Blood Covenant

by Michael Franzese

  "Don, these guys say they have $15 million to invest," I said. "I confirmed the money, but I haven't been able to qualify them. I want you to play it straight. Play it as if you're talking to FBI agents."

  King met Guerrero and Barrett and handled them as I had advised, and a promotion was set for Atlantic City-all aboveboard. When Guerrero failed to come through with the initial seed money, a few hundred thousand, both the deal and the connection collapsed. Apparently, an FBI budget cruncher had decided that the agency wasn't in the fight business and pulled the plug on the whole operation. Had the FBI put up the money to promote a few fights, both King and I might have softened.

  Guerrero was left with fifty-two taped conversations with me, but none amounted to anything. In fact, the operation backfired. When King was later indicted for tax evasion, I had my attorney send him the tapes that pertained to him. King's lawyers used the recordings to show the lengths the government had gone to in order to sting the colorful promoter. The jury frowned upon the tactic and found King innocent.

  Following the trial, King sent me a note: "Thanks. I owe you one. -Don King."

  68

  In 1981, things definitely took an upward turn. I was about to land my biggest scam of all. It all began when Sebastian "Buddy" Lombardo went to my father with a problem. His boss, Lawrence lorizzo, was being shaken down by a gang of thugs attempting to move in on Vantage Petroleum, his multi-million- dollar wholesale gasoline business. Dad referred Lombardo to me. I checked out lorizzo, and the information I received on the gas man raised my eyebrows.

  Larry lorizzo was the son of a jazz saxophone player who had worked on Broadway and in Brooklyn burlesque houses. The younger lorizzo grew into a mammoth, six-four, four-hundredfifty-pound businessman who ate pizzas the way most people eat Ritz crackers. Since he was the size of two men, he apparently decided that he needed two wives. Interestingly enough, it was not a "then" and a "now," as frequently happens in our society, but two wives at the same time. Only one of these was a legal wife, of course. The other was just a girlfriend.

  lorizzo would spend half the night with one wife, usually from dinner until 3:00 or 4:00 A.M. Then he'd wake up, tell her he needed to check his gasoline stations along Long Island's highways, and then bed down the rest of the night with his other wife. He followed this schedule for more than ten years, routinely having dinner with Wife I and breakfast with Wife II. Between the two women, he had seven children.

  In addition to his bizarre domestic life, lorizzo had gone through a much-publicized spat with Martin Carey, the brother of then New York Governor Hugh Carey. The squabble over Carey's cut-rate gasoline business led to a lawsuit. lorizzo later testified before a congressional subcommittee that Carey was blending gasoline with cheap, hazardous waste to jump his profits and provide funds for his brother's successful reelection campaign for governor in 1978.

  I could accept the girth, the wives, and the mixed brood of offspring, but the lawsuit and rumors that lorizzo had cooperated with the government were something else. Although his gasoline business was a plum, I decided to pass on it. But Lombardo refused to give up, pushing me just to meet with lorizzo, and after seven months of his insistence, I relented.

  lorizzo and I met at Peter Raneri's restaurant in Smithtown, Long Island. He was already seated when I arrived, and although I could tell that there was a mountain of flesh bubbling under the table, I was surprised that from the neck up lorizzo looked like a normal person. Even below the neck, he wasn't sloppily fat. There were no rolls of lard flopping around his body or hanging down like melting wax from his arms. He was definitely an obese man, but he was also solidly packed.

  As he picked at his food, lorizzo outlined his impressive operation. He owned or supplied three hundred gasoline stations in and around Long Island, an operation that grossed millions of dollars a month. His problem was that despite being rich and successful, he lacked power. He was having trouble with a group of men who were trying to extort him and muscle in on his supply stops.

  "I'd be very appreciative if you could help me with this problem," lorizzo said.

  I asked who was shaking him down, and it turned out to be a band of small-fry associates of another family. Eliminating them wouldn't be a problem I was sure. I was more concerned with learning about the Martin Carey incident. The fat man explained that it was a civil suit, meaning it was a personal battle between businessmen that didn't involve anyone "ratting out" to police or prosecutors. That made a difference with me. What lorizzo didn't admit to me that day was that he had previously reported Carey to both the police and the FBI.

  As I listened and observed, I noticed that lorizzo ate very little. This was notable because I had been told that the man had once eaten fifty hamburgers at a sitting and then consumed two large pizzas for dessert. During our entire relationship, I would never witness such a display. From the beginning, lorizzo maintained a policy of hiding his gluttony from me, and I took this as a sign of respect.

  69

  Fixing lorizzo's problem proved to be easy. I sent out a squad headed by Vincent Aspromonte, a menacing figure who sported an ugly scar across his forehead. A butcher by trade, Aspromonte had acquired his image-enhancing scar in a knife fight (or an auto accident, depending upon which story one believed). Either way, the result was effective. The shakedown artists took one look at the scar and were never seen again.

  "Larry, your problem is solved," I announced, visiting lorizzo at his Vantage office. The moment the words left my lips, I sensed a change in him. He could feel the power I commanded and felt that he had tapped into the flow of it.

  "Here's how I'll repay you," lorizzo said, and for the next hour, he proceeded to outline how we could milk hundreds of millions of dollars in illegal profits from his gasoline operation. The key was the incompetence of the federal, state, and county governments in collecting gasoline taxes. Together, the three governing bodies demanded a twenty-seven-cent bite out of every gallon of gasoline sold. But demanding it and getting it were two different things. The slack collection of the tax enabled lorizzo to stall having his owned or leased stations pay the gasoline taxes for as long as a year. By that time, they would close the station, the owners would vanish, and then, a month or so later, the station would reopen under new management and start again.

  lorizzo further snarled the works by having all his companies registered in Panama. Under Panama's bearer stock law, the owner of a company was the person who had his hands on the stock. That meant the "official" owners of the gasoline stationsand of lorizzo's umbrella operation-could be (and often were) two guys with machetes out in a Panamanian sugarcane field. When the government agencies went looking for their tax money, that's where they'd have to look.

  We opened a new Panama company, Galion Holdings, to oversee our joint operations. Vantage, which was mired in lorizzo's past shady tactics, supplied Galion Holdings with the gasoline, and Galion supplied the stations. I installed John Gargarino, a retired union official, as Gallon's president. Aspromonte was made vice president. I then "bounced" most of the existing station managers and lessees and began inserting my growing team of men in their place. Each of my associates was given three to six stations and paid a salary of $500 per week per station. All the remaining money would come back to Galion.

  My deal with lorizzo was that twenty percent of the profits (off the top) would go to the Colombo family. The remaining money would be split fifty-fifty between us. lorizzo handled the paperwork while I protected the stations and dealt with other suppliers. The operation soon began producing millions of dollars in skimmed tax money, a good percentage of it delivered as grocery bags full of cash that reeked of gasoline.

  That same year, officials in the state of New York figured out how they were being beaten for tens of millions in gasoline tax dollars and decided to change the law. Instead of the stations being responsible for the taxes, the burden would be shifted to the wholesalers. This change couldn't happen overnight, so the state alerted the o
perators and gave them a year to make the switch. This grace period gave lorizzo ample time to figure out how to play the shell game on the wholesale level. What he discovered thrilled him: the state had made it easier and far more profitable to steal the tax money than before. We would no longer have to rely upon collecting bags of money reeking of gasoline from the service stations. We could rake it off the top of huge wholesale shipments.

  The method lorizzo developed to do this was known as a "daisy chain." Under the new law, the gasoline could be sold taxfree from one wholesale company to the next. The last company to handle the transaction, the company that sold directly to the retailers, was responsible for the tax. lorizzo would take a shipment of, say, a million gallons into Company A and sell it to his stations and those on his growing supply route. On paper, however, instead of the gasoline going to the stations, it would go to Company B, then to Company C, and finally to Company D. On paper, it would show that Company D had sold to the stations, but companies B through D were just shell firms that consisted of nothing more than a phone number and some stationery.

  Company D, the one responsible for paying the taxes, would be owned by those same guys down in the Panama sugarcane fields. After a few hundred million gallons of invisible gasoline passed through Company D, it would then declare bankruptcy. When the state and federal governments tried to collect their tens of millions of dollars in tax money, they'd have to go on the mind-numbing paper trail from Company A through Company D. At the end of this grim rainbow was no pot of tax gold but the "burnout" firm, owned by some guy named Juan in Panama, current address unknown.

  Since Company A was selling tax-free gasoline to the stations, Galion Holdings could undersell everyone in the area-except those who were also stealing. Station owners, who could in turn sell the fuel tax-free to their customers, began begging to get on Gallon's supply route-a direct contradiction to charges later leveled by prosecutors that the station owners had been forced into buying lorizzo's gasoline by my "goons." Galion never had to force anybody to purchase gasoline at ten cents a gallon less than they could anywhere else. Even the stations supplied by Mobil, Shell, Exxon, Texaco, and other major oil companies shuffled their papers so that they could illegally purchase fuel from Galion or one of its subsidiaries. When they called, they asked lorizzo to make deliveries at very early morning hours to avoid company spotters.

  Of course, we were ripping off the public, but we didn't see it that way. Instead of being ripped off, we reasoned, the New York public was actually benefiting from the Robin Hood-like operation. Gasoline prices dropped in New York City and Long Island, as station owners had an extra profit margin to work with. Since the wholesalers were responsible for paying the taxes, the gasoline stations were in the clear. Thus, station owners and managers buying Galion gasoline could undercut everyone else in the area and still make a larger profit. This fact helped salve our consciences.

  70

  As our operation grew, Gallon swallowed up large and small independent suppliers all across New York and Long Island and into New Jersey, Connecticut, and Pennsylvania. Galion also purchased the valuable wholesale distributors' licenses from those companies to keep the daisy chains going.

  We created so many shell companies that finding names for them got to be a chore. We alleviated the monotony by giving them humorous names, as I had done earlier in the construction business. Among the multitude of companies we created were S.O.S. Oil; Southern Belle Petroleum; Dine, Dance, and Drink, Inc.; and Down to Earth Management.

  With the money came the toys. Galion Holdings was able to purchase a Learjet and a Bell jet helicopter, as well as a twenty-five-foot Chris Craft speedboat and a forty-foot Trojan yacht named John-John, both docked at my half-million dollar home in Delray Beach, Florida. Gallon also custom-ordered the Trump Princess of Winnebagos, a $370,000 mansion on wheels furnished better than most doctors' homes. I purchased an assortment of condominiums and settled Maria and our three small children in a multimillion-dollar Brookville, Long Island, mansion, complete with its own racquetball court and satellite television system.

  Whatever guilt I had about thievery on this level was also erased because there was no real perceived victim. I wasn't stealing from people but from institutions, I reasoned, and the institution I was stealing from in the gasoline business was the government-the same government that had sent my father to prison for fifty years on the testimony of a few lowlifes.

  To celebrate the gas gang's continuing good fortune, I began hosting a dinner-and-dancing party every Monday night at the Casablanca nightclub on the Jericho Turnpike in Huntington, Long Island. I owned a share of the club and closed it for these nights of private frivolity. Between fifty and a hundred guys and dolls showed up each week for the occasion. Over the several hours these spirited Monday night parties lasted, I would meet with various associates or prospective associates in back rooms. They entered, paid their respects to me like I was Don Corleone, then stated their business. I did what I could for them. The feeling of power that this routine produced was absolutely intoxicating.

  lorizzo was so fond of these weekly galas that he rarely missed one. Quick to become intoxicated despite his great girth, he once became so giddily drunk that he picked up a flower pot, put it on his head, and danced around the room. By then he was pushing five hundred pounds. His surrealistic Carmen Miranda imitation made for an unforgettable sight. Later that evening, I drove the big man home in his brand-new Cadillac.

  "With the money we're making, we don't need anything," Iorizzo said, inebriated as much by cash and power as by alcohol. "We don't need this car."

  With that, he ripped the door off the glove compartment and threw it out the window, howling with laughter.

  "We don't need this arm rest!" He railed as he ripped that off and tossed it out.

  "We don't need this sun visor!" And that went next.

  Iorizzo proceeded to strip the inside of the car, piece by piece, bouncing parts of the lavish interior down the highway.

  "We don't need nothing, Michael!" he concluded. "I can just buy another new Cadillac tomorrow!"

  And it seemed that he was right. In some ways, it was the best of times.

  71

  There were a few problems. One major one was that lorizzo went on a power trip that knew no bounds. During the next three years, he asked me to kill at least fifty people who had offended him in various ways. I refused every request, telling him that murder was bad business. On the streets, my men were also becoming drunk with money and power. They made their own requests to hit this person or that, or raze rival stations and trucks. I always turned them down, saying that it was unnecessary.

  The men didn't limit their bullying to outsiders. Frank "Frankie Gangster" Castagnaro walked into Gallon's office one afternoon, pulled out a .45, and stuck it in Iorizzo's face.

  "If you ever sell Michael out, I'll kill you," he warned.

  Things became so unruly that I was forced to call a meeting of the troops. I summoned everyone to a large basement assembly room in one of Gallon's offices in Commack, Long Island. When everyone was seated and accounted for, there were more than fifty in attendance. I stood before them at a podium like Lee Iacocca addressing his top executives at Chrysler. My topic that evening was violence and the new mob.

  "Violence is bad business," I said. "It will bring too much heat on this operation. This isn't the 1930s, and they're not the days of Al Capone. Those days are gone. We are in a new era. We are not shylocks and pimps. We are businessmen. We have a good thing going here, and we can all make a ton of money, but only if we're smart.

  "We want to be friends with our competitors so we can win them over and bring them into our operation. Whenever possible, we don't want to extort them or bully them or beat them up. The age of the bent-nose enforcer is nearly over. We can offer our competitors a service they can't get anywhere else, and we can offer them profits they can't make anywhere else. We don't need to force them. They'll join us willingly. Pla
y it my way, and they'll have no choice.

  "From this point on, there will be no violence of any kind unless I personally approve it. There are no exceptions. If you have a problem, bring it to me and I'll solve it. If I can't, we'll use our muscle as a last resort-but only as a last resort."

  At the end of my speech, I ordered an associate to pass out beepers, and I instructed all my men to wear them twenty-four hours a day. Prosecutors would later dub us "the Beeper Gang."

  Not long after that meeting, lorizzo broke the rule and proved me prophetic. The fat man and a Long Island wholesaler named Shelly Levine had a difference of opinion over $270,000 lorizzo claimed Levine owed him. The sum was a pittance considering the money we were raking in, but lorizzo was a power junkie and needed to throw around his considerable weight. He called the frizzy-haired Jewish man into his office and slapped him around. When I heard about it, I was livid. Levine had a big operation that I was looking to sweep into Galion. I came down hard on lorizzo, a process amplified by the fact that he had always been terrified of me.

  Shelly Levine did exactly what I feared he would do: he ran and got his own muscle. The man Shelly turned to was stubby, cigar-chewing Joe "Joe Glitz" Galizia, a soldier in the Genovese family. lorizzo and I were basking in the Florida sun when the call came. Joe Glitz was so eager to settle things that he told me he was flying to Florida for the meet.

  "See what you did?" I scolded lorizzo. "We could have had Shelly with us. Instead, you smacked that guy, and now I've got to deal with Joe Glitz."

  Glitz arrived the following afternoon with Shelly Levine in tow. I met them on the outdoor patio of the Marina Bay Club in Fort Lauderdale. The first thing I did was order Glitz to bounce Levine from the meet. I didn't want to talk interfamily business with an outsider.