How Mobsters Live the High Life without Getting Caught

On The Sopranos, 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

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The new 'Outfit'

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.

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.

In 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."

Reported by Steve Warmbir

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Jewel Heist Fugitive "Cherry Nose" Brown is Captured by the @FBI

A 76-year-old fugitive accused of belonging to a $5 million jewel theft ring masterminded by Chicago's former chief of detectives was arrested in the suburbs outside Washington.

William "Cherry Nose" Brown was picked up by agents from the FBI's Washington field office in Woodbridge, Va., the FBI said in a statement. It said that the arrest was without incident.

Prosecutors say Brown was part of a ring of thieves led by former chief of detectives William Hanhardt that stole $5 million in gems, jewelry and watches in eight states over a decade. Hanhardt, a tough, crime-busting cop in his heyday who later became a technical adviser to Michael Mann's 1980s television series "Crime Story," was indicted in October 2000 along with five other men.

All but Brown have pleaded guilty and await sentencing.

Brown, who formerly lived in Gilbert, Ariz., has been a fugitive until now. Details of what he was doing in suburban Washington and how the FBI discovered his presence there were not immediately available.

The charge against Brown is not as extensive as those against other members of the ring. But he is charged with conspiring with Hanhardt and the others to transport stolen luxury watches in interstate commerce.

Prosecutors say that on Oct. 2, 1996, Brown was among ring members who trailed jewelry salesman Paul Lachterman from suburban Chicago to a Chesterton, Ind., restaurant. There, Brown allegedly served as a lookout while others opened Lachterman's trunk and removed a box of watches.

Ring members knew Lachterman sometimes traveled with as much as $500,000 worth of watches. On Oct. 4, 1984, $300,000 worth of watches had been stolen from the trunk of his car in suburban Milwaukee.

In the 1996 incident, though, the watches in the trunk had been planted there as bait by FBI agents who were already watching the gang.

The thieves drove the box a short distance, checked the weight and immediately returned it to Lachterman's trunk. Prosecutors say the light weight may have suggested the contents were not worth stealing.

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Hanhardt Admits Masterminding Jewel Theft Ring

Wearing the bright orange jumpsuit of a federal prisoner, the Chicago Police Department's former chief of detectives pleaded guilty Thursday to masterminding $5 million in jewelry thefts.

William Hanhardt, 72, admitted to capping a 33-year career as one of the city's boldest crime-busting detectives by leading a band of thieves who pulled eight heists in seven states over more than a decade. Hanhardt agreed to pay $4,845,000 in restitution for stolen jewelry, gems and watches and faces as much as a dozen years in prison.

"It's remarkable that a person who was chief of detectives of the Chicago Police Department admits to being part of a racketeering conspiracy," U.S. Attorney Patrick Fitzgerald said afterward. "There's no controversy over whether Mr. Hanhardt is guilty -- he stood up in court and said that today," Fitzgerald said.

Hanhardt, who took an overdose of pills in what doctors called a suicide attempt only a week ago, pleaded guilty to conspiracy to engage in racketeering and conspiracy to transport stolen jewels over state lines. While he pleaded guilty to the charges in the indictment, he made a point of saying he disagreed with some of the additional details of the case as outlined in court by federal prosecutor John Scully.

Which side federal U.S. District Charles R. Norgle Sr. ends up believing could have an effect on exactly how much time behind bars Hanhardt gets. Norgle set the sentencing for Jan. 31 and both sides said they might call witnesses.

Among other things, Scully told Norgle that two "active" Chicago police officers, one a detective, had provided information that was helpful to Hanhardt and his henchmen. Asked after the hearing about the term active, federal prosecutor John Podliska said it meant "active at the time." He declined to comment on whether the officers remain active on the force. Fitzgerald said all the information the police should have has been provided.

Prosecutors had said previously that Hanhardt, although retired from the force, had been able to make use of police computers to get information about such matters as car rentals by jewelry salesmen. Many of the thefts were from automobiles parked by unsuspecting salesmen.

Hanhardt was among six men indicted on the charges in October 2000 as the government surfaced its long simmering investigation of the once powerful police official. Four others also have pleaded guilty and a fifth defendant, William "Cherry Nose" Brown, has never been captured.

Federal law sets a maximum sentence of 25 years in prison and a fine of at least $500,000 for Hanhardt's two offenses. But under sentencing guidelines, he is likely to get somewhere around 12 years.

Law enforcement officials say the first of the heists took place in Wisconsin in 1984, two years before Hanhardt retired from the force. "It's our evidence that for decades Bill Hanhardt has been a corrupt policeman," said Gary Shapiro, former chief of the federal organized crime strike force and now first assistant U.S. attorney.

The plea comes a week after Hanhardt was rushed to a hospital from his suburban home where he was found unconscious. Doctors determined that he had taken an overdose of a powerful pain killer in a suicide attempt. He was arrested and placed in the psychiatric unit at Bethany Hospital in Chicago. Since then, he has been moved to the government's Metropolitan Correctional Center.

Federal prosecutors say that the heists masterminded by Hanhardt took place in Arizona, California, Michigan, Minnesota, Ohio and Wisconsin. While the gang actually got more than $5 million worth of goods, they had targeted more than 100 jewelry salesmen and $40 million in jewelry, gems and watches, according to federal prosecutors.

Prosecutors said the gang's operations were among the most sophisticated they have ever encountered, with smoke grenades, fake beards and mustaches, listening devices and other high-tech paraphernalia. "William A. Hanhardt directed one of the country's most successful and long-lasting organized-crime schemes," Scully told the judge.

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Sammy Gravano and the Devil Dogs

Mob rat Sammy Gravano had a new name, a new home, and a lock on Arizona’s Ecstasy market. Then a gang of skinheads brought him down.

When 18-year-old Jordan Jarvis took off out of the keg party at 2658 East Gemini Street around 11:30 p.m. Memorial Day weekend in 1999, he was shaking. Streaming out of the house behind him in a blind rage were about 15 steroiders from Highland High in the Phoenix suburb of Gilbert. These guys called themselves the Devil Dogs, and they were enormous. As they came after Jarvis, a couple of them stripped off their T-shirts.

“Emergency!” someone yelled. “Get that motherfucker!”

Jarvis ran to the street and almost cried with relief when he saw his friend Charles “Bubba” Cairns, 19, in his black open-top ’76 International Harvester Scout truck, the engine running. “Go, dude, go!” Jarvis yelled to Bubba, jumping into the front seat and buckling himself in. But then Bubba’s friend Alisha Larson, 17, lost her shoe as she was climbing into the backseat. She bent to pick it up.

The Dogs were upon them, screaming like lunatics. “You’re the motherfucker who beat up Riley Gilbert!”

“No, man,” Jarvis said. “I don’t even know who that—”

A fist slammed in out of the darkness and shattered Jarvis’s cheekbone. The Devil Dogs swarmed around the truck. They grabbed at Jarvis. His seat belt held him in. So one of them, a kid named Kevin Papa, climbed into the Scout, straddled Jarvis and began smashing his face, over and over. “Stop it! Stop it!” screamed 17-year-old Beth from the backseat. She tried covering him with her body, but the Dogs pulled her away and then took turns hammering his face. To Beth the flat smack of fists pummeling Jordan Jarvis “sounded like machine-gun shots.”

The attackers howled like a pack of mongrels. As they kicked and clawed and punched, they spit out expletives: “Faggot!” “Piece of shit!” “You fucking niggers!” It didn’t seem to make much difference that Jarvis and Bubba were both white.

Even though he was in a choke hold, Bubba managed to get the truck into gear. “White power!” someone yelled as they peeled away down Gemini Street. Beth looked down—her legs were spattered with blood. When she checked on Jarvis, she almost fainted. His face was unrecognizable, a red and purple mass. Jarvis’s nose was crushed, pushed flat into a mangled left cheek. Blood soaked his shirt, the seats, the windshield. As Jarvis fought to stay conscious, he thought, I’m going to die.

As they raced away, Jarvis dimly heard a sound fading behind them—the strange sound of human children barking like dogs.

Twenty miles to the west, a short, stocky 54-year-old man with graying hair relaxed with his family in Tempe, quietly enjoying the holiday. A few of his neighbors still knew him as Jimmy Moran, owner of a local construction firm. Close friends and family knew him by another name: Salvatore Gravano. The Bull.

Few would question his status as the most notorious Mob turncoat in history. After a 20-year career as an enforcer, hitman, and eventually underboss of New York’s Gambino family, Sammy Gravano turned informer in 1991. He nailed 39 mobsters and landed Gambino boss John J. Gotti in Federal prison for life. Despite admitting to 19 murders, his searing insider testimony earned him a sweetheart deal with the government. Then, in the kind of second act that Americans—especially mobsters—aren’t supposed to have, Gravano relocated to Arizona and quickly returned to the work he knew best.

In rebuilding a crime network from the ground up, Sammy the Bull didn’t reach out to the old-world Mafia. Instead, authorities say, he joined together with a new breed of vicious young suburban white-boy gangsters led by Michael Papa, 23, a brilliant and charismatic Arizona State University premed student, and Gravano’s own son, Gerard, 23. With Sammy as godfather and venture capitalist, and muscle provided by the violent white supremacist gang the Devil Dogs, the group sought to dominate the Phoenix market for a drug that burst like a supernova in the 1990s: Ecstasy. At its height the Gravano-Papa cartel was pulling in about $1 million profit per month.

Sammy and the Dogs. Together they rose, and together they fell. Gravano couldn’t have known it on that quiet Memorial Day weekend, but the Gemini Street attack would eventually set forces in motion that even the most powerful former Mob man in America would be unable to control.

The Bull Gets a New Life

Salvatore Gravano’s first hit was in 1970, on one of his closest childhood friends. He murdered the guy in cold blood as a favor to a more powerful friend, who lusted after the guy’s wife. Years later, some say, the Bull stood by calmly and watched his wife Debra’s brother get shot, a Mob murder he helped plan.

“If evil had to take on a form or a shape, Sammy is it,” said Rosanne Massa, the sister of one of Gravano’s murder victims. But to prosecutors he was the golden boy. And so, on April 19, 1995, Gravano stepped through the doors of an Arizona prison and into the Federal Witness Protection Program after just five years of jail time and $250,000 in fines. He still had millions, and a new taxpayer-supported life to spend them on.


His Fed handlers constructed a new identity for him. “James Moran” would hail from the backwater badlands of South Dakota, as far from the killing streets of Brooklyn as you can get. Gravano even had minor cosmetic surgery, a nip and tuck around the face on the government’s dime. “It was either for vanity or to disguise himself from Gotti’s assassins, but either way it didn’t work,” said a law-enforcement source. “He was still ugly, and he was still recognizable.”

In 1996, a year after he left prison, Gravano left the Witness Protection Program. “Too many restrictions,” he’d say later. “You couldn’t have contact with your family or anybody.”

Nobody came out of witness protection like Sammy. He produced the bestseller Underboss: Sammy the Bull Gravano's Story of Life in the Mafia, his chronicle of Mob life. He got to keep half of the $850,000 book deal—in violation of New York’s Son of Sam law prohibiting criminals from profiting from their exploits. He was interviewed by Diane Sawyer on Turning Point. He was the world’s first incognito with a press agent.

He liked Arizona. But he had to have his family around him. After all, he thought, what’s more important than family?

The Neighborhood Goes to Hell

When Vince Zajdzinski saw a middle-aged couple and a realtor across the street from his house, looking over the dilapidated acre-and-a-half property at 1207 East Secretariat, he recognized Sammy Gravano right away. “He has such a distinctive build,” Zajdzinski says. “He’s a small man, five-six, but he’s got that boxer body.” Zajdzinski, 62, a builder and former Chicago fireman, had just watched an A&E profile on Gravano.

Zajdzinski didn’t let on that he knew who his new neighbor was. Gravano introduced himself as Jimmy Moran. Sammy soon hired Zajdzinski to gut and rebuild his new home, a $500,000 job. Poring over blueprints one evening, Zajdzinski decided it was time for Gravano to come out into the open.

“Are we going to be putting gun turrets into this place or what?” he asked.

Sammy laughed. “You know who I am?”

Zajdzinski stared at him.“You’d be a hard guy not to know.”

The job dragged on. Gravano, Zajdzinski says, was maddening as a client, obsessive over details and not particularly knowledgeable about construction. One afternoon, after being informed by Zajdzinski that “he didn’t know shit,” the Bull charged. Lunging across the living room, Gravano whipped out a pistol and put it to his neighbor’s head. Gravano’s wife, Debbie, witnessing the scene, froze.

“Look, if it will make you feel better,” Zajdzinski said coolly, “just go ahead and shoot me.”

For a beat Gravano hesitated. Then he backed off and stalked away. “You’re not going to make me go back,” he snarled.

The incident didn’t break up the friendship. Months later Zajdzinski took Gravano to his evangelical church. When the minister announced the altar call, summoning anyone in the congregation to be born again, one man raised his hand.

The serial killer with 19 notches in his belt, Sammy the Bull.

Gravano soon gathered his extended family at the sprawling eight-bedroom Secretariat house—Debbie, Gerard, daughter Karen, Karen’s boyfriend David Seabrook, and a revolving series of friends and cousins. Sammy wanted to be surrounded by neighborhood people who still had his back.

Debbie and he had divorced, but they made a pact. Sammy could have his family life, but he also had to keep his own apartment a few miles away. He would have to spend nights at his place. That way if Gotti and company sent assassins, the hit wouldn’t take out the whole family.

Back in the Game

Phil Pascucci looked like what he was, East Coast Italian, so Gravano was standoffish toward the 35-year-old hustler when he met him in late 1997. After all, there were still Gotti allies out on the street. “I’m not their favorite person,” he told a friend. “They could motherfuck me up and down.” But gradually Sammy thawed out. According to affidavits obtained from defense sources, the two began a tight three-year relationship, during which Pascucci acted as part business partner, part surrogate son. Soon enough Gravano asked Pascucci to help him put together a large-scale pot purchase.

The practical-minded Pascucci balked. Too tough, he said. Instead, he steered Gravano in another direction: Ecstasy.

Gravano had never heard of the drug. Pascucci painstakingly explained the market in E to Gravano. How you could make a pill for 50¢ and sell it wholesale for $9 or $10. And how you could move 30,000 or 40,000 tabs a week.

Pascucci had a source, a lab in Texas. In early 1998 Sammy took over wholesale distribution, while Pascucci handled supply. As long as they were making money together, Pascucci was Sammy’s fair-haired boy. Gerard, Sammy confided to one of his men,“could never come in and be involved…because he doesn’t have what it takes. Some people do, some people don’t.” But when Pascucci’s E connection dried up in mid-1998, Gravano turned cold toward his surrogate son. It was time for Gravano’s real son to step up and become Daddy’s new supplier.

Like Father, Like Son

Gerard Gravano resembled his dad: short and squared-off, with deep-set, heavy-lidded eyes. But the kid seemed lost since moving to Arizona three years earlier. He had a lot to live up to. Few in his family thought he had his dad’s brains or street savvy. So when opportunity knocked, Gerard kicked open the door.


It was late 1998 when Gerard Gravano met a fellow transplanted New Yorker named Michael J. Papa in the VIP lounge at a Phoenix hot spot. Papa was one of the local club scene’s biggest E dealers, but he didn’t hawk his product on the dance floor like some street skell. He was way smoother than that.

A Long Islander from Jericho, New York, the tall and good-looking Papa had been captain of his high school football team, and a punter for the University of Buffalo in ’94. Now he was a 4.0 student at ASU with a thriving sideline. He was always holding—good stuff, too, foreign-made Ecstasy pills stamped with logos borrowed from corporate America or Hollywood—Calvin Kleins, Nikes, Pink Pussycats.

Ecstasy dealers were the new royalty of the club scene. “When Mike Papa and his guys came into a club,” said a young female ASU student who frequented the rave scene, “it was like the sea parted.” It didn’t hurt that Papa was bulked up on steroids and bronzed from tanning salons. The guy looked the part.

The Ecstasy scene in Phoenix seemed to bloom overnight. Fewer than one thousand pills had been confiscated in the whole state in 1999. A year later that number climbed to 75,000 in one week in the Phoenix area alone. Suddenly MDMA, 3, 4-methylenedioxymethamphetamine, a synthesis of mescaline and speed, was everybody’s favorite drug.

When Gerard Gravano met him, Mike Papa already had an Ecstasy distribution network in place centered around the clubs near ASU. He was moving up to 1,000 pills a week, with a markup of at least $10 per pill. If only he had the right backing, he told Gerard one night, he could be moving 25,000 a week.

In response, Gerard told Mike Papa who his father was.

The Punk Meets the Godfather

Sammy Gravano began providing seed money and leadership for Mike Papa’s Ecstasy organization in spring 1999. When he was around the Bull, the normally confident Papa became tongue-tied, staring at the floor as he talked. According to one member of Gravano’s inner circle, “Sammy would go up and down with Papa. One week he would be in, Sammy liked him; the next week he’d say, ‘This kid can’t be involved with us.’” But the upside was too great to resist. The arrangement was simple: Mike Papa would offer his supply of pills; Sammy would offer the weight of the Gravano name. And if further intimidation was necessary, Mike Papa would summon a horde of barking, shatteringly violent skinheads to do his bidding.

Papa had first encountered these teen freaks through his friend Jovan Isailovic, 20, a wild-eyed Czech. After meeting at Gold’s Gym in the East Valley suburb of Gilbert, Mike and Jovan became inseparable—lifting weights together, shooting steroids together, selling drugs together. For kicks they would sometimes get together with a bunch of Jovan’s sketchy friends, load up on drugs and booze, and engage in their own brand of extreme cage fighting, usually in an empty swimming pool. Two guys at a time would enter the pool and proceed to beat each other bloody. The one who could pull himself out afterward was the winner. Jovan Isailovic fought under the moniker “the Iceman.”

Before long Papa had more than just a close friend: He had an enforcer. “Mike Papa could say, ‘Jovan, sic ’em,’” says former Gilbert officer Mike Sanchez, “and Jovan would just pound the crap out of whoever it was without even thinking about it.” But there was more to the relationship. Jovan, like many of his cage-fighting buddies, had been a charter member of a group of Highland High School white-supremacist muscleheads called White Power. Since 1993 each class had seen its own gang, and Jovan had kept close ties to each. Every year they called themselves something different—Chindo Squad or A-Team or Dog Pound. The class of ’99 found its name in an epithet the Germans threw at the Marines in World War I: Devil Dogs.

Bad Dogs

Jovan’s pretty, flame-haired little sister Jovanka, 17, started going out with Mike Papa’s little brother, Kevin, while they were both students at Gilbert’s Highland High. At five-seven Kevin was smaller than his brother, but that only made him look up to Mike more. He was dying to prove himself to his older sibling.

On his 17th birthday, Kevin’s mom, Mary Ann Papa, saw the words “Devil Dogs” scrawled on a card her son received from Jason Lee, a hulking six-one, 245-pound skinhead friend of his.

“What does that mean, what Jason wrote?” Mary Ann asked.

Kevin just laughed. “Jason is an idiot,” he said. But at Highland, Kevin was spending more and more of his time with Lee and the other Dogs, often wearing a uniform ripped from the skinhead book of style: white sleeveless “wife beater” Ts, jeans, black Doc Marten boots with fat white laces. Even though much of the group’s hatred was aimed at blacks, one of its members, Marquis Wonsey, was the child of a white parent and a black one. “We’re OK with Mark,” said one Dog. “He’s no gangsta. He dresses white and he talks white.”

They were a loose group, perhaps 20 core members, but they liked to make their impact felt—with their fists. “We go out and hunt pussies and homos,” one Devil Dog said in June 1999. The violence of the random beatings seemed to increase every weekend. One victim lost a tooth in the shoe of an attacking Devil Dog. Another showed up at the Gilbert police department with a boot-print-shaped bruise on his forehead. But it was the beating of Jordan Jarvis on Memorial Day weekend—outside the home of Jovan and Jovanka Isailovic—that got the cops interested for real. The kid’s ruined face was impossible to ignore. Gilbert police antigang officers Sanchez and Terry Burchett began hauling in the Dogs, including Kevin Papa, for questioning. Witnesses fingered Kevin as the one who was “dropping bombs”—throwing great looping punches—on Jarvis that night. He admitted that the Devil Dogs jumped victims “almost every week, especially at concerts.”

As the investigation widened throughout the summer of 1999, two things became clear. If you wanted Ecstasy in Gilbert, the guy to see was Mike Papa. Also, Mike Papa was connected. Heavy connected. Mob connected.

The cops couldn’t believe what they were hearing. “None of us would’ve ever believed these kids were tied to former mobsters,” recalls Sanchez. “It was too good to be true. It was huge.” It was also time to call in reinforcements.

Consolidating the Drug Market

Michael Papa liked to boast. “I’ve got a new boss,” he started saying that July, dropping the name Gravano as a veiled threat.

He also began crowing of a connection “high up in the Israeli Mafia.” Papa’s seemingly bottomless supply of E came from a smuggling organization run by a 45-year-old Israeli named Jacob “Koki” Orgad. It was made in Israeli labs. The ring pumped at least 9 million pills into the U.S. market from 1997 to 1999.

Orgad specialized in hiring white trash from Middle America to act as drug mules. Based in L.A., Orgad had tentacles in every major metropolitan area in America. His man in New York City, Ilan Zarger, became Michael Papa’s source for drugs.

That summer Mike Papa and Gerard Gravano began a campaign of consolidation. Prompted by Sammy, backed by Jovan and the Dogs, they clawed their way into a bigger and bigger share of the Ecstasy market.

Early in July 1999, Gerard and Mike Papa waited in darkness outside a club called Pompei near ASU. Inside the club was James Keller*—one of the most visible Ecstasy dealers in Phoenix, a flamboyant, cash-flush kid who wore a long black leather duster, even in the stifling Arizona heat.

When Keller stepped out of Pompei that night, Gerard Gravano suddenly appeared out of the shadows. Gerard wasn’t physically intimidating, but lately he had been packing. Mike Papa materialized behind him. Sweeping a steroid-enhanced forearm around Keller’s windpipe, Papa caught the dealer in a naked choke hold, a classic Brazilian jujitsu move.

“This is our fucking turf!” Gerard screamed into the guy’s face.

Mike Papa dropped the slumping dealer to the pavement. Then he and Gerard stomped Keller’s face to a pulp.

The heavy muscle was repeated all over the rich drug bazaars along Scottsdale Road. The Phoenix Ecstasy market had been a series of small duchies, each run by an individual dealer. That summer it became a single empire, run by Sammy the Bull.

Keller turned out to be a Zarger man, and he whined to New York about his treatment. Zarger sent a burly bodyguard named Macho to Arizona and talked openly about having Sammy “whacked.” Weller and two Zarger goons demanded a meeting.

The dispute was settled in Cosa Nostra fashion, with a sit-down in mid-July 1999. Practiced in the art of intimidation, Sammy made sure it took place on his own stomping ground—Uncle Sal’s (as in Salvatore Gravano) Italian Ristorante, the Scottsdale place where Debbie and Gerard worked and which served as a de facto headquarters for the Gravano family.

Flanked by Mike Papa and Gerard, Sammy was in rare form. “I own Arizona,” he said. “It’s all locked down. You can’t sell pills here without going through me.”

Maybe it was the threat of violence. Or maybe it was the cheap red wine. But the Zarger people caved. Sammy agreed to let them continue their business; they agreed to give him 25¢ from every pill they distributed in the state. The threat of a hit vaporized. If Gerard and Mike hadn’t had a monopoly on the Phoenix Ecstasy market before this, they sure did now.

High on the Hog

The money rolled in in fistfuls, and it went out just as fast. Everyone had a new Lexus—Sammy, Debbie, Gerard, David Seabrook. “It looked like a friggin’ Lexus dealership over there,” said one neighbor of the house on Secretariat.

The renovation had transformed the place into a $750,000 showcase, all built to Sammy’s order. A custom front door of knotty alder, complete with a speakeasy-style peep window. Miniature horses in a paddock out back. A swimming pool complete with waterfall and 65 tons of surface-select boulders.

The pool helped support Sammy’s cover as a pool excavator. His company, Marathon Development, stood out amid the junked-up industrial park landscape, a neat pea-gravel yard around a cappuccino-colored office. Most days Sammy sat at a desk at the rear, near the access to the parking lot, where he could watch the front and back doors at the same time.

Michael and Gerard sometimes did 25,000 pills a week, and they were branching out to Columbus, Albuquerque, San Francisco. The cash was flowing. But as any dealer knows, cash can be as much of a headache as the drugs. It has to be dealt with.

On the night of October 25, 1999, Michael Papa left the office of Marathon Development. Driving with his girlfriend, Laurel, in her black Nissan Altima, he headed north toward the club district of Scottsdale. They never made it.

Phoenix police officers Ronald Sterrett and Rose Choulet stopped the Altima under the guise of investigating a traffic violation. They searched his wallet. “What’s this?” Sterrett asked. A deposit slip showing $17,729 placed in a Wells Fargo account.

“I just invested $15,000,” Papa quickly explained. “I became part owner of a pool company called Creative Pools.” It was a subsidiary of Marathon Development. The cops gave Papa a citation for driving with a suspended license. They kept the deposit slip: hard proof of a business relationship with Gravano.

Business continued without a hitch. Throughout this period, Sammy Gravano continued warm relationships with his contacts in the federal government, many of whom made it a practice to drop by whenever they were in Arizona. They might have been impressed by the number of FedEx packages coming into Sammy’s firm—shipments of Ecstasy, mostly from New York.

In September 1999, Gravano spoke at a conference of FBI supervisors in Phoenix. Fifty or so Feds listened as Gravano talked about lessons gleaned in his career as a Gambino gangster. When Gravano returned to Marathon Development that afternoon, he never noticed a tiny pole camera mounted in the parking lot, which had a peeking view into his office.

Someone was watching.

What started as the Devil Dogs beating case had blossomed into a full-blown investigation run by the Phoenix police and the DEA. Authorities painstakingly compiled surveillance reports and 16,000 wiretapped conversations. Heat was coming from inside, too—Zarger and Orgad had both been arrested that summer, and federal authorities were turning their distributors into informants, using classic connect-the-dots techniques to trace the drugs to Arizona. But if anything, Mike Papa became more reckless. His most brazen move furnished investigators with its most solid link between the Devil Dogs and Sammy Gravano’s E cartel. On the night of January 8, 2000, wiretaps monitored Mike Papa’s desperate calls for help to shake down Kevin G. Purser, 37, owner of a Tempe restaurant, for payment of a debt. Soon the parking lot was full of Papa’s closest allies. When he strolled inside to make his play, about a dozen buddies walked in with him.

Mike Papa and his goon crew were in the restaurant for almost a full hour. (Kevin Purser denies any shakedown occurred.) All during that time, cars and trucks driven by high school–age white males with shaved heads slowly circled the parking lot, cavalry support for the ground troops inside.

Snaring a Bull

Like many small men, Sammy owned a small dog—a Chihuahua he insisted was a miniature Doberman. It was barking in the early morning of February 24, 2000, when a small army of Phoenix police and DEA agents swept down on Gravano’s apartment. They confiscated guns, marijuana, and a cache of Viagra.

A few miles to the south, a police tactical team in full protective gear used a steel battering ram to smash down the alder door of the Secretariat house. All across the East Valley, the busts went down simultaneously. Sammy Gravano. Debbie Gravano. Karen Gravano. David Seabrook. Gerard Gravano. Mike Papa. Jovan Isailovic. Forty-five people in all.

During initial court appearances, Gravano father and son struck a defiant tone. Gerard complained bitterly of lack of access to counsel. “You might as well line us up and shoot us in the head,” he said. Sammy was positively dismissive. “In my criminal life,” he told the judge, “this is a minor thing.”

Representatives from the Arizona state attorney general’s office asked for $5 million bail, declaring the former hitmen a danger to the community. The judge agreed. Gravano’s family, Mike Papa, and Jovan Isailovic were released on bond, but Sammy himself fell into the hands of Maricopa County’s famed Joe Arpaio, the self-proclaimed “toughest sheriff in America.” Sheriff Joe dresses his inmates in lipstick-pink boxer shorts, which, he says, curtails their macho tendencies. Sammy the Bull in pink undies. It was an image to warm the icy cockles of John Gotti’s heart.

Aftermath

Shortly after the February 24 Ecstasy-ring bust, Kevin Papa finally faced sentencing for the Devil Dogs’ beating of Jordan Jarvis. Five of the Devil Dogs were charged, convicted, and received jail time. Kevin Papa got the harshest stretch of all—two and a half years in the state penitentiary in Yuma.

Over 18 months, Jarvis himself endured repeated bouts of reconstructive surgery—three operations, with more to come. His doctors scraped bone spurs from the misshapen planes of his face and took cartilage from his ear to rebuild his nose.

Debbie Gravano sold the house on Secretariat, but she and her children remain in the Phoenix area awaiting trial. Uncle Sal’s enjoyed a brief surge in popularity after the busts but has since been padlocked.

Sammy Gravano’s state trial on 181 counts of conspiracy, drug distribution, and running a criminal enterprise is scheduled to begin June 4. This winter new federal charges were piled on Sammy, Gerard, and Mike Papa in New York, based on the investigation of the drug network of Ilan Zarger and Koki Orgad.

The federal government is paying in full for Sammy Gravano’s defense. “I think the Feds are going to offer Sammy a deal,” former Gotti defense attorney John Mitchell told Court TV. “Sammy knows a great deal of information that was never disclosed…I don’t think [they] want that to come to light, and they’re going to step in and take care of their boy.”

Jovan Isailovic pleaded guilty to Ecstasy distribution charges. His sister Jovanka sent Kevin Papa their junior prom portrait. “I can’t believe this is the last time we kissed,” she wrote.

Kevin Papa says he is tormented by his cellies at Yuma, who taunt him about Michael Papa’s connection with Gravano.

“They ask me, ‘What’s your brother doing with that rat?’”

He never knows how to answer.

Thanks to Gil Reavill

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