La Cosa Nostra Mob and Russian Mafia Team on Alleged Fraudulent Gas Tax Scheme

Thirteen members of the Mafia and of Russian organized crime were indicted today on charges of collaborating in a scheme to evade $60 million in Federal and state taxes on the sale of gasoline and fuel oil, Federal officials said.

The United States Attorney for New Jersey, Michael Chertoff, called it the largest tax-evasion conspiracy of its kind, part of a larger problem nationwide that defrauds the Government of more than $2 billion a year. The figure is an estimate based on retail gasoline sales and intelligence from informants.

The conspiracy, a scheme that has become increasingly common in the last decade, involves the formation of a chain of dummy wholesale distributors, whose existence helps disguise the intent to avoid taxes. Passing Along the Cost

In a legitimate transaction, fuel leaves the refinery and is sold to a distributor, one of several in the wholesale chain. These refiners, wholesalers of gasoline, are known as "producers." Under Federal tax law producers who register with the Internal Revenue Service may sell to one another without having to pay excise tax. But eventually, as the gasoline makes its way to market, a wholesaler will sell to a small company without the exemption, or directly to the retailer. At this point, the excise tax must be paid, and the producer-seller who has the tax exemption must pay the tax, passing the cost along with the sale price of the fuel.

In illicit transactions involving groups of dummy wholesalers who falsely claim tax-exempt status as "producers," the fuel is moved from one company to another in a series of paper transactions. But the fuel itself never leaves the initial storage center.

Often, the indictment said, invoices among the chain of companies reflected sale prices higher than those actually paid. The difference, the Government said, was often refunded to certain retailers as a cash kickback.

One company in the illegal chain was called the "burn" company, which supposedly would be responsible for paying the applicable taxes. But all its documents were false. In fact, the indictment said, it was a sham intended to insulate the other companies from detection.

When the tax man came calling, the "burn" company disappeared and the other companies in the chain dissolved. Undercutting Wholesalers

The Government said potential tax revenue ends up as a mob tax -- in this case to the Gambino crime family -- and to enrich the conspirators.

To maintain their illicit business association, the conspirators also reinvest some of the unpaid tax money in their companies, enabling them to undercut legitimate wholesalers by a few cents a gallon. This further tightens the mob's hold on the industry, officials said.

The defendants are charged with multiple counts of racketeering, wire fraud, tax evasion and money laundering and face millions of dollars in fines and prison terms of 30 years to life.

Mr. Chertoff and James C. Esposito, the agent in charge of the Federal Bureau of Investigation in New Jersey, said the indictments came after a four-year inquiry.

In February 1992, a fire destroyed a building in Ewing Township, N.J., near Trenton, where the undercover agents had established a series of distributorships. Joint Illegal Operation

After the fire, the agents were contacted by some of those indicted today and were told they would not be allowed to conduct business unless they agreed to make payments and to have their profit margin regulated by the assocation formed by the Gambinos and the Russians.

Mr. Chertoff described the case as a "snapshot of how the traditional and emerging organized crime families operate together."

Mr. Chertoff described the Gambinos' involvement as typical of Mafia groups in providing an "enforcement mechanism." The Gambino family entered the bootleg fuel business recently, officials said, after initial success by the Lucchese, Colombo and Genovese families in infiltrating organizations already set up by Russian emigres.

The prime Gambino figure indicted today was Anthony (Fat Tony) Morelli, who was identified as a captain in the crime family. He was accused of supervising Gambino associates who used threats and violence to help maintain the illegal fuel operation and collect up to 2.25 cents for each gallon sold through the association of dummy companies. Mr. Chertoff said $6.7 million in cash was paid as a mob tax to the Gambino crime group.

Mr. Morelli's associates were identified as Joseph Maritato of Manalapan, N.J., Edward Dougherty of Staten Island, John A. Brogna of Brooklyn, Anthony Zummo of Commack, L.I., and Gregory Federico of Mountainside, N.J.

Victor Zilber of North Brunswick, N.J., who came to the United States from the Soviet Union in 1979 and was naturalized two years ago, was described as operating many of the dummy companies. The indictment said he worked closely with Mela Rubinov, also of North Brunswick, and Arkady Seifer of Brooklyn, who were partners in the associaton of companies run by Zilber.

Igor Roizman of Brooklyn and Jacob Dobrer and his son, Vyacheslav Dobrer, both of Staten Island were also identified as members of the bootleg fuel consortium.

A 13th defendant, George Doddy of Cherry Hill, N.J., was described as an associate of the Dobrers who set up a meeting for the attempted extortion of the undercover business by the Dobrers. All were arrested today, except the Dobrers, whose whereabouts overseas were not known. Mr. Roizman is serving a sentence in the Federal prison in Allenwood, Pa.

Thanks to Charles Strum

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Uncle of Mafia Informant, Peter "Big Pete" Chiodo, is Found Slain in Brooklyn

Two years ago Peter Chiodo of Staten Island was shot a dozen times and critically wounded, but the 500-pound informer against the Mafia still lived to testify against a dozen major underworld figures.

A year ago Mr. Chiodo's sister, Patricia Capozzalo, of Brooklyn, was seriously wounded in what the authorities described as a failed attempt by the mob to kill her.

And yesterday, the police found the body of Mr. Chiodo's uncle, Frank Signorino, of Staten Island, stuffed in the trunk of a parked car in East New York, Brooklyn. There were numerous wounds to his forehead, some resembling gunshot wounds.

The authorities would not say last night what the motive might have been in Mr. Signorino's slaying. But the investigators and witnesses in the trials of Mafia leaders last year have said that the earlier shootings were intended to intimidate Mr. Chiodo into silence. Role in Upcoming Trial

Ronald Goldstock, director of the New York State Organized Crime Task Force, said of Mr. Signorino's slaying, "There could be a thousand reasons for it, and the silencing of Mr. Chiodo is one possible motive."

Mr. Chiodo, one of the more prominent witnesses in the Federal Government's recent prosecutions of Mafia leaders, is expected to testify again at the upcoming trial of Anthony Casso of Brooklyn, whom prosecutors say is the boss of the Lucchese crime family.

Mr. Casso was captured by the F.B.I. two weeks ago as he was getting out of a shower at a hideout in Mt. Olive, N.J. He had been a fugitive for almost three years and had been charged with ordering the killings of 11 people linked to fraudulent construction contracts in New York.

Mr. Casso has been described by Federal authorities as one of the most dangerous Mafia figures in the country. With his capture, officials say the leaders of the region's five Mafia groups are either serving long prison terms or awaiting trial.

The police discovered the body of Mr. Signorino with a black plastic bag tied around his head in the trunk of an abandoned car at Vermont Street and Flatlands Avenue. Reported Missing

Sgt. Michael Race of the 75th Detective Squad said the remains, which were frozen, were turned over to the city Medical Examiner's Office, which will perform an autopsy.

"The body was frozen," Sergeant Race said "Mr. Signorino was reported missing three days ago, and we are not exactly sure what caused the wounds in his head." The detective said the remains had been identified by the dead man's family.

Sergeant Race said the authorities were trying to determine whether Mr. Signorino had any ties to the Mafia.

Mr. Chiodo, whose girth earned him the nickname "Big Pete," turned informant against Mafia figures after being shot a dozen times in May, 1991.

Mr. Chiodo, who has admitted that he was a captain in the Lucchese crime family, said he decided to cooperate with the authorities after two of his criminal associates threatened to kill his wife and his father.

According to the authorities, in the yearlong interval between the shooting of Mr. Chiodo and that of his sister, there were repeated attempts to intimidate other relatives of Mr. Chiodo's.

At the trial last year of Vittorio Amuso, a Lucchese crime chieftain who was convicted of nine murders, Alfonse D'Arco, another underworld figure turned informant, testified that he had made such attempts. Mr. Chiodo also testified about Mafia activities at that trial.

Another person connected to Mr. Chiodo, Anthony Fava, who the police said was a close associate, was found shot to death in Brooklyn 18 months ago. None of shootings has been solved.

Thanks to Richard D. Lyons.

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Jack Gail and Joseph Granata Recorded on Mob Tapes

As Jack Gail and Joseph Granata drank coffee in a Rosemont restaurant last December, they talked privately of their experiences as killers, according to secret tape recordings.

Granata, 51, a former Chicago mob enforcer turned government informant, said he liked to see his victims plead for their lives.

''You just wanna have fun,'' Granata told Gail, a felon from Highland Park. ''What ya do is let him beg, let him beg, let him beg. Did you ever have a . . . . beg?''
''No, I never let anybody beg,'' responded Gail, according to a recording of the conversation that was entered into court proceedings in Lake County on Tuesday.
''Oh, I love it,'' Granata continued.
''Let me tell you something,'' said Gail, continuing the conversation. ''When I do that there ain`t no conversation, nothin.` See, I`m a believer. . . I don`t deal with them (lying).''
''I laugh,'' Granata replied. ''I bust out laughing. You`re gonna see, I`m gonna laugh. Cause I love it. I laugh and they look and they go, `Oh, it`s all right, this is all a joke.` ''

Granata, who said he was an enforcer for Joseph Ferriola, a late Chicago crime boss, recorded the conversation in his role as an undercover government informant. In the Rosemont restaurant meeting on Dec. 2, and in other meetings that Granata recorded with Gail, the two men talked frequently of murders and trafficking in drugs.

Lake County Assistant State`s Attorneys George Strickland and John Kornak say the tapes prove Gail`s propensity for crime, and they asked Circuit Court Judge Raymond McKoski to consider the tapes when he sentences Gail on Thursday.

A jury in August convicted Gail, 47, of armed violence and possession of a controlled substance.

The charges involve some cocaine and a .357 Magnum revolver that Gail purchased from Granata in January in the parking lot of the Lake Forest Oasis on the Tri-State Tollway. Gail faces 6 to 30 years in prison.

His attorney, Dennis Berkson of Chicago, objects to McKoski considering the tapes when he sentences Gail. He contends that Granata is a liar and that the conversations are puffery and braggadocio by two men trying to impress each other with their toughness.

''What we have here is two individuals who are lying to each other,'' said Berkson, pleading with McKoski on Tuesday not to consider the tapes. ''I don`t think that anyone can say that Mr. Granata is an honest man.''

Berkson said the state is attempting to ''bring in other crimes that have not been proven or corroborated'' against his client.

Strickland said there is no corroboration because the drug trafficking and murders that Gail and Granata were planning before Gail`s arrest did not happen. ''What we are basically trying to do is show what they were going to do in the future,'' Strickland said.

McKoski said he will review the taped conversations and decide which parts he will consider at the sentencing hearing on Thursday.

At the time of his arrest in January, Gail was living in the Highland Park home of Karen Canzoneri. Her husband, Salvatore, a pizza company owner, was slain in his home in 1989. The murder has never been solved.

Gail faces another trial on Oct. 5 on charges that he solicited the murder of Gabriel Ponzio, a man in Florida whom Gail disliked. The murder never took place.

Thanks to Robert Enstad.

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Sammy the Bull Testifes That John Gotti Ordered the Slaying of Gambino Crime Boss Paul Castellano

Reputed mob boss John Gotti ordered the slaying of Paul Castellano out of fear that he faced assassination himself, Gotti's onetime underboss said during his first day of testimony yesterday in a hushed and heavily guarded courtroom.

There were "quite a few reasons" why Gotti wanted the head of the Gambino crime family killed, Salvatore Gravano said in a low and gravelly voice. But, he testified, Gotti's chief motive was self-preservation.

Gravano described the 10 months during which, he, Gotti and others planned Castellano's execution. He said the final plan came shortly after the death of cancer-striken Aniello Dellacroce, the Gambino family's underboss and Gotti's mentor.

"Paul showed total disrespect and didn't go to the funeral," Gravano told the jury. "We were wondering if and when . . . Paul might make a move - if he might strike," Gravano testified. "We wondered if he might shoot John and Angelo" Ruggiero, a close Gotti associate. "Paul Castellano, after Neil [Dellacroce] died, said he was going to wreck John's crew," said Gravano. He said Castellano was angry that members of Gotti's crew had violated a family rule - enforceable by death - against drug dealing.

Gravano, the highest-level mob informant ever to testify against Gotti, was calm and composed as he took the stand under a deal to reduce his prison sentence to 20 years. Indicted along with Gotti and co-defendant Frank Locascio, he faced life in prison without parole if convicted at trial. Gravano occasionally glanced at Gotti, and once during the testimony pointed out Gotti and Locascio as being the boss and consigliere of the crime family.

Under questioning by Assistant U.S. Attorney John Gleeson, Gravano said others beside Gotti were dissatisfied with Castellano.

"At the time, there were a lot of conversations about Paul. Nobody was too happy with him . . . He was selling out the family for his own basic businesses," said Gravano, explaining that Castellano formed several business partnerships with leaders of the Genovese crime family.

Gravano said Gotti and his followers also were upset that Castellano had allowed another crime family to kill a Gambino crime captain in Connecticut. "You just don't let another family kill a captain in your family," Gravano testified. "That's against the rules."

Gravano said Gotti discussed two other possible plans for killing Castellano that were rejected. In one plan, Castellano was to have been shot at his home on Staten Island. But that plan was dropped because "there was a lot of FBI surveillance at his house," Gravano said.

Another rejected plan called for an old-time mobster to walk into a diner where Castellano and his driver, Thomas Bilotti, frequently went before meeting with Castellano's lawyer, James LaRossa. "The old man was known by Paul and would be able to walk in and shoot him," Gravano said.

Gravano, 46, said the final planning session for Castellano's murder came the night before Castellano and Bilotti were shot to death outside Sparks Steak House on East 46th Street on Dec. 16, 1985.

Frank DeCicco, a Castellano loyalist, had informed Gotti and Gravano that he would be meeting Castellano and Bilotti for dinner at Sparks on Dec. 16, Gravano testified. Also among those attending the dinner, said Gravano, would be Thomas Gambino, son of the late Carlo Gambino, for whom the Gambino family is named.

The night before, at a meeting Gotti arranged, Gotti, Gravano and Ruggiero sat down with eight other mob figures at Gravano's drywall construction firm in Brooklyn and outlined a plan to kill two men whose names were not revealed. "We didn't tell them who was going to be hit," Gravano said. "We just said he had to be done."

Gravano said it was decided that the shooters would be John Carneglia, Edward Lino, Salvatore Scala and Vinny Artuso, all members of the Gambino crime family.. The others would serve as backups who would be stationed at various locations.

The next afternoon, the participants - armed with guns and walkie-talkies - met Gotti and Gravano in a small park on the Lower East Side and were told the names of their targets for the first time. "We told them exactly who was going, and that it had to be done," Gravano testified.

The designated shooters were stationed in front of Sparks, Gravano said, and four backup shooters were posted around the block. He said the backups included Anthony Rampino, a convicted Gambino soldier, and Ruggiero.

"Me and John got in the car and went to the Third Avenue side of East 46th," Gravano testified. "I was a backup shooter. If they [Castellano and Bilotti] got away, we would be ready."

At that point in his testimony, U.S. District Court Judge I. Leo Glasser closed the session for the day and ordered Gravano's examination to continue today.

Gravano, known on the street as Sammy the Bull, spent much of his two hours on the witness stand discussing his crime career, which he said began shortly after he dropped out of school at the age of 16. From 1961 to 1964, "I worked on and off. I committed armed robberies, burglaries."

He served in the Army between 1964 and 1966. After his discharge, he said he returned to Brooklyn. "I went back to my life of crime," he said.

Gleeson asked him how many murders he was admitting."Nineteen," Gravano said.

Gravano said he was something of an expert killer. Asked by Gleeson if there was a common expression used by the Gambino family for murder, Gravano said without emotion: "To do a piece of work - to whack someone out."

He described his 1976 initiation into the Gambino crime family in the presence of Castellano. He said during the ceremony, his trigger finger was pricked with a pin, a drop of blood was placed on the picture of a saint and the picture was set afire.

He then repeated his oath of silence: "If I divulge any secrets of this organization my soul should burn like this saint."

Gravano testified that officials of the Luchese, Colombo and Bonanno crime families were notified of the plan to kill Castellano. "They were behind the killing," he said. New York's fifth crime organization, the Genovese family, was not consulted. "We didn't trust them because Paul Castellano was in partners with them," Gravano said.

Thanks to Pete Bowles

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U.S. Says Mob Is Drying Up In New York

New York's five Mafia families, who survived years of Federal attack, have deteriorated in recent months to the point that three are virtually out of business and two are crumbling, many law-enforcement authorities and experts say.

After 60 years of illicit expansion, the combined racketeering power and wealth of New York's five traditional families is going the way of their counterparts in most other cities around the country, who have succumbed to a decade of aggressive Federal prosecution, the authorities say.

For the first time since the Mafia groups were formed in the 1930's, the experts say that all five families -- Gambino, Genovese, Lucchese, Colombo and Bonanno -- are in disarray, hurt by convictions and indictments of top leaders, murderous internal disputes, generational changes and defections by high-ranking members who have become Government witnesses.

The Lucchese family, for example, has had three changes of leadership in less than a year: one boss was jailed, and a second became a Government witness after he botched the killing of a mob captain -- who himself went on to become a key witness in a major racketeering trial aimed at ending the Mafia's influence in the window-installation industry.

All eight defendants were cleared of the racketeering charge on Friday, and six were cleared entirely, while two mid-level bosses were convicted of extortion. But prosecutors said afterward that the case had succeeded in driving the mob out of what had been a lucrative industry.

Moreover, many of the mob's customary money-producing rackets in the New York region, including extortions and kickbacks in the garment district, the Fulton Fish Market and the construction and trucking industries, have been eliminated or reduced by recent convictions and civil court remedies, the experts assert.

Federal and state law-enforcement officials say that the Colombo and Bonanno families have also been so shaken that they are no longer considered powerful threats. But officials cautioned that the the Genovese and Gambino groups -- the two largest in the country -- remain potent forces in illegal sports betting, loan-sharking, labor racketeering and the waste removal industries in the region.

Andrew J. Maloney, the United States Attorney in Brooklyn, and Ronald Goldstock, the director of the state's Organized Crime Task Force, forecast that the families could be reduced to the level of street gangs within a decade. They said that if prosecution pressure and defections continue, the mobs will lose what remains of their once-flourishing extortion rackets in legitimate businesses.

"No organization, legal or illegal, can withstand repeated decapitations at the top," Mr. Maloney said about the New York area. "They are certainly no longer a growth industry."

Not all experts are that optimistic. Robert J. Kelly, the president of the International Association for the Study of Organized Crime, agreed that the families seemed to have been weakened, but said that if the family units disappear they may undergo another incarnation. Mafiosi 'Will Persist'

"There may not be a Mafia, but there will be mafiosi who will persist as long as there are lucrative criminal opportunities," said Mr. Kelly, who is a professor of social science and criminal justice at Brooklyn College.

From intelligence obtained mainly from electronic eavesdroping and informers, experts cited these signs of decay in the families:

• Leadership vacuums or internal wars have weakened the Gambino, Lucchese, Colombo and Bonanno groups, with the bosses and top leaders in each of the families serving prison sentences or in jail awaiting trials.
• The number of active mob members has dropped by half in most cases since a peak in the late 1970's, law-enforcement officials say. The Colombos are down to about 100 members and the Bonnano family to 75.
• The only reputed boss of a family not behind bars is Vincent Gigante, the suspected Genovese leader, who has been declared mentally unfit to stand trial on racketeering charges. Four capos or captains are trying to run the family but still consulting Mr. Gigante on major decisions.
• The acting boss of the Lucchese family, Alphonse D'Arco, 59 years old, and a capo, Peter Chiodo, 40, both apparently fearing for their lives because of family strife, have become government witnesses. Their defections, said Mr. Maloney, may produce a wave of new indictments against Lucchese members. "It could be the death knell for the family," he asserted.
• Control of the Colombo family is being disputed by two factions and the authorities say that the rivals have issued contracts to murder each other.

The new turmoil in the Lucchese family stemmed from distrust and a failed attempt to kill Mr. Chiodo in May. After surviving 12 bullet wounds, Mr. Chiodo became a Government witness. When Mr. D'Arco learned last month that there was a contract on his life for botching the hit on Mr. Chiodo, he, too, became a turncoat.

Since the 1930's, the New York region has been the Mafia's strongest bastion in America. Except for New York and Chicago, the F.B.I. and Federal prosecutors maintain that in the last decade they have largely eliminated Mafia strongholds in most big cities. But they say the job has been harder in New York, the only area with five separate, large families, while other cities had one family to eradicate.

Experts say that New York's families have survived because each family created a rigid organization, with rules that defined what kinds of crime could be committed and how profits would be divided.

The Mafia groups also engaged in more sophisticated white-collar crimes than other criminal gangs, and they infiltrated major labor unions. 'Mob's Invisible Tax'

The Manhattan District Attorney, Robert M. Morgenthau, said that by skimming "multimillions" annually from the construction and garment industries, the families had imposed an "invisible tax" on the region.

"What they do translates directly into higher costs for such basic things as clothes, the costs of an apartment and an office and discourages legitimate businesses from coming here or staying here," Mr. Morgenthau added.

Laura Brevetti, a former Federal prosecutor, noted that testimony and records disclosed that the Colombo family alone netted at least $80 million a year in the mid-1980's from gasoline tax frauds in New York, New Jersey and Connecticut. And Mr. Morgenthau noted that a raid last year on the office of Thomas Gambino, 62, whom prosecutors have called a major organized-crime figure in the garment district, found records showing that he had $75 million in stocks, bonds and bank accounts.

The names of the five families are actually designations by law-enforcement authorities, based on the groups' founders or later bosses. Most members are not related by blood.

As in other regions, the New York Mafia has now has been severely injured by long-term legal strategies that concentrate on eliminating entire family hierarchies.

Federal prosecutors have used the Racketeer Influenced and Corrupt Organizations Act, or RICO, and state authorities have applied the state's new Organized Crime Control Act, known as Little RICO, to obtain convictions and indictments against previously insulated bosses and leaders. 'Process of Grinding Down'

Mr. Goldstock, who was not involved in the case, called the window trial "neither a victory nor a defeat, but rather part of an investigative process of grinding down organized crime."

He emphasized that until several years ago it had been "almost unheard of" to convict such high ranking mobsters as Venero Mangano and Benedetto Aloi, who were convicted on Friday on charges of extortion in the window-installation industry.

Two bosses who remain in control of their organizations, investigators say, are John Gotti and Vincent Gigante, 63; authorities say they head the Gambino and Genovese crime families.

Mr. Gotti, 51, is in jail awaiting trial on racketeering charges that include the slaying of his predecessor, Paul Castellano. But Federal and state investigators said that Mr. Gotti still runs the Gambino family from prison, using his son John Jr. The officials, however, believe that his absolute control has slipped in his absence.

Mr. Gigante, 63, was declared mentally unfit last March to stand trial. But investigators believe that he, too, is still in charge.

Thanks to Selwyn Raab

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