Deal With the Devil: The FBI's Secret Thirty-Year Relationship With a Mafia Killer

by Peter Lance

  But Scarpa’s involvement was even more important in retrospect for what it said about his tactical skill. That single tip about Panarella not only reinforced his relationship with Villano, who was regularly kicking back reward money to him; it also endeared Scarpa to Malone, the powerful assistant director in charge of the New York Office.

  It also made Carmine Persico and his brother look good. The Snake, who had assumed control of the family after Joseph Colombo’s shooting, was now cementing his position as boss. “This was one of those incidents,” says James Whalen, a retired special agent from the New York Office, “where Scarpa ended up making everybody happy: God, the mob, and the FBI. It was a triple play.”36

  Chapter 8

  THIRTY DAYS IN FORTY-TWO YEARS

  Asked about Gregory Scarpa Sr.’s motivation for cooperating with the Feds, one official told former New York Times reporter Selwyn Raab, “It was his insurance policy”—an allusion, wrote Raab, to “Scarpa’s hope that he could obtain leniency if he were confronted with a long prison sentence.”1 If that was the Mafia killer’s intent, the evidence unearthed in this investigation demonstrates that he was remarkably successful.

  From 1950 to 1992, Scarpa was arrested twenty times on charges ranging from gun possession, assault, and hijacking to trafficking in fake securities worth millions. Yet before his final arrest for murder in 1992 he served only thirty days in jail, after pleading guilty in 1978 to the attempted bribery of two police officers.2*

  In the early 1970s, before the bribery charge,3 Scarpa was running what an assistant U.S. attorney described as “a sophisticated auto theft ring which stole hundreds of new cars from the streets of New York and had them sent to locations around the world.”4 In the late 1970s Scarpa safeguarded the proceeds of two substantial crimes: the hijacking of a silver shipment stolen from John F. Kennedy International Airport and the theft of approximately $2 million in diamonds.5 In 1986 he was identified as “one of the biggest distributors of counterfeit credit cards in the New York Metropolitan area.”6 After his arrest by undercover Secret Service agents, Scarpa faced a $250,000 fine and up to seven and a half years in prison.7 But he ended up with a $10,000 fine and five years’ probation after Lin DeVecchio intervened on his behalf with the judge.8

  A lawyer who represented Scarpa put it bluntly: “No one with a track record like that could be so lucky.”9 In a 1992 murder trial under oath, DeVecchio denied that he’d given that kind of help to a confidential informant like Scarpa,10 but he finally admitted to it in his recent book.11

  And yet, while Greg Scarpa was getting special protection from the Bureau, other branches of the Justice Department were going to extreme lengths to lock him up.

  “Caution Should Be Exercised”

  On November 4, 1971, Scarpa was charged with the interstate possession, transport, and sale of $450,000 in securities stolen from the U.S mail, in that case where his named co-conspirator was Gennaro “Jerry” Ciprio, who was killed three days after Joey Gallo.12

  Though Scarpa slightly overstated the amount of the heist, informing the FBI that the securities were worth $550,000, this was clearly the same theft cited in the March 28, 1970, airtel to Hoover, which identified the securities as stolen Cleveland and Columbus, Ohio, bearer bonds. During his debriefing on that heist, Scarpa pretended he had no personal involvement and was disclosing the theft to the FBI in exchange for a bonus.13

  As the Chicago Feds were working the case, they were unaware that their principal target in the theft was a Top Echelon Criminal Informant working with the FBI’s New York Office. To them, Scarpa was just another wiseguy looking at serious jail time. But in July 1972,14 after Ciprio’s death, the case was transferred to the Justice Department’s Eastern District in Brooklyn where it was ultimately dismissed.15

  The ink on that dismissal was barely dry before Scarpa was facing stolen-securities charges again—this time from the Organized Crime Strike Force in Newark, New Jersey. Prosecutors across the Hudson River were seeking a grand jury indictment of Scarpa for using counterfeit IBM stock certificates that had been printed in New York, sold in New Jersey, and transported to Philadelphia.16 The estimated face value of the stocks was $4 million—not the kind of number you’d expect to be associated with an FBI informant who was in “dire need of financial assistance.”

  Throughout the spring and summer of 1973, a flurry of airtels was sent from Newark to Washington keeping Bureau officials in the loop on the progress of the fingerprint analysis tying Scarpa to the fake stock certificates. At the bottom of each airtel was inscribed a warning in bold:

  CAUTION SHOULD BE EXERCISED IN THE EVENT ANY CONTACT IS MADE WITH SUBJECT SCARPA . . . IN VIEW OF PREVIOUS ARREST FOR POSSESSION OF A DANGEROUS WEAPON.17

  “Clearly the Newark Strike Force wanted to nail this guy,” says retired FBI agent James Whalen, a veteran of the New York Office.18 But when word of Scarpa’s impending indictment was leaked to a newspaper, the Mad Hatter erupted. He called the Bureau’s Newark Office and berated the SAC, insisting that “what appeared in the paper pertaining to the FBI would be nothing compared to what [he was] going to do to embarrass the Bureau.”19 According to an airtel from the Newark SAC to then FBI Director Clarence M. Kelley:

  SCARPA said he is going to reveal every thing, scheme and technique, imaginable pertaining to the FBI because of what is being done to him. SCARPA was asked who he is and the purpose of his call and he replied that “I damn well know who he is.”

  This was extreme behavior, to say the least, from a CI who was repeatedly described in FBI memos as “emotionally stable and reliable.” When the SAC “specifically asked” if Scarpa was “trying to intimidate him,” Scarpa replied with profanities, ending the call after insisting that “the New York Office . . . be contacted.”20

  On June 7, 1974, Greg Scarpa Sr. was finally arrested. He was released on a $25,000 bond.21 With this multimillion-dollar bogus stock case, Scarpa had come a long way from the minor gun-possession and hijacking charges outlined in that first airtel to Hoover in 1961. Now forces within the Justice Department were earnestly trying to send him to prison. But over the next two and a half years—again, for unknown reasons—the IBM stock case experienced a series of delays.

  FBI headquarters continued to stay in the loop. On March 13, 1976, Director Kelley got a special-delivery package relating to the case, indicating that the pending prosecution in New Jersey was being monitored at the highest levels of the Bureau.22 On December 6, the SAC in Newark sent a memo to the Brooklyn Strike Force informing them that the case was set for trial on January 3, 1977.23

  It’s unknown what sort of behind-the-scenes communications, if any, took place at that point among Newark, Washington, and the FBI’s New York Office. But on March 30, 1977, the same Newark SAC sent Kelley a memo stating that “the case [was] being placed in a pending inactive status by the Newark Division.”24

  A portion of another memo dated September 9, 1977, stated, “The Bureau will be kept advised of pertinent developments.”25 Both the March and the September memos were heavily redacted before their recent release.

  The last record in the newly released files relating to the prosecution of Gregory Scarpa for that $4 million counterfeit-securities sale is dated December 19, 1977. Also heavily redacted, it refers to an “ENCLOSURE TO THE BUREAU” and is labeled “final disposition sheet.”26 In short, the case was effectively dead.

  But the mystery of what happened to the indictment didn’t become clear until almost eight years later. In a July 22, 1986, memo relating to the closure of Scarpa’s credit card case, a prosecutor from the EDNY Organized Crime Strike Force acknowledged that the 1974 securities case had been “dismissed.”27

  “We now know,” says defense attorney Flora Edwards, “that for decades Greg Scarpa Sr. was being protected by the Bureau time and time again. The special protection went so far that it literally pitted officials of the Justice Department against each other. But all of those multimillion-dollar white-collar
crimes Greg committed pale in comparison to his murders.”28

  “Somebody Got to the Witness”

  Scarpa’s street reputation as a voracious killer also worked to his advantage when it came to inducing amnesia in witnesses. There are two cases that prove that point, both from the 1960s. In November 1965, Scarpa was at a diner in Lawrence Township, New Jersey, with Nick Bianco, a wiseguy who had transferred into the Colombo borgata from the Patriarca family in Providence, Rhode Island.

  A witness saw the two of them, with a third party—unnamed, but identified as “connected”—“pilfering” coins from a phone booth. An airtel dated January 20, 1966, indicates that the three of them were facing fines totaling $6,000, which Joe Colombo himself pledged to pay to make the petty charges go away.29 But the airtel goes on to say:

  January 20, 1966: Informant has ascertained through his attorney that the individual who initially reported the pilfering of the telephone booth cannot identify any of the 3 defendants and only saw a car leaving from the diner immediately after the pilfering was noted.30

  The airtel then reports that the failure to ID the suspects based on the witness’s sudden memory loss would “invalidate the arrest and search warrant of Bianco’s car which was obtained on the basis of this individual’s statements.”31

  “This was a case in which some prosecutor put the time in to get a warrant on Bianco’s vehicle, which means that initially the witness was certain,” says a former agent who worked organized crime in New York and asked not to be identified. “But it feels like somebody got to the witness, and whoever wrote the airtel almost seems to take pleasure in that—that the case against Scarpa might get tossed.”32

  It wasn’t the only time Scarpa went free because a witness had a memory lapse. Four years later, in October 1969, Scarpa, his son Greg Jr., and five others were caught unloading a container truck they had driven from a pier in Port Elizabeth, New Jersey. They were arrested for hijacking 870 cases of J&B scotch, worth $70,000, from a Brooklyn warehouse.33 The Brooklyn DA took the case seriously enough to obtain a six-count indictment, which listed one Robert Dubin as the owner of the hijacked truck.34 But the case was later dismissed after Dubin reportedly refused to testify at trial.35

  As another indication of how audacious Scarpa was in manipulating Villano and the FBI officials above him in New York and DC, it should be noted that the J&B hijacking came just six months after Greg had tipped off the Feds to a thousand-case Cutty Sark whiskey heist.36 That meant that Scarpa was continuing to commit the same types of crimes he was reporting to Villano. The obvious question is whether he had a role in the Cutty Sark theft.

  The airtel on that hijacking reports that after some surveillance, “100 cases of Cutty Sark was [sic] observed to be unloaded.” According to the memo “the stolen scotch was [later] recovered,” but we don’t know if that reference was to the entire thousand-case load, or if it was nine hundred cases short. Scarpa himself told the Feds that he’d “back[ed] off” buying the load “because he did not have a location large enough to handle such a quantity.” But if the November 1970 theft of mercury is any indication, he might have kept a few cases for himself. In the mercury hijacking, while Scarpa reported 400 cylinders stolen, the Feds recovered only 324.

  “Greg was a scotch drinker,” says the former agent from the New York Office who was familiar with Scarpa’s habits. “In terms of that Cutty load, I’m betting he grabbed a few cases before reporting the theft. And if Villano was true to form, Greg got a reward to boot.”37

  Charlie the Sidge

  One measure of the cold blood that ran through Scarpa’s veins was the trajectory of his relationship with Calogero LoCicero, known in the Profaci-Colombo borgata as Charlie the Sidge. Over the years, the Sidge had been arrested eight times on charges ranging from vagrancy to murder. But only two of the arrests resulted in convictions—both times for weapons possession.38 During the first Colombo war, LoCicero, then acting as family consigliere, had brokered the deal that freed Joseph Colombo and other top Profaci family members who had been kidnapped by the Gallo brothers.

  In an airtel to Hoover on March 20, 1962, Scarpa (per his FBI handler) detailed LoCicero’s efforts at keeping the peace.39 But a subsequent memo emphasized the Sidge’s up-and-down relationship within the family.

  June 11, 1962: LOCICERO has been reprimanded on many occasions and at one time the order was out to have LOCICERO executed. . . . [But] LOCICERO has always been able to clear himself and come back in the org. LOCICERO is the only official in the PROFACI family who would talk back to PROFACI or argue with PROFACI. LOCICERO hates and is hated by the MAGLIOCCO brothers. LOCICERO holds the permanent rank of captain, but on occasions has acted as boss, underboss and is presently acting as consigliere.

  LoCicero’s antipathy for “Joe Malayak” led to his aborted attempt to enlist Scarpa to murder Magliocco, as detailed in Chapter 3, and although the hit never materialized, it underscored LoCicero’s trust in Greg, who managed a numbers operation for Charlie.40 Scarpa described LoCicero, who always signed his name with a big “X,” as a “top hoodlum in Brooklyn.” He insisted that he was “completely loyal to LoCicero and would be willing to accept any orders or requests” that the Sidge might make.41

  LoCicero’s standing in the borgata was so high in 1964 that a New York Times piece declared that the “reins of the [Profaci] organization are now reported to be in the hands of Charles LoCicero, known as The Sidge.”42 To emphasize his padrone’s power in the family, Scarpa told his FBI handlers a story about how LoCicero had viciously dealt with an “outlaw gang” associated with Ralph “Whitey” Tropiano, an associate of the New England LCN who operated predominantly out of New Haven.43

  March 12, 1964: Informant stated that LOCICERO was actually able to penetrate the gang and win their confidence while making them believe he was in with them. LOCICERO decided that all members with the exception of TROPIANO should be killed. LOCICERO’s recommendation was accepted and the job of killing the other gang members was handled primarily by TROPIANO and . Informant related that they were successful in killing all the other members in a short period of time with the exception of one who was picked up and sentenced to a term in prison. He stated that this member while in prison made statements to the effect that he would get PROFACI, LOCICERO, and others. . . . Within three or four days after this individual was released from prison he was killed and his body dumped in a field.44

  This airtel demonstrated LoCicero’s capacity for brutality and deception when it served the interests of la famiglia. But as a sign of just how two-faced Scarpa himself could be, after pledging his loyalty to the Sidge, he also made it clear to the Bureau that “if as a result of LoCicero’s efforts to mediate the dispute between the Gallo and Profaci groups, Profaci retaliated against LoCicero, [Scarpa] would then favor the Gallo group.”45 In short, family loyalty or not, Greg Scarpa was a survivor—one who regularly “ratted out” his padrone LoCicero to the FBI.

  Cheating His Own Son

  Just two months after professing his fealty to the Sidge, Scarpa told his handlers a story about Charlie that seemed to underscore LoCicero’s greed. It’s a tale that helps to explain the role Scarpa may have ultimately played in his mentor’s death.

  June 11, 1962: LOCICERO’s only love in life is money. To illustrate that Informant told the following story:

  It is customary when the child of a member of the family is getting married for invitations to be sent to all members of the family. In response to this invitation, everyone is expected to make a cash gift to the groom to give him a start in life. When LOCICERO’s son, FRANK, went to get married, he did not have any money, so LOCICERO told him that he would finance the wedding and FRANK could repay him from the money he received as wedding gifts.

  On the day of the wedding when all the members of the PROFACI family had left their envelopes with the cash wedding gifts, LOCICERO took the envelopes from his son, FRANK, and told him that he would count the money and deduct the
cost of the wedding.

  The following morning, LOCICERO gave FRANK $500.00 and stated that this is a gift from him. The wedding presents did not even cover the cost of the wedding. As a result of such treatment, all of LOCICERO’s sons hate him.

  In 1964, Charles LoCicero was indicted by a federal grand jury for failing to pay taxes on $53,000 in undisclosed income from 1957 to 1960.46 Tax evasion was the crime that ultimately brought down Al Capone, and LoCicero was vulnerable to the same strategy. Apparently worried about the potential for an IRS charge, LoCicero reportedly set fire to the Florentine Furniture Corporation, one of his legitimate businesses on Avenue U in Bensonhurst. Not long after that, Scarpa was ready to “burn” him with the Bureau.

  July 9, 1962: . . . according to stories [Informant] heard [Florentine Furniture] was burned in order to destroy LOCICERO’s books and records so that they could not be subpoenaed by the IRS.47

  As a sign that LoCicero was beginning to lose his grip on reality, he reportedly boasted to Scarpa that he’d been elected boss of the Profacis by the Commission and went so far as to “express . . . appreciation to Carlo Gambino.” But the Sidge, who was sixty years old at the time, reportedly stated that he “felt . . . control of the ‘family’ should be turned over to younger individuals.”48 That prompted this snide reply from Scarpa:

  October 15, 1963: Informant is of the opinion that LOCICERO was lying and that he was not elected “boss” but was only trying to give the impression he was important.49

  After Joseph Colombo took the reins, Scarpa made it clear that LoCicero was on a downward slide. By November 1964, Scarpa leaked word that “LoCicero no longer [had] any status whatsoever in the family and [was] constantly being degraded by other members.”50 By 1965, despite his destruction of the books, the former consigliere was convicted on the IRS charges and sentenced to eighteen months in prison.51 That summer he was held in what was then known as the Federal House of Detention in Manhattan,52 while the Immigration and Naturalization Service prepared to deport him to Italy.