Friday, January 29, 2010

Rudy Fratto Says that Not Paying Taxes for 7 Years Was Just a Mistake

Rudy Fratto, reputed top lieutenant in the Chicago Outfit, proudly told me just before his sentencing on Wednesday that he'd never before been convicted of a crime.

Given all the attention the FBI has paid to him over the years—plus the fear he inspires in wiseguys when they spot him in their rear-view mirrors and the silence at the mention of his name—that's surprising.

"Before this, no convictions. Not federal. Not state," said Fratto, 66, whose lucky streak ended when he pleaded guilty to evading federal income tax payments for seven years. "They make me out to be some bad guy. But really, John, I'm not that bad. I'm just a good guy who made a mistake."

Fratto's "mistake" was avoiding federal income taxes by funneling cash into a defunct trucking company until he got caught.

He didn't dress like some flashy HBO gangster. He wore a beige suit, dark tie, gray hair combed forward, glasses. He looked like a tired clerk.

Fratto's attorney, the esteemed criminal defense counsel Art Nasser, looked more the part. Art's big head of gleaming gray hair, the sharp blue suit, the tan, the white teeth, the sarcasm in the eyes. Nasser could wear a camel-hair coat draped over his shoulders, without putting his arms through, and get away with it.

In court, U.S. District Judge Matthew Kennelly sat through the tears and the familial pleas for mercy. He saw the truly heartbreaking sight of Fratto's sobbing teen-age sons begging to keep their dad out of prison. The boys, one in high school, one in college, used their neckties to dry their tears.

Then Fratto's wife, Kim, dressed in black, slowly hobbled up to the bench, gripping a walker. She sobbed that if Rudy went away, she'd lose the house and they'd be destitute. "And I've got two broken feet, judge, and now I'm going blind!" cried Kim, startling everyone in the courtroom.

Then Fratto spoke to the judge, admitted his crime, asked for mercy, and said, yes, indeed, his wife was going blind. "Yes, your honor, she told the doctor that she wanted to see the ocean, and he said she probably wouldn't see the ocean, or the beach, or whatever," Fratto said.

Kennelly announced he was forced to impose a prison sentence, rather than send a bad message to faithful taxpayers. "A year and a day," Kennelly said.

"A year and a day?" asked Nasser, who tried to stop a smile, but then his lips broke free of his teeth and there it was. "A year and a day, judge, means he'll be able to get to a halfway house in a few …"

Kennelly cut him off. "I'm not interested in that," the judge said brusquely. "That's up for the Bureau of Prisons to decide."

In federal court, a sentence of one year would have been worse than a year and a day. That's because federal sentencing guidelines mandate that if a sentence is one year or less, the defendant must serve every day of the time. But anything over a year and the defendant serves about 85 percent. But not all of it in prison. Fratto will do a few months, perhaps at the Club Fed in Oxford, Wis., where corrupt politicians will know who he is.

Chances are they've even nodded at him, respectfully, from across some steakhouse floor.

After a few months, Fratto will be moved to a federal halfway house in Chicago, sleeping there at night, spending his day working or whatever. Currently, Fratto is employed as a "technical consultant for the electronic entertainment industry," Nasser said.

Don't you love it? It sounds like a great trade once legalized video poker comes to Rush Street.

Not a word was mentioned in court about Fratto's reputed ties to organized crime, or his relationship with restaurant and nightclub owners. But some close to Fratto worry about other criminal investigations.

Before entering court, Fratto confronted Joe Fosco, a blogger son of a late Teamsters union official who has filed a civil suit against Fratto alleging that he'd been threatened. In the hallway, Fosco said Fratto had taken him for a ride through Melrose Park, and pointed at a sign for D&P Construction—controlled by the brother of Outfit boss John "No Nose" DiFronzo—while implying that DiFronzo wasn't happy with Fosco.

"It's all lies!" Fratto said, rounding on Fosco. "Get out of here, liar! You pervert! I'm not going into court if he's going in."

After the sentencing, the Fratto women, their tears dried by the court's mercy, confronted Fosco in the hallway. One of the women who'd just finished pleading for compassion and forgiveness showered Fosco with earthy insults.

"This is all a (expletive) joke," Rudy Fratto said, walking away.

That may be. He insists he's just a good guy who made one mistake, even if it happened seven years in a row.

Still, there's no mistaking the notion that federal investigators aren't finished with Fratto.

Thanks to John Kass

Rudy "I'm a Reputed Good Guy" Fratto Heads to Prison and Yells at Blogger

For years, Rudy Fratto has been dubbed a reputed top Chicago mobster. But Fratto sees its differently.

“I’m a reputed good guy,” Fratto said Wednesday, outside a federal courtroom, just moments after a judge sentenced him to prison for a year a day for tax evasion.

Indeed, U.S. District Judge Matthew Kennelly found Fratto “has done an outstanding job of raising a family,” but said Fratto’s crime was too serious to allow him to sentence Fratto to home confinement, as Fratto wanted, rather than prison.

Fratto, 66, of Darien, had avoided paying taxes on more than $800,000 on income over seven years by having various firms, including a gaming technology company, pay him through a bank account of a defunct trucking company that Fratto controlled.

“I was living beyond my means, and I was taking care of my family,” Fratto explained.

Fratto could have been sentenced up to 18 months in prison. By being sentenced to a year and a day, rather than a year, Fratto becomes eligible for good conduct time and could serve as little as 10 months of his sentence.

Fratto’s family tearfully requested that he not be sent to prison, citing him as the family’s role model.

Right after his sentencing, outside the courtroom, tensions ran high as Fratto and his family clashed with a blogger who attended the court hearing and has written negatively about Fratto. Irate family members had to be restrained as Fratto yelled at the blogger, “Get out of here.”

The tax evasion charge, investigated by the IRS, marks the first time Fratto’s been convicted of a crime.

Before his current problems, “I never been arrested for anything,” Fratto explained. “Not traffic. Not a DUI. Nothing.”

But he’s been a target of FBI investigators for years.

Most recently, federal investigators listed him as a top threat to Nick Calabrese, a former mob hitman who had turned into the star witness at the Family Secrets mob trial.

Fratto also allegedly attended a meeting in 2001 to approve the expansion of the video gambling territory of top mobsters James Marcello and his half-brother, Michael.

On Wednesday, Fratto tried to appear unruffled about the proceedings, but as he walked down the hall he shouted, “What a f------ joke!”

Thanks to Steve Warmbir

Wednesday, January 27, 2010

Rudy Fratto Sentenced to One Year and One Day in Federal Prison

Rudy Fratto, a reputed lieutenant in the Elmwood Park street crew of the Chicago Outfit, was sentenced in federal court today to a year and one day in prison for tax evasion.

Fratto, 65, of Darien, pleaded guilty last year to failing to report nearly $200,000 in income in 2005. Fratto, 65, admitted he had employers issue his checks to a defunct company that had an account he used for his expenses. Fratto said he did this between 2001 and 2007.

Fratto has been identified by authorities as an Outfit figure, and his name came up in recent years at the sentencing of corrupt Chicago police chief of detectives William Hanhardt and at the trial of former U.S. Marshal John Ambrose.

Thanks to Jeff Coen

The Chicago Syndicate AKA "The Outfit"

This is a work in progress, but the table below will include Members of the The Chicago "Outfit" who appear in articles within "The Chicago Syndicate". Eventually, each member will have a bio page with links to the articles in which he appears. The gangsters have been split into 3 categories: "Bosses", "Friends of Mine" and "Friends of Ours". It is not intended to be an all-inclusive listing of Outfit Members and Associates, but more of an index for this site. As other members or associates are mentioned in articles, the list will grow. If you have information on any additions or changes that should be made, please let me know.
For those who are not listed, use our custom mobster search bottom at the top of the page.
BossesFriends of OursFriends of Mine

Al Capone
Anthony "Joe Batters" Accardo
Bruno Roti Sr.
Felix "Milwaukee Phil" Alderisio
Frank "The Enforcer" Nitti
James "Little Jimmy" Marcello
(Under Question)
Jim "Big Jim" Colosimo
Joey "The Clown" Lombardo
John "No Nose" DiFronzo
Johnny Torrio
Joseph "Joey Doves" Aiuppa
Joseph Ferriola
Paul "The Waiter" Ricca
Rocco Infelice
Sam "Momo" Giancana
Sam "Wings" Carlisi

Al Pilotto
Albert Tocco
Al Tornabene
Angelo "The Hook" LaPietra
Anthony "The Hatch" Chiaramonti
Anthony Giannone
Anthony Zizzo
Bill Daddano
Bill "BJ" Jahoda
Bugs Moran
Christopher Giuliano

Dominick "Tootsie" Palermo
Frank Calabrese Sr.
Frank Maltese
Frank "The German" Schweihs
Fred Roti
Gerald Scarpelli
Jack "Machine Gun" McGurn
Jake Guzik
James Basile
James Belcastro
James "Jimmy I" Inendino
Jasper Campise
Joe "Singing Joe" Vento
Joe "The Builder" Andriacchi
John "Jackie" Cerone
John Fecoratta
John Gattuso
Johnny Genero
Ken "Tokyo Joe" Eto
Louis Marino
Mario Rainone
Michael "The Large Guy" Sarno
Michael Spano Sr
Michael Talarico
Nick Calabrese
Pat Marcy
Paul "The Waiter" Ricca
Robert "Gahbeet" Bellavia
Robert Natale
Rocco Infelice
Salvatore "Solly D" DeLaurentis
Sam "Teets" Battaglia
Thomas Giuliano
Tony Centracchio
Tony Spilotro
Vincent "Jimmy" Cozzo

Betty Loren-Maltese
Billy Dauber
Don Stephens
Ed Hanley
Frank Cullotta
Fred Pascente

James Vondruska
John D'Arco Sr.
John Duff Jr.
John LaGiglio
Michael Oliver
Michael Spilotro
Phillip Goodman

Robert Cooley
Thomas Tucker
William Galioto
William Hanhardt

Reputed Mobster Rudy Fratto Jr. Seeks to Become a Homemaker

Although his Outfit ancestors were known as "Cock-eyed" and "One Ear," reputed suburban Chicago mob boss Rudy Fratto Jr. wouldn't mind being known as "the Homemaker."

Reputed Mobster Rudy Fratto Jr. Seeks to Become a HomemakerAfter copping a plea as a tax cheat, Fratto, 65, has asked a federal judge in Chicago to give him a term of home confinement when he is sentenced on Wednesday afternoon.

"In light of the responsibilities and obligations he, and he alone has, not only to his family, but to his Government, we request that the Court impose a sentence of home confinement for a term and with the most stringent of conditions and requirements the Court deems appropriate," states a motion asking for mercy and leniency filed by Fratto's attorney Arthur Nasser.

Among Fratto's obligations according to the court filing, is the complete and total care of his wife Kim who is allegedly convalescing in their Darien home following a misstep out their front door. Kim Fratto broke bones in both of her feet in the accident last July and required surgery, states her husband's motion to avoid jail time. Fratto's attorney submitted extensive medical reports and copies of Mrs. Fratto's foot X-rays to support the contention that she is incapacitated.

A few months after the accident, Mr. Fratto pleaded guilty in U.S. District Court to a single charge of tax evasion. In the plea agreement Fratto admitted not paying $141,192 in taxes on more than $835,000 income beginning in 2001. The prescribed penalty for such a violation is 12-18 months in federal prison.

"Mrs. Fratto's only caretaker since the accident to the present time and into the future is her spouse, defendant Rudy Fratto. He must attend to her most basic everyday needs" contends Fratto's lawyer. "In addition to attending to Mrs. Fratto's basic needs, he must also act as cook, house cleaner, dishwasher and chauffeur" for his wife and several of the couples' children.

Prosecutors are not convinced that Rudy "the Homemaker" Fratto deserves such mercy. At tomorrow's sentencing hearing, the government will contest any leniency for Fratto. "A sentence of home confinement would send the wrong message to him, his associates, and the public in general" say federal prosecutors in a pre-sentence filing with Judge Matthew F. Kennelly.

The associates of Fratto's who might get the wrong idea include his underlings who toil on the streets for the Outfit's powerful Elmwood Park Crew. Although never charged with a crime, Fratto has been named as a Mob associate and recently as a crime syndicate leader by local, state and federal law enforcement agents.

His most notable relative was Luigi Tomaso Giuseppi Fratto, who was a gangland leader and labor racketeer from the 1930s into the '60s. Luigi Fratto was also known as "Cockeyed Louie" due to his off-kilter eyeball.

As the I-Team first reported, federal investigators considered the modern-day Fratto to be a major threat to the safety of mob witness and reformed hitman Nicholas Calabrese. Calabrese' compelling testimony helped put away top hoodlums during the recent Family Secrets mob murder trial.

Fratto was also photographed over the years by federal surveillance teams during meetings with mob leaders. In 2001 he was seen at a secret Outfit summit to plot the takeover of video-poker turf in the suburbs.

On another occasion, Fratto was observed meeting with former Chicago Police Chief of Detectives William Hanhardt. The men were to work out details of a proposed gangland hit, according to testimony in 2002 during a sentencing hearing in Hanhardt's jewel theft case. The hit did not occur and Hanhardt is serving a federal prison sentence.

On Wednesday, the government will attempt to convince Judge Kennelly that Rudy Fratto should join Hanhardt in prison. Fratto's lawyer will argue that his client deserves home confinement-even with certain conditions.

"Those requirements can include electronic monitoring, periodic reporting to the United States Probation Office, unannounced residential visits during hours of confinement by designated law enforcement personnel, any method of telephonic monitoring of residential and mobile/cell telephones (or no cell phone), continued employment during specified hours which will enable him to carry on his income producing activities, all of which will enable him to pay off the outstanding income tax liabilities he has incurred as a result of his defalcation" states defense attorney Nasser in court papers.

Thanks to Chuck Goudie

Tuesday, January 26, 2010

St. Valentine's Day Massacre 81st Anniversary Italian Pizza Banquet and Slide-Lecture: Gangster Ghosts and Secrets

By Richard T. Crowe

Sunday Feb. 14 -- St. Valentine's Day --
7 to 7:30 PM check-in and optional cocktail time
followed by dinner and lecture.


645 W. North Avenue, Chicago
(in the heart of "Bugs" Moran territory!)
(312) 654-2576

Featuring Italian specialties --
PIZZAS -- A selection of Thin and NY styles --
cheese/sausage/pepperoni/veggie/etc. Unlimited soft drinks -- Homemade Italian
Bread and Foccacia Chips -- Mixed Green Salad w/Assorted Dressings -- Penne
Pasta w/ Marinara Sauce -- Cinnamon Ticos (dessert)

Hear the facts not fictions --

Gangster and Capone legends and much more.

Strange tales about the hangouts of Al Capone and the cursed bricks of the St. Valentine's Day Massacre wall; bizarre secrets of Capone's, Frank Nitti's, and Deanie O'Banion's gravesites; the haunted Dillinger escape jail in Crown Point, IN; and more local lore.

Richard Crowe was scheduled to appear on the celebrated Al Capone "treasure vault" TV special but was dropped from the show when he uncovered the real facts about the so-called "secret vault." Discover the inside story of Capone's headquarters at the Lexington Hotel! Years before the Geraldo/Capone show, Crowe searched with a metal detector for lost treasure at the home and grounds of mobster Mossy Enright (gunned down in 1920) -- a Chicago gangster legenday treasure tale with much more credence than the dubious Lexington Hotel fable.


All major credit cards accepted. Or mail payment by check or money order to:

Richard T. Crowe
POB 557544
Chicago, IL 60655

Monday, January 25, 2010

Russian Mafia Makes an Appearance on 24

'24' Season 8, Episodes 3and 4 continued to ramp up the tension and stakes on Jack Bauer's latest bad day. A number of murders, an assassination attempt, a betrayal or two, and the return of former FBI agent Renee Walker occurred.

Spoilers surely followed.

It seems that the Russian Mafia's agent inside the New York Police Department has managed to get a spot in the escort for President Hassan by forcing another officer to switch shifts with him at gun point. Then he killed the officer and his wife. Then Jack Bauer found the corpses, and much to his consternation, he was found with the corpses by two other police officers, one of whom is very much into street justice for cop killers.

The upshot was that the Russian hitter planted a bomb to detonate under President Hassan's limo. Fortunately Jack Bauer was about to persuade the more reasonable officer of his bona fides and warn CTU just in a nick of time, allowing the heroic Cole Ortiz to foil the assassination at great risk to himself.

The upshot of the aftermath is that faithless brother, Farhad Hassan, is unmasked and is forced to go on the run, the Russian Mafia guy is killed, Hassan's reporterette girl friend is set free with apologies all around, and Brian Hastings has one more mistake to smooth over.

Now why would the Russian Mafia want to take out the President of the Islamic Republic. It seems that the Russians would like to sell the Islamic Republic some spent fuel rods that can be turned to weapons grade uranium of which nuclear bombs can be made. President Hassan had demurred. His brother would very much like to work a deal. If this means that President Hassan has to die and little brother take his place, the cause of Jihad sometimes required martyrs.

Thanks to Mark Whittington

Mafia II Pin-Up Girl Calendar Contest

Mafia II Pin-Up Girl Calendar Contest
In support of their upcoming title, Mafia II, game publisher 2K Games has dropped a limited edition pin-girl calendar, and Baller Status has a couple to give away. The calendars feature pictures of era-based models that are seasonal to each month, and are a fun addition to any office desk or work station.

There will be two winners chosen for the new calendar. All you have to do to enter is fill out the contest form here.

Sunday, January 24, 2010

John Dillinger's Getaway Car Sells for $165,000 at Auction

A 1930 Ford Model A used by bank robber John Dillinger to evade federal agents sold at auction Saturday for $165,000.

The car, sold at the Barrett-Jackson collector car auction in Scottsdale, Ariz., had a cameo role in the 2009 movie "Public Enemies" starring Johnny Depp.

This car was used in John Dillinger's 1934 escape from the Little Bohemia Lodge in Manitowish Waters, Wis. Dillinger and his gang had been staying at the lakeside resort when the proprietor tipped off the FBI. The car, sold for $165,000 at the Barrett-Jackson collector car auction in Scottsdale, Ariz., had a cameo role in the 2009 movie

This car was used in Dillinger's 1934 escape from the Little Bohemia Lodge in Manitowish Waters, Wis. Dillinger and his gang had been staying at the lakeside resort when the proprietor tipped off the FBI.

A team of agents attempted to surround the house, but Dillinger and his partners Homer Van Meter and John "Red" Hamilton escaped to a nearby house where they found the Model A and forced its owner to drive them to safety.

Later, the car caught the attention of police and Hamilton was fatally wounded in a gun fight. The car still bears a bullet hole and the stains of Hamilton's blood.

Dillinger later ditched the car in Chicago, stealing a 1934 Ford V8 in its place. (Dillinger was known to prefer Ford's then-new V8 cars for their speed.)

The car was eventually returned to its original owner, who left it parked in his garage, figuring it wasn't worth repairing. A subsequent owner, who purchased the car 30 years later for $1,400, also left it untouched.

Temporary cosmetic repairs were done to the car in 2007 for the movie. The identity of the winning bidder was not immediately known. The price paid for the car includes a 10% "buyer's premium" added on to the $150,000 final bid price.

In general, Model A Fords are not particularly rare or valuable, even today. "I have to admit, this is a surprising price for a model A, regardless of ownership," said McKeel Hagerty, president of the collector car insurance company Hagerty Insurance. Hagerty Insurance is a sponsor of Speed TV's live broadcast of the Barrett-Jackson event.

Thanks to Peter Valdes-Dapena

Friday, January 22, 2010

James "Little Jimmy" Marcello is Moving Back to Chicago

Mob boss James "Little Jimmy" Marcello gets to stay in Chicago...for now.

Judge James Zagel granted a motion this morning in federal court that allows Marcello to remain at the Metropolitan Correctional Center in Chicago while he appeals his Family Secrets conviction. He had been serving his life sentence in the maximum security penitentiary in Atwater, California, but was brought back to the MCC because of a petition filed against him by the United States Probation Office. Inexplicably, the government wants to cite Marcello for a long ago probation violation, even though he is serving a life sentence from the Family Secrets case.

If Marcello's appeal is denied then Judge Zagel will recommend the Bureau of Prisons assign Marcello to an institution such as Oxford, Wisconsin, instead of being sent back to California so he will be closer to his family. "Mr. Marcello has no family in California. His wife, three children and grandchildren reside in the Chicagoland area," states the Marcello motion.

Oxford has long been the prison of choice for Chicago Outfit figures, crooked politicians, white collar criminals and other cigar chomping convicts-because of its close proximity to Chicago.

Originally, Judge Zagel had recommended Marcello spend the rest of his life locked up in the fed's crossbar hotel in Terra Haute, Indiana. But Marcello's guilty co-defendant, Joey "the Clown" Lombardo, is already assigned there. "It is our understanding that a 'seperatee' order prevented Mr. Marcello's designation to Terre Haute since Co-Defendant Joseph Lombardo was designated there" wrote Marcello's attorney Marc Martin.

Thanks to Chuck Goudie

Wednesday, January 20, 2010

US Attorney and DEA Agent Targeted in Murder-for-Hire Plot

The United States Attorney's Office announced that two DuPage County, Illinois men were arrested last week after being charged by complaint in a murder-for-hire plot targeting an Assistant United States Attorney and a Drug Enforcement Administration agent assigned to Chicago.

Frank Caira, 39, of Downers Grove, Illinois, and Jack Mann, 41, of Naperville, Illinois, were charged with solicitation to commit a crime of violence, specifically attempting assault or intimidation of a federal officer, and attempting to kill a law enforcement official of the United States.

Both men appeared before Magistrate Judge Nan R. Nolan in Chicago Saturday afternoon, January 16, 2010. Mann has subsequently appeared in court today and remains detained. Caira is scheduled to appear for a detention hearing before Magistrate Judge Nolan on Thursday, January 21, 2010.

This case was investigated jointly by the Chicago Federal Bureau of Investigation Violent Crimes Task Force and the United States Marshal’s Service Northern Illinois Threat Assessment Task Force.

Gambling & The Chicago Mob Video

Restaurant owner Nick Sarillo freelanced as a bookie. He defied the Chicago mob, otherwise known as "the Outfit," and was nearly killed.

Tuesday, January 19, 2010

Bill Kurtis to Receive the FBI’s Director’s Community Leadership Award

An awards ceremony and luncheon honoring legendary Chicago journalist and acclaimed documentarian Bill Kurtis Bill Kurtis to Receive the FBI’s Director’s Community Leadership Awardwill be held today (Tuesday, January 19) at Harry Caray’s Restaurant in Chicago.

Mr. Kurtis is the 2009 Chicago recipient of the FBI’s Director’s Community Leadership Award (DCLA), which is presented annually to an individual or organization that has furthered the efforts of law enforcement. Director Mueller will be represented at Tuesday’s ceremony by Robert D. Grant, Special Agent-in-Charge of the Chicago FBI, who will be presenting Mr. Kurtis with the award.

An informal reception for Mr. Kurtis will begin at 11:30 a.m., with the award presentation starting at approximately 1:00 p.m.

James Marcello Requests Prison Transfer Closer to His Family

When top Chicago Outfit boss James "Little Jimmy" Marcello was sentenced in the fed's Family Secrets mob murder case, he expected to do his time at a prison somewhere close to home.

To make it easy for family visits.

Judge James Zagel even "designated James Marcello to the maximum-security prison in Terra Haute, IN." according to a motion filed by Marcello's lawyers Monday in U.S. District Court. But the Bureau of Prisons had other plans for Little Jimmy and now he is trying to make things right.

BOP officials last year assigned the long-time Chicago hoodlum to a cell in the maximum security penitentiary in Atwater, California. Atwater is more than 100 miles from San Francisco.

"Mr. Marcello has no family in California. His wife, three children and grandchildren reside in the Chicagoland area," states the Marcello motion that will be heard Tuesday morning by Judge Zagel.

The problem may be that Marcello's guilty co-defendant, Joey "the Clown" Lombardo, is assigned to the fed's crossbar hotel in Terra Haute."It is our understanding that a 'seperatee' order prevented Mr. Marcello's designation to Terre Haute since Co-Defendant Joseph Lombardo was designated there" wrote Marcello's attorney Marc Martin.

Marcello's motion asks that he be held in the Metropolitan Correctional Center in downtown Chicago while he appeals his Family Secrets conviction-or at least until the filing of the opening brief.

Then, the motion asks Judge Zagel to "recommend that the BOP designate Mr. Marcello to an institution closer to his family, e.g., Oxford, WI."

Oxford has long been the prison of choice for Chicago Outfit figures, crooked politicians, white collar criminals and other cigar chomping convicts-because of its close proximity to Chicago.

Marcello does have one thing going for him: he's already been brought back to the MCC in Chicago because of a petition filed against him by the United States Probation Office. Inexplicably, the government wants to cite Marcello for a long ago probation violation, even though he is serving a life sentence from the Family Secrets case.

Thanks to Chuck Goudie

Frank Campione Accuses Son of Being a Rat

Don't dishonor thy father.

That's the theme of a Colombo gangster's nine-page letter rant accusing his son of committing the unforgivable sin of speaking to FBI agents.

"You broke the laws of honor, loyalty and family tradition and you tarnished and embarrassed our family name," reputed mob soldier Frank Campione wrote to his son Michael.

The letter, dated Dec. 3, was seized by Bureau of Prisons officials at the Metropolitan Detention Center, where Campione is awaiting sentencing for shaking down a Long Island gambling club.

Prosecutors James Gatta and Elizabeth Geddes filed the letter in Brooklyn Federal Court yesterday in an attempt to keep Campione from getting a lenient sentence for medical reasons.

In the letter, the 67-year-old Campione warns his son, "I plan on being around a while."

The mobster's anger was apparently triggered by his belief that Michael told FBI agents he opposed his father's bail application, a source said.

"A rat is the worse [sic] thing anybody can be as far as I'm concerned," Campione warned. "I guess you learned that trait from your mother, but she is a woman and doesn't understand the laws of the land and family traditions. You are my son and ... you should have known better."

A knowledgeable source said Michael Campione is not involved in organized crime.

Frank Campione faces up to 46 months in prison when he's sentenced on Monday by Federal Judge Brian Cogan.

By the letter's conclusion, Campione had calmed down a bit. "Kiss the kids for me. Dad."

Thanks to John Marzulli

Michael "The Prince of the Mafia" Franzese Busted on Bad Check Charge

Some habits die hard.

An ex-Colombo family mobster who left the Mafia to become a born-again Christian motivational speaker was busted in Tennessee for writing bad checks, officials said Monday.

Michael Franzese, the Brooklyn-born mobster once nicknamed "The Prince of the Mafia," was led from a plane on the runway in Knoxville in handcuffs Friday night, police said.

The ex-wiseguy - who has bragged that he made more money than Al Capone - downplayed the arrest in an interview with the Daily News, saying it was an "unfortunate misunderstanding" with a business associate.

"I didn't pass bad checks, I didn't take any merchandise. I didn't do anything wrong," said Franzese, 59. "It's a dispute with my former manager over a small amount of money - nothing more," said Franzese, the son of famed 92-year-old Colombo enforcer John (Sonny) Franzese.

The younger Franzese, who became a "made" Colombo soldier in 1975, made millions bootlegging gasoline until he was indicted in 1987. Deciding to leave the Mafia behind, he accepted a prison sentence and testified against his former family.

He served three years and upon his release wrote a series of mob-themed inspirational books with titles like, "The Good, the Bad and the Forgiven" and "I'll Make You an Offer You Can't Refuse: Insider Business Tips from a Former Mob Boss".

He tours the country speaking to church groups, students and professional athletes on the dangers of gambling and fraud.

He said he is worried how the arrest would affect his booming speaking business.

"I'm in a ministry right now and this story has already hurt," Franzese said. "I know I carry baggage from my previous life, but I worked hard to shed my past."

Franzese was in Knoxville to speak to a men's organization at a Baptist church but instead spent the night in jail after being picked up an outstanding warrant for bad checks.

His former manager "thought I owed him money and chose to get the police involved," said Franzese, who declined to elaborate on the specifics of the dispute. "It'll blow over."

A Knoxville police spokesman would not identify the complainant in the case.

Franzese, the founder of a youth counseling group called the Breaking Out Foundation, was released from jail Saturday morning on $7,500 bond and returned home to Southern California.

He vowed not to let the arrest deter him from his new mission.

"I am going to stay out there preaching my message," he said. "I have overcome a lot and I'm going to keep doing the best I can."

Thanks to Jonathan Lemire

Former Mafia Prosecutor Now Uses Data Mining to Catch Tax Cheats

Another crazy idea popped into Bill Comiskey’s head: What if the tax department required banks to turn over their customers’ mortgage applications? Homebuyers fill them out at a time when they want to impress the bank with their incomes. They sometimes are not in the same mood when they fill out their tax returns. Investigators could compare the two records, look for clues.

Comiskey, the state’s lead tax enforcer, called Nonie Manion, director of the audit division, from the car. He was zipping across New York state to deliver another speech at another tax preparers convention. “Would this work?” he asked.

Every piece of personal information is on the table these days at the tax department, where a desire to collect taxes on the underground economy is prompting new and aggressive tactics. Comiskey, a one-time Mafia prosecutor, has been armed by lawmakers with new powers. His staff is for the first time pulling information from third parties into a continuous river of information about businesses and individuals.

The tax department is brainstorming a kind of data mining most often associated with Homeland Security.

Is a bar underreporting its sales? Annual reports from liquor wholesalers would show it.

Is a pizza franchise selling more pies than it is reporting to the state? The chain’s parent company might have to show how many pizza boxes it sent to the local shop.

Is a car dealer low-balling its sales? Check the records over at the DMV.

The new approach makes New York a leader in the pursuit of tax cheats and has put tax professionals and businesses on alert that New York is no longer soft on fraud. Some tax professionals say the state is being unnecessarily antagonistic, particularly toward cash businesses that do not keep great records.

Comiskey makes no apologies.

It is his job to “close the tax gap” — the term for the billions of tax dollars individuals and businesses do not pay every year.

If one person does not pay taxes, another person has to pay more. Honest taxpayers get squeezed, and the state’s schools, roads and health care systems suffer.

Comiskey brings the experience of a forensic investigator. But as a newbie to the tax department, he also feels free to throw out ideas that seem naive or impossible to people who have been auditing tax returns for a long time.

Some of the tax-hunting methods seem like common sense to him. For a long time, auditors shied away from talking to taxpayers. They had the power of subpoena, but chose instead to work with records requests or interviews with the tax preparer.

Now, auditors more often just talk to taxpayers. And the state Legislature just made it a crime for taxpayers to lie to investigators.

The audit division set a record in Comiskey’s first year, producing $3 billion in revenue — $1 billion more than the year before.

Criminal tax fraud investigations increased from 581 in the ’06-’07 fiscal year to 2,078 in the ’08-’09 fiscal year. Nearly 600 cases were referred to prosecutors that year, about three times as many as the last year of the previous administration.

Comiskey’s methods are catching a lot of attention from other states and from taxpayers.

Other states are also improving their investigative resources, but New York is unique in winning state legislation that requires third parties to supply information routinely, said Verenda Smith, speaking for the Federation of Tax Administrators, in Washington, D.C. And Comiskey is eager to tell people about it. He delivered 42 speeches across the state in 2009.

“It’s not a game of gotcha,” Smith said. “Gotcha is the last thing you want to have to deal with and should be the tiniest part of your work. Most people will pay correctly and on time if they know what to do. Even more people will pay correctly and on time if they know you can catch them.”

It does feel like gotcha to some business owners, who are challenging the state in its tax tribunal.

The tribunal in December delivered a rare victory to the taxpayer when it questioned the state’s method of estimating taxes owed by a Buffalo restaurant that could not produce its own receipts.

Similar cases are brewing all over the state, said Tom Riley, tax partner at ParenteBeard LLC, in Syracuse. But fighting the state is expensive and mostly a losing proposition. More-frequent audits are frustrating small-business owners, who cannot afford to fight. There’s a happy medium someplace, he said, but this is not it.

“Not that long ago, they were all about customer service, and taxpayers were customers and the pendulum swung one way,” Riley said. “Now it’s swung so much the other way, it’s become very difficult.”

Riley said the attitude is coming directly from the top of state government at a time when the state needs to close budget gaps.

In fact, Gov. David Paterson’s office is expected to announce this week that he wants to rely even more on tax fraud enforcement to balance next year’s budget.

Former Gov. Eliot Spitzer brought Comiskey to the tax department from the attorney general’s office in 2007. The two worked together in the AG’s office, where Comiskey led the Medicaid Fraud unit.

Before that, Comiskey spent 10 years on New York’s Organized Crime Task Force and had also worked in the AG’s criminal prosecution’s bureau and for district attorneys in Rensselaer County and Manhattan.

At the Medicaid Fraud Unit, investigators installed hidden cameras in nursing homes and saw nurses moving call bells away from patients so the staff could watch movies and socialize.

He brings those same techniques to his current job.

When he talks to groups, he likes to play real tapes of tax preparers who got caught in stings.

In 2007, the tax department decided to test the unregulated world of tax professionals. The investigators wore wires and visited tax preparers around the state, pretending to be new customers. Sometimes, they took the books of real businesses they had already stung for hiding income. They would even send in the real business owner with a hidden tape recorder.

Comiskey has been investigating fraud his entire career, but he was surprised to find so many tax preparers who put themselves at risk by fixing the books for strangers in exchange for a few hundred dollars.

“What you need to do is redo the books,” one said on tape. “Rip out these pages and do them again.”

The tax department did 170 undercover visits in three years. About 30 percent engaged in some type of fraud, he said.

The tax department’s staffing reflects the state’s new commitment. The staff grew from 2,562 in 2006 to 3,060 today. It is hiring 111 new auditors. The biggest growth was in the special investigations unit, which grew from 34 people in 2006 to 142 today.

Mark Klein, a tax attorney for Hodgson Russ LLP, in Buffalo, said he’s never seen anything like the state’s crackdown in his 30 years in the business.

The undercover stings are turning friends on friends, clients on their accountants, he said.

“It is rocking their world. It really is,” he said.

Klein hates to say it, but for a long time, New York taxpayers had the perception that they could skim a little off the top.

“New York has made it clear that they’re going to crack down,” he said. “They’re very much focused on cash businesses, and it’s getting to be like Big Brother.”

Klein is advising his clients to keep good records.

He said the state is catching some porpoises while fishing for tuna.

He said the state tax department asked a Syracuse bar for every sales receipt for every drink for the past three years. Of course, the bar doesn’t keep track of every drink sold, he said.

When there are no good records, the law allows the state to use outside information to estimate. The burden is then on the taxpayer to prove the state wrong.

In this case, Klein said, the state calculated a sales based on the cost of the bar’s rent. The bar is stuck.

“In that way, they’re catching a lot of honest tax people and making it appear as though they have a liability, when they don’t,” Klein said.

The State of New York Tax Appeals Tribunal recently shot down the state’s method of estimating sales volume at a restaurant called Mother’s, in downtown Buffalo.

The tribunal said the tax department used industry records in a way they were not intended to estimate taxes for the restaurant, which could not produce sales receipts.

“It must be pointed out that a lack of records does not equate to a presumption that taxable sales have been underreported,” the opinion said.

The tax department said that case was fact-specific and does not prevent the legally permissible use of third-party sources.

Comiskey said the fact that so many cases are upheld by the tribunal means that they are doing a good job of making reasonable estimates.

The department is just getting started on its new project to collect clues from third parties.

Comiskey wants to pour every available piece of information about a business into a computer database, where it can be quickly sorted, matched and analyzed.

The information will come from both private industry and state agencies. Surprisingly enough, the volumes of personal information collected by other government agencies — such as the Department of Motor Vehicles, the Health Department and the Department of State — are not already systematically collected and analyzed by tax auditors.

That is, in part, because the information has not always been kept in computer form, and, in part, because no one asked for it.

For at least 15 years, state law has required cigarette wholesalers to report the volume of sales to retailers. The information came on paper and sat mostly untouched in boxes.

Manion said businesses generally respond to these requests for information. But some businesses and even some other government agencies say they do not have enough information technology staff to comply.

The tax department is also working to routinely grab records of transactions from credit card companies. A 2009 bill did not make it through the state Legislature because banks convinced the tax department that their request would require extensive computer programming and that there could be problems with the data. It could be January 2012 before they start getting the information.

On the Big Brother issue, Comiskey and Manion said it’s true that privacy is sacrificed in administering tax laws. But, they point out, the government already knows about individuals’ medical problems, their earnings, their mortgage payments and their retirement contributions.

“It’s certainly not Big Brother when we’re asking businesses to provide us with what is essentially business information to help us administer tax laws fairly,” Comiskey said.

Thanks to Michelle Breidenbach

Monday, January 18, 2010

Hotline Created to Report Haitian Earthquake Relief Fraud

The FBI and the National Center for Disaster Fraud (NCDF) have established a telephone hotline to report suspected Haitian earthquake relief fraud. The number is (866) 720-5721. The phone line is staffed by a live operator 24 hours a day, seven days a week. You can also e-mail information directly to

The National Center for Disaster Fraud was originally established by the Department of Justice to investigate, prosecute, and deter fraud in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. Its mission has expanded to include suspected fraud from any natural or man-made disaster. More than 20 federal agencies, including the FBI, participate in the NCDF, allowing it to act as a centralized clearinghouse of information related to Haitian relief fraud.

The FBI continues to remind the public to apply a critical eye and do their due diligence before giving contributions to anyone soliciting donations on behalf of Haitian victims. Solicitations can originate from e-mails, websites, door-to-door collections, mailings and telephone calls, and similar methods.

Therefore, before making a donation of any kind, consumers should adhere to certain guidelines, including the following:

* Do not respond to any unsolicited (spam) incoming e-mails, including clicking links contained within those messages.

* Be skeptical of individuals representing themselves as surviving victims or officials asking for donations via e-mail or social networking sites.

* Beware of organizations with copy-cat names similar to but not exactly the same as those of reputable charities.

* Rather than following a purported link to a website, verify the legitimacy of non-profit organizations by utilizing various Internet-based resources that may assist in confirming the group’s existence and its non-profit status.

* Be cautious of e-mails that claim to show pictures of the disaster areas in attached files, because the files may contain viruses. Only open attachments from known senders.

* To ensure contributions are received and used for intended purposes, make contributions directly to known organizations rather than relying on others to make the donation on your behalf.

* Do not be pressured into making contributions, as reputable charities do not use such tactics.

* Do not give your personal or financial information to anyone who solicits contributions. Providing such information may compromise your identity and make you vulnerable to identity theft.

* Avoid cash donations if possible. Pay by debit or credit card, or write a check directly to the charity. Do not make checks payable to individuals

If you believe you have been a victim of fraud from a person or an organization soliciting relief funds on behalf of Haitian earthquake victims, contact the National Center for Disaster Fraud at (866) 720-5721. You can also fax information to (225) 334-4707 or e-mail it to

Public Enemies on Mafia Wars

To help promote the Dec. 8 DVD and Blu-ray Disc release of Public Enemies, Universal Studios Home Entertainment teamed with Zynga for a cross-promotion with its online Mafia Wars game.

Mafia Wars is a role-playing game accessed through social media sites such as Facebook that lets users run their own crime family, participate in various crimes and steal loot. In early December Mafia Wars staged “Public Enemies Week,” helping to promote the gangster flick with special jobs and loot objects based on the film’s plot.

The campaign, led by appssavvy, a direct sales team for the social media space, in partnership with the Los Angeles office of Ignited, a marketing innovations agency working on behalf of Universal, was touted as the first such promotion of its kind. Mafia Wars is played by more than 25 million Facebook users.

“Public Enemies on Mafia Wars is the blockbuster social media campaign of 2009,” said Chris Cunningham, co-founder and CEO of appssavvy. “The foundation of every campaign we’re involved with is focused on relevance and delivering something the end user will find valuable. This effort with Universal Studios Home Entertainment and Zynga demonstrated these fundamentals of social media marketing to perfection.”

Zynga reported Public Enemies Loot garnered nearly 55 million interactions during the week-long campaign, and tie-ins to Public Enemies activities within the game were posted to players’ Facebook news feeds more than 7.6 million times, delivering nearly a billion viral impressions. The campaign generated nearly 25,000 ‘Likes’ and more than 26,000 comments on the Mafia Wars Facebook fan page.

“Even John Dillinger would be impressed with the scope and success of this effort,” said Mike Wokosin, VP of digital marketing for USHE. “Mafia Wars was an incredibly dynamic environment to seamlessly integrate our property and to effectively engage a significant and relevant audience.”

Thanks to John Latchem

Sunday, January 17, 2010

Is Ralph DeLeo the Street Boss of the Colombo Crime Family?

In Boston, home to the New England Mafia and a string of legendary former bosses like “The Cheese Man’’ and “Cadillac Frank,’’ Ralph DeLeo was a virtual unknown.

“Here, I’m nothing,’’ DeLeo said within earshot of an FBI bug. But in New York, he said, “Everybody is holding the door for ya, helping on your coat, giving you hugs . . . kissing you, and all this type of stuff. ‘Oh, you gotta sit in front, you gotta do this, are you comfortable? Can I get you coffee?’ ’’

But to the FBI, DeLeo, 66, of Somerville was somebody.

Agents tapped his cellphone from January through November of last year, then he was indicted last month on a federal racketeering conspiracy charge. The indictment filed in US District Court in Boston alleges that he is the “street boss’’ of New York’s Colombo family and runs a small crew based in Greater Boston involved in drug trafficking, extortion, and loansharking.

DeLeo is being held in Arkansas, where he’s also facing charges of cocaine trafficking. An FBI affidavit filed last week in courts in Boston and Arkansas detailed DeLeo’s alleged position in the New York mob and offered snippets of conversations from his bugged telephone calls.

The affidavit alleges that DeLeo is the highest-ranking member of the Colombo family who is not in prison, and ran the family’s business for most of last year. He allegedly reported to its boss, Carmine “The Snake’’ Persico, and acting boss, Alphonse “Allie Boy’’ Persico, who are in prison.

During an FBI-bugged call to his sister from New York last week, DeLeo, who had allegedly presided over a mob induction ceremony, admitted that he found his job “like overwhelming a little bit,’’ the affidavit said.

He described going to the ceremony in different groups and cars to “make sure we weren’t followed,’’ and added, “it was a big deal; people picking us up, taking us somewhere else and all that type of stuff, I wasn’t ready for all that.’’

In October 1989, New England mobsters did the same thing, arriving at a Medford home in different cars and groups. But it didn’t do them much good because the FBI had planted a bug in the house and captured its first-ever recording of a Mafia induction ceremony that led to a takedown of the hierarchy of the local mob.

Before the New England family was weakened by waves of prosecution, it was unheard of for another Mafia family to encroach on its territory.

The indictment alleges that in the past year DeLeo and three other men, Franklin M. Goldman, 66, of Randolph, Edmond Kulesza, 56, of Somerville, and George Wiley Thompson, 54, of Cabot, Ark., plotted to distribute marijuana and cocaine, extort money from victims, including one in Canton, and collect loansharking debts.

DeLeo allegedly paid $50,000 for 2 kilograms of cocaine that were transported from California to Massachusetts in December 2008, according to the indictment.

It’s not DeLeo’s first brush with the law.

He served a 25- to 40-year sentence in state prison at Walpole for kidnapping and armed robbery when he escaped in 1977.

He was convicted of killing an Ohio doctor in 1977 and sentenced to 15 years to life. But the state’s governor granted him clemency in 1991 and he has been free since 1997.

Unaware that his alleged encroachment into New England last year had drawn attention, DeLeo kept talking as the FBI kept listening.

During a March call to his sister from Florida, DeLeo lamented about all of the attention he was getting from other wise guys.

“They gave me too much attention,’’ DeLeo said, according to the affidavit. “You know, too many hugs, too many kisses. You know, holding the car door for me, holding doors for me, you know all that type of stuff. And, um, I’m not into that type of stuff. I’m, uh, you know, I’m . . . at heart I’m a regular guy, you know. Uh, you know to them I’m something else, but I’m really not that something else.’’

When his sister asked if he brought his girlfriend on the Florida trip, DeLeo said he was just “with the guys’’ because he was afraid she would be suspicious if she saw the royal treatment he was getting.

“You know what I mean, cause they definitely act like Sopranos and . . . the way they [pay] attention to me is, you know, they would huh, you know she would suspect something.’

Thanks to Shelley Murphy

Junior Gotti Contemplates Leaving New York and Becoming a True Crime Author

Junior Gotti Contemplates Leaving New York and Becoming a True Crime AuthorNow that the government has given up trying to put him in prison, John "Junior" Gotti says he may leave New York and try his hand at writing true crime stories.

The son of notorious Gambino boss John Gotti held a celebration dinner Friday at a restaurant in Westbury on Long Island.

Federal prosecutors announced Wednesday that after a series of hung juries they wouldn't seek a fifth retrial against the younger Gotti, who says he quit the mob in 1999.

Gotti told reporters at the dinner that he's thinking about moving south and may write a true crime book.

He says it may be "better for everybody" if he moves away.

Gotti served nine years in prison for racketeering, but prosecutors failed to convict him of charges that he ordered several murders.

Family Secrets Mob Prosecutor, John J. Sully, Now Serves on the Bench

For John J. Scully, who closed out his 25 years of fighting organized crime as a federal prosecutor in Chicago with the Operation Family Secrets trial before ascending to the bench last year as an associate judge in Lake County, some boasting may be in order. But Scully — a retired U.S. Navy captain who served on a destroyer off the coast of Vietnam in combat operations and later as an intelligence officer in the Navy Reserve — isn't one to toot his own horn, according to his current and former colleagues.

"He's accomplished a lot in his lifetime, and you wouldn't know it. … He's very humble," said fellow Lake County Associate Judge Jorge L. Ortiz.

Some highlights of Scully's career in the U.S. Department of Justice include the investigation and prosecution of former Chicago Police chief of detectives William Hanhardt, who pleaded guilty to running a Chicago Outfit interstate jewelry theft crew, and the prosecution of the On Leong gambling ring based in South Side Chinatown, a complex case that exposed payoffs to the mob, Chicago police and a Cook County judge.

His achievements were recognized by the U.S. attorney general in 2008, when Scully, along with two fellow prosecutors, was honored with a top national award, the DOJ's John Marshall Award, for his work in the Family Secrets case. The case targeted members of the Chicago Outfit and resulted in convictions involving 18 unsolved organized crime murders dating to 1970.

"He didn't even tell any of his friends about it [the top national award]. I found out about it by reading about it in the newspaper," Ortiz said. "That's just how he is."

Aside from practicing as an in-house attorney for Illinois Bell for three years in the late 1970s and early '80s, Scully, 62, has spent his professional life in public service.

His judicial service began in February 2009, when he was appointed to an associate judgeship in the 19th Judicial Circuit. He started out in the traffic division at Lake County's Park City branch court and is carrying out an assignment in misdemeanor court in the county's main courthouse in Waukegan.

"He's taken an amazing path to get to where he is," said Lake County Associate Judge Michael J. Fusz, a longtime friend. "It's incredible firepower on the bench, having somebody with his experience."

That path was carved out from Chicago's South Side, where Scully grew up in an Irish household as the eldest of seven children. The son of a World War II Navy veteran who worked as a steel estimator in Chicago factories, Scully attended De La Salle High School and became the first member of his family to attend college when he was admitted to the U.S. Naval Academy.

"I always assumed, when I was in high school, that I would, one way or another, be in the service. It's something that one should do if you can — serve your country," Scully said.

If the military or college weren't an option, Scully said, he had thought that "maybe I'd be a police officer or a firefighter."

"I figured I was going to go into the service and try to get an education," he said.

After graduating from the academy in 1969, he married his high school prom date, Pat, whom he had met when the two were teenagers working at a National Tea grocery store on the city's Southwest Side. He was a stock boy; she was a cashier.

As a newly commissioned naval officer, Scully asked to be assigned to a destroyer out of San Diego. He served on the USS Hull, off the coast of Vietnam from May 1970 to August 1971, providing assistance to carriers in the South China Sea, and providing naval gunfire support in close proximity to the shore, assisting either Army or Marine Corps spotters.

After his Western Pacific deployment, he headed for law school at the University of San Diego School of Law.

"I had always been the kind that read the paper, front page to the last page, and realized that so much of what was part of American life dealt in one way or another with the law," Scully said.

After nine years of active duty, which included prosecuting and defending sailors and Marines as an officer in the JAG Corps, Scully served an additional 20 years in the Navy Reserve, most of that time as an intelligence officer. He was ultimately in charge of about 170 intelligence officers and specialists in the Midwest.

Scully's career as a civilian prosecutor began in Lake County, as an assistant state's attorney prosecuting felonies for 14 months in the early 1980s. By 1982, he joined the Department of Justice as a special attorney with the U.S. Organized Crime Strike Force, which merged with the U.S. Attorney's Office in 1990.

"Growing up in Chicago, I think I had a fair sense of how much influence the Chicago Outfit had on various aspects of life in and around Chicago, and I felt I wanted to assist in investigating and prosecuting," Scully said.

Assistant U.S. Attorney T. Markus Funk worked alongside Scully as part of the three-prosecutor trial team in the Family Secrets case.

Funk described his former colleague as "unflappable," and "comfortable in his own skin," with a strong sense of empathy and a knack for gaining the trust of people from all walks of life — from the victims of violent crimes to a "murdering mobster."

"I've never seen him come unraveled, never seen him lose his cool," Funk said.

"He's not a guy who needs to talk tough or get accolades from other people," Funk said. "He's not a political being; he doesn't strive for some sort of public acclaim. He just wants to do the right thing. That seems to be what has been guiding him, and that's a great thing for a judge."

Criminal defense attorney Edward M. Genson opposed Scully in numerous cases during the judge's years with the DOJ.

"He was an extraordinarily good lawyer, an extraordinarily principled lawyer," Genson said. "His word was his bond.

"A fair prosecutor is going to be a fair judge," he said. "I'm sure he'll be fair."

Scully's colleagues on the bench say the judge's life experience, coupled with his personality traits, make for an "ideal" judge.

"He's a person of compassion, humility, industriousness, patience. And he is a grinder, someone who just keeps working at it," Ortiz said. "I think he's a perfect combination for a judge."

After 25 years of making the long commute from his home in Lake County to the federal courthouse in Chicago, Scully retired from the U.S. Attorney's Office in 2007.

"I had done most aspects of what I set out to do — to combat the Chicago Outfit," he said.

Around Christmas 2008, he submitted his bid for a judgeship.

"I've always enjoyed being in court, and I missed being in court from '07," Scully said.

For Scully, a father of four grown children and the grandfather of four whose name has followed the titles of captain, assistant U.S. attorney and now judge, "I'm a husband, dad and a grandpa first."

Looking back on the path that led him to the bench, Scully is quick to mention his high school sweetheart and wife of 40 years.

"I've had experiences that a lot of other people are not able to have, and that's mainly been made as a result of going to the Naval Academy. A lot of it flowed from there," Scully said. "But so much of it is as a result of having a wife who was supportive."

Thanks to Maria Kantzavelos

Friday, January 15, 2010

World's First Al Capone Birthday Bash

In the 1920s and ’30s, when Al Capone ruled the Chicago underworld, a party thrown by the infamous gangster was a major event.

His celebrations were massive, attracting city officials, celebrities and other dignitaries.

Now, 63 years after Capone’s death, Prospect Heights resident Richard Larsen is looking to make Capone’s 111th birthday an extravaganza Chicago area residents will not forget. On Jan. 17, Larsen will host his first Al Capone birthday bash at the Executive Plaza Hotel in Wheeling.

“God only knows” where the idea came from, said Larsen, a Capone historian, whose work on the subject includes a film titled “The Other Side of Capone,” which aims to show the softer, less notorious side of the man. “I was just sitting around, thinking of the next Capone promotion I could come up with.”

Larsen, who runs the Web site, said he is hoping to throw the type of party Capone himself would have thrown, with guests dressed to the nines, music and dancing.

The festivities will include numerous contests, including a Capone look-alike contest, Capone trivia and a best-dressed gangster contest. Winners will receive prizes like $50 gift certificates to Salerno’s Pizza in Glenview and packages from Sybaris Romantic Getaways.

Larsen said Richard Crowe, a Chicago historian well-known for his haunted Chicago tours, will serve as master of ceremonies, and Antoinette Giancana, the daughter of former Chicago mob boss Sam Giancana and author of books on the Chicago mob, has said she will attend. But the party also will be a promotional event, Larsen said. Guests will have a chance to view clips of “The Other Side of Capone,” which Larsen made with director Ron Karpman of Buffalo Grove, and listen to “Madonna Mia,” a love song Capone wrote for his wife while imprisoned at Alcatraz.

Larsen and Karpman have produced and released a CD of “Madonna Mia” as recorded in English and Italian by two vocalists backed by mandolin, accordion, violin, piano and upright bass.

The recording has served as a sort of lead-in to the duo’s next project. Larsen and Karpmen also are hoping to find actors willing to appear in a scene for their next film, “Capone the Music Man,” which they will be shooting at the party.

The scene will be a re-enactment of a banquet Capone threw in September 1927 in Chicago after the famous boxing match between Jack Dempsey and Gene Tunney. Karpman explained that Dempsey lost the fight and Capone lost thousands of dollars he had wagered, but Capone decided to throw a lavish party anyway.

During the party, Capone asked the bandleader if Capone himself could conduct the orchestra through “Rhapsody in Blue,” Karpman said. When the song ended, Capone turned around and had tears in his eyes.

“Here’s this brutal murderer crying,” Karpman said. “It underscores the saying that music soothes the savage beast.”

Larsen said he and Karpman recently found a band, the Glenview-based Ralph Wilder Orchestra, to perform “Rhapsody in Blue” at their party.

Both Larsen and Karpman said they realize that throwing a party in the name of a gangster could be considered unusual—controversial, even. They are aware that past Capone-related events in Chicago have been met with criticism and scorn by the likes of law enforcers and municipal officials.

When the subject came up, Larsen produced a laminated Chicago newspaper article in which a city of Chicago spokesperson declined to comment on an event that perpetuated Chicago’s image as a city of gangsters.

Larsen said he chose not to hold his event in Chicago, because he didn’t want to deal with the potential backlash—or the parking constraints.

Even though the party is to be held in Wheeling, Wheeling police asked that questions about the event be directed to Prospect Heights police, whose jurisdiction includes the Executive Plaza Hotel. Calls to the Prospect Heights Police Department were not returned. But Karpman said he and Larsen are not trying to deny the crimes Capone committed, and they “aren’t trying to put a halo over his head.”

“On the surface, it sounds very strange, and I think that’s the reason Rich decided to do this,” Karpman said.

Larsen said he hoped the prospect of a birthday bash for a dead gangster would draw attention. Perhaps, he said, people would attend and learn about the lesser-known side of Capone—the man that he said established soup kitchens during the Great Depression and gave money to a fund to support widows of police officers killed in gang warfare.

“Do we always have to focus on the negative?” Larsen said. “Have we not seen enough films on Capone as this horrible person?”

Larsen said with the event, he hopes to reflect Capone’s more generous acts by donating portions of proceeds from ticket sales to local charities, including Greater Wheeling Area Youth Outreach and the Chicago Coalition for the Homeless.

For that reason, Todd Hoffman, assistant general manager at the Executive Plaza Hotel, said he and the other hotel administrators were looking forward to the Capone birthday bash.

“We're hoping it's going to be a great event,” Hoffman said. “We're hoping the community supports it because a lot of the proceeds are going back into the community.”

Those involved with the event also anticipate a bash that reminds people of the how significant Capone was to Chicago.

“Chicago should get used to the idea that Capone is iconic in its history,” Larsen said.

Thanks to Jeff Danna

Thursday, January 14, 2010

Junior Gotti Will Avoid 5th Racketeering Trial

Junior Gotti can stop looking over his shoulder, for the time being. Federal prosecutors decided today that they will not retry the alleged mafia Don on racketeering charges.

If they had pursued prosecution, it would be the fifth time the government went after "Junior."

"In light of the circumstances, the Government has decided not to proceed with the prosecution against John A. Gotti," said Preet Bharara, the United States Attorney for the Southern District of New York, in a statement.

After his fourth trial ended in a mistrial last month, law-enforcement sources had speculated that the feds would finally quit because the jury pool had been tainted.

"Obviously we're thrilled," said Gotti's defense lawyer Charles Carnesi. "He wants to savor the moment with his family. I'm very pleased, I think they acted appropriately."

Gotti has been free on $2 million bail since a jury deadlocked on Dec. 1 after deliberating for 11 days.

Seth Ginsberg, another one of his lawyers, called it the "right decision."

"I hope that they stick to it this time and let John and his family be at peace," Ginsberg added.

Three trials in 2005 and 2006 also had ended in hung juries, after the government presented evidence accusing Gotti of ordering a kidnapping and attempted murder plot against Guardian Angels founder Curtis Sliwa.

In the latest trial, prosecutors for the first time attempted to tie Gotti to multiple murders, in addition to the claims about Sliwa.

The repeated hung juries left some comparing Gotti to his father, the late John "Dapper Don" Gotti. The elder Gotti was convicted of racketeering in 1991. He was sentenced to life in prison and died in prison in 2002.

Family members claim "Junior" Gotti has been a government target simply because of his last name. The 45-year-old mobster, born on Valentine's Day in Queens, led the Gambino crime family for much of the 1990s while his father was in prison.

Gotti wants his six children to have something he didn't have while he was growing up – a present father. His dad had already spent nine years behind bars by the time he was 13.

Thanks to Hasani Gittens

Al Capone Era Murder Mystery To Be Examined by Chicago's Cold Case Unit

The City Council’s resident historian cracked open the history books for another re-write Tuesday, this time involving some of Chicago’s most notorious characters: mob boss Al Capone; Prohibition Agent Eliot Ness and Edward J. O’Hare, father of the city’s most famous war hero.

Thirteen years after absolving Mrs. O’Leary’s cow of responsibility for the Great Chicago Fire, Ald. Edward M. Burke (14th) wants to set the record straight about the role O’Hare played in Capone’s conviction — and possibly shed new light on O’Hare’s gangland-style 1939 murder.

At Burke’s behest, the deputy chief of detectives in charge of the Chicago Police Department’s Cold Case Squad agreed to take a fresh look at the 70-year-old murder case, with help from a soon-to-be-released book about Capone that just might provide a few clues.

Asked how much time he expects police to spend on the case, Burke replied, “Very little.” The alderman said he’s more concerned about setting the record straight about the role played by Edward J. O’Hare, Capone’s business partner-turned-federal informant.

“O’Hare was the linchpin in the criminal investigation that led to the conviction of Capone. But for his cooperation, Capone may never have been brought to justice,” Burke told the Police Committee. “If nothing else, O’Hare’s reputation ought to be rehabilitated and the truth ought to be known. ... It was not ‘The Untouchables.’ It was not the role played by Kevin Costner ... that led to the conviction of Al Capone, the most notorious criminal of American history. ... It’s a fiction of Hollywood.”

The story of Edward “Butch” O’Hare, is well-known. He was the World War II fighter pilot who shot down five Japanese bombers, saved the U.S.S. Lexington and was ultimately rewarded by having his name attached to the airport once known as Orchard Field.

Lesser known is the fact that the war hero’s father, Edward J. O’Hare, was a gambler and owner of the Hawthorne Kennel Club racetrack in Cicero who partnered with Capone only to turn on the Chicago mob boss.

The elder O’Hare helped crack Capone’s bookkeeping codes, leading to the mobster’s conviction on tax evasion charges.

On Nov. 8, 1939, the 46-year-old O’Hare was driving his new Lincoln Zephyr near Ogden and Rockwell when he was gunned down by three men wielding shotguns.

The car carrying the gunmen was reportedly traced to a Cicero nightclub owned by Ralph Capone, Al’s older brother.

Newspaper stories at the time described O’Hare as a “prize moneymaker for the mob” and speculated that he was assassinated, either in retaliation for ratting on Capone or to serve notice that Capone was planning a comeback.

During’s Tuesday’s Police Committee hearing, Jonathan Eig, author of the soon-to-be-published book, “Get Capone: The Secret Plot That Captured America's Most Wanted Gangster,” offered a different explanation.

Eig noted that, at the time of O’Hare’s murder, Capone was suffering from syphilis that had ravaged his mind and body — so much so that he was “incapable of and uninterested in resuming his career.” And even though O’Hare helped deliver the goods on his former partner, there was “no evidence to suggest that Capone knew it,” the author said.

Instead, Eig pointed fingers at a Capone family struggling to pay medical bills, court fines and a $300,000 debt to the IRS.

“Prohibition was over. The old outfit was earning at a fraction of its peak. But, Eddie O’Hare was still making money at his racetracks, including Sportsman’s Park,” Eig said.

Noting that Al Capone was a “silent partner” in the racetrack, Eig said, “To round up cash, the Capone brothers would likely have turned to O’Hare and demanded Al’s fair share of the profits. O’Hare was a big, strong, tough and stubborn man. If he refused to pay — or if he refused to pay as much as the Capones wanted — he would have understood the consequences. That’s why he was carrying a pistol at the time of the shooting.”

Burke believes the murder investigation was derailed from the outset by Daniel “Tubbo” Aloysius Gilbert, the chief investigator for the Cook County state’s attorney. Gilbert was subsequently described by investigators as Chicago’s “richest cop.”

“If the mob ever had a police chief, it was Gilbert,” Burke said.

Thanks to Fran Spielman

Blood Oath The Heroic Story of a Gangster Turned Government Agent.

Blood Oath: The Heroic Story of a Gangster Turned Government Agent.

"Organized crime is not a thing of honor," we're reminded by George Fresolone, a former member of the Bruno-Scarfo family, which ran the underworld in Philadelphia, Atlantic City and other parts of New Jersey. As a minor cog in the gambling-loansharking wheel, he went to prison in 1983 with assurances that his fellow mobsters would take care of his family financially. But they did not, and here began Fresolone's disillusionment with organized crime. In 1988, he became an informant for the New Jersey State Police, collecting enough evidence to indict some 39 figures. Ironically, he was inducted into La Cosa Nostra a month before his undercover work ended. With the aid of Wagman (The Nazi Hunters), Fresolone tells a suspenseful story, ending with a chapter on his life in the Witness Protection Program.

Tuesday, January 12, 2010

Central European Organized Crime

Central Europe and especially the Czech Republic and Hungary, are used as centers for coordination, communication and conciliation between very powerful international crime syndicates, which have managed to install their HQs of their operations and gain access in the heart of the EU.

Although it has not been a subject of special reporting by the media in Europe, when assessing organized crime activities in Europe, one should take into serious consideration the situation in this region.


Hungary has the unique geo-economic advantage of occupying the middle of Europe between the east and the west side of the Continent and in the midst of the important axis of the Danube as well as the Baltic-Aegean one. As an effect, crime syndicates were apt in using this country as a major transit ground for their pan-European operations and as a base for coordinating their cells in other regions.

Similarly, the accumulation of capital in this country as in most former communist countries was made during the '90s, partly due to smuggling and illegal activities, thus the very criminal activity occurred in an institutionalized societal manner along with corrupted practices in the security and the judicial sectors.

The local criminal networks in Hungary and Budapest in particular, are less significant in the hierarchy of than that of the infamous Italian Mafia or the Chinese triangles. They were basically formed by former members of security forces and pre-existing black marketers who maintained contacts with local authorities. The rapid development of the above had as a result the control of up to 20% of local GDP, due to a number of endogenous and exogenous factors.

First, the geo-economic position of the country facilitates to a maximum degree the traffickers to move illicit cargo by road and rail routes. For example from Ukraine tobacco and women are trafficked towards Austria and from Romania illegal immigrants are transferred, whilst from Croatia and Serbia weapons and drugs are being imported.

Hungary has adequate public infrastructure and storage services (Logistics), providing a strong argument for crime syndicates to pursue their activities there. In order for criminal groups to transform themselves into an integrated organized crime structure, there has to be the necessary infrastructure that will enable them to have a continuous and smooth flow of contraband merchandise, which in turn will provide economies of scale for their operations. Under this assumption, Hungary seems as a perfect destination.

Another important factor was the widespread corruption in the local security forces and the coexistence of former and present executives with links to members of the organized crime. The result was poor security controls and in general non-compliance with the law.

Currently Budapest hosts the global epicenters of illegal pornographic material, contraband cigarettes and is also a meeting point and negotiation center between the heads of international crime groups in the sectors of arms, women and drugs trafficking.

Money laundering is also another thriving illegal industry, closely associated with the above.

According to recent information the Hungarian Security Council, a government agency providing guidelines and action against crime in the country, disturbing trends for the foreseeable future, were noted. Indeed confidential reports of the local police, found that the number of criminal organizations has increased considerably after 2007, as well as their, turnover. Also, it is estimated that construction companies and business groups involved in public procurement are now subject of the control of organized crime, and it is also very interesting that groups coming from China and Latin America, have managed to establish their presence there, in order to increase their positions in Western Europe via Budapest.

Furthermore the Hungarian intelligence service (NBH) in a report in 2008, stated that after the accession to the EU in 2004, a great increase was witnessed in the turnover of the organized crime groups, which became more flexible and multifaceted, effectively penetrating more legitimate businesses. Hungarian officials-many of whom have been trained in schools of the FBI in U.S- are actively fighting the flow of black money that tends to lead traces back into, key executives in many respectable businesses, not directly associated with illegal activities.

In general, taking into account that the current global financial crisis creates the need for many legitimate businesses of fresh capital, one can assume that Hungary will have to face more challenges in those issues in the short-term.

So far the security forces of Germany, Italy, Austria, Sweden and USA work very closely with the authorities and has made several successful joint operations.

Czech Republic and Slovakia

The Czech Republic is an economically and socially developed country in Central Europe that has been facing for years serious issues relating with the activities of organized crime. Local security authorities relay in their reports, that they are facing some 100 organized groups in the country with at least 3,000 members. Alongside, other 5,000 people have auxiliary roles in these organizations which are also staffed by accounting, legal and other professional functions.

Of all these criminal groups, 30 are integrated and internationalized, reaching the gold standard of the "International Mafia" with diverse activities in many countries around the world.

Local leaders of criminal networks are nationals of the former Soviet Union and especially Russia, Ukraine, Georgia and Moldova. Also Croats, Serbs, Albanians, Bulgarians, Romanians, Vietnamese and Chinese make up the majority of the groups. There are also groups from Turkey and Greece specialized in money laundering and managing drug loads moving to Germany as well as, illegal prostitution.

Finally, there is definite presence, of the so-called Italian mafia and various groups from Latin America, Lebanon, Iran and Nigeria. The Czech nationals tend not to create their own organizations but to adhere to foreign and not as heads but as support staff, which both demonstrates the prevalence of foreign organized crime in society and also the difficulty for the authorities to collect information on the important criminal echelons.

On the other hand, Czechs arch-criminals have managed to form groups outside the country and particularly in France, Italy, Croatia and Bulgaria. Occasionally there are reports of activity in Greece, Turkey and Cyprus regarding the above.

The Czech Republic because of its extensive borders with Germany, which is considered as the prime market of smuggled goods and drugs in Europe, facilitates trafficking to there and acts as a coordinating center for groups wishing to enter Germany. Moreover, in recent years several cases have been revealed, of coordination and delivery of drugs original source from the Middle East to the U.S. via Prague and Ostrava.

Further in the borders between the Moravian province and Poland, there is widespread tobacco, alcohol and drug contraband mainly being managed by organized groups of Romany and local kingpins.

Regard illegal migration and trafficking, the Czech Republic is infamous as a place of concentration and transit of Ukrainian and Moldovan nationals sent to Germany and the Scandinavian countries.

In Slovakia also the issue of organized crime is high on the news and the police reports. The country "hosts" 50 groups with over 700 regular members. Most of those are foreigners, Kosovo-Albanians, Ukrainians, Russians and Georgians working with local elements.

Slovakia from the late 90s has been informally divided into zones of influence between these groups in order to avoid unnecessary turf wars that had claimed many victims over the past years. The capital Bratislava has a strong Albanian presence, specializing in the illegal prostitution industry with annual turnover that may exceed 50 million Euros.

Further Slovakia has become a center of negotiation between pan-European criminal groups that regularly meet on mountain vacation hotels in the south of the country and agree into wider activities.

According to occasional news and information, the Romanian teams specializing in car theft "divide" their illegal sales when negotiating in the Slovakian territory and representatives of other groups from Germany and the Netherlands divide the market relating to illegal prostitution. Finally, the narcotics contraband provides the opportunity for contacts between different groups from the Netherlands, the Scandinavian countries, Turkey, Albania-Kosovo and Germany that agree on promoting substances in specific locations.

In Slovakia there is an extensive weapons smuggling network, which mainly imports weaponry from Moldova, the Caucasus and the Balkans. At times customers have come even from sub-Saharan Africa and the Middle East looking for explosives and anti-tank rockets and missiles.

Finally one of the fastest growing groups are the Chinese and Vietnamese, who now have formed a well-structured organized crime network that stretches from Athens Greece to Glasgow, Scotland, a development that will most certainly occupy the actions of the European security Authorities in the coming years. The Vietnamese, especially are consider as prime dealers and distributors of contraband cigarettes, clothing and other consumer items.

The Vietnamese network is also specialized in illegal immigration from East Asia to Europe and it is of trans-border nature, since the Vietnamese in Czech (Prague, Brno, Ostrava), are in contact with their fellow compatriots in Germany, Poland and Austria, thus a wider ethnic network emerges that has expanded considerably over the past 15 years.

Lastly, there is a strong trend of "Phony marriages" to be recorded, especially between Vietnamese organized members and locals, in order to facilitate the integration of the former in the society. Similar finding have been found regarding Albania, Russian and nationals from the ex-Yugoslavian countries. Therefore the members of the crime syndicates are able to firmly root themselves in the EU and attain the status of the citizen that protects them from expulsion should their activities become known to the authorities.

In Hungary, Czech Republic and Slovakia, 90% of drugs sold within the territory are being distributed by foreigners. Typically, there is an abundance of hard drugs in Prague and Budapest, and the price of heroin is half than that sold in Berlin and Paris and so are other drugs like ecstasy tablets. This creates what is called "Narco-tourism" which along with "sex tourism" in the same cities creates ideal conditions for the accumulation of large amounts of black capital for the criminal organizations.

It is indicative of the great economic momentum gained by the criminal syndicates that only in Budapest it is roughly be estimated that 1,000 "International escorts" are being illegally employed earning an income of excess of 80 million Euros for organized crime syndicates.

A similar situation occurs in other countries, and if one adds the whole range of illegal sex industry in Central Europe (Clubs, entertainment, movies, brothels, internet-phone appointments, etc), then it could be safely estimated that an annual turnover of over 5 billion Euros is being generated. As it can be seen, the so-called "real economy" is being greatly influenced by the parallel-illegal one, creating a symbiosis that is based in the importation of substantial amounts of capital.

In recent years, Prague has witnessed the establishment of Russian originating criminal groups that have set up perfectly legitimate businesses and in particular hotels, restaurants and real estate companies, in order to launder capital. More than 150 have been made known over the past few year and they also include businesses, mansions and horse riding clubs in the tourist regions of Karlovy Vary and Marianske Lazne.

As far as Karlovy Vary is concerned, it already being named as a "Russian city", due to the sheer amounts of investments made there by Russians, quite a few of those of highly questionable nature.

The ultimate goal of this new strategy is -according to a confidential report by the Czech Ministry of Interior- the penetration by the Mafiosi of the economic and political life of the country and already numerous cases of corruption involving mayors, and local council heads has been recorded

The research on organized crime activities in Central Europe, may gain further notice for the European security architecture, since the countries located in this geographical zone, are being used as stage points for further inclusion of criminal structures in the larger EU countries such as Germany and to a lesser extent France and Italy.

Moreover the European integration process and the lack of border controls, creates a unique opportunity for further empowerment of those criminal networks, that are able to tap into their specialization and acquired experience and further enlarge their illegal activities, as is the case over the past twenty years.

The collapse of Communism in 1989 provided a challenge for the security authorities across the EU that it is becoming vividly clear nowadays and will most certainly be of importance regarding the future of the Continent that has to confront a series of important challenges relating to the security of its citizens.

Thanks to Ioannis Michaletos and Marketa Hanakova.

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