The Mob and the City (29 page)

More than half of the soldiers identified by the 1963 McClellan Committee hearings were residing in the outer boroughs and suburbs. Mobsters sprung up in
upscale communities like Rego Park, Queens, and Lido Beach, Long Island as largely assimilated suburbanites. By 1963, 80 percent of the New York Mafia's soldiers had been born in the United States.
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Take Joe Valachi, whose experience was a microcosm of the wiseguy life. The son of working-class immigrants, Valachi grew up in a cold-water tenement in East Harlem. At age nineteen, Valachi was sentenced to Sing Sing, where he made his first real contacts with
mafiosi
. After being initiated into the Cosa Nostra in 1930, he did strongarm work for underboss Vito Genovese, engaged in heroin trafficking, worked as a bookie and loanshark, and used his loansharking business to obtain interests in a union-free shop in the garment district and vending machines in bars. He later purchased the Lido Restaurant in the Bronx and bought a house for his family in Westchester County in order “to be in a nice neighborhood.”
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In 1959, his fortunes reversed when he was convicted of narcotics trafficking and condemned to a long sentence in federal prison. Unable to earn on the streets, Valachi lost the restaurant, the house in the suburbs, and ultimately his wife.
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Or consider John “Sonny” Franzese. The seventeenth child of Neapolitan immigrants, Franzese grew up in Brooklyn when the families were recruiting new men in the 1930s. The young thug was brought into the Mafia by Sebastian “Buster” Aloi of the Profaci Family. He was drafted into the United States Army during the war, but he was discharged in 1944 for his “pronounced homicidal tendencies.” He rose quickly with the Profaci Family as a brutal enforcer, loanshark, and extortionist who collected skims from Brooklyn bars and restaurants. He met his beautiful wife while she was working as a coat-check girl at the Stork Club. In the late 1940s, he opened the Orchid Room tavern in the burgeoning neighborhood of Jackson Heights, Queens. In 1960, he moved his family into a spacious suburban home on Long Island he bought for $39,000 (about $300,000 in 2013 dollars).
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While they were never millionaires, both
mafiosi
enjoyed middle-class suburban lives for decades. The fact that uneducated street thugs like Valachi and Franzese could obtain middle-class status is a perverse tribute to the capacity to make money under the Mafia.

The Wealthy Ones

A smaller minority of
mafiosi
made it big. Joe Valachi estimated his Genovese Family had “about 40 to 50 wealthy ones.”
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Although the net worth of a gangster is always elusive, based on evidence from tax evasion prosecutions, FBI wiretaps, and other reliable sources, there are documented cases of
caporegimes
and bosses who became rich on rackets:

• Luciano Family
  caporegime
  Michael “Trigger Mike” Coppola became rich from bootlegging, the numbers lottery, and labor racketeering. Coppola's wife once saw him count out $219,000 in cash on their dining room table. He explained to her that it was his regular share of the Harlem numbers. He bought a house near the ocean in Miami Beach, and he flew around the country to mob hotspots like Las Vegas. Coppola would later plead guilty to evading $385,000 in income taxes between 1956 and 1959 (about $3 million in unpaid taxes in 2013 dollars) on millions more in income.
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• Another Luciano
  caporegime
  named Ruggiero “Richie the Boot” Boiardo lived like a king in New Jersey. He first made his money as a bootlegger and speakeasy operator around Newark. As a young man, he bought audacious jewelry like a two-hundred-fifty-stone diamond belt buckle worth $5,000 in 1931 ($75,000 in 2013 dollars). Boiardo later used his profits from illegal booze and the numbers lottery to build Vittorio Castle, a lavish banquet hall with grape vineyards in the middle of Newark that attracted celebrities from New York City. He later built a “castle-like” miniature mansion worth over $75,000 in 1954 (over $650,000 in 2013 dollars) in the wealthy township of Livingston, New Jersey.
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• Genovese Family boss Anthony “Fat Tony” Salerno feasted on a variety of rackets. He held interests in the East Harlem numbers lottery and loansharking operations, engaged in labor racketeering with the International Brotherhood of Teamsters, and ran many construction industry rackets. In the 1950s, Salerno split his time between his horse ranch in Dutchess County, his apartment in tony Gramercy Park South, and his house on the exclusive Venetian Islands in Miami. In 1978, Salerno pled guilty to criminal charges of gambling and tax evasion for failing to pay $76,578 in income taxes ($273,000 in unpaid taxes in 2013 dollars) on over a million dollars in income.
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• Lucchese Family boss Anthony “Tony Ducks” Corallo started out life as a humble tile setter in East Harlem, then spent the rest of his life looting labor unions and industries in New York. As a venal labor racketeer, he took to flashing fat wads of cash, and moved his family into the wealthy neighborhood of Malba, Queens. In 1968, Corallo was convicted along with others of paying a $40,000 bribe for the award of an $840,000 city parks contract (a $268,000 bribe for a $5.6 million contract in 2013 dollars). The FBI placed an electronic bug in Corallo's black Jaguar. One day, Corallo's driver spotted FBI agents trailing them. His driver suggested they were following them because they thought Corallo controlled the toxic-waste-disposal business. “They're right,” responded Corallo, unaware he was on tape.
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• Gambino Family boss Paul Castellano wanted to appear to be another successful businessman in his fifteen-thousand-square-foot mansion on Todt Hill in Staten Island. When FBI agents wiretapped his estate, however, they discovered that his “legitimate” businesses were bolstered by racketeering. His son's Scara-Mix Concrete Company enforced a concrete cartel on Staten Island. His meat companies and union ties gave him monopolistic power in the wholesale meat markets. Meanwhile, his “industry association” controlled no-show jobs in the garment district. Castellano's power and income derived largely from the Gambino Family's control of key union locals. “Our job is to run the unions,” Castellano was picked up saying on a bug.
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The Ghost of Al Capone: Avoiding Fixed Assets

When the Treasury Department convicted Al Capone on tax evasion charges for failing to report income from
illegal
sources, it had a lasting impact on the Mafia. According to a report by Chicago bankers in the 1930s, mobsters began putting money into legitimate businesses so they could “withstand an investigation and show that they were earning sufficient income to enjoy the expensive
living they were enjoying.” The New York Mafia was permanently affected by the Capone prosecution, too. “After Capone went down, word spread around the Mob: give Uncle Sam his vig,” said Louis Ferrante. “I wasn't going the way of Capone,” vowed Lucchese Family associate Henry Hill. “That was the hardest part; hiding the money, not making a hit.”
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The threat of an Internal Revenue Service (IRS) investigation caused
mafioso
to hide cash or avoid too many fixed assets that marked wealth. Big savings accounts and large homes had to be justified with “legitimate income” from businesses. New England boss Gennaro “Jerry” Angiulo beat the IRS by gradually funneling money from his illegal gambling operations into his golf course, a bowling alley, hotels and motels. Henry Hill laundered money through a shirt company and “paid cash for everything [so] there were no records or credit card receipts.” As FBI agent Joe Pistone said, “The IRS doesn't have a chance against wiseguys” because they paid for everything with thick rolls of “Lincolns and Hamiltons.”
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These extralegal measures did not encourage optimal savings and wealth creation. Jimmy Fratianno had to take hidden interests in casinos, with no paperwork, and stash away stacks of cash.
Mafiosi
could not simply use their cash to purchase major assets like homes. “You have to either borrow money or something if you want to buy a house. [The IRS] would say where did you get the money,” explained Fratianno.
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This frustrated normal investments. “They can't invest it without going through fucking fronts…what good is it?” complained Fratianno. “Even when they die, their heirs's got to hide the money.”
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The wife of a Gambino Family soldier lamented how she and her husband had to limit their legal assets. “Later on, when the money started coming in, everything we ever bought in the way of property—houses, office buildings, and so on and so forth—had someone else's name on the papers, not ours,” said Lynda Milto.
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Put another way, the Lucchese Family never had a pension and savings plan. Most wiseguys would not have contributed to it anyway.

In 1954, the Justice Department prosecuted Frank Costello for federal income tax evasion under a different theory. Rather than trying to establish all of Costello's illegal income, the government went through the arduous process of proving that the mob boss's spending far exceeded his declared income and assets. At trial, prosecutors painstakingly called 144 witnesses and introduced
368 exhibits to prove that Costello and his wife spent nearly $60,000 in 1948 ($580,000 in 2013 dollars) and more than $90,000 in 1949 ($872,000 in 2013 dollars).
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Although this prosecution strategy was difficult to replicate, it provided an early window on the mob lifestyle. Costello's rampant consumption was not unusual. Wiseguys spent money at astonishing rates.

Spending Money Like Water

Wiseguys spent their money on a high-consumption lifestyle. When Vincent “Fish” Cafaro was asked what he did with the millions of dollars he made, he described a spendthrift life:

Wiseguys spent their money on all kinds of lavish consumption, starting with the mob nightlife. “Most of them like to be in the limelight. They like to get all dressed up and go to a fancy place with a broad on their arm and show off,” explained Vincent “Fat Vinnie” Teresa. Sammy “The Bull” Gravano recounted his big-spending nights on the town picking up tabs, leaving huge tips, and ordering champagne and prime steaks. “It was let's go to the Copa…and I'm broke again and its macaroni and ricotta at home,” said Gravano.
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Wiseguys tended to spend freely in their personal relationships, too. Anthony “Gaspipe” Casso recounted “spending money like there was no tomorrow” with his young wife. They went on frequent vacations to Saint Thomas, Bermuda, and Las Vegas, routinely dined at the best restaurants in Manhattan, and always
saw the latest Broadway shows.
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Quite often, wiseguys were spending money on mistresses, too. “Everybody who had a girlfriend took her out on Friday night…wives went out on Saturday night,” recounted the wife of Henry Hill.
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The other woman could be costly. “Some wiseguys will set their girlfriends up with an apartment and stipend,” said Joe Pistone.
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