Family Affair

by Sam Giancana

  In addition to its traditional rackets like bookmaking, loan sharking, labor infiltration (which by 2003 had been severely limited via government intervention), prostitution, political fixing, and extortion, the onset of the new millennium brought with it new business opportunities for The Outfit. A majority of these opportunities came in the form of white-collar scams and taking advantage of the most recent advancements in technology.

  The proliferation of bigger and more cost-friendly healthcare plans and HMOs in the 1990s offered a perfect chance for the crime family to delve into the healthcare industry. Typical mob scams in this arena of business included opening healthcare brokerage companies and then overcharging customers—in a lot of cases mob-backed businesses and labor unions—for group healthcare providers, pocketing the difference, and intimidating the administrators at the providers into approving the overcharges. The Outfit would often times strong-arm people into securing coverage through these companies and then use access to medical records they gained through ownership to blackmail their own customers. It is suspected that Anthony Centracchio, who was heavily invested in the Westside Medical Center and listed as president of the firm, led the syndicate’s foray into the medical field.

  Garnering a foothold in the country’s financial district has been a big moneymaker for The Outfit too. Stock manipulation scams, such as pump-and-dump rackets, in which mafia-run brokerage houses falsely inflate stocks only to sell before the bottom falls out, and muscling associates involved in Wall Street for insider information to use to the crime family’s advantage have turned a steady profit for at least two decades.

  The advent of the Internet, the cell phone, and the international business world’s increasing dependence on the computer has also brought newfound cash rewards for the mafia in Chicago. The Internet provides a place for The Outfit to launder its profits with considerably more ease and less possibility of discovery and offers a new way to make money from all forms of gambling, pornography, and prostitution. Stolen computer components retain a huge dividend on the black market, plus have an added bonus of being practically untraceable. Finally, the black market sale of cell phones and calling cards to foreigners in the Chicagoland area reaps a large benefit for the mob.

  A Chicago Crime Commission report titled “New Faces of Organized Crime” sums up the modern-day Outfit best: “The new Chicago mob, like other generations before them, is like a serpent that sheds its skin. Its present appearance may be different, but beneath the surface is the same dangerous beast. The mob is more flexible and adaptable than ever before. Its power and wealth have never been more sound and difficult to penetrate.”

  14.

  The Weight Meets His Fate

  The Spilotro Crew: A Decade Later

  With Tony Spilotro out of the picture in Las Vegas, for all intents and purposes the region once again became a wide open territory. Although The Outfit replaced him with a combination of Donald “The Wizard” Angelini, an Outfit lieutenant and gambling expert who lived a portion of the year in Chicago and the other portion in Las Vegas, and Chris Petti, Spilotro’s man in San Diego before his execution—both of whom would be indicted and eventually jailed alongside John Di Fronzo in 1993 on charges of trying to extort a California-based Native American casino property—the desert basically became free of mafia influence after the Ant’s departure. Corporate buyouts of a majority of the mob-controlled casinos and hotels coupled with the two Strawman convictions turned the one-time gangster’s playground into a vacation hot spot for families and a convention destination for businesses worldwide.

  By the conclusion of the 1980s, most of Tony Spilotro’s crew was long gone from Vegas, either dead, in jail, under the protection of the government, or plying their trade in another city’s underworld. Frank Cullotta, Tony’s former right-hand man and leader of his Hole in the Wall Gang, disappeared into the witness protection program. Victor and John Spilotro, Tony’s younger brothers, each moved back to Chicago and continued to work under The Outfit’s protection. Lefty Rosenthal, the mastermind of The Outfit’s gambling empire in the desert, left Las Vegas and relocated to Florida, he continued to be one of the country’s most-respected handicappers until his death in October 2008. Paul Schiro, Tony’s guy in Phoenix, remained the Chicago mafia’s representative in Arizona until he was convicted in 2001, along with the former chief of detectives from the Chicago Police Department, cop Bill Hanhardt, for helping run a multimillion-dollar jewelry heist ring.

  Former Hole in the Wall Gang members Wayne Matecki and Ernie Davino both ended up going legit and are currently living in Illinois and New Jersey, respectively. Leo Guardino died in 1998, after serving a prison sentence on burglary charges connected to his work with the Spilotro crew. Crazy Larry Neuman died in prison in 2002.

  Out of The Ant’s entire inner circle, Joey Cussamano and Fat Herbie Blitzstein were the only ones to remain in Las Vegas after their boss’s murder. Cussamano, who some even claim became The Outfit’s point man in Nevada after Petti’s and Angelini’s imprisonment, has been there uninterrupted since 1986, when Tony died. Blitzstein, who was forced to leave in 1988 to serve a prison sentence for tax evasion and credit card fraud, returned to Las Vegas in 1991 and reopened shop on a large-scale loan-sharking and sports gambling operation. According to police reports, Blitzstein was also running a series of insurance fraud scams, in which he would offer up his services to clients of his other illegal business ventures as means of clearing their debt if they agreed to aid him in filing false claims.

  Setting up a headquarters for himself at a body shop he owned on Fremont Street, just off the Strip, called Any Auto Repair, by the mid-1990s Fat Herbie’s various rackets had blossomed into a venerable cash cow. And he wasn’t sharing. Not working for Spilotro anymore made it so it was all his. And although he kept up solid relations with his former friends and associates in The Outfit as well as the mafia syndicate working out of Los Angeles, he wasn’t paying tribute to them either, which made it all the better.

  However, the fact that he had no mob protection, no crime family officially watching his back, made him vulnerable. When the L.A. mafia, in the midst of harsh times due to general attrition and a late-1980s racketeering bust of most of its administration, was on the lookout for people and illegal businesses to exploit, they turned to Vegas. A crew stationed in Sin City was witnessing Blitzstein’s lucrative operation up close, and he became the perfect mark. All the while, Fat Herbie was oblivious to the dangers on the horizon. He thought, despite not cutting the boys back in Chicago in for a piece of his burgeoning mini criminal conglomerate, they were still looking out for him. Which in his mind made him untouchable. He thought incorrectly.

  The L.A. mafia had seen better days. It was 1996, and the crime family was just getting back on its feet after the release from prison of its boss Peter “Shakes” Milano and his brother and underboss Carmen “Flipper” Milano, both of whom pled guilty to various racketeering charges in March 1988 and were each sentenced to six years of jail time. A syndicate that once boasted well over seventy members in its heyday of the 1950s was down to less than two dozen. Turncoats like Altadena “Jimmy the Weasel” Frattiano, a one-time acting boss of the family; Anthony “Tony the Animal” Fiato, a top enforcer of Shakes Milano; and Mike Rizzitello, a powerful capo, had done significant damage.

  Reduced to controlling only a small number of rackets—mostly moderate-size bookmaking and loan-sharking operations—and being afforded a general lack of respect by the rest of the L.A. underworld, the Milanos had to find new ways to generate cash. It was the Milano brothers belief that such measures were the only hope of restored power and prestige.

  Pete and Carmen Milano, known as passive dons and ones who virtually refused to use violence as a means of wielding authority, were desperate. They wanted to get the family’s reputation back to where it was years before, and by the mid-1990s, they appeared willing to go to extreme lengths to accomplish this goal. One of these lengths was being more flexi
ble on their unspoken edict of nonviolence. The results of this decision would not turn out well for Herbie Blitzstein.

  The Milano brothers were born in Cleveland, sons of Anthony “Tony the Old Man” Milano, the longtime consiglieri of the Cleveland mafia. Tony Milano came to the United States from Calabria, a southern region of Italy, in 1900 and settled in Buffalo. After a few scrapes with the local police, he left town and headed west, finally planting his family’s roots in Cleveland. Along with his brother Frank and his best friend, Alfred “Al the Owl” Polizzi, both future bosses of the Ohio-based crime family, he started a loan company and two separate importing companies, bringing in Italian and Sicilian culinary delicacies via his contacts in New York. All three businesses were run out of the Italian-American Brotherhood Club, a social club opened by Milano in the Little Italy section of the city during the 1930s and that over the years became a hotbed of mob activity. Combining forces with the area’s Jewish mob, “The Mayfield Road Gang” led by Moe Dalitz, to gain a grip over all local vice, Tony and Frank Milano, rose to be the most powerful figures in Ohio organized crime throughout the early to middle twentieth century.

  Tony Milano also took up interests in California starting in the 1940s, keeping residence in a posh Beverly Hills estate. Once settled in his new digs, he received the blessing of L.A. mob don Jack Dragna, to forge a small but prosperous niche for his Cleveland gangster consortium on the West Coast. For most of the 1940s, 1950s, and part of the 1960s, he split his year in half, living the fall and winter months in California and the spring and summer months in Ohio. Part of the reason Los Angeles was so appealing to Tony was that it was close to his brother Frank, who, following his stint as mafia boss in Cleveland, fled the country for Vera Cruz, Mexico, instead of facing charges in Ohio for income tax evasion.

  Eventually though, in the late 1960s, Tony packed up his belongings and returned to live out the final years of his life in Cleveland, leaving behind his sons Peter and Carmen to look after his interests in L.A. Carmen had received a law degree and for a while was a practicing attorney before being disbarred. When Dominic Brooklier, the don of the Los Angeles mafia for most of the 1970s and his underboss Sam Sciortino were convicted of racketeering charges in November 1980 and sent away to prison, two spots opened up atop the crime family hierarchy, and Peter and Carmen Milano were more than happy to fill them.

  Ruling unfettered for eight years until their bust in 1988, the Milano brothers did their time and reemerged on the street in the mid-1990s ready to start anew. They were keeping their eyes open for any possible future scams and new victims to terrorize, when Carmen, who relocated his crew to Las Vegas, learned from some associates how much money Herbie Blitzstein was making in the operations being run out of his auto repair shop. He became more than a little interested. Checking to make certain that Blitzstein’s ventures were not under anyone else’s protection, Carmen Milano decided Fat Herbie’s rackets were his and the L.A. mob’s for the taking. Clearing the decision with his brother Pete in California, who desperately needed fresh sources of income for his crime family’s portfolio, it was all systems go for the takeover of Blitzstein’s business by the fall of 1996.

  “Carmen wasn’t a tough guy by any means, but he had some real dangerous guys that used to hang around him,” says former FBI agent, Herm Groman, who worked the Milano’s Las Vegas-based crew in the 1990s. “The crime family he belonged to was facing hard times and Carmen and his brother, were looking for ways to revitalize it. Herbie was an easy mark. He was walking around town, flashing his success, and that pissed a lot of people off. Plus, he had no formal protection, like he had back in the 80s when he was under the Spilotro group out of Chicago. The guys out of L.A. saw taking his business from him as their right. Blitzstein was Jewish. He wasn’t Italian, so they didn’t view him as a part of their operation. Since he wasn’t giving anyone in the mafia a taste of his rackets, they felt like they were being disrespected in some way. The guy really didn’t stand a chance. Once they made their decision to go after him, it was a done deal. The L.A. mob might have been on the ropes, but they were still a family and they had a number of guys working on their behalf. Herbie was just one man.”

  BEGINNING in October, the first of several meetings took place between Carmen Milano and others—mostly West Coast-based wiseguys—in order to decide how the job of muscling in on Fat Herbie was going to work. Sitting at a back table of the Sea Breeze Social Club, the California mafia’s Las Vegas headquarters, Milano discussed specifics of the plan with Stephen “Stevie the Whale” Cino and Louis “Little Louie C” Caruso, both reputed soldiers in the L.A. mob, and Johnny Branco and Peter “Pete the Crumb” Caruso (no relation to Louis Caruso), both high-level associates who worked under Carmen and his brother. The group decided they would approach Blitzstein at his home and tell him of their intentions. If he refused to go along with the plan, which they believed was a likely scenario, Milano gave them permission to beat him into submission. Although the underboss authorized a beating of Fat Herbie, it was specifically instructed that they were not to kill him. Knowing that Blitzstein also sometimes acted as a fence for stolen jewelry and often kept merchandise at his house and at the auto repair shop he worked out of, Milano ordered the group to rob him of any jewels he was in possession of too.

  Thinking it would be safer to have a connection on the east coast, instead of someone local, to lay off the stolen merchandise, Cino, originally from Buffalo, suggested they bring Bobby Panaro, the Buffalo mafia’s representative on the west coast as well as an associate of Blitzstein’s, into the fold. Milano agreed with Cino’s suggestion, offered the Buffalo mob liaison and his boss, upstate New York don Joseph “Lead Pipe Joe” Todaro, a piece of the action and invited Panaro to attend the group’s next meeting, which took place at a coffee shop inside Bally’s hotel and casino on the Strip, approximately a month later.

  While in the coffee shop, Milano instructed Pete Caruso to reach out to Alfred Mauriello, another valued associate who worked for the L.A. mafia, and have him outsource the shakedown intended for Blitzstein to two of his subordinates. Subsequently, Mauriello, who was paid $10,000 for his efforts, gave the job to Antonio Davi and Richard Friedman, promising them each $3,500 once the work was completed. Milano then informed Peter Caruso, that he was to break in to Fat Herbie’s residence in the hours leading up to the confrontation, take all the jewelry they could find, and then leave a back door open for Mauriello’s thugs, who would be tailing them.

  What Milano didn’t know was that Pete Caruso had changed the plan. Despite not having the authority to do so, he wanted the entire Blitzstein operation for himself and was planning to kill to get it. Instead of having Maureillo tell Davi and Friedman to rough up their target if he resisted, he told him to instruct the pair to murder Fat Herbie.

  At this point in time, Milano and company decided to bring one more person into their conspiracy. His name was Joe De Luca, and he was Blitzstein’s partner in Any Auto Repair. It was widely known that De Luca and Fat Herbie had been feuding for quite some time. De Luca wanted a bigger piece of the business, but his partner didn’t want to give it to him. He felt he deserved it. He was Blitzstein’s front, and as a result he was exposed to a great deal of risk. If the police ever started nosing around the auto repair business and found out that it wasn’t just a place for people to get a tune-up or a muffler replaced, he would be in a lot of trouble.

  Fat Herbie continually dismissed his partner’s desire to be cut in for a larger share of his profits and that frustrated and angered De Luca to no end. So, when Johnny Branco, who was aware of the friction developing in the business partnership, asked him to join the Milano organization’s plan to run Blitzstein out of town, De Luca didn’t hesitate and immediately jumped on board. It was a major coup to get De Luca to turn on Fat Herbie since his defection came equipped with information on their target’s schedule and security codes.

  De Luca told them that Fat Herbie was going to be in Mexico over th
e Christmas holiday, so the Milano group set their sights on the first week of January as the time to confront Blitzstein. On January 4, 1997, Pete Caruso, De Luca, Cino, Panaro, and Branco all met at a Vegas-area Denny’s restaurant, to iron out the final details of their plan and discuss how exactly Fat Herbie’s assets were going to be divided up following the hostile takeover.

  What the plotting wiseguys didn’t know was that their scheme was cursed from the outset. First of all, Johnny Branco, tapped by the Milano brothers to become a made man at the syndicate’s next initiation ceremony, was working for the FBI and wearing a wire the entire time he was helping organize the Blitzstein caper. Furthermore, Carmen Milano’s Las Vegas crew had been infiltrated by a pair of undercover FBI agents posing as wiseguys who were tipping off their superiors to a portion of what was transpiring in an investigation called “Operation Thin Crust.”

  On January 6, the long-gestating plan to forcefully acquire Fat Herbie Blitzstein’s various illegal business ventures was put into motion. At around 3:00 P.M., while Blitzstein was still at work, Pete Caruso, and others armed with security codes provided by Joe De Luca, entered Fat Herbie’s residence and pilfered the home of all its valuables. They got uncut diamonds worth over $65,000. They got Rolex and Cartier watches. They got twenty-five pounds of gold bullion. They got cash. When they were done raiding the place, they came away with over $100,000 dollars. Just as Milano had advised, they left the back door open for Davi and Friedman, who were set to arrive soon thereafter.