low by relentless federal prosecutions and changing times.


In the last 20 years, federal prosecutors in Chicago, armed with evidence produced by the FBI and Internal Revenue Service, have put mob leader after mob leader behind bars--more than 150 made members, associates and workers.

Mob boss Sam "Wings" Carlisi, for whom Marcello worked as a chauffeur, died in prison in 1997. (Carlisi was sentenced to serve 13 years for convictions on mob racketeerings, loan sharking and arson in connection with an illegal gambling business in the Chicago area and the West suburbs.) Mob boss Joseph "Joey Doves" Aiuppa went to prison in 1986 and died in 1997, a year after his release. (Joey Doves started as a gunman for Capone. He served time for skimming profits from the Mob's interests in its Las Vegas casinos.) Top mob counselor Angelo "the Hook" LaPietra went to prison in 1986 and died in 1999, shortly after his release. ("The Hook" was a member of the Mob's 26th Street Crew that patrolled South of the Eisenhowser Expressway including the gambling dens of Chinatown and Chop Shops on the Southside.) Top mob lieutenant Joseph "Joey the Clown" Lombardo went to prison in 1982 and was released in 1992.

What's left of the mob's leadership is getting old. This, of course, assumes that anybody is really in charge. Adding to the Outfit's problems, many top mobsters moved from the city to the suburbs years ago, abandoning those tough old Chicago neighborhoods that were always the mob's best recruiting grounds. New talent can be hard to find.

The Chicago Outfit today makes most of its money from illegal gambling. Those video poker machines in the back of local bars and social clubs feed millions a year to the mob. Illegal sports gambling, whether through a neighborhood bookie or an offshore betting operation somewhere in Central America, feeds millions of dollars more to the mob.

The mob also continues, though at a slower pace, to finance drug deals, engage in loan-sharking--lending money at exorbitant rates to those people no bank will touch--and to wield influence in organized labor, despite a strong federal effort to purge the mob from such unions as the Laborers and the Teamsters.

Indeed, the mob's continued influence within unions remains so strong that it--along with the mob's influence in politics--will be the subject of a future installment of the Chicago Sun-Times' "Crime, Inc." series.

As the sons of old-time mobsters pick up law degrees and MBAs, the new Chicago mob also has developed a fondness for setting up quasi-legit companies, such as insurance firms, designed to rip off clients at the first opportunity.

One example the feds point to is Specialty Risk Consultants, a reputed Outfit insurance company that is accused of siphoning more than $12 million out of the town of Cicero.

That scheme, though, didn't fare well on two fronts. Eight reputed players in the scam, including Cicero Town President Betty Loren-Maltese, are on trial in federal court, and the jury in the case is expected to start its seventh day of deliberations Monday. (On January 9th, 2003, Betty Loren-Maltese revieved a sentence of eight years in prison from U.S. District Judge John Grady)

While the scam showed some sophistication, the profits from it weren't invested well. Key members of the scheme are accused of plowing millions of dollars into an isolated Wisconsin golf course that they had hoped to turn into a casino. The feds dubbed it the mob's "Fantasy Island," and that's all it ever was. No casino ever opened, and a white elephant remains.

Though the Chicago mob's top leadership has been decimated, young Turks have begun to turn more to violence, threatened and real, according to FBI experts and other law enforcement sources. Most obviously, two men have been shot dead in mob hits in recent years, but there's also the cheap day-to-day viciousness.

Consider, for example, the business tactics of the Giuliano brothers, Thomas and Christopher, who were convicted in 1999 of using muscle--beating a man up--to force the man to pay gambling debts. The victim owed Thomas Giuliano $75,000 and was told that amount would skyrocket to $200,000 in about 30 days if he didn't pay up. Thomas Giuliano, 33, allegedly warned the victim that he should show up to one meeting or "I'm gonna come through the window and grab you." When the brothers finally did track down their man, at his place of work, Christopher Giuliano, 29, grabbed the man's neck with both hands and began pushing his head into the wall. Fortunately, FBI agents, who had the business under surveillance, rushed in and saved him.

Or consider the case of alleged mob soldier Anthony Giannone, from suburban Bartlett, who made this colorful threat to a man who owed him $55,000: "When I find you, every day it rains, I'm gonna make you remember me." The implied threat, authorities explained, was that Giannone would break the man's bones. And even after the victim healed, his mauled body would ache when it rained.

Who's the boss?

Is it Joey the Clown?

Or No Nose?

Or the Builder?

The fact that mob watchers are not even sure who's running the Chicago Outfit these days--Lombardo, DiFronzo or Andriacchi--is seen by some as a sign of great sophistication.

"That very fact that you need to ask that question shows how effective the Outfit is," argues St. Xavier University Professor Howard Abadinsky, who has written on Chicago organized crime.

Or it could mean there is no clear leader willing to step up and take the heat from the feds, other observers argue.

The Chicago mob, Abadinsky points out, wisely keeps a low profile, especially compared with the New York mob, which has a way of gathering headlines through gunplay. Or as then mob boss Tony Accardo once told FBI agents in the early 1970s, "We're gentlemen in Chicago. They're savages in New York." But there have been those two mob hits in the last three years. In 1999, mobster Ronald Jarrett was shot dead outside his Bridgeport home. Two years later, Anthony "the Hatch" Chiaramonti was shot outside a Brown's Chicken & Pasta in south suburban Lyons. And so, some observers wonder if the violence will escalate over turf disputes.

Abadinsky, for one, doubts it. "They've been successful, they've been controlled, they are much more hierarchical," he said. "They've been able to control the kind of violence that would generate attention."

To rise to the top of any organization, you have to build an impeccable resume and pay your dues. And it helps to have family in right places.

By these standards, law enforcement sources say, James Marcello is perfectly positioned to take command of the Chicago Outfit. Especially given his relative youth--he's 58.

He worked for Chicago's Department of Streets and Sanitation as a laborer from 1960 to 1973, but it has been his other jobs, like working as the No. 2 man for "Wings" Carlisi, that spoke to his true talents.

Marcello, who lived in the Lombard area, has shown he's crafty and paranoid about surveillance. He's feared. And stone-cold ruthless.

At his trial, prosecutors said Marcello took part in planning the hit of a mob associate, Anthony "Jeeps" Daddino, which never took place, and was a prime mover behind the unsuccessful torching of the Lake Theatre in Oak Park. But Marcello is best known in mob circles for his alleged part in the slayings of the Chicago mob's man in Las Vegas, Anthony Spilotro, and Spilotro's brother Michael.

In 1986, the Spilotros were stripped to their underwear, beaten senseless and buried alive in an Indiana cornfield. No one has ever been charged in the case, but investigators have long believed Marcello helped set up the brothers for the hit.

Marcello's brother-in-law is former Chicago police officer William Galioto, whom the Chicago Crime Commission named a mob lieutenant in its 1997 organization chart.

Galioto was an investor in a new movie studio being planned on the West Side in 1995. The project attracted front-page headlines--and fell apart--when Mayor Daley killed a $5.5 million low-interest loan for the studio after learning about the mob ties. And Marcello's nephew is John Galioto, business manager of Laborers' Local 225 in Des Plaines until it was forced into trusteeship in the late 1990s because of alleged ties to organized crime and extravagant spending. Both Galiotos have denied any connection to organized crime.

Even without such impressive connections, Marcello's name is enough to invoke dread. Take, for instance, this secretly recorded conversation between Richard Spizziri, who worked for Marcello, and a man behind on juice loan payments.

"I don't want to give this to Little Jimmy," Spizziri says. "If I give this to Jimmy, he's gonna send somebody. He's gonna send f------ . . . f------ nine guys out, and they will find you."

During another chat, Spizziri describes the talents of the dedicated professionals to be dispatched.

"I don't want youse to get hurt," he tells the debtor. "I really don't want you to get hurt, 'cause they don't send f------ people like Sean," Spizziri says, referring to a big guy who works for him.

"Sean's a f------ goof. . . . Sean does what you tell him to do, a couple of slaps and it's over.

"These people, when they send these people, they like what they're doin'. This is their job.

"They love it."

Thanks to Steve Warmbir