Cybercrime Is Funding Organized Crime

For months now, the feds have said organized crime was moving into the realm of cybercrime, using hackers to run scams and break into systems.

But Assistant U.S. Attorney Erez Liebermann, chief of the computer hacking and intellectual property section in New Jersey's U.S. Attorney's Office, says cybercrime has been so profitable for organized crime that they're now using it to fund the rest of their underground operations.

"In terms of the risks and rewards, there's a higher chance of getting more, financially, using the world of computer crime. Organized crime is realizing this," he said. "We have suspicions of organized crime being behind some cybercrime that we're investigating here. The attorney general has issued reports about organized crime and terrorist links using computer crime, hacking and intellectual property crimes as a way of raising revenue. It's being used to fund organized crime."

Analysts at Websense, a Web security company, reported late last year that the mob was expected to band together more closely with hackers in 2007 to form a more organized cybercrime community.

The beefed-up online crime cooperative has begun buying, selling, and trading ready-made cyberattack toolkits and exploiting zero-day vulnerabilities. Dan Hubbard, VP of security research at Websense, noted that organized criminals have realized that the Internet has been an untapped resource for earning them profit. Tools and exploits to steal personal, business, and financial information are the hottest commodities for cybercriminals.

Liebermann said federal law enforcement is in a good position to tackle this burgeoning crime.

"The laws that we have ... target a lot of this activity," said Liebermann. "I do not feel handcuffed, no. There is the Cybersecurity Enhancement Act out there, and if it passes, it would enhance penalties and add computer crime to the list of predicate crimes that would give rise to a RICO [Racketeering Influenced and Corrupt Organizations Act] charge."

The prosecutor added that when they charge someone under RICO, the sentencing guidelines provide enhanced penalties because "organized crime is an enhanced problem to be dealt with." If the law passes and computer crimes are added to the list of RICO crimes, it would enhance the penalties for organized crime with computer acts.

And Liebermann says the United States is becoming more and more able to chase down and prosecute cybercriminals, organized or not, even if they're out of the country. Until recently, launching hacking or denial-of-service attacks from outside U.S. borders was enough to keep criminals beyond the long arm of the U.S. law.

Liebermann says their reach, though, is lengthening.

"It presents a special problem, not just for the U.S. but ... other countries have recognized that this is a problem," he added. "Previously, getting information was a problem. It was a more laborious process to get that information without skipping any steps or taking any roundabouts. Other governments are able to work faster, using the same tools we previously had to get the information back on a more efficient basis. We can pick up a phone with a list of countries, like the United Kingdom or Israel, and have a live body. It's a good list of countries."

And even the countries that aren't participating in a particular process are more willing to help in some way now. That's a huge help, according to Liebermann, because of the fleeting nature of digital evidence.

"Botnet herders shift to new servers again and again and again," he said. "If you identify a server but it takes months to get information from another country, the chance of getting any information on this is very slim. If the cooperation is immediate, the chance of getting information is much better. It's a recognition that computer crime has no boundaries."

Thanks to Sharon Gaudin

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Mobster Presidential Campaign Contributions

Rudy Giuliani's campaign revealed that the actor in The Sopranos who played Paulie Walnuts donated to them, even though Rudy is a Mafia-buster. It's pure self-interest. The more real mobsters who are off the street, the more jobs there are for the actors who play them. Thanks to Argus.

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Chicago Crime Commission Briefs U.S. Paratroopers on Mob Tactics

Some U.S. paratroopers headed for Iraq will have a working knowledge of organized crime provided by Chicago mob fighters.

The head of the Chicago Crime Commission this month provided intelligence personnel from the 101st Airborne Division with a primer on the investigation of organized-crime rings that will assist them in their upcoming deployments to Iraq and Afghanistan.

Gangsters and other career criminals are an extra wrinkle in the security situation in the theater. Kidnappings and smuggling are pinned on organized rings in Iraq while Afghanistan is a hot bed of heroin.

Although the Crime Commission is primarily geared to monitoring the activities of the Windy City's "Outfit," its expertise can also be applied to other rings that are organized in similar fashion and engaged in venerable rackets such as extortion, murder and drug trafficking.

Commission President James Wagner said in a statement Monday that the troops received extensive background on gangs operating in the region as well as training in ways to investigate and break up such organizations.

Wagner will be revisiting Fort Campbell later this summer for briefings on the subject with top Army commanders.

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Nick Calabrese Blasted by Attorney on Cross Examination

Friends of ours: Nick Calabrese, James "Little Jimmy" Marcello, Sam Carlisi, Frank Calabrese Sr., Anthony Spilotro
Friends of mine: Michael Spilotro

An attorney for James "Little Jimmy" Marcello, the reputed head of the Chicago Outfit, today blasted a star witness' account that Marcello was made into the mob in a 1983 ceremony.

Marcello is half Irish, and according to the testimony of Outfit killer Nicholas Calabrese, only men who are fully Italian can be made members of the Chicago Outfit.

Marcello's attorney, Thomas Breen, asked Calabrese on the witness stand if he had met Marcello's "lovely mother Mrs. Flynn," referring to her maiden name.

"And Mrs. Flynn is as Irish as Paddy's pig, isn't she?" Breen said.

"Then Jimmy Marcello lied," Calabrese shot back, apparently a little rattled. "[Marcello's sponsor] Sam Carlisi lied, they lied to the boss."

Nicholas Calabrese gave a detailed account of how he, Marcello and Calabrese's brother, Frank Calabrese Sr., were made with several other men in a ceremony in a closed Chicago area restaurant in 1983.

Breen suggested through his questioning that Calabrese was lying about many details he gave to FBI agents and told jurors from the stand.

Breen asked Calabrese about the making ceremony.

"They serve food?" Breen asked.

"No," Calabrese said.

"No corn beef for Mr. Marcello?" Breen jabbed.

Calabrese has admitted to taking part in at least 14 murders for the mob. As part of his plea agreement with prosecutors, he is avoiding the death penalty and hoping to get something less than life in prison. He's testifying against his brother Frank Calabrese Sr., Marcello and three other men on trial.

Earlier in the trial, Breen scored a point when he was able to get Nicholas Calabrese to say he did not recognize the photo of one of the men that he took part in killing, Nicholas D'Andrea, in Chicago Heights in 1981.

Calabrese said he had only seen the man briefly. The mob was interested in grilling D'Andrea about the attempted murder of a south suburban mob boss but beat D'Andrea so badly that he died before questioning.

The attorney for Calabrese's brother, Frank Calabrese Sr., revealed during his questioning earlier in the day that a family member of one of Nicholas Calabrese's murder victims secretly recorded Nicholas Calabrese during a prison visit.

Nicholas Calabrese took part in the murders of the mob's man in Las Vegas, Anthony Spilotro, and his brother, Michael Spilotro. Their brother, Dr. Pat Spilotro, a dentist, was a friend of Nick Calabrese and also did his dental work, Nicholas Calabrese testified. The dentist visited Nicholas Calabrese in prison once and recorded him, but Calabrese told him nothing about the murders.

In 2001, Nicholas Calabrese sent Pat Spilotro a Christmas card from prison, telling him that he had made a decision he never believed he would have made. Nicholas Calabrese was referring to cooperating with the FBI, according to court testimony.

"God willing, I'll be home next Christmas," Calabrese wrote.

Thanks to Steve Warmbir

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Police Sergeant Recalls Battles with Mobsters

Friends of ours: Joseph "Joey the Clown" Lombardo, Frankie "The German" Schweihs, Felix "Milwaukee Phil" Alderisio, Sam Giancana, Johnny Roselli, Jimmy Hoffa
Friends of mine: Richard Hauff

Among the observers paying close attention to the “Family Secrets” mob trial in Chicago is retired police officer John J. Flood who boasts about having one of the first law enforcement run-ins with two of the key defendants in the case.

“Joey Lombardo and Frankie Schweihs: in my lifetime and career as a police officer I have been fighting those guys in different matters of law enforcement over those years,” Flood told WBBM’s Steve Grzanich during a recent interview from his home in Las Vegas.

It is the first meeting with Lombardo and Schweihs that Flood remembers best back in 1964 when Sgt. Flood, with the Cook County Sheriff's Police, interrupted Schweihs and Lombardo and thwarted an attempted hit on mob associate Richard Hauff. “It was happening up on Mannheim Road and Lawrence Avenue at a hotel up there. I came upon it and almost got killed making the arrest,” Flood said.

That was back in the early days for Schweihs and Lombardo, before they hit police radar, said Flood. “I called into Chicago Intelligence and asked who is Frankie Schweihs and they didn’t know. I had to call a knowledgeable Chicago detective who told that’s Phil Alderisio’s bodyguard. He’s a bad guy. Find out who was in the car and who they were going to kill,” said Flood.

While the Family Secrets trial may close the books on 18 mob murders, Flood expects that other mysteries may go unsolved.

“The significant murders that Lombardo would know about would be the murders of Sam Giancana and Johnny Roselli. They were supposed to testify before the Church Commission on the assassination plot against Fidel Castro but they turned up dead. If Lombardo was talking, which I doubt he ever would because he lives by his code, he could tell you who killed (Jimmy) Hoffa and what happened.”

Will guilty verdicts mean the end of the Chicago outfit? "Someone will replace Lombardo. All you have to do is look at the fabric of the American system – corporate crime, white collar crime, organized crime. There is no way in the world organized crime people are going to be leaving gambling, going to be leaving pornography, the lending of money, prostitution – it is not going to happen,” Flood said.

According to Flood, the “Family Secrets” trial will likely be the final chapter for the likes of Lombardo and Schweihs. The retired police officer said the trial also brings to a close his own 40 year career as an organized crime fighter.

Flood is the founder of the Combined Counties Police Association, one of the most well-known and respected independent law enforcement unions ever formed in the United States. He is also one of the foremost experts on organized crime and an authority on the Chicago Outfit.

Thanks to Steve Grzanich

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Daley Refuses to Answer Questions on Pal's Mob Connections

Friends of mine: Fred Barbara

'Journalists don't carry guns . . . no, they carry the ink, the ink,'' railed Daley last Thursday at a City Hall news conference.

Hizzoner has been on a tear, ripping the local news media with the fury of a hurricane hitting the coast.

The mayor can be a bully at times.

Nobody wants to say it in so many words, but every department head at City Hall, certainly his 10 previous chiefs of staff who have been put through the mayoral wringer and spun out City Hall's revolving door, know what it's like to be in the woodshed. When they leave, their tongues have been torn out. Not one has ever publicly spoken of what it's like to work for Daley, understanding that it is best never to talk of he-who-shall-not-be-named.

The mayor's wrath was on full display last week. Part Jack Nicholson, part Richard Nixon, Daley roared like a blast furnace, lashed out like a wounded lion, fulminating when reporters dared to inquire about his relationship to Fred Barbara.

''I think it's ridiculous,'' fumed the mayor, refusing to answer, barking back at reporters, ''Any other questions?''

Barbara is a millionaire many times over thanks to lucrative connections to city waste hauling contracts, his wife's now-defunct trucking firm tied to the city's scandal-scarred Hired Truck program, and his ongoing banking business in partnership with well-connected politicians. But many years ago, long before he ever golfed or dined with the mayor or contributed thousands of dollars to Daley-backed candidates, Barbara had caught the eye of the feds. They believed he was mobbed up and indicted him in 1982 in a gambling and juice operation. Barbara was acquitted, never convicted of that or any other crime.

Suddenly, last Tuesday, Barbara's name was vaulted back into public view thanks to the massive Family Secrets mob trial playing out at the federal building. Nick Calabrese, aging hit man-turned-government-witness, told a spellbound courtroom about all manner of mob horrors, including how the Chicago Outfit blew up or burned down certain unlucky suburban restaurants. Fred Barbara, according to Calabrese, was a member of one of the mob's bombing crews back in the 1980s. Barbara didn't respond to my phone calls.

The front page Sun-Times headline the next day read, "Hit man: Daley pal in on mob bombing.''

For Daley, the ink hit the fan. The mayor was apoplectic. For two days, he lashed out at reporters.

''You have the power of the pen, you have a lot of power,'' he declared. ''We don't even know who you are.''

And yet he seems to know where we grew up.

''Most of you never grew up in Chicago,'' said the Baron of Bridgeport.

The problem is the mayor thinks everything is unfair these days. Just about any question, let alone criticism, rankles him. City Hall reporters take the brunt of the mayoral battering as the mayor castigates some of them for living in the suburbs, suggesting they don't really know or care about the city he loves.

He wags his finger, reminding the press of its own dirty laundry, like recently convicted Sun-Times press boss Conrad Black and his creepy, crooked right-hand man, David Radler.

''Look at all the scandals you have received as journalists, every day there is another article, I mean, c'mon, every day there's an article,'' said Daley. ''Every day there's someone, you know, doing some misconduct."

And then he lectures us on our cold hearts and callousness.

''You report a gun killing on Page 25," the mayor jabs triumphantly. ''How about that one? Because it's not your son or daughter. They're not poor. You have a lot of power, don't you realize that?''

We do.

Then again, so does the 19-year occupant of the City Hall's fifth floor.

Mayor Daley has a difficult job that he performs with passion and skill. And we in the press are no shrinking violets. We can take the bullying and the bluster. But at the end of the day, it wouldn't hurt, along with the journalism lecture, to just answer the question.

Thanks to Carol Marin

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Material Girl, Madonna, to Make Movie on Mafia World?

It seems that Madonna is getting increasingly fascinated with the mafia and the gangster world.

After working with Timbaland on hip-hop tracks, the pop diva is now planning to make a film about her jailbird former lover, Chris Paciello, who was once a New York mobster.

Madonna dated Paciello for two years in the nineties, but the pair parted ways after he was jailed for murder following a theft in which a woman was shot dead by an accomplice. But now that the one-time nightclub investor is free, Madge is seriously thinking about making a movie on his life and has even met him three times in the past six months to discuss the project.

A shortlist of stars has been put together for the movie including Mark Wahlberg, John Cusack and star of massive American sci-fi series Heroes Milo Ventimiglia.

"Recording with Timbaland must have given Madonna a taste for gangsters. She's back in touch with her old flame Chris. She has met him three times to thrash out a deal - first when she went to LA for the Academy Awards, then twice in New York, including her most recent trip there last month," The Sun quoted a source, as saying.

"There's no romance. She is desperately keen to produce a film based on the book Mob Over Miami about him. She has always been fascinated by tough guys and loves his story," the source added.

However, the source adds that Madge's hubby Guy Ritchie has made it very clear that he won't be involved in the movie, as he thinks that the whole project is a bad idea.

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Book Review: Deep Water: Joseph P. Macheca and the Birth of the American Mafia

Contrary to popular belief, New York City was not the birthplace of the American Mafia. As students of organized crime history know, the real birthplace was New Orleans; but while the prevailing literature about the mob in the Big Easy has concentrated on the late 19th century, Deep Water takes the origin back to the Civil War. As such, this is one of the more foundational organized crime books ever written. The book wraps the definitive era of American history in with the emergence of a new kind of criminal. Deep Water is ostensibly the story of the origins of the Mafia in America told through the trials of the Macheca family, fruit merchants in New Orleans. The main character is J.P. Macheca, stepson of the Macheca patriarch and an intriguing figure from both a business and political sense - he spent nine months in the Confederate Army.

Thomas Hunt brings the story alive through his rich attention to details. You can practically smell the fetid air of the New Orleans waterfront. The one thread that ties the elements together is the rich familial history intertwined with the background history. I think in teaming with Martha Macheca Sheldon, Hunt made a smart move. Anecdotal family stories brings a dimension to the Macheca saga that you rarely get from a general Mafia book. Not wanting to lavish too much praise on the author, but it’s always exciting to find a new way to approach a subject.

The opening half of the book takes the reader through mid 19th century New Orleans. The Civil War, as seen through the eyes of this Southern melting pot, comes alive. From there, Hunt expertly parses out the Reconstruction policies and the ensuing political fallout in post-war New Orleans. The last part of the book deals with the assassination of Police Chief David Hennessey and the ensuing legal proceedings and eventual vigilante killings of a number of Sicilians, including J.P. Macheca. This section, having been written about before, takes a new life here, with an explanation that makes the lynching of the Sicilians more a calculated hit than a random act of mob violence.

If there is any criticism, it’s the lack of notes. It’s evident from the references that Hunt dug deep for the story. I would have liked to have seen where some specific pieces came from.

Deep Water is a worthy addition to the organized crime canon and the greater body of books on Civil War-era America.

Thanks to Blog Critic's Scott Deitche.
Scott M. Deitche is an environmental scientist by profession. He also writes on the Mafia, including the books Cigar City Mafia: A Complete History of the Tampa Underworld, and The Silent Don: The Criminal Underworld of Santo Trafficante Jr.

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Gambino Wire Tap Led to Crooked NBA Ref, Threats Now from Mobsters?

Friends of ours: Gambino Crime Family

The allegedly dirty NBA referee who's set to sing in a mob point-shaving scandal sought police protection yesterday -- after receiving threats that he could be whacked, cops said.

Three Manatee County Sheriff's squad cars screeched up to the Bradenton, Fla., home of terrified former NBA official Tim Donaghy to investigate menacing telephone calls against him. "Our concern is for his safety and his family's safety," said Sheriff's Lt. Robert Mealy. "We are definitely going to share any information we get with the FBI."

The rogue ref's family is even urging him to enter the federal witness-protection program, one friend said. "They think he will be killed if he goes to prison, or even if he doesn't, just because he's probably talking, cooperating, and that's ratting on the mob," the pal said. "I don't think [the Mafia] would take that very well.

"[Relatives] are very concerned for his safety," the friend added. "I think they knew something serious was going on, but not like this, not this big, whole life-or-death issue with the Mafia. I mean, it's the Gambinos."

Mealy declined to reveal more details of the threats against Donaghy, who is being investigated by federal authorities for allegedly working with mobsters tied to the Gambino crime family to fix the scores of NBA games to pay off his gambling debts.

The disgraced ref is said to be set to spill all - threatening to bring down anyone and everyone with him, sources said. He'll be naming names of other refs, coaches, players and game "validators," who sit unobtrusively in the stands to review calls on the court, the source said.

"There are other allegations of gambling that the FBI will run down," based on Donaghy's talk so far, one source said. "Everybody's pointing a finger at everyone else."

Donaghy's name came to the attention of feds during wiretap probes of Gambino mobsters. Yesterday, "he received some threatening phone calls, and he wanted them documented," Mealy said. "I know Mr. Donaghy was concerned."

Donaghy, 40, resigned from the NBA shortly after this past season amid then-undisclosed allegations that he bet on games he officiated. Feds have not yet revealed which games they are probing.

Several friends in Cape May, N.J., where his parents summer, said Donaghy's co-workers grew suspicious of his behavior about three years ago, when he would offer to trade free tickets to certain games with some refs in exchange for others - and then suddenly renege.

"He just started screwing them," one friend said. "Tickets started going missing, misplaced . . . It was no longer, 'Hey, Tim's kind of an a- - hole.' It became, 'Tim is f- - - ing with the NBA.' And that's when they stopped trusting him completely."

Retired dentist John Minutella of West Chester, Pa., where Donaghy grew up and worked at a golf course, recounted a horrific prank Donaghy pulled on him 10 years ago, when the embattled ref put a dead bird in his golf bag. Minutella found the maggot-infested carcass 24 hours later. "Nobody wanted to play golf with him," said Minutella, 64. " I can't say one nice thing about him. I believe this guy was almost soulless."

Thanks to James Fanelli

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Mafia Cop to Remain in Vegs Jail Until Tax Charges Trial

Friends of ours: Ralph Eppolito, James Eppolito, Gambino Crime Family
Friends of mine: Louis Eppolito, Stephen Caracappa

A former New York police detective dubbed the "mafia cop" must remain in custody pending his trial in Las Vegas on tax charges, a judge ruled Thursday.

Louis Eppolito, 57, stood before U.S. Magistrate Judge Peggy Leen in a black-and-white-striped inmate uniform as she declared him a danger to the community and a flight risk. Eppolito's wife, two daughters and son attended the Las Vegas hearing but declined to comment afterward.

Eppolito and another former New York detective, 64-year-old Stephen Caracappa, are accused of working for the Luchese crime family while serving as officers with the New York City Police Department.

Last year, a New York jury found the pair guilty of participating in at least eight mob-related killings, but a federal judge later dismissed the racketeering case after determining that the statute of limitations had run out. However, Assistant U.S. Attorney Eric Johnson said Thursday, the judge also found that prosecutors had an "overwhelming case" against the pair.

Detention for both defendants already has been ordered in the New York case pending a government appeal of the dismissal. Johnson said he expects the state of New York to prosecute Eppolito and Caracappa on murder charges if the federal government fails with its appeal.

The two detectives retired in the early 1990s and moved to Las Vegas, where they were arrested in March 2005.

A federal grand jury in Las Vegas indicted Eppolito and his wife, Frances, in January 2006 on three counts of filing a false income tax return. Their trial is scheduled to begin Sept. 24 before U.S. District Judge Roger Hunt.

The couple's son, Anthony, has been charged with distributing methamphetamine. His trial is scheduled to begin Sept. 24 before U.S. District judge Philip Pro.

Prosecutors have said Louis Eppolito, who appeared briefly in a dozen movies, grew up in a family closely linked with organized crime.

His father, Ralph, was a Gambino family soldier, and his uncle, Jimmy, was a Gambino captain.

Louis Eppolito's 1992 autobiography, "Mafia Cop: the Story of an Honest Cop Whose Family Was the Mob," details his police career and his Mafia connections.

Thanks to Carri Geer Thevenot

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