Scores

by Blutrich, Michael D. ;

  I shook my head and opened the gift. I didn’t know whether to laugh or cry as I read the words on a printed T-shirt: “Participant in the Federal Witness Protection Program.”

  The next morning, sleeping on my stomach, dead to the world, I heard that ever-annoying sound of my vibrating beeper dancing across the hotel room’s nightstand. I was so comfortable, so content, I decided not to answer. Finally, at long last, the humming and scratching faded, and I happily drifted back into oblivion.

  But it came again. And again. Conceding defeat, I lifted my head and found myself drawing a series of desperate breaths, almost as if I was drowning. Reaching out, I resentfully grabbed at the little box, pressed the button, and read the brightly lit green-colored screen: “Call Bill Ready. 911.”

  “Figures,” I cursed, “the fucking FBI.” I picked up the phone and dialed Ready’s number.

  “What’s doing, Bill?”

  “Jack and I just wanted you to know we’re making the undercover investigation public today, that’s another reason you needed to leave town. We’re gonna drop in on Mike Sergio and Willie Marshall at their homes, bringing both holiday cheer, and a reel of video clips showing them committing and confessing to crimes.”

  “My God,” was all I could gasp, my mind reeling in anticipation of the reactions Sergio and Marshall would have to the tapes. The list would include: disbelief, denial, horror, fear, hate, betrayal, and worst of all, a desire for revenge.

  “I just wanted to give you a heads up, to tell you to turn off your phone, and stay well hidden. We’ll call later.”

  It was time for my first check-in with Casey back at the office. Pulling out an untraceable calling card, I reached the firm. “Michael, help me, the phones are out of control!”

  My reaction was a hearty laugh. “Take a deep breath and start at the beginning.”

  “I don’t know where to begin. We’ve had repeated calls from the Daily News and the New York Post. Mike Sergio called at least fifty times. All of your friends called as did several of your clients. Everyone wants to talk to you, everyone wants you to call them.”

  My heart was racing even though the news was exactly as I’d anticipated. “Case, the lawyers will handle the reporters. Tell Sergio he can reach me through Bill Ready at FBI headquarters. And just tell my friends you’re waiting to hear from me.”

  Later that week, accompanied by his attorney, Pearlstein dutifully attended his proffer with the Heritage task force. Again chairing the gathering was Mike Siegel, and the question-and-answer session went off without a hitch. Just as with my proffer, Siegel declared that Pearlstein would be allowed to serve as a cooperating witness in the Florida prosecution, and reiterated we would be receiving the sentence reduction recommendations from his office as outlined at the meeting in New York.

  During this same time period, a major media furor began unfolding back home. The first hints came as our Scores public relations agent called to say the Daily News was preparing a major story about the Scores investigation. It was after midnight one night when we learned the piece would be in the paper’s morning edition. Andrew secured a copy by driving to Miami in the wee hours and, when he returned, tossed one to me: “The article is on page two.”

  I opened the paper and found myself gazing at a giant-sized picture of my face—my image consuming no less than one-third of the entire page. Indeed, the article wasn’t “on” page two, it was page two, and it took my breath away. “Serial murderers don’t get pictures this big,” I moaned.

  New issues were also brewing in unexpected corners. Rudolph Giuliani, then mayor of New York City, embarked upon a moral purge aimed at excising Manhattan of adult entertainment. Somehow feeling he was the man to set the proper tone for the city, His Honor intended to banish all adult movie theaters, bookstores, and strip clubs to a rat-infested zone adjacent to the West Side Highway, an area where prostitutes and drug dealers ruled the roost.

  When the measure passed the City Council, no one in the legal community expected the courts to uphold such abridgement of free speech. But everyone was proven wrong; every stage of judicial review floated down on the side of the new banishment plan. The personnel back at Scores, and at every other high-end lap dance club in the city, grew nervous. While there would certainly be lengthy and complicated court battles ahead, the writing was on the proverbial wall: Scores either needed a new theory of defense, or new premises in the mayor’s nether zone.

  With nothing but time on our hands, Andrew and I threw ourselves into tackling the problem by sitting poolside and reading every word of the laborious new law. After days of arguments going nowhere, we finally identified an issue worth debating. Even playing devil’s advocate, we became suddenly excited, believing we’d actually found a hook on which to fight. We concluded that the language of the law itself could be turned against the city.

  Specifically, the law defined an adult bookstore as one where the square footage devoted to adult (meaning sexual) subject matter was more than 40 percent. “So tell me if I’m wrong,” I mulled out loud, “if a store only uses, for example, 39 percent of its total space for sexy magazines, books, and peep shows, the law doesn’t apply.”

  “But it doesn’t help us,” Andrew complained, “we’re not a bookstore.”

  “Au contraire, the drafters of this particular law were lazy. They defined adult clubs, like our Scores, by reference to and incorporation of the language applicable to bookstores.”

  “And if we,” Andrew was excited now, “limit topless dancing to less than 40 percent of our total square footage, the law can’t touch us?”

  “Bingo!”

  We immediately went to work on the club’s floor plans with a local architect. The big question was whether the club could still function if 60 percent of the lease’s square footage was put to use in ways outside the realm of topless dancing. After consultation with the professionals, the answer was an unqualified affirmative!

  With independent ratification and endorsement from our experts, I picked up the phone and shared the fantastic news with the underlings running the big show back home. To a man, everyone opposed our new tactic. They were much more enthusiastic about completely different strategies being adopted by most of our competitors. In the end, I made the final decision. Scores would part company with other clubs in the city, and we would make structural changes to comply with what would soon become universally known as the “60–40 Rule.”

  In the months and years that followed, 60–40 proved to be Scores’ salvation. Virtually every lap dance club in the city outside the new zone was eventually closed by judicial fiat. The state appellate courts, on the other hand, unanimously upheld 60–40.

  CHAPTER THIRTY-EIGHT

  The 156-Page Plea

  JANUARY 21, 1998

  The Manhattan federal prosecutors scheduled a press conference, summoning a worldwide media audience for an announcement of great import. The Honorable Mary Jo White, Manhattan’s United States Attorney of long standing, spanning the terms of multiple presidents, took center stage to confirm the unsealing of the “Scores” indictment against, among dozens of others, John A. Gotti, Jr., the acting head of the Gambinos. According to White, the indictment contained charges of racketeering, murder conspiracy, extortion, and loan-sharking; and included captains, members, and associates of multiple crime families.

  We’d received no advance warning of the announcement. We grabbed every newspaper carrying the story, printed every available Internet article, watched news telecasts, and slowly put together the pieces. Among the other named defendants were Mike and Steve Sergio, Willie Marshall, both DePalmas, and Tori Locascio.

  Ms. White, her small torso partially hidden behind rows of microphones, declared the case was a major blow to organized crime nationwide. Applauding the work of her staff and the FBI, she went on to remind the public how rare it is for law enforcement to penetrate into the highest tiers of the mafia, and how the indictment was nothing less than a giant step toward elimina
ting the mob’s extortion of innocent working people and businesses. Her closing words were, “What this case graphically shows is the power, profit, and reach of the Gambino crime family in business and industries, both legitimate and illegitimate, throughout the metropolitan New York area.”

  There was a sense of long-delayed satisfaction in Palm Beach as we watched clips of the press conference on repeated national news broadcasts. We collectively roared upon spotting Carol Sipperly, Marjorie Miller, Jack Karst, and Bill Ready snuggled on the stage behind White and their superiors, all seeking credit and acknowledgment for the mob prosecution of the decade.

  When a copy of the indictment itself appeared on the Internet, we read it through. We laughed mightily at some of the nicknames attached to familiar figures. Mike Sergio was appropriately listed as a/k/a (“also known as”) “Mikey Hop” and his son was branded with a grammar-school nickname, “Sigmund the Sea Monster.”

  “No one calls Steve by that name,” I declared.

  “Who cares?” Andrew bellowed in reference to his long-standing nemesis. “No matter what happens, Steve will forever be recorded in mafia history as ‘Sigmund the Sea Monster.’ It was all worth it, just for that.”

  When Bill Ready called a few days later, I teased him about how badly I felt at being ignored on the very day the undercover efforts reached fruition. I also laughingly suggested that Mary Jo White should have acknowledged the loss of my hemorrhoids as part of the undercover operation.

  “The truth, Michael, is that Jack and I haven’t slept for days. We were in charge of rounding up the defendants for arrest and we had little else on our minds.”

  “So everyone’s behind bars?”

  “Absolutely, and they’ll all stay there for the duration. We don’t think any of them will get bail. And while I can’t talk details about the prosecution anymore, Jack and I both know there would’ve been no case at all without you and all the risks you took. No one may have said it on television, but you are a real hero in all this.”

  At the first Florida debriefing following the New York press conference and subsequent media splash of attention, we were treated to lunch at a local barbeque restaurant by members of the task force. It was clear our months of sessions with Florida prosecutors were winding down as we’d already shared most of our secrets and insights. The mood was pleasant and relaxed, the barriers of formality and distrust having long ago eroded over months of interaction.

  At one point during lunch, one of the agents casually turned to me. “That was some press conference back in New York. I don’t think we realized just how important an investigation was going on at Scores.”

  “It sure pissed off Judy,” one of the other agents chimed in, then stopped, quickly realizing he’d misspoken.

  As the group strolled back to their cars, I slid next to the agent who’d revealed Hunt’s negativity about New York. “Why would Judy care about our mafia case?”

  The agent looked around furtively and, confirming we were out of earshot of the group, quietly returned: “Pissed is the understatement of the century. She was downright livid, filled to overflowing with piss and vinegar. I heard her complain about the unfairness of all the publicity New York gets while our work down here is ignored.”

  “Doesn’t she understand that a major indictment against the world’s largest crime family, including its boss, always gets extraordinary press attention? It’s not about the case—mafia stories sell papers!”

  “She doesn’t care. She hates the New York prosecutors, she hates you two, and she’s not impressed with your undercover work.”

  About two months later, I received an emergency beeper message from my lawyer, Norman Moscowitz. I returned the call with a burning coal in the pit of my gut.

  “Michael, I’m sitting here staring at your plea agreement from Hunt. I’ve never seen anything like it in my life.”

  “I don’t understand, Norman, what are you talking about?”

  “Well, I’ve tried several times to read it, but I just can’t make any sense of it.”

  “You’re talking nutty. What’s the big deal about a plea agreement?”

  “For one thing,” Norman stuttered, “it’s 156 pages long!”

  I dropped the phone.

  It took me five nights to read through the maze Hunt had constructed. Hunt’s mind-set seemed to be that all participants were responsible for the entire fraud. As a result, she hadn’t bothered to specify which crimes I’d knowingly participated in, and which were perpetrated by others without my knowledge or participation. In essence, the plea recounted every act of every crime committed at Heritage, and held me responsible for all of them. I was suddenly reading all about crimes I never knew took place, but now, I seemingly “owned” them all.

  We were also being required to plead guilty to the commission of alleged “new crimes” during our cooperation with New York—which was an outright lie. Hunt acknowledged as much in a call with us, but claimed that if we didn’t agree to this and sign the plea, Delaware was prepared to indict us in its state courts, a claim which also turned out to be completely false. But in the end we had no choice. The prosecutors had all the cards and, if we didn’t accept the plea agreement, all of our cooperation in both districts would be ignored at the Florida sentencing.

  These “new crimes” had in fact been part of a puppet show directed by the prosecutors during our time in New York, who’d wanted us to pursue a vigorous defense in both a civil action commenced in the Southern District of New York by Delaware, and in an insurance insolvency proceeding for Heritage filed in Delaware, so that it wouldn’t appear we were cooperating with the FBI at Scores. With permission of the federal judge presiding over the Delaware civil case in New York, and against my better instincts, we filed false affidavits in the New York civil action, and false Proofs of Claim in the Delaware insolvency, opposing all relief the insurance company sought. If we’d undertaken any other strategy, all the mobsters and our insurance co-defendants would have known (or seriously suspected) we’d been flipped into cooperating. Everyone in law enforcement understood the life-threatening situation presented, and how important our approved filings had been to the eventual success of the mafia investigation—with the solitary exception, whether real or feigned, of Hunt.

  CHAPTER THIRTY-NINE

  Surrender

  1998

  Over the ensuing weeks, an eerie wall of silence developed. Calls to Orlando seeking status reports went unacknowledged, messages left for the New York prosecutors about a rumored recent Hunt meeting with the New York team were ignored, and even calls to the FBI sat unreturned. To my mind, the deafening silence was a clear signal of impending catastrophe.

  A flow of rumors emanating from both Florida and New York confirmed my worst fears. According to sources, Hunt arrived in New York with a coterie of task force members and proceeded to make incredulous inquiries, based on wholly false facts, as to how it was possible the New York prosecutors allowed their cooperators to burn a quarter million dollars a month in Scores profits on lavish living, while the insurance company they defrauded was in a multimillion-dollar hole. Needless to say, none of this was true. Most of the money from Scores went right back into the club to pay its debts, and we were hardly living high on the hog. And, of course, this had all been negotiated long ago. But on the phone with Marjorie Miller after Hunt’s visit, she was icy.

  “We gave you money for living expenses when you left New York,” she said.

  “Are you kidding?” I scoffed. “Your office handed us a grand total of $12,500. We appreciated it, but that didn’t even cover the security on the house in Palm Beach the FBI insisted we lease.”

  “I didn’t know that,” Miller shot back.

  “What are you talking about? Jack and Bill flew to Florida to approve the house, and one of our lawyers has been sending Carol monthly reports on our expenditures down here paid by Scores.”

  Hunt had read Carol and Marjorie the riot act. She threatened to for
mally complain to their superiors, or to take the matter to the attorney general in Washington. She shared “inside information” that the State of Delaware, the victim, was so outraged, it was considering initiating a very embarrassing civil litigation against the New York United States Attorney for improper dissipation of stolen assets. Hunt was again invoking the Delaware Insurance Department as the battering ram for her threats.

  As it turns out, the Hunt threat was made up out of whole cloth. Delaware officials had no intention of litigating against the New York prosecutors, and no conversations between Hunt and Delaware had ever taken place on the subject. Unfortunately, however, Sipperly and Miller were apparently fooled and took the empty threats seriously.

  Appealing to Hunt as a fellow prosecutor, Carol and Marjorie sought to mend fences. Hunt’s response was simple: Scores was to be sold immediately, and we were to be incarcerated as soon as possible. She would then handle Delaware.

  A meeting between the New York prosecutors and our attorneys took place a week later. It was chaired by Sipperly’s boss, Mark Pomerantz, the new First Assistant United States Attorney. A trio of our attorneys, Sandy Weinberg, Peter Ginsberg, and Myles Malman, attended. As each of the attorneys was a former prosecutor, each knew Pomerantz well and held him in high regard.

  Sipperly opened the meeting by stating that we had violated our plea agreement, pointing to the uncontrolled spending of Scores’ profits in Florida. Ginsberg quickly interrupted. “Let’s hold it right there, Carol. Together with Andrew, I personally negotiated that issue with your forfeiture department and the deal was simple: our clients retained control. The only condition was they couldn’t reduce the club’s resale value.”