INTRODUCTION

In 1992, the Commission conducted a two-day To date, Leonetti has testified in eight federal tri- public hearing on the control of bars by als, plus three re-, and three state trials in prosecu- and issued a report. The Commission identified several tions of the Pittsburgh La Cosa Nostra and the Patriarca, such establishments and the organized crime members Genovese, Gambino/Gotti, Lucchese, Colombo and and associates holding interests in them. Most of the Bruno/Stanfa Families. His testimony has led to the owners of record and all of the organized crime figures convictions of more than 15 made members and 23 as- invoked their Fifth Amendment right against self-incrimi- sociates, including , who was elevated nation at the hearing and refused to answer questions. from to boss of the Patriarca Family of New The hearing and report featured the testimony of a former England following his indictment and prior to his convic- made member and a former associate of the Southeast- tion, together with virtually the entire hierarchy of the ern -South Jersey Family of La Cosa Patriarca Family; Charles “Chucky” Porter, underboss Nostra. In striking testimony, former captain Thomas of the Pittsburgh La Cosa Nostra; Venero “Benny Eggs” “Tommy Del” DelGiorno and a former associate, whose Mangano, of the Genovese/Gigante Family identity had to be concealed for his protection, explained in New York; Benedetto Aloi, consigliere of the why organized crime gravitates toward liquor-licensed Colombo Family in New York; Santo Idone, a captain establishments — from use of the business to launder of the Bruno/Scarfo Family, and acting captain Michael to use of the premises as a safe haven to meet Taccetta and soldiers Anthony “Tumac” Accetturo,2 and conduct illegal business, including the plotting of Martin Taccetta and Thomas Ricciardi, all of the New murders. They also identified numerous members and Jersey branch of the Lucchese Family. Leonetti also associates from seven different La Cosa Nostra families testified at the sentencing hearing of Patriarca boss who have held undisclosed interests in or exerted influ- Raymond J. Patriarca, Jr. ence over bars throughout . Leonetti proved valuable to the federal gov- During its investigation, the Commission sought ernment in areas beyond criminal prosecutions. He access to a former, high-ranking La Cosa Nostra mem- provided a 20-page declaration that formed the basis ber who, at the time, was in federal custody and was for the federal government’s 1990 civil testifying in numerous federal prosecutions of organized suit resulting in the court ordered takeover of Local 54 crime figures in New York, Connecticut and Pennsylva- of the Hotel Employees Restaurant Employees Interna- nia. Philip Leonetti served as underboss and confidant tional Union and the ultimate removal of its key officials, to his uncle Nicodemo Scarfo, the boss of the South- who were Bruno/Scarfo associates. Leonetti also pro- eastern Pennsylvania- South Jersey Family of La Cosa vided information that contributed to the 1993 federal Nostra, commonly referred to as the Scarfo Family dur- indictment of Vincent “The Chin” Gigante, boss of the ing his reign from March 1981 to early 1991.1 Leonetti Genovese/Gigante Family in New York. In addition, was at his uncle’s side as meetings were held and deci- the prospect of Leonetti’s testimony has been credited, sions made. His intimate knowledge of the Family’s ac- in part, with causing underboss Salvatore “Sammy the tivities and operations ranks next to that of Scarfo Bull” Gravano to cooperate with federal authorities himself. against his boss, , the head of the Gambino/

1After his incarceration in January 1987, Scarfo initially ran the Family through Leonetti, until his imprisonment in April 1987, and then through Anthony Piccolo until early 1991, when John Stanfa became the boss.

2In February 1971, Accetturo was the in charge of the New Jersey branch of the Lucchese Family and fled the state to avoid a subpoena issued by the Commission. Gotti Family in New York. When Leonetti was re- Equally compelling were Leonetti’s accounts sentenced on his federal convictions in May 1992, of Scarfo’s own involvement with bars. He outlined the court recognized him as “the most significant Scarfo’s ownership of several New Jersey bars, his crime figure who chose to cooperate” at that time use of fronts to conceal his ownership interests, his and termed his cooperation “extraordinary” and “out- use of bars as the sites for murders, the tribute that he standing.” Leonetti’s sentence was reduced from 45 received from bar owners and his frequenting of bars years to six and one-half years. both to socialize and to discuss his organized crime business. This report, a follow-up to the Commission’s 1992 report, is the culmination of numerous and ex- In relating his knowledge about organized tensive interviews with Leonetti over the past two crime’s involvement in bars, a subject that had here- and one-half years, as access to him was arranged by tofore never been explored with him, Leonetti ex- federal authorities. It sets forth Leonetti’s account of posed many of the Scarfo Family’s day-to-day ac- events as related to a Commission special agent. The tivities and shed new light on the operation of orga- quoted material that appears in this report is the agent’s nized crime. He intertwined the role of bars in de- summary of those interviews. tailing the actions of both Scarfo and the Commis- sion of La Cosa Nostra in the wake of the murders of Leonetti disclosed to the Commission startling bosses and . He also new information about nine of the bars previously chronicled the “making,” or induction, ceremonies; identified by the Commission and the organized crime the Family’s relationship with attorneys; its dealings figures who have owned or controlled the liquor li- with politicians; its extortion of “street tax”; its in- censes. Two of the bars — ’s Memo- volvement with labor unions, and its “sit-downs” with ries in Margate City and the Coral Reef in Bellmawr other La Cosa Nostra families to resolve disputes. — continue to operate. Leonetti also linked orga- Leonetti revealed the sit-downs and meetings that he nized crime to 14 additional bars in New Jersey, as and Scarfo attended with Gambino Family boss John well as numerous ones in . These bars Gotti and his predecessor, Paul Castellano, to settle include two that the Gambino Family had operated a dispute involving a New Jersey bar. in south Jersey. One of the organized crime bars newly revealed by Leonetti is still licensed — Leonetti’s revelations underscore once again Maynard’s in Margate City. In the course of prepar- the ease with which organized crime has been able ing this report, the Commission uncovered a fourth to pierce New Jersey’s alcoholic beverage licensing active license that has been utilized by an organized system. It is evident from the facts disclosed by crime associate, who was known to Leonetti, in his Leonetti that particular liquor licenses passed with- operation of Hooty Moo’s Beef & Ale in Waterford out government interference from one organized crime Township. A fifth active license — Frog Rock member to another and that certain organized crime Country Club in Hammonton — has as one of its members became involved in one bar after another. owners an individual known to Leonetti as a prior For example, a bar in Atlantic City was operated by owner of another restaurant and bar. Leonetti also four different groups of organized crime figures uti- established the organized crime ownership of a re- lizing the same liquor license, and one Scarfo Fam- tail distribution liquor license, which was held by ily associate, Sy Hoeflich, owned bars in Atlantic, attorney Harold Garber and real estate salesperson/ Gloucester and Camden Counties. Accordingly, the broker Alvin Lippman until April 1995 and had been conclusions and recommendations made by the Com- used by them to operate A.C. Discount Liquors in mission in 1992 are reiterated in this report. Atlantic City.

2 PHILIP LEONETTI

Philip Michael Leonetti was born on March 27, owned by his grandparents, who were 1953, in Philadelphia, Pennsylvania. His childhood was Scarfo’s parents. His grandparents influenced, and his young adult life controlled, by his uncle also lived in an apartment in that Nicodemo Scarfo. Leonetti’s indoctrination at an early building. In approximately 1964, age into the ways of La Cosa Nostra insured his com- when Leonetti was about eleven years plete acceptance of a life in organized crime upon at- old, Scarfo moved from Philadelphia taining adulthood. Scarfo’s molding of Leonetti pro- into the same apartment building. vided him with a blood relationship who, he believed, After Scarfo moved in, Leonetti was would deliver absolute fidelity to him and the Family. around his uncle almost daily for No one was more trusted than Leonetti. At age 27, he approximately the next 25 years. became a made member, reporting to his uncle. At age 28, he was elevated by Scarfo to captain and at age 32, Leonetti’s mother and father were to underboss. However, Leonetti disavowed omerta, separated or divorced by the time he organized crime’s oath of secrecy, in 1988 when he and his mother moved to Atlantic faced a 45-year sentence in federal prison at the age City. As a result, Scarfo had a big of 36 and chose, instead, to cooperate with the fed- influence on Leonetti’s life, especially eral government against the very individuals who had since they lived in the same building. constituted his universe. Leonetti became, and remains Scarfo was the father figure in his life. to this day, the highest-ranking Southeastern Pennsyl- As Leonetti grew up, he saw how vania-South Jersey Family member to cooperate with Scarfo made a living from illegal ac- law enforcement authorities against La Cosa Nostra. tivities. He also saw how Scarfo op- erated and the people that Scarfo as- Leonetti summarized for the Commission his life sociated with. By the time Leonetti in organized crime: graduated from high school, it seemed natural for him to follow Scarfo into a criminal career. Leonetti indicated that La Cosa Nostra had an effect on his life many When Leonetti was about nine years years before he even knew what it was. old, Scarfo drove to Atlantic City one He grew up in a family where five of day and took Leonetti for a ride in a his relatives were La Cosa Nostra pick-up truck that had just been used members. His uncle, Nicodemo in a . Scarfo told Leonetti that Scarfo, was a La Cosa Nostra mem- day that he had “killed a very bad ber and so were three great uncles man” and that Scarfo needed and a second cousin. When he was Leonetti to ride with him in the truck about five years old, in approximately because a little boy in the truck would 1958, Leonetti and his mother moved make Scarfo seem less suspicious in from Philadelphia to Atlantic City to case he was stopped by the police....3 live in an apartment building that was In the summer of 1971, when Leonetti graduated from high school, Scarfo was incarcerated at the New

3The murder is detailed at pages 6 through 8 of this report. Jersey State Prison at Yardville, N.J., underboss of the Family at the time for refusing to testify before the New and he had the final say on all mat- Jersey State Commission of Investi- ters. In January of 1986, Scarfo el- gation. Scarfo was there for approxi- evated Leonetti to the position of mately two years until his release in underboss. Scarfo officially an- the summer of 1973. Scarfo was in- nounced this to members of the Fam- carcerated in the same section at ily at a La Cosa Nostra induction cer- Yardville as Angelo Bruno, who also emony that his uncle held in Phila- refused to testify before the State delphia in March of that year. Commission of Investigation. Bruno was the boss of the Family at the time. Scarfo, Leonetti and others were in- dicted on federal racketeering During the two years that Scarfo was charges in January of 1988. In No- incarcerated, Leonetti carried mes- vember of that year, along with Scarfo sages back and forth between Scarfo and several other members of the and Salvatore “Chuckie” Merlino. Scarfo Family, Leonetti was con- Merlino then carried the messages to victed in federal court in Philadel- and from Philip Testa. At the time, phia of violating the federal RICO Testa was the underboss of the Fam- statute. At the sentencing in May of ily and Merlino was an associate. 1989, Leonetti received a 45-year They were both close friends of prison term. Scarfo’s and lived in Philadelphia. Also during this period, Leonetti col- From the early 1970s until he began lected weekly payments for Merlino cooperating with federal law enforce- on a loanshark debt in Atlantic City. ment authorities in June of 1989, After Scarfo’s release from the State Leonetti was involved in numerous Prison at Yardville in the summer of criminal activities, including murder, 1973, Leonetti was involved with attempted murder, , extortion, Scarfo and Scarfo’s criminal activity loansharking, gambling, labor rack- on a daily basis until approximately eteering, , corruption and tax November of 1988, when Leonetti evasion. was convicted on federal RICO charges. In Leonetti’s world, constant precautions had to On June 8, 1980, Leonetti became a be taken to avoid the omnipresent eyes of law enforce- made member in the Bruno Family ment. Scarfo operated under the assumptions that his of La Cosa Nostra. At that time, premises were bugged and that his movements were under Philip Testa was the boss of the Fam- surveillance. A frequent place for meetings was his apart- ily and Scarfo was his consigliere. ment at 26 North Georgia Avenue in Atlantic City. Prior to being made, Leonetti was an Leonetti outlined the safeguards: associate and proposed member. During May or June of 1981, after becoming boss, Scarfo elevated Any sensitive conversations about il- Leonetti to the position of captain. legal activities or La Cosa Nostra When Scarfo was incarcerated in fed- matters that Leonetti participated in eral prison on a firearms violation at Scarfo’s apartment were always from August of 1982 to January of conducted in a guarded manner. 1984, Leonetti was one of five mem- Most of the time, Scarfo, Leonetti bers that Scarfo left in charge of run- and others used code words to dis- ning the Family for him. The others guise the true meaning of their con- were Salvatore “Chuckie” Merlino, versations. Such conversations were Salvatore “Salvie” Testa, Lawrence usually held either outside or in “Yogi” Merlino and Leonetti’s great Scarfo’s kitchen, where voices were uncle, Nicholas “Nicky Buck” Pic- kept low while the volume on two colo. Salvatore Merlino was the television sets and a radio was turned up. That was done to avoid being The Scarfo Family was part of La overheard by law enforcement au- Cosa Nostra, a national organization thorities who were always suspected made up of organized crime “fami- of having Scarfo’s apartment bugged. lies” from cities throughout the . La Cosa Nostra is governed by the “Commission,” a Leonetti emphasized that he did not like the group of bosses of the most powerful moniker “Crazy Phil.” He explained that it was as- families. The Commission performs signed to him by the media and not his associates in several functions, such as resolving organized crime: disputes between families and ap- proving the “making” of family bosses. The nickname “Crazy Phil” was given to Leonetti around 1978 by a Each family consists of members who news reporter with an Atlantic City have undergone a formal , radio station. Some newspapers then or “making,” ceremony in order to picked up on it. Leonetti was never be inducted into La Cosa Nostra. A called by this nickname by anyone in member who has been inducted into the Family. He didn’t like the name, La Cosa Nostra is referred to as a but Scarfo did. Scarfo said that guys “made” member. Members hold po- would pay a lot of money to have that sitions of varying rank and author- kind of nickname and reputation. ity. There is a boss, an underboss and an advisor to the boss, known as the consigliere. There are , As a backdrop for his declarations on the Scarfo who are also known as capos or cap- Family’s involvement with bars, Leonetti provided a syn- tains. The caporegimes supervise opsis of the history of the Scarfo Family and a brief de- soldiers, who are divided into groups scription of La Cosa Nostra and its structure: known as regimes or crews. Associ- ates, who are not made members, are recruited by and accountable to the From the late 1950s until the early members. Associates work with mem- 1980s, the Family was called the bers to make money in a variety of Bruno Family, after the boss, Angelo ways, including extortion, Bruno. In March of 1980, Bruno was loansharking and gambling. Mem- murdered in a Family power struggle. bers may sponsor associates for mem- Philip Testa, who had been Bruno’s bership into La Cosa Nostra. Gen- underboss from the early 1970s, be- erally, each member under the boss came boss in approximately May of must obtain permission from the next 1980. After becoming boss, Testa higher level within the family in or- made Scarfo his consigliere. In an- der to participate in illegal money- other power struggle, Testa was mur- making schemes or crimes. If dis- dered when a bomb exploded at his putes develop between members of house in in March different families or members within of 1981. Scarfo became the boss ap- the same family, a meeting is held to proximately one week after Testa’s resolve the problem. This type of death. The Family has operated pri- meeting is referred to as a “sit- marily in the southeastern Pennsyl- down.” vania and south Jersey area, with op- erations reaching throughout New Jersey. Its members have had regu- In 1992, Leonetti commenced a new life with a lar contact with other La Cosa different identity under the Federal Nostra families throughout the coun- Program. He exists under constant threat of a “con- try. tract” that was placed on his life. THE ROLE OF BARS IN SCARFO’S LIFE

Bars in both south Jersey and Philadelphia Scarfo’s first captain, Felix DiTullio, was a bar were integral to Nicodemo Scarfo’s life in organized owner. Because of criminal convictions, DiTullio had crime. Leonetti explained how they played a key role in his partner, Family member Alfred Iezzi, hold the liquor Scarfo’s induction as a La Cosa Nostra member, suc- license for the Friendly Tavern at 1039 South 8th Street cession to boss of the Family, planning and execution of in Philadelphia. Iezzi owned the license from December killings and induction of others into La Cosa Nostra. 1955 to December 1966, when it was transferred to Scarfo became a made member of La Cosa DiTullio’s wife. The bar still operates with her license. Nostra at the Sans Souci, a restaurant and cocktail lounge Leonetti reported: that operated in Cherry Hill (Camden County) from the 1950s to the 1970s.4 Leonetti recounted the story re- lated to him by his uncle: Scarfo told Leonetti that the first cap- tain that he was assigned to after be- ing inducted into La Cosa Nostra was Scarfo told Leonetti on a few occa- Felix “Skinny Razor” DiTullio. sions over the years that he was in- Scarfo said that DiTullio took him all ducted into La Cosa Nostra at the old over when he travelled around and Sans Souci, which was a restaurant introduced him to a lot of people in- and bar near the race track traffic volved in La Cosa Nostra. DiTullio circle in Cherry Hill, N.J. Scarfo said used to own a bar, which was known that he was “made” in 1954 or 1955, as the Friendly Tavern, near 8th and when he was 25 years old, and that Washington Streets in south Philadel- he was initiated by Joe Ida, the boss phia. Scarfo told Leonetti that the of the Family at the time. Scarfo’s Friendly Tavern was used to murder cousin, Anthony “Tony Buck” Pic- people when DiTullio was still alive. colo, and two uncles, Michael “Mike Buck” Piccolo and Joseph “Joe In the early 1960s, Scarfo led a group that Buck” Piccolo, were also inducted was assembled by boss Angelo Bruno to murder an in- into La Cosa Nostra at the same cer- dividual who “showed disrespect” to the Family’s emony. Scarfo told Leonetti that an- consigliere, Joseph Rugnetta, who was himself a bar other uncle, Nicholas “Nicky Buck” owner.5 The brutal slaying was carried out in a bar in Piccolo, was inducted into La Cosa the area of the City of Vineland (Cumberland County). Nostra about five years before them. Leonetti narrated the episode for the Commission: Nicholas, Joseph and Michael Pic- colo are brothers. The Piccolo broth- In approximately 1962, when Angelo ers are Leonetti’s great uncles and An- Bruno was boss, Scarfo and some thony Piccolo and Leonetti are sec- associates of the Family used a bar ond cousins. in the Vineland, N.J., area to kill a man named “Reds” Caruso. Leonetti learned about his murder from sev-

4The Commission is unable to provide specific time periods for some of the older bars appearing throughout this report because of an absence of official records. 5Rugnetta’s ownership of the South Philly Grill is discussed at page 96 of this report. eral conversations that he had with to bring Caruso to the bar and for Scarfo and others over the years. Anthony Casella and Santo Romeo to Salvatore Merlino and Santo Idone hold him while Santo Idone choked also told Leonetti about the killing. him to death. Angelo Bruno wanted One of the times that Leonetti heard Caruso choked. However, Idone ar- about the “Reds” Caruso murder rived late and Scarfo had to shoot was in approximately the summer of Caruso instead. Scarfo shot him five 1986 at a meeting in Atlantic City on times with a handgun that was the Boardwalk, between the Enclave wrapped in a scarf and concealed in condominiums and the Golden Nug- his coat pocket. Scarfo thought get Casino. was at- Caruso was dead, but Caruso said, tended by Scarfo, Leonetti and a cap- “You got me, Nick.” Scarfo then took tain in the Family named Santo an ice pick and kept stabbing him in Idone. the back. The ice pick got stuck in Caruso’s back and Scarfo had to Caruso was killed because he showed break it off. disrespect to Joseph “Joe The Boss” Rugnetta, who was the consigliere of After Caruso was dead, there was a the Family. Caruso tried to shake knock at the door and the killers got down Rugnetta for money and also scared because they thought it was a slapped him. Until his death in the police officer who used to stop at the 1970s, Rugnetta lived near 12th bar at about that time of day to pick Street and Snyder Avenue in south up beer. It turned out to be Santo Philadelphia. After Caruso showed Idone. After Idone arrived, they put Rugnetta disrespect, Angelo Bruno a rope around Caruso’s neck to make ordered his murder. it look like he had been choked. This was done to satisfy Bruno because of The conspiracy to kill Caruso in- his instruction that Caruso was to be volved Family members and associ- choked. Caruso’s body was then ates, including Scarfo, Santo Idone, wrapped in blankets or plastic and Santo Romeo, Anthony Casella and put in the back of a pick-up truck. The Salvatore Merlino, as well as others, body was driven to a grave that had whom Leonetti did not know, but who already been dug somewhere in the helped dispose of the body. Scarfo, Vineland area. Romeo, Casella and Merlino lived in south Philadelphia at the time and Bruno gave instructions that Caruso’s Idone lived in the Chester, Pennsyl- body was to be left next to the grave vania, area. site because others who had been as- signed to dig the grave would then Scarfo, who was already friendly with return to bury the body after it had Caruso, started to “romance” him in been dropped off. Bruno set it up so order to set him up. On the day of that those involved in murdering the murder, Salvatore Merlino went Caruso and those involved in digging to Caruso’s house in south Philadel- the grave and burying Caruso did not phia and told Caruso that Scarfo was know each other’s assignment. waiting for Caruso in a nearby car. Scarfo then gave Caruso a fabricated Scarfo later found out that those who story about how he needed Caruso to had dug the grave, later filled it in go with him to a bar in Vineland. and buried Caruso’s body in a grave Caruso agreed to go. that they had dug elsewhere. Bruno did that as a safeguard in case one of Because the bar was closed on the those involved in killing Caruso at the day that Caruso was killed, those in- bar decided to cooperate with law en- volved in the murder got the keys from forcement authorities. If someone its owner. The plan was for Scarfo took the police to the original grave to dig up the body and it wasn’t there, not remember the first name of that person would look like a liar. "Reds" Caruso’s brother. After Caruso’s body was dropped off Dominick “Reds” Caruso was reported missing by his at the original grave, Scarfo drove wife on January 30, 1962. As of this date, Caruso’s the pick-up truck to his parents’ body has not been found. apartment building in Atlantic City where Leonetti lived. Leonetti was * * * * about nine years old at the time. Scarfo picked up Leonetti and took Both Angelo Bruno and his successor, Philip him for a ride to Philadelphia to use Testa, met violent deaths in internecine power struggles. him as a decoy. Scarfo figured that Each was slain after leaving an organized crime-owned if anybody saw the killers using the bar — Bruno had been at Cous’ Little Italy and Testa truck in the murder and reported it to had left his bar, Virgilio’s.6 Leonetti recounted the events the police, the police would never following each murder, as reported to him by his uncle. think that a truck with a little kid in it Bars played a prominent role as events unfolded. With had been used in a murder. Scarfo respect to Bruno, Leonetti delineated the actions taken told Leonetti on the day of the mur- by the Commission of La Cosa Nostra following the der that he had just “killed a very bad unsanctioned killing, the interplay between Scarfo and man” and explained to Leonetti why the Commission, and Scarfo’s rejection of the he wanted Leonetti to ride with him Commission’s offer for him to become boss in favor of to Philadelphia. Scarfo drove the Testa: truck to Philadelphia for it to be de- stroyed so that it could never be used as evidence. After Bruno was murdered, the Com- mission of La Cosa Nostra started an The bar where Caruso was murdered investigation to identify the people was owned by either a member of the who were responsible for Bruno’s Family named Anthony “King death so that they could be killed. Kong” Perella or a relative of his. This was done because the Bruno Perella was from the Vineland area. “hit” was not sanctioned by the Com- He died in an auto accident sometime mission. The Genovese Family was around the mid-1960s. Over the given of conducting the in- years, a few members of the Family vestigation, which was headed by lived in the Vineland and Bridgeton Vincent “The Chin” Gigante, An- area. Besides Perella, they included thony “Fat Tony” Salerno and Bobby Joseph “Joe” Scafidi and his son, Manna. All three held high-ranking Samuel Scafidi. For many years, Jo- positions in the Genovese Family at seph Scafidi was the captain for the the time. members who lived in that area.... Scarfo made several trips to New York In the latter 1970s and early 1980s, to meet with Gigante, Salerno and when Scarfo and Leonetti went to the Manna to discuss Bruno’s death. 9M Bar to meet with Salvatore Scarfo was assisting them in trying Merlino, they often used to see the to find out who murdered Bruno and brother of “Reds” Caruso there. used to tell Leonetti what occurred Scarfo, who knew the brother as far at the meetings. back as he knew “Reds,” always talked to him at the bar. Leonetti did Anthony “Tony Bananas”

6Cous’ Little Italy appears at pages 96 through 98 of this report. Virgilio’s appears at pages 9 through 11. Caponigro, who was the consigliere cussed with Gigante the problems of the Family at the time of Bruno’s that the Family was having with kill- murder, was the main suspect in ing Simone because Simone wouldn’t Bruno’s death. At one of the meet- obey orders to “come in.” Scarfo and ings that Scarfo attended, about a Gigante also decided that a member month after Bruno’s death, Bobby of the Family, named Frank Sindone, Manna told Scarfo that the Commis- should be killed for his involvement sion had Caponigro and his brother- in Bruno’s death. in-law, Alfred “Freddie” Salerno, killed. Salerno was a member of the Scarfo later met with Paul Family. Manna also said that $20 Castellano in New York and explained bills had been stuffed up Caponigro’s to him the problem that the Family rectum to indicate that he had been was having with killing Simone. killed because of his greed. Castellano was the boss of the Caponigro’s and Salerno’s bodies Gambino Family at the time. He told were found in around April Scarfo that he would see to it that of 1980. Manna also told Scarfo that Simone was killed. Simone was mur- the Commission determined that dered by the Gambino Family and his John “Johnny Keys” Simone was in- body was found in in volved in Bruno’s murder and that he the summer of 1980. was going to be killed. Simone was a member of the Family from the In the fall of 1980, Frank Sindone Trenton, N.J., area. was murdered by Family members Salvatore “Chuckie” Merlino, Frank At another meeting, Manna told Monte and Salvatore “Salvie” Testa. Scarfo that the Commission wanted Testa lured Sindone to a south Phila- him to be the new boss of the Family, delphia house owned by Testa asso- but Scarfo turned it down because he ciate Virgil Mariutti. Mariutti was not felt that Philip Testa deserved it living in the house at the time and more. Around May of 1980, Testa was not present when the murder took and Scarfo were called to New York place. Monte and Merlino were al- to meet with Gigante, Salerno and ready present when Testa and Sindone Manna. Testa was informed that the arrived. Once Testa and Sindone Commission had approved him as the were inside, Merlino shot Sindone as new boss and wanted Testa to make he was shaking hands with Monte. Scarfo either the underboss or Shortly after the murder, Merlino and consigliere. Testa agreed. He made Testa drove to Margate, where they Peter Casella the underboss and met Leonetti at his condominium in Scarfo the consigliere. Leonetti be- the Margate Towers on Atlantic Av- lieved that that was the only meeting enue in Margate. Soon after, concerning Bruno’s murder that Testa Merlino, Testa and Leonetti met attended. Testa never felt comfort- Scarfo and they all went to the Easy able going to meetings in New York Street Pub, where Merlino and Testa because he didn’t know many New gave Scarfo and Leonetti the details York La Cosa Nostra members. Since of Sindone’s murder. The Easy Street Scarfo had connections in New York, Pub was located on Avenue Testa had him take care of most mat- between Atlantic and Pacific Avenues ters with La Cosa Nostra families in Atlantic City. there. After Testa became the boss, Scarfo Philip Testa used Virgilio’s, his Philadelphia bar continued to go to New York concern- and restaurant at 5 Bank Street, as for his ing Bruno’s murder. Scarfo was told illegal activities. Testa and his son, Salvatore “Salvie” to continue having the Family inves- Testa, owned the property. After Philip Testa acceded tigate Bruno’s death. Scarfo dis- to boss of the Family, Virgilio’s became his headquar- ters and the hub of the Family’s operations. Law en- Family. Testa inducted Leonetti, forcement surveillances of Virgilio’s between March Merlino and several others into La 1980 and March 1981 captured most high-ranking Cosa Nostra at that time. Scarfo was members and numerous associates entering and leaving also present. Others who were initi- the bar. Leonetti recalled the following about Virgilio’s: ated were Salvatore “Salvie” Testa, Salvatore “Chuckie” Merlino, Rob- ert “Bobby” Lumio, Anthony From the late 1970s until his murder “Blonde Babe” Pungitore, Salvatore in March of 1981, Philip Testa owned “Wayne” Grande, Frank Narducci, a restaurant and bar that he used as Jr., and Anthony “Tony” Casella. his headquarters and office for his illegal activities and La Cosa Nostra Later that same summer, Scarfo, matters. The restaurant was on Bank Leonetti and Merlino again violated Street near Market Street in Philadel- the condition when they travelled phia. When Testa originally opened to Virgilio’s in Philadelphia. At the the business in the late 1970s, it was time, Leonetti and Family captain known as the Bank Street Restaurant. Santo Idone were formally intro- In approximately 1979 or 1980, he duced to each other as fellow La Cosa changed the name to Virgilio’s. From Nostra members. The introduction approximately May of 1980, when was made at Virgilio’s because Idone Testa became boss shortly after had not been present for Leonetti’s Bruno’s death, until Testa’s murder in induction at John Cappello’s house. March of 1981, Virgilio’s was the cen- Other Family members present at ter of operations for the Family. Virgilio’s that day were Philip Testa, Leonetti did not know whose name Salvatore Merlino and Salvatore was on the liquor license, but knew Testa. from dealings with Philip Testa, his son, Salvatore “Salvie” Testa, Scarfo and others that Philip Testa owned Virgilio’s also provided employment for Family and controlled the business. members and associates: Scarfo and Testa were close friends who met regularly through the years. Some of the individuals associated Scarfo, Leonetti and Lawrence with the Family worked at Testa’s res- Merlino travelled from their homes taurant. Frank Monte, who was a in the Atlantic City area to meet with member of the Family and good Testa and others at Testa’s restaurant friends with Philip Testa and Scarfo, on many occasions. The only time worked there and spent a great deal that they restricted their trips was of time there. In the fall of 1980, between January and October of Monte and Family members 1980, when they were placed on bail Salvatore “Chuckie” Merlino and restrictions after their indictment for Salvatore “Salvie” Testa murdered Vincent Falcone’s murder. They were Family member Frank Sindone. At prohibited from travelling outside of the time of the murder, Virgilio’s was Atlantic County until they were ac- serving as headquarters for Family quitted in October of 1980. boss Philip Testa. Monte was in- volved in murder and illegal gam- There were times when Scarfo, bling activities.... Leonetti and Merlino violated the bail condition confining them to Atlantic Monte was employed at another bar County. One occasion was on June prior to working at Testa’s. Leonetti 8, 1980, when Philip Testa held a La recalled that, in the early 1970s, he Cosa Nostra initiation ceremony in and Scarfo travelled to a bar in the south Philadelphia home of John Cinnaminson, N.J., to see Monte, who Cappello, who was a captain in the was working as a bartender there. Leonetti did not recall the name of 1978, Testa’s daughter, Maria Sheeran, became the sole the bar, but knew it was in corporate officer. The license was sold approximately Cinnaminson....7 seven months after Testa’s death. Virgil Mariutti, who was a close Following Testa’s murder on March 15, 1981, friend of ’s, managed Scarfo, who had been Testa’s consigliere, began ma- Philip Testa’s restaurant during part neuvering to become the next boss of the Family. A of the time that Testa owned it. Testa Philadelphia bar served as his base of operations. named Virgilio’s after Mariutti. It was Leonetti revealed Scarfo’s actions in consolidating sup- at a south Philadelphia house owned port within the Family, confronting the opposing faction by Mariutti that Frank Monte, and obtaining the approval of the Commission of La Cosa Salvatore Merlino and Salvatore Nostra in his bid to become the boss: Testa murdered Frank Sindone in the fall of 1980. Mariutti did not occupy the house at the time and was not In the days after Philip Testa’s mur- present when the murder occurred.... der in mid-March of 1981, Scarfo used the 9M Bar at 9th Street and John Varalli managed Testa’s bar and Moyamensing Avenue in south Phila- restaurant when it was known as The delphia as a kind of headquarters for Bank Street Restaurant, prior to Virgil his attempt to become the new boss Mariutti becoming the manager. In of the Family. The 9M Bar was a approximately 1979, at Philip Testa’s “safe” place to meet and conduct request, Scarfo got Varalli a job at business because it was operated by an Atlantic City restaurant that was a friend of Salvatore “Chuckie” owned by Vince Sausto, an associate Merlino’s. of the Family.... From the latter 1970s until the mid- Joseph Erace also held a position at 1980s, Merlino used the 9M Bar as a Testa’s restaurant. Erace was an as- hangout and also as his headquar- sociate of the Family who was in- ters to conduct his illegal activities volved originally with Testa and and to meet with his associates. Monte and later with Scarfo, Scarfo and Leonetti often met Leonetti, Frank Gerace and Johnny Merlino there during that period. Palumbo. In 1979 or 1980, Leonetti During those years, the bar was was present when Scarfo and Frank known as the 9M Bar. The name was Gerace discussed giving Erace a job later changed to Anthony’s Bar. One at Local 54 and Scarfo gave his ap- of the people who operated the bar proval. The discussion took place at during those years was a numbers one of the regular meetings that writer who turned his action into Scarfo and Gerace held to discuss Lo- Merlino. The Family also had an il- cal 54 at Gerace’s mother’s apart- legal video gambling machine there. ment at 26 North Georgia Avenue in Atlantic City. As soon as Testa was murdered, Scarfo began meeting with the cap- tains of the Family to try to get their In 1977, the liquor license for Virgilio’s was held by support for him to become boss. ETTENAEJ Corporation, whose officers were Testa’s Scarfo wanted to be able to go to the son-in-law, Robert Sheeran, and Frank “Chickie” Commission of La Cosa Nostra in Narducci’s sister-in-law, Jeanette Hearn. Joseph Erace New York and say that he had the sup- was listed in the license application as the manager. In port of the captains in the Family and

7Monte worked as a bartender at the Cinnaminson Country House and also used the premises to further the Family’s illegal gambling activities. The business was sold in January 1973 and, on February 13, 1973, the premises were destroyed by arson. that he would like to be the next boss. and Lawrence Merlino were also Scarfo was the consigliere at the time. present at the meeting. Idone said The captains were Santo “Big Santo” that he would support Scarfo if Scarfo Idone, Joseph “Joe” Scafidi, John agreed to try to get along better with “Johnny” Cappello, Alfred his relatives who were La Cosa “Freddie” Iezzi, Frank Monte and Nostra members in the Family. For Frank “Chickie” Narducci. many years, Scarfo had not been on very good terms with his uncles, . . . Nicholas, Joseph and Michael Pic- colo, and a cousin, Anthony Piccolo. After Philip Testa was murdered and Scarfo agreed. Scarfo didn’t have to while Scarfo was contacting the cap- try and convince Monte to support tains of the Family to get their sup- him because they were friends and port for him to become boss, he met Monte would have automatically with Alfred “Freddie” Iezzi at a bar backed Scarfo. that Iezzi owned in Philadelphia. The bar was known as the Old Timers At the same time, the underboss of Tavern and was located on Wharton the Family, Peter Casella, was also Street, near Broad Street.8 Iezzi had attempting to become the boss. been a captain in the Family for many Casella was close with captain Frank years and was Scarfo’s captain for “Chickie” Narducci, Sr. Another several years until Testa made Scarfo member of the Family, Harry “The his consigliere in 1980. Hump” Riccobene, also wanted to be the boss. Scarfo and Iezzi met at the Old Tim- ers Tavern because it was a “safe” At Philip Testa’s wake, Frank place where Scarfo could talk to Iezzi “Chickie” Narducci told Scarfo that about becoming the boss. Iezzi Peter Casella wanted to meet Scarfo agreed to support Scarfo for that po- afterward at John Cappello’s house. sition. Leonetti, Lawrence Merlino The wake and Cappello’s house were and Salvatore Merlino also attended both in south Philadelphia. Scarfo the meeting and were present for the was almost certain by then that conversation between Scarfo and Casella and Narducci were behind Iezzi. Leonetti had been to the Old Testa’s murder. Because Scarfo was Timers Tavern many times over the concerned that he was being set up years with Scarfo for various meet- to be killed, he took Ralph “Blackie” ings since Scarfo reported to Iezzi at Napoli aside at the wake and told one time. Iezzi used the Old Timers Napoli to immediately drive to north Tavern as his headquarters for his il- Jersey and let Bobby Manna know legal activities. that Scarfo wanted to meet with him the next day about becoming boss of . . . the Family. Manna was a member of the Genovese Family of La Cosa A couple of days after Testa’s death, Nostra. Napoli told Scarfo that he Scarfo met with captains Santo Idone would meet with Manna and then and Frank Monte at the 9M Bar and drive right back to Philadelphia to got their support for him to become tell him what Manna had said. Scarfo boss. Leonetti, Salvatore Merlino and Napoli agreed to meet at the 9M

8The bar, which was located at 1304 Wharton Street in south Philadelphia, had also been a meeting place for boss Angelo Bruno. From 1941 to 1956, Alfred Iezzi held the liquor license and operated the business as Ticket Grill. He held another license and ran the bar as Old Timers Tavern from January 1971 until 1978, when he transferred the license to his wife. The license was sold in November 1983. Bar as soon as Napoli returned. At about 2:00 a.m., Ralph Napoli ar- rived at the 9M Bar, where everyone Scarfo then told Leonetti, Lawrence who had gone there previously was Merlino, Frank Monte and Santo still waiting for him. Napoli told Idone to go to the 9M Bar after the Scarfo that he had talked to Manna wake and wait for him and Salvatore and arranged for a meeting that day. Merlino to return from the meeting Scarfo and Napoli both had to miss with Casella. Fearing for Scarfo’s Testa’s funeral in order to attend the safety, Leonetti took John Cappello meeting. Early in the day, Scarfo and to the 9M Bar as insurance against Napoli went to the area Scarfo’s being killed. Cappello was where Scarfo met with Manna. Peter Casella’s brother-in-law, but Scarfo told Manna what had hap- was not really worth much as insur- pened the night before when he met ance because Casella had never got- with Peter Casella and the others and ten along very well with him. Leonetti said that he felt that Casella and told Cappello that night that he was some of the others were responsible going to kill him if anything happened for Testa’s murder. After talking to to Scarfo. Scarfo, Manna decided to set up an appointment for Scarfo to meet with Leonetti, Santo Idone, Frank Monte, Vincent “The Chin” Gigante and An- Lawrence Merlino and John Cappello thony “Fat Tony” Salerno. Gigante went to the 9M Bar to wait for was the boss of the Genovese Fam- Scarfo. When Scarfo and Salvatore ily and Salerno was a high-ranking Merlino arrived, Scarfo told them member. After Manna scheduled the that Peter Casella, Anthony “Tony” meeting, he got word to Scarfo about Casella, John “Coo Coo” Grande, the arrangements and told Scarfo to Joseph “Joey” Grande, Frank tell Peter Casella that he had to at- “Chickie” Narducci and Rocco tend. Because Testa’s death had not “Rocky” Marinucci had all been at been sanctioned by the Commission Cappello’s house for the meeting. At of La Cosa Nostra, it conducted an the time, all were members of the investigation to determine who was Family, except Joseph Grande and responsible. The Genovese Family Rocco Marinucci. John Grande was was in charge of conducting the in- the father of Joseph Grande and An- vestigation. As boss of the Genovese thony Casella was Peter’s brother. Family, Gigante sat on the Commis- Scarfo said that when he and Merlino sion. arrived at Cappello’s house, Marinucci was listening to a police About a week after his meeting with scanner and the rug in the room Manna, Scarfo travelled to New York where they were meeting had been and met with Gigante, Salerno and rolled up. Scarfo said that he felt that Manna. Peter Casella and Rocco they were going to try to kill him and Marinucci also attended the meeting, Merlino. Peter Casella told Scarfo but showed up about three hours late. that he had found out from somebody After hearing from both Scarfo and in New York that Philip Testa had Casella, Scarfo was told by Gigante, been murdered by John Berkery, who Salerno and Manna that he was the was an associate of the Family. new boss. He was also told to kill all Casella then said that he wanted those who were involved in the Testa Scarfo to kill Berkery to retaliate for murder. Casella was instructed by the Testa murder. Scarfo told Casella Gigante, Salerno and Manna to re- and the others that he didn’t believe tire to Florida. Scarfo told Leonetti it. Scarfo also told them that he what occurred at the meetings when would be meeting with Bobby Manna he returned from them. the next day to explain what he thought was happening. Of the five individuals involved in Testa’s mur- Those involved in the Marinucci kill- der, two were killed on Scarfo’s orders. Leonetti de- ing were able to murder him at the scribed the fate of the conspirators, with the Buckeye Buckeye Club because it was con- Club, a Philadelphia bar that was located at 1226 South trolled by Frank Narducci, Jr., and Eighth Street, providing the location for one of the Philip Narducci at the time. The slayings: Narducci brothers inherited the Buck- eye Club from their father, Frank “Chickie” Narducci, who had been Within a year of the meetings and on murdered just a few months before, Scarfo’s orders, Frank “Chickie” in January of 1982, for his involve- Narducci and Rocco Marinucci were ment in Philip Testa’s death. Chickie killed for their involvement in Testa’s Narducci had operated the Buckeye murder. Scarfo also wanted to kill Club for many years. He used it as a Anthony Casella, but those assigned hangout and to conduct his illegal ac- were never able to get him in a posi- tivities, which included gambling and tion to do it without taking a big risk loansharking. Leonetti had been of getting caught. Teddy DiPretoro, there with Scarfo on many occasions who was another person involved in over the years for meetings and to the Philip socialize. Chickie Narducci was mur- Testa, became a protected govern- dered near his home in south Phila- ment witness and was never killed delphia by Salvatore Testa, Joseph either. “Joey Pung” Pungitore and Eugene “Gino” Milano. In March of 1982, Rocco Marinucci was murdered by Frank Narducci, Jr., Joseph Grande and Salvatore Frank J. Narducci, Jr., owned the property where the “Wayne” Grande at a private club Buckeye Club was situated. and bar, known as the Buckeye Club, on 8th Street, near Wharton Street, * * * * in south Philadelphia. Salvatore Testa was in charge of planning the Leonetti divulged that Scarfo held two making murder. At the time of the murder, ceremonies at Merighi’s Savoy Inn, a restaurant and Testa, Salvatore Grande and cocktail lounge in Buena Vista Township (Atlantic Narducci were members of the Fam- County): ily. The plan to kill Marinucci called for Merighi’s Savoy Inn was a restaurant Frank Narducci, Jr., to become and bar located in the Vineland area. friendly with him in order to make it It was owned by brothers Ernie and easier to set him up. On the day of Tom Merighi.... [Ernie] had been the killing, Marinucci was lured by friendly with Scarfo for many years. Narducci to the Buckeye Club, where Scarfo told Leonetti that...[Ernie] Salvatore Grande and Joseph placed bets with the illegal gambling Grande were waiting for them. While business that Scarfo controlled. From at the Buckeye Club, Joseph Grande approximately the mid-1960s until shot Marinucci to death. Salvatore approximately 1970, Scarfo had a Grande and Joseph Grande are gambling operation in the Atlantic brothers. Marinucci’s body was left County and Cumberland County area at the Buckeye Club until nighttime, and had a lot of action in the Vineland when it was taken out and dumped in area.... Joe and Samuel Scafidi, who south Philadelphia. Leonetti learned were father and son, operated an il- about the details of the Marinucci legal gambling business in the murder from Joseph Grande, Frank Vineland and Bridgeton area. The Narducci, Jr., and Salvatore Testa. Scafidis were members of the Family from Bridgeton. There was a busi- ness relationship between Scarfo’s made them soldiers. Scarfo “took gambling operation and the Scafidi’s down” Scafidi because of his age and gambling operation. because Scarfo had recently become the boss and wanted to fill the posi- tions with people he was close to and In June 1968, brothers Thomas and Ernest Merighi were could trust. placed on the liquor license in addition to their parents, who had held the license since July 1954. In 1979, the The second induction ceremony that license was transferred to the brothers, who held the Scarfo had at Merighi’s Savoy Inn license jointly until approximately 1989, when 100% was held in June of 1986 and was the interest was transferred to Thomas. Since 1994, Tho- last induction ceremony that he held mas Merighi and his son have held the license. as boss. Those inducted at that cer- emony were Joseph Ligambi, Salvatore “Torre” Scafidi, Anthony Leonetti detailed the two making ceremonies: “Tony” Pungitore, Jr., Joseph “Scoops” Licata, Anthony “Slicker” Attanasio and Ralph “Junior” Staino. While Scarfo was the boss of the Fam- ily, he held two La Cosa Nostra in- duction ceremonies at Merighi’s Sa- In an interview by Commission staff, Ernest voy Inn. Neither Merighi was aware Merighi admitted to placing bets on sports events and that the ceremonies were conducted horse races from the 1960s into the 1970s, but stated there. In May or June of 1981, Scarfo that he did not know that the bookmakers he used were held the first of the two ceremonies aligned with Scarfo’s gambling operation. He also ad- and inducted one individual named vised that he placed some of the bets from the licensed Anthony and another named Pete. premises and knew that patrons were placing bets from Leonetti did not remember their last the pay phone inside the premises. In addition, Merighi names. However, when shown a pho- stated that Scarfo, Leonetti and their associates were tograph of Peter Caprio, Leonetti regular patrons and that he knew of their reputations identified him as the person named and Scarfo’s criminal conviction. Merighi had first met “Pete” that Scarfo inducted. When Scarfo at Scarfo’s bar in Atlantic City, The Penguin Club. shown a photograph of Anthony “Tony” Capozzi, Leonetti identified By allowing Scarfo and his associates to frequent him as the person named “Anthony” the restaurant and hold affairs there, at a time when that Scarfo inducted. Scarfo’s criminal and organized crime reputation was notorious, Ernest Merighi violated N.J.A.C. 13:2- Capozzi and Caprio were both from 23.5(a), which reads: the northern New Jersey crew of the Family. Capozzi was a union offi- cial with either the Electrical Work- No licensee shall allow, permit or suf- ers Union or the Iron Workers Union. fer in or upon the licensed premises In approximately 1985, Leonetti at- the habitual presence of any known tended the wedding of Pete Caprio’s prostitute, , racketeer, noto- daughter in northern New Jersey with rious criminal, or other person of ill Lawrence Merlino, Phillip “Moe” repute. McFillin and Leonetti’s great uncle, Nicholas “Nicky Buck” Piccolo. Ernest Merighi currently holds an interest in a At the same making ceremony, Scarfo liquor license. He is a one-third partner in DEW, Inc., elevated Lawrence Merlino and which has owned the liquor license for Frog Rock Coun- Leonetti to the positions of captain. try Club in Hammonton (Atlantic County) since Novem- He also “took down” John “Johnny” ber 29, 1994. Cappello and Joseph “Joe” Scafidi from the positions of captain and Riccobene: No, no, you’d still have * * * * to renew [the liquor license] every year. In a 1977 federal wiretap,9 Scarfo, then a sol- Testa: No, we didn’t get it yet. dier, was captured in conversation with underboss Philip Testa, captain Frank “Chickie” Narducci and sol- Narducci: Yeah, I’m gonna do that. dier Harry Riccobene about the use of fronts in owning a liquor license. The discussion followed their learning Testa: But we didn’t get it yet. We’re that the ABC denied the liquor license application of still fighting for it. Testa’s son, Salvatore, and Narducci’s son, Frank, Jr. An investigation by the Atlantic City Task Force of the Narducci: Well, it’s still up in escrow, ABC, created in 1977 to uncover front arrangements, and we still didn’t get it yet; but we established that the sons did not have the independent still will keep it that way [by appeal- resources to finance the $250,000 purchase of the li- ing]. We’ll pay on it. cense, business and property of Le Bistro, at 2201 Pa- cific Avenue in Atlantic City, and were fronting for their Riccobene: Right. fathers, who were precluded from having any interest in a liquor license. The wiretap revealed: Narducci: And we bring it to the 3rd Circuit Court. Testa: Well, they got to get a clean Scarfo: Yeah, but it ain’t yours to pay name. Harry, you know that! (all [on]; it’s hers [the licensee’s). That’s laugh). Isn’t that right - Marron! the thing Chick! You ain’t got the li- This is so ridiculous. These two kids, cense! She’s got the license. these two kids here: How clean do you want guys, for Christ sake! They Testa: That’s right. We don’t have are babies yet. it. She’s got it. Riccobene: Right. Scarfo: You just bought the property. Testa: One guy is twenty-one. One Narducci: Right. guy is twenty- three, twenty-four. Scarfo: And she’s still got the li- Scarfo: Fa bingo (Ph) Phil. Phil you cense. She and - gotta go fight this. You gotta wind up; forget about relief in the state Narducci: Yeah, but we bought ev- court! erything off her, but they. They won’t they (New Jersey authorities) won’t Testa: It’s a four or five year thing. release the license. Scarfo: That’s it. Scarfo: They won’t release but they . . . have separated-ah-the real estate from the license. (Discussion about appealing the decision to federal court.) Riccobene: Well then it’s still hers. Narducci: It’s up on the appeal and Scarfo: That’s what they did to make so they can’t take the license. Am I the deal for the real estate guy. right Harry?

9Excerpts of the wiretap, including the one appearing in this report, were introduced at the 1982 federal RICO prosecution of the Bruno Family. Riccobene: Yeah, that’s still her li- Testa: You burn guys [fronts] up. cense then. Look at this poor guy [who provided Narducci with a $72,500, unsecured Scarfo: That’s still her license. loan as the down payment for the property], he was a nice fellow. Narducci: Well, can’t you do that- Burned him right up. He’s getting ah-pending-ah- investigated. They start subpoena- ing him. Geez, they scare guys away. Scarfo: Well that could be an argu- ment there that you - Narducci: Yeah, he got in a lot of trouble himself, you know. Narducci: Don’t tell my argument there. Now we bought this whole Scarfo: And they are probably look- place. You stopped us from getting ing - the license. We bought it. So can’t you bring that to the 3rd Circuit Court Testa: We were gonna use his name! on appeal? Scarfo:- into his building (Ph) busi- Riccobene: Sure. ness. Scarfo: I got - Testa: We were gonna use his name! He recommended we don’t use his Testa: Sure, that’s what’s gonna hap- name. pen anyway. Narducci: Don’t use it no more. Scarfo: I got the newspapers. And listen I sent them to Bobby with the Scarfo: Sure, what? “Master Plan.” Testa: He’s scared out? Testa: See, they are killing me with the mortgage. Riccobene: Well, you can’t blame the guy in a way. Narducci: Right. Narducci: Now, they [know] who he Testa: See every year. Now at the is. He never had no trouble in his end of the year, we ran out of money. whole life and - So now we can’t go to that source no more. You run out of sources. Guys Testa: All of a sudden, Task Force, get scared of you. So now we got to FBI on him, everybody - (laughs). pay out of our own pockets. As soon as we make a payment we’re dead. Testa: Yeah, he thought it was a joke. Now it’s infiltration. Riccobene: He didn’t realize it at the Narducci: Yeah right. beginning, Chickie. If he would have realized it, he probably would have Testa: And on and on and that’s the told you. Like he said, “Don’t use end of that. my name, put on this act.” . . . Riccobene: Uh huh. Riccobene: Well, that’s what we have Narducci: That just keeps them off to be careful of now, because anybody our back, you know what I mean? we involve; he’s gonna get it. They Where in the f___ are you gonna get [law enforcement] are gonna scare nice guys that are gonna get involved the s___ out of them. in your - in your business. Scarfo: Yeah. Narducci: Yeah, yeah. I - unless we - unless we got somebody they can’t scare. THE SCARFO FAMILY AND BARS

Leonetti listed the numerous and varied purposes ing or the meeting can be held after that liquor-licensed establishments served for the Scarfo it closes. Sections of the bar can also Family: be closed off during business hours in order to meet privately.

Bars and restaurants with liquor li- censes are very important to the As a result of the importance of bars, Scarfo criminal activities of La Cosa Nostra. exerted influence over those owned by his associates Both members and associates of the and even became the owner of several bars himself: Family used bars as places to plan their criminal activities, commit crimes and hold celebrations. At Scarfo held a hidden ownership in- times, bars were used by the Family terest in four bars and influenced or as places to induct proposed mem- controlled several others at different bers into La Cosa Nostra and hold times between the mid-1960s and ap- Family meetings. Of the seven in- proximately November of 1988, when duction ceremonies that Scarfo had he was convicted on federal RICO when he was the boss, three were held charges. The bars that Scarfo con- at bars and one was held at the home trolled or influenced were owned by of a bar owner. Bars were even used Family members or associates who to provide jobs for some members and were “with” Scarfo. In La Cosa associates. They were also places Nostra, the word “with” is used to that members and associates of the indicate that a La Cosa Nostra asso- Family used to hang out and party ciate is accountable to a certain La with each other. Bars also provided Cosa Nostra member. a means for the owners to show le- gitimate sources of income and to launder money from illegal activities. Scarfo enjoyed a symbiotic relationship with Scarfo Family members and associates who owned In La Cosa Nostra, all family busi- bars. One benefit that Scarfo bestowed upon the bar ness and illegal activity is done in owners stemmed from his control of Local 54 of ; therefore, members and asso- Bartenders and Hotel Workers Union. Scarfo’s domi- ciates have to have places where pri- nance of Local 54’s officers, which has been well- vate meetings can be conducted. For documented by law enforcement authorities, helped that reason, it was important to have to insure his control and influence over the bar own- members and associates of the Fam- ers. Leonetti elaborated: ily who owned “friendly bars” where meetings could take place. Leonetti described bars as the “offices” of La In approximately 1977, Scarfo Cosa Nostra. The advantage in hav- gained control of Local 54 of the Bar- ing bars that are owned by members tenders and Hotel Workers Union. and associates is that you can con- Local 54 was located in Atlantic City trol who comes and goes when you and became very powerful when ca- need to use them. For example, the sino gambling started. Scarfo con- bar can be shut down to hold a meet- trolled Local 54 through its officials, who were associates of the Family In 1981 or 1982, Scarfo used his con- and included Frank “Percy” Gerace, trol over Local 54 of the Bartenders Robert “Bobby” Lumio, Albert and Hotel Workers Union to attempt Daidone, Frank Materio, Roy Silbert, to extort money from the owners of...a Anthony “Weasel” Viesti, Joseph restaurant and bar...in Atlantic City.... “Joe” Erace, Frank Lentino, Eli “Big Kirk” Kirkland, Daniel Daidone, To try and get some money...Scarfo Anthony Staino and Felix ordered Frank Gerace, the president Bocchicchio. Frank Gerace was of Local 54, to put up a picket line at president of Local 54. Lumio became the [establishment].... Scarfo, a member of the Family in June of Leonetti and Lawrence Merlino sat 1980, when he was Secretary-Trea- in a parked car near the bar to watch surer of the union. Lumio and the picket line being set up. Al Leonetti were inducted into La Cosa Daidone and Eli “Big Kirk” Kirkland Nostra at the same ceremony. Lumio organized the picket line. A short was a cousin of Angelo Bruno’s. time later, Scarfo sent Leonetti to see [one of the owners]. Leonetti told Scarfo used Local 54 to influence and [him] that he could see that [he] was control the bar owners that were having some union problems and that “with” him and also to help them. if he gave Scarfo and Leonetti $200 Through Scarfo’s control of Frank a week, they would see to it that Lo- Gerace and other union officials, cal 54 did not unionize the [estab- Scarfo saw to it that there was little lishment].... However, [the owner] or no union involvement by Local 54 told Leonetti that he would just go at bars owned by Family associates ahead and allow the union to union- who were “with” him. The union was ize his restaurant if they wanted to. kept entirely out of some bars, while others were given sweetheart union Daidone and Kirkland were both as- deals where the owners paid a lim- sociates of the Family. Scarfo told ited amount to the union for employee Gerace to hire both of them at Local benefits. Some of the bar owners who 54. Daidone was a close associate either did not have their businesses of Raymond “Long John” unionized or who were given sweet- Martorano, who was a member of the heart deals were Gerald “Jerry” Family. Daidone had helped Blavat, Sy Hoeflich, Saul Kane, An- Martorano arrange for the Decem- drew Cornaglia and Vince Sausto. ber 1980 murder of John McCullough, They were all associates of the Fam- who was the head of Roofers Local ily. 30. In the summer of 1981, Bobby Lumio, who was a member of the Family and the secretary-treasurer of The effect of Scarfo’s control over both Local 54 and Local 54, died of leukemia. Not long numerous liquor-licensed establishments was clear: after Lumio’s death, Scarfo proposed Daidone for membership into the Family. Scarfo did that because he By controlling several bars and a wanted to reward him for his involve- large and powerful union like Local ment in the McCullough murder and 54, Scarfo was able to have a great also because he wanted to have an- deal of influence over a portion of other Family member in Local 54. New Jersey’s bar and restaurant in- However, Scarfo, who went to jail in dustry. August of 1982, never got around to making him. Daidone and Martorano were convicted of Leonetti recited an example of how Scarfo uti- McCullough’s murder sometime lized his control of Local 54 in an attempt to extort money around 1984. from the owners of a bar and restaurant in Atlantic City: During at least part of the 1960s and 1970s, Eli Kirkland was an Atlantic Angelo Bruno, who was the boss of City-area numbers runner. From ap- the Family at the time, also knew that proximately the mid-1960s until ap- Local 54 would be a big money- proximately 1970, when Scarfo op- maker when the casinos started and erated a gambling business in the also wanted to control the union. same area, Kirkland and Scarfo were Bruno wanted Ralph Natale, an as- involved with each other in illegal sociate of the Family who was gambling activities. During the late “with” Bruno, to run Local 54. 1970s, Kirkland asked Scarfo for a Bruno was already using Natale to job and Scarfo instructed Frank control Local 170 of the Bartenders Gerace to hire him at Local 54. In and Hotel Workers Union, which had approximately 1983, while Scarfo its offices in the Cherry Hill area. In was in prison on a firearms violation, the early part of the 1970s, Natale he sent word to Leonetti to tell killed Joseph “Joey” McGreal, who Gerace to fire Kirkland because tried to take over Local 170 from Scarfo and Leonetti had learned that Natale. The killing was done with Kirkland was again involved in drug Bruno’s permission. trafficking. Scarfo did that to pro- tect the union from bad publicity. Around 1977, Scarfo went to see Bruno in Philadelphia to “register” Frank Gerace and Local 54 as being Leonetti described how Scarfo emerged in con- “with” him. Bruno was very upset trol of Local 54. He explained that when casino gam- and told Scarfo that he wanted to bling was approved for Atlantic City in 1976 by voter control both Local 170 and Local 54 referendum, Scarfo realized the significance of the ser- through Natale. In approximately vice industries and the power that would inure to those 1978, Bruno and Scarfo had a sit- who controlled Local 54. Already one of the largest down in Philadelphia, at which time labor unions in south Jersey, Local 54 was to become Bruno told Scarfo that he wanted the most powerful union in Atlantic City. Leonetti re- Scarfo to back off and let Natale run vealed Scarfo’s steps in wrestling and cementing con- Local 54. Scarfo didn’t listen to trol of the union through a direct challenge to boss Bruno and told Gerace not to meet Angelo Bruno, invoking the Genovese Family’s influ- with anyone from the Family except ence over a national leader of the union and even re- him. sorting to murder. Again, a bar provided the secure location for Scarfo’s high-level meetings. According to In approximately 1978, after the sit- Leonetti: down with Bruno, Scarfo had a sit- down with Natale in Atlantic City. Natale told Scarfo that he wanted to In 1976, around the time that casino control Local 54, but Scarfo said that gambling was approved in New Jer- he would not step aside and that he sey, Scarfo became interested in con- would protect his control over Local trolling Local 54 of the Bartenders 54 through Frank Gerace. and Hotel Workers Union. He knew that Local 54 would become large In about 1979, Natale was arrested and powerful when the casinos were on arson and drug trafficking charges built in Atlantic City and that he and went to prison soon afterward. could make a lot of money. In 1977, Bruno then got help from another Scarfo succeeded in gaining control union official named John of the union through his relationship McCullough, who was friendly with with Frank Gerace, the head of Lo- Bruno and protected by him. cal 54. Scarfo and Gerace knew each McCullough was the head of Local other from when they both lived in 30 of the Roofers Union in Philadel- the same south Philadelphia neigh- phia. Bruno wanted someone who borhood many years earlier. was friendly with McCullough to try and take control of Local 54, as fall of 1980, Scarfo made arrangements Natale had been trying to do. for him and Testa to meet McCullough at Virgilio’s in an attempt to get McCullough In about 1979, the national leaders to stop causing problems at Local 54. This of the Bartenders and Hotel Workers meeting took place soon after Scarfo, Union split Local 54 into two locals, Leonetti and Lawrence Merlino were ac- Local 54 and Local 491. They left quitted for the murder of Vincent Falcone Frank Gerace in charge of Local 54 in October of 1980. Leonetti and Merlino and appointed Tom Kissick to run were present when Scarfo and Testa met Local 491. Ernie Potts and with McCullough, but they did not sit in “Goonie” Walsh were appointed to on the meeting. After the meeting ended, help Kissick. Both Potts and Walsh Scarfo informed Leonetti and Merlino that were associates of John he told McCullough that Local 54 be- McCullough’s. After Potts and Walsh longed to him and Gerace and that started at Local 491, they threatened McCullough should leave the union alone. Gerace and Gerace told Scarfo that Scarfo said that McCullough was polite, he felt that Potts and Walsh were go- but thought that he might still cause prob- ing to try and take control of Local lems. 54 away from Gerace. Scarfo wanted Local 491 merged back into After that meeting, McCullough contin- Local 54. ued to interfere with Local 54. Scarfo then called for a second meeting at Virgilio’s, After Angelo Bruno was murdered but McCullough didn’t show up. Scarfo and Philip Testa became the boss of was furious and said that he wanted the Family around May of 1980, McCullough killed. Testa made Scarfo consigliere. Testa supported Scarfo in his fight to merge After McCullough failed to appear at the Local 491 back into Local 54 and to meeting, Scarfo got Testa’s permission to control Local 54. During this period, kill McCullough and informed Gerace Scarfo took several steps to accom- that he would be killed. Soon after, Scarfo plish these goals. He met with made arrangements to meet Raymond Genovese Family consigliere Bobby “Long John” Martorano at Virgilio’s. At Manna to ask for his assistance in the time, Martorano was an associate of merging the two locals. The the Family. He had been very close with Genovese Family had influence over Angelo Bruno for many years. At the the Chicago La Cosa Nostra Family meeting, which took place in approxi- which controlled Ed Hanley, who was mately November of 1980, Scarfo told one of the national leaders of the Bar- Martorano to kill McCullough. Leonetti tenders and Hotel Workers Union. was present for that conversation and Also, Scarfo told Gerace, who was heard Scarfo give Martorano the order. going to see Hanley at a national union meeting, to tell Hanley to In December of 1980, McCullough was merge Local 491 back into Local 54. shot to death by Willard Moran, who was In addition, Scarfo had Gerace tell an associate of Martorano’s. Moran mur- Tom Kissick that he would be killed dered McCullough while posing as a de- if he didn’t resign as head of Local livery man dropping off Christmas flow- 491. Not long after Scarfo took these ers at McCullough’s house in northeast steps, Local 491 was merged back Philadelphia. Martorano told Scarfo and into Local 54. Gerace then got Leonetti that it was his idea to have Moran Kissick a job in one of the casinos. pose that way. Even after Bruno’s death and the On the night that McCullough was shot, merging of the two locals, John Leonetti was at Virgilio’s with Scarfo, McCullough still challenged Gerace Philip Testa, Salvatore Merlino, Lawrence and interfered with Local 54. In the Merlino, Frank Monte, Salvatore Testa and an attorney who had represented taken over as head of Roofers Local Angelo Bruno for many years, Jake 30 after McCullough’s death. Kossman. While there, it was re- Mangini was also an officer of Local ported on the television news that 30 and a close friend of Traitz’s. McCullough had been shot to death. Leonetti, Salvatore “Chuckie” Because Kossman was in their pres- Merlino, Lawrence Merlino and ence, Scarfo indicated how sorry he Salvatore “Salvie” Testa were present was that McCullough had been mur- at Virgilio’s when Scarfo and Philip dered. After Kossman left, Scarfo Testa met with Traitz and Mangini, talked openly about how glad he was but they were not involved in the con- that McCullough was dead and how versation. Philip Testa, Scarfo, Traitz much trouble McCullough had and Mangini sat at a table and caused them. Leonetti, the Merlinos and Salvatore Testa sat at the bar. Scarfo told About a week or two after Leonetti later that he and Testa had McCullough’s killing, Martorano laid the law down to Traitz and went to Atlantic City and met with Mangini and explained to them that Scarfo to discuss the murder. Local 30 was “with” the Family. Leonetti was present when Traitz said that he didn’t want to Martorano gave Scarfo the details. wind up like McCullough and wanted Scarfo told Martorano that his ar- to know about any problems that the ranging McCullough’s death would Family was having with Local 30 so help him become a member of La that he could straighten them out Cosa Nostra. Martorano told Scarfo right away. Local 30 had been un- that he had used Willard Moran to der the Family’s control for many shoot McCullough. Scarfo was up- years. From that point on, Traitz set because he didn’t know Moran became the main person that Scarfo and was concerned whether he could and Leonetti contacted when they be trusted. needed help with something that in- volved unions in the construction in- In approximately 1981, about a year dustry. after McCullough’s murder, Willard Moran was arrested for the McCullough murder and was later In depicting Scarfo’s dominance of Local 54 and convicted. After his conviction, its effect on bars, Leonetti disclosed the locations for Moran cooperated with the police Scarfo’s and Gerace’s surreptitious meetings, with the and testified against Martorano and apartment of Gerace’s mother providing the primary site: Albert Daidone of Local 54. Martorano and Daidone were good friends and Martorano used him to Scarfo, Gerace and Leonetti held help with the McCullough “hit.” many meetings over several years at Martorano and Daidone were con- Lillian Gerace’s apartment. In ap- victed of the McCullough murder in proximately 1978, they began meet- approximately 1984.10 ing there at least once a month to dis- cuss Local 54. Initially, the meetings After McCullough was killed, Steve were held at Frank Gerace’s Traitz and Michael “Nails” Mangini Linwood, N.J., home or at an apart- were called to Virgilio’s to meet with ment that his mother owned on Mis- Philip Testa and Scarfo. Traitz had sissippi Avenue in Atlantic City. In

10The convictions were overturned in February 1992. Martorano and Daidone are awaiting re-. Leonetti, who was not cooperating at the time of the original trial, is expected to testify against them at the second trial. late 1978 or early 1979, when Lillian Leonetti distinguished the tribute given to Scarfo Gerace moved to an apartment in the by bar owners who were “with” him from the street tax same Atlantic City apartment build- that Scarfo exacted from loansharks, drug dealers and ing where Scarfo and his others conducting illegal businesses within his territory, mother...lived, the meetings began to a practice that had not been routine under prior bosses be held there. Scarfo urged Frank Angelo Bruno and Philip Testa: Gerace to have his mother move into that apartment house so that he, In late 1981 or early 1982, after Leonetti and Gerace would have a Scarfo became the boss, he ordered place to meet secretly, undetected by that certain members and associates law enforcement authorities or the of the Family begin collecting cash public. The layout of the apartment extortion payments from drug deal- building made it possible for Scarfo ers, loansharks, bookmakers and and Leonetti to enter Lillian Gerace’s other racketeers. The only ones ex- apartment through the rear of . . . cused from making these extortion Scarfo’s mother's apartment and payments were members and some meet with Frank Gerace without be- close associates of the Family. Lists ing observed from the street. were kept to account for who was making the payments and how much was being paid. Members and asso- Bar owners received benefits in addition to ciates of the Family referred to the preferential treatment by Local 54 and, in return, paid extortion payments as “the elbow” tribute to Scarfo: and “the shakes.” These payments were collected on a large scale and under the threat of harm. Those who The bar owners who were “with” didn’t make the payments were as- Scarfo gave him some kind of “trib- saulted or killed. Several “shake- ute.” None of them charged him for down crews” were set up to go around meals or drinks at their establish- and target who should pay and then ments. Some gave him weekly cash collect the extortion payments from payments. One paid for extensive them. The first shake-down crew was work on a house that Scarfo owned headed by Pasquale “Pat the Cat” in Florida. The tribute given to Spirito, who was inducted into La Scarfo was in return for the benefits Cosa Nostra by Scarfo in January of the bar owners received from being 1982. Spirito’s extortion activities under his protection, such as limited were overseen by Joseph “Chickie” involvement by Local 54 at their bars. Ciancaglini, who was a captain in the These bar owners were also able to Family. The crew was comprised of use Scarfo’s name and reputation to Spirito, Nicholas “Nicky Crow” impress or intimidate people. They Caramandi, Charles “Charlie White” knew that they had Scarfo behind Iannece and Ralph “Junior” Staino. them if they needed help with a prob- When they first started making col- lem or wanted a favor. lections, Caramandi, Iannece and Staino were associates, but they were The bar owners also gave Scarfo trib- later inducted into La Cosa Nostra ute because of their friendship with by Scarfo. Over time, the make-up him. Plus, they knew “to do the right of the crew and the captains who thing.” In La Cosa Nostra, this term oversaw its activities changed. In means to show a La Cosa Nostra 1983, Ciancaglini went to prison and member respect by being polite to him Spirito was murdered by the Family. and giving him money or gifts. Scarfo Thomas “Tommy Del” DelGiorno had been friendly with most of these and Francis “Faffy” Iannarella be- bar owners for several years. gan directing the crew in November of 1984, when Scarfo elevated them $1 million from Philadelphia devel- to acting captains. They were in- oper Willard Rouse III. In April of ducted into La Cosa Nostra by 1987, Scarfo, Leonetti and other Scarfo in January of 1982. Scarfo Family members were ar- rested, charged and held without bail The tribute that the bar owners gave for the murder of Scarfo Family cap- to Scarfo was different from the ex- tain Salvatore “Salvie” Testa. As a tortion payments that Scarfo had col- result of the Rouse and Testa matters, lected from drug dealers, loansharks as well as other charges brought by and bookmakers. The tribute that the state and federal authorities, Scarfo bar owners gave to Scarfo was based and Leonetti were confined in the on their friendship and the bar own- Philadelphia prison system during ers received benefits in return for that most of 1987 and 1988. During this tribute. However, the collection of period, Scarfo’s son, Nicky Scarfo, extortion payments from drug deal- who is also Leonetti’s cousin, visited ers, loansharks and bookmakers was Scarfo and Leonetti at least once a done with the threat of harm and little week at the prison. Sometimes, if anything was received in return. Scarfo and Leonetti both met with Nicky and other times, they met Nicky separately. During each visit, Nicky When Scarfo and Leonetti were incarcerated showed and discussed with Scarfo during 1987 and 1988, Scarfo’s son, Nicky, oversaw and Leonetti a “collection sheet,” the collection of street tax and tribute and reported which laid out the extortion payments, on the collections when he visited Scarfo and Leonetti tribute and other profits that Scarfo in prison: and Leonetti were making from their various illegal activities. If Scarfo In January of 1987, Scarfo was ar- or Leonetti met with Nicky sepa- rested and held without bail for his rately, Scarfo and Leonetti later dis- involvement in an attempt to extort cussed with each other what the col- lection sheet showed. THE BARS AND THEIR OWNERS

SCARFO’S BARS

Leonetti confirmed for the Commission that gambling and loanshark businesses Scarfo was the part owner of bars in New Jersey. in the Atlantic City area. While Leonetti disclosed that at various times between 1967 Scarfo was in the New Jersey State and 1976, Scarfo held an undisclosed ownership inter- Prison at Yardville between the sum- est in four bars in New Jersey. Scarfo, who was barred mer of 1971 and the summer of 1973, from holding any interest in a liquor license because of Bucci his ties to Scarfo. He told criminal convictions, was able to conceal his interests Scarfo that he wanted to be a “free- by having “trusted associates of the Family front for lancer” and didn’t want to be affili- him in the bars where he held a hidden interest.” ated with anyone anymore. Around Scarfo’s hidden ownership of one of the bars, the Stanley the time that Scarfo got out of Restaurant, is discussed at pages 60 and 61 of this re- Yardville in the summer of 1973, port. Bucci moved back to Philadelphia. Scarfo and Leonetti later heard that From approximately 1967 to 1970, Scarfo and Bucci began working with Funzie an associate of the Family owned The Penguin Club, a Marconi and his brother Marc bar that featured erotic dancers in Atlantic City: Marconi in illegal activities after he moved back to Philadelphia. The Marconi brothers were both made Between approximately 1967 and members of the Family from Phila- 1970, Scarfo was a part-owner of delphia. Scarfo and Leonetti also The Penguin Club, which was located found out that Bucci became involved on Atlantic Avenue, near Virginia Av- in drug trafficking sometime after he enue, in Atlantic City. Scarfo’s part- cut his ties to Scarfo. Bucci died ner in the bar was a friend of his around 1983 when Scarfo was at a named Thomas “Tommy Butch” federal prison in La Tuna, Texas, Bucci, who was an associate of the serving time for a firearms convic- Family. They operated the bar dur- tion. ing the years that Leonetti was in high school. Leonetti knew about The Penguin Club from being around The liquor license was held in the name of the Scarfo and Bucci when they operated associate, Thomas Bucci, from June 22, 1967, to July it and from talking to his uncle about 15, 1971: it over the years. Around the mid-1960s, Bucci moved Scarfo and Bucci leased the building from Philadelphia to Atlantic City, where The Penguin Club was located. where he lived at several different Leonetti knew that Scarfo was not on rental properties over the years. At the liquor license for the club because times, he lived with his grandmother he had a criminal record, but was not on South Georgia Avenue, only a few certain about Bucci. Scarfo told houses away from the apartment Leonetti that he and Bucci had to pay building where Scarfo and Leonetti off the police to keep The Penguin lived. Like Scarfo, Bucci operated Club open because of the type of op- eration that it was. When there got charged in three execution-style murders, of which to be too much heat from the law, Allison was convicted, and were suspects in several other Scarfo and Bucci had to close the club killings. According to Leonetti: down.

Alfredo Ferraro, who was an associ- Cliff and Al Williams were brothers ate of the Family, worked as a jani- who were associates of the Family. tor and watchman at The Penguin The Williams brothers, especially Al, Club for Scarfo and Bucci. In 1977, were friendly with Scarfo during the Ferraro murdered Guiseppi “Pepe” late 1960s and the 1970s. During the Leva at Scarfo’s direction. mid and late 1960s, Cliff and Al Wil- liams owned The Haunted House, which was a bar on Pacific Avenue Leonetti described the nature of The Penguin between and Texas Av- Club when his uncle owned it: enues in Atlantic City. Leonetti knew about the ownership from conversa- tions with Scarfo and the Williams The Penguin Club was a “bust out” brothers, but didn’t know who was on bar where strippers worked the bar the liquor license. and tables and tried to hustle the male customers. The strippers sat and Before Cliff and Al Williams became flirted with the customers and tried friendly with Scarfo in the late 1960s, to get them to buy over-priced bottles they had been involved with Angelo of champaign and drinks. Bruno and Frank Sindone. Bruno was the boss of the Family during that period and Sindone was a member. On August 10, 1970, the license was suspended for Some of the illegal activities that the 100 days on charges that the female entertainers so- Williams brothers were involved in licited drinks from patrons. Bucci was represented in were murder, drug trafficking, theft the matter by attorney Edwin H. Helfant.11 and bribery. Leonetti knew from many conversations with Cliff and Al Williams and Scarfo that the Williams * * * * brothers were responsible for a few murders. Over the course of approximately seven years, Scarfo held an undisclosed interest in The Haunted The Williams brothers used 2705 Pacific Corp. as the House in Atlantic City during two different periods — front on the liquor license. The partners in the corpora- from September 1969 to June 29, 1972, and from June tion were Allison Williams’ wife, Nancy Williams, Scarfo 29, 1972, to April 1, 1976. Woven throughout Leonetti’s Family associate Richard “Dickie” Wells and a third in- statements about Scarfo’s concealed interest in the bar dividual. During the period that the Williams brothers are accounts of murder, including that of then Municipal owned the bar, Allison Williams owned the property. Court Judge Edwin H. Helfant. Scarfo and Alvin Feldman, who was both a Fam- According to Leonetti, Scarfo acquired The ily associate and Scarfo’s business associate, were the Haunted House from brothers Allison and Clifford Wil- undisclosed owners of The Haunted House for a brief liams. The Williams brothers later developed extensive period of time. During that period, Feldman’s father criminal records, including federal convictions for oper- owned the property. Because of criminal convictions, ating a major methamphetamine laboratory, were neither Scarfo nor his partner could hold a license. As a

11Helfant’s relationship with Scarfo is detailed at pages 29 through 31, 33 and 34 of this report. result, they continued the license under the name of 2705 Feldman sold their interests in The Pacific Corp. Leonetti reported: Haunted House to an associate of the Family named Joseph “Cadillac Joe” Carey, who operated the bar The first time that Scarfo had a hid- until late 1976. During at least part den interest in the bar was from ap- of the time that Carey owned the bar, proximately 1969 until at least the fall it was known as Harlow’s Haunted of 1971. House. The bar was the first disco in Atlantic City when disco music be- Scarfo’s first partner in The Haunted came popular. Carey’s criminal as- House was Alvin Feldman, who was sociates included Scarfo, Feldman, also a hidden owner. Feldman, who Jake Rosen, Anthony “The Dog” was an associate of the Family, was DiPasquale, Dickie Wells, Al Williams a business associate of Scarfo’s in the and Cliff Williams. Carey had a very 1960s and early part of the 1970s. large loanshark business. Scarfo and Feldman used The Haunted House as a meeting place to conduct their loansharking, gam- When Carey purchased the business, he also acquired bling and other illegal activities. Al- the property. though Leonetti knew that Scarfo and Feldman had a hidden interest Leonetti furnished the following background on in the business and liquor license, he Feldman: didn’t know whether they purchased or leased the building where the bar was located. Leonetti also did not Leonetti knew from his contact with know who fronted for them on the li- Feldman that he was involved with quor license. Leonetti knew that Scarfo in loansharking, gambling, the Scarfo’s and Feldman’s names sale of pornographic materials and weren’t on the license from hearing the hidden ownership of The Haunted them talk about the bar. Leonetti in- House. Scarfo also told Leonetti dur- dicated that Feldman and Scarfo both ing many conversations over the had criminal records and bad repu- years that Feldman was involved in tations which would have prohibited arsons, bombings and murder. them from holding a liquor license. Feldman had many friends who were associates of the Family, including Scarfo and Feldman sold their inter- Anthony “The Dog” DiPasquale, est in The Haunted House not too long Joseph “Cadillac Joe” Carey, Jack after Scarfo was incarcerated at the “Rocky” Rackover, Richard “Dickie” New Jersey State Prison at Yardville Wells, Judge Eddie Helfant, Al Will- for refusing to testify before the New iams, Cliff Williams, James “Jimmy” Jersey State Commission of Investi- Parsells, Jake Rosen and Sammy gation. Scarfo was incarcerated from Wise. Feldman was also friendly with the summer of 1971 until the sum- Carl “Pappy” Ippolito, who was a mer of 1973 for refusing to testify member of the Family. about his involvement in La Cosa Nostra. Leonetti graduated from During the late 1960s and early high school the same summer that 1970s, Scarfo and Feldman were Scarfo was sent to Yardville. During partners in the operation of three At- that summer, Leonetti worked at The lantic City book stores which sold Haunted House checking identifica- pornographic materials. One of the tion and collecting cover charges at book stores was on Atlantic Avenue the door with Feldman. near Chelfont Avenue, only a couple . . . of doors away from the Stanley Res- taurant. Another was located on In approximately 1972, Scarfo and Kentucky Avenue. A third store was located on South Tennessee Avenue front of the apartment building where near Atlantic Avenue. Dickie Wells, Scarfo and Leonetti lived on North who was a close associate of Scarfo’s Georgia Avenue in Atlantic City, but and also friendly with Feldman, were unsuccessful. Virgilio was an worked in those stores for Scarfo and associate of the Family at the time, Feldman. but he was later inducted into La Cosa Nostra by Scarfo. Scarfo’s relationship with Feldman deterio- Scarfo’s other reason for wanting to rated to the point that Scarfo sought boss Angelo Bruno’s kill Feldman occurred not long after permission to kill him. In reciting one of Scarfo’s rea- Scarfo went away to Yardville. sons, Leonetti narrated the events that also led to the Feldman and Eddie Helfant had murder of Edwin H. Helfant, an attorney and municipal double-crossed Scarfo concerning a court judge who was shot four times on February 15, criminal case that Scarfo was at- 1978, for betraying the Scarfo Family: tempting to get fixed for Nicholas Virgilio. Helfant, who was an attor- ney with offices in Atlantic City, was Shortly before Scarfo’s incarceration a municipal court judge in Somers at the State Prison at Yardville, he Point. Helfant was an associate of received information that made him the Family who was friendly with want to kill Feldman. Shortly before Scarfo and many of his criminal as- Scarfo was sent to Yardville, Scarfo sociates. told Leonetti that Dickie Wells found out that Feldman had a spare set of In approximately 1970, Virgilio shot keys made for Scarfo’s Cadillac when a man to death on the corner of Sov- Feldman had recently borrowed the ereign and Atlantic Avenues in Atlan- car. Wells told Scarfo and from that tic City. He killed him in front of two point on, Scarfo was extremely sus- Atlantic City policemen who were in picious of Feldman because he felt an unmarked police car. Virgilio told that Feldman was going to try to kill Leonetti that he was drunk when he him. Scarfo believed that Feldman saw the man standing on the corner wanted the keys to his car to plant a and that he crossed the street and shot bomb in it. Scarfo knew that Feldman him with a handgun. Virgilio killed and Anthony “The Dog” DiPasquale him because he was always beating were knowledgeable about explosives up his step-daughter, who Virgilio was and had either killed or at least tried dating. Virgilio used the defense that to kill people in the past with car the killing was in self-defense. He bombs. Scarfo told Leonetti that said that the man attacked him, that Feldman had once paid DiPasquale the man’s gun fell on the ground, and to kill someone with a car bomb. that he picked up the gun and shot Scarfo always wanted to kill the man because he kept hitting him. DiPasquale, but never got around to it. He was suspicious of DiPasquale After Virgilio was charged, Scarfo because of DiPasquale’s relationship went to see Helfant about fixing the with Feldman and always figured that case, because Helfant had been in- DiPasquale would have helped volved in fixing cases before. Some- Feldman with any attempt to kill him. time after Scarfo approached him, After Scarfo found out that Feldman Helfant told Scarfo that he knew the had a set of keys made to his Cadillac, Superior Court judge who had he went to see Angelo Bruno, the boss Virgilio’s case and that he would be of the Family. He asked Bruno for able to get the judge to go easy on permission to murder Feldman and Virgilio at sentencing. Helfant also Bruno agreed. Scarfo and Nicholas told Scarfo that it would be neces- “Nick the Blade” Virgilio made a sary to pay off the judge. Helfant couple of attempts to kill Feldman in claimed that he could arrange for the judge to give Virgilio a light sentence wanted to make certain that he got of only about two to three years if his money before Feldman was killed. Scarfo came up with about $6,000 for Helfant to pay off the judge. Feldman was murdered by Santo Idone, Joseph Scalleat, Frank Scarfo, Leonetti and Virgilio raised “Chickie” Narducci and Joseph about $4,000 of the $6,000 in pay- “Chickie” Ciancaglini. All were La off money by taking up a collection Cosa Nostra members in the Family from their associates who were at the time except for Ciancaglini friendly with them. Leonetti got an- who was made later. Scalleat set up other $2,000 from Virgilio’s brother. Feldman by telling him that he After the money was collected, wanted Feldman to look over a ware- Leonetti delivered it to Helfant. house that he wanted torched. Scalleat used that excuse because it After paying the money to Helfant, seemed like a logical request since Scarfo and Leonetti expected a light Feldman was an arsonist. Feldman sentence for Virgilio. However, the was picked up by Scalleat at a loca- judge sentenced Virgilio to twelve to tion where Feldman was living with fifteen years. Virgilio was sentenced a girlfriend named Rene. Idone, not long after Scarfo was incarcer- Narducci and Ciancaglini were wait- ated at Yardville in the summer of ing at the warehouse for Feldman 1971. When Scarfo found out that and Scalleat to arrive. Once Feldman Virgilio received such a long prison and Scalleat got there, Idone grabbed term, he was extremely angry. Soon and held Feldman while Narducci after Virgilio’s sentencing, Scarfo started stabbing him with an ice pick. found out from Dickie Wells that Narducci stabbed Idone accidently in Helfant and Feldman had split the the arm and Idone couldn’t hold onto pay-off money between themselves Feldman. When Feldman broke free, and had not passed it on to the judge. he started to run away, but Helfant and Feldman were very Ciancaglini caught him and Narducci friendly. This betrayal made Scarfo finished stabbing him. Feldman’s want to kill Feldman even more. body was buried and, as far as Scarfo also decided that he wanted Leonetti knew, has never been found. Helfant killed. Leonetti didn’t know where the ware- house was located or where Feldman Scarfo was in Yardville for about two was buried. years. During that time, he was housed in the same section of the Right after Feldman was killed, prison as Angelo Bruno. Bruno was Frank Sindone took Scarfo and also at Yardville for refusing to tes- Leonetti aside at Frank’s Cabana tify before the State Commission of Steaks at 10th Street and Investigation. While they were there, Moyamensing Avenue in south Phila- Scarfo constantly complained to delphia and told them about Bruno about Feldman and asked Feldman’s murder. Sindone was a Bruno to have Feldman killed. Bruno member of the Family who was in- agreed. volved in loansharking and gam- bling. He used Frank’s Caban Steaks Feldman was murdered in 1974 af- as his headquarters to conduct ille- ter a long delay. The hold-up oc- gal activities. Sindone knew that curred because Feldman had bor- Scarfo would be happy to hear about rowed about $60,000 from Carl Feldman’s death. Sindone learned “Pappy” Ippolito and it took awhile about Feldman’s murder from Joseph for Ippolito to get his money back. “Chickie” Ciancaglini, who was un- Ippolito, who was a member of the der Sindone at the time. Even though Family from the Trenton, N.J., area, Leonetti wasn’t made then, Sindone described Feldman’s murder to it done quickly. Scarfo did the same Scarfo in Leonetti’s presence because thing when he got Bruno’s permission Sindone knew how close Leonetti to murder Guiseppi “Pepe” Leva and was with Scarfo and that Leonetti Louis DeMarco. DeMarco was shot could be trusted. As time went on, to death in Atlantic City by Vincent Leonetti learned more about the Falcone and Leonetti in 1976 be- Feldman murder from Scarfo. cause he was robbing the offices of bookmakers who worked for Frank Scarfo decided to wait to have “Chickie” Narducci in Philadelphia. Helfant killed until after “Nick the Blade” Virgilio was released from The Helfant murder was one of the prison so that Virgilio could have the crimes that Scarfo and Virgilio were personal satisfaction of murdering convicted of in the 1988 federal him, since he double-crossed Virgilio. RICO trial that resulted in convictions Virgilio was released from prison in for Scarfo, Virgilio, Leonetti and sev- approximately 1977. eral other members of the Family. Leonetti wasn’t charged with Helfant’s Helfant was murdered in early 1978, murder because the government about a year after Virgilio was re- didn’t have enough evidence at the leased from prison. Scarfo, Virgilio time. Leonetti admitted to his in- and Leonetti were involved in the volvement in Helfant’s murder when murder and its planning. Virgilio shot he began cooperating with the fed- Helfant to death in the bar of a mo- eral government. tel that Helfant owned. Helfant’s motel was known as the Flamingo Motel, which was located on Pacific Leonetti described Helfant as “an associate of Avenue, near Chelsea Avenue, in the Family”: Atlantic City. Virgilio wore a ski mask and carried a snow shovel when he shot Helfant. He used the ski mask Helfant was close not only with and shovel to disguise himself and Scarfo, but also with several associ- blend into the area. There had been ates of the Family, including Leonetti, a large snow storm just before the Alvin Feldman, Harold Garber and murder. After Virgilio shot Helfant, “Stumpy” Orman, who was a former he ran to a get-away car driven by big-time . . . racketeer from Atlantic Scarfo and they left the area. City. Leonetti knew from talking to Leonetti provided the snow shovel to Scarfo that Helfant had been in- Virgilio. Leonetti also helped plan the volved in fixing court cases, illegal route that Virgilio used to and from gambling and fixing horse races. the murder scene, which they took a dry run of prior to the murder. The Helfant owned horses and the Green Flamingo Motel was used because Lantern Stables, which, Leonetti be- they knew that Helfant was at the bar lieved, was located in the Atlantic every night and also because they County area. Helfant was involved knew the area and felt safe killing him in fixing races at the Atlantic City there. John “Johnny” Palumbo, who Race Course during the late 1960s was an associate of the Family, pro- and early 1970s. When Helfant fixed vided them with the handgun that a race, he let Scarfo know in advance Virgilio used to shoot Helfant. what the winning horse would be so that Scarfo could go to the track and Scarfo asked Angelo Bruno for per- bet on that horse. mission to kill Helfant only about a week before he was killed. Scarfo did When Scarfo obtained a hidden ownership that because he liked to show Bruno interest in The Haunted House for the second time, his that when he had a job to do, he got partners were an attorney, Harold Garber, and a liquor salesman, Alvin Lippman, both Family associates. Be- Scarfo, Garber and Lippman paid cause Lippman’s solicitor’s permit barred him from hold- Carey around $150,000 for the liquor ing a retail liquor license, Garber held the license in the license, business and building. They name of 781-AIG Corp. Garber also purchased the were equal partners, with each hold- property. The bar was re-named Harold’s Haunted ing a one-third interest, but Garber House. Scarfo, Garber and Lippman acquired the bar and Lippman “fronted” for Scarfo’s after their interest in opening a restaurant and bar at the interest on the liquor license and Deptford Mall had been discouraged by boss Angelo property. Scarfo could not be on the Bruno: liquor license because of his bad reputation and criminal record and because he couldn’t show enough le- In approximately 1975 or 1976, gitimate income to make the pur- Scarfo, Harold Garber and Alvin chase. Leonetti learned these things Lippman attempted to operate a res- from conversations with Scarfo, taurant and bar at the Deptford Mall Garber and Lippman. in Deptford, N.J., but the Family boss, Angelo Bruno, told Scarfo not to. After Scarfo, Garber and Lippman Shortly after Bruno turned down purchased the bar, they changed the Scarfo’s idea, Sy Hoeflich and Sonny name from Harlow’s Haunted House Gutin opened the Deptford Tavern at to Harold’s Haunted House. Vincent the same location. Falcone and Leonetti worked at the bar as managers. They rotated the . . . nights that they worked there. After Bruno stopped them from open- When it came time to open Harold’s ing a bar at the Deptford Mall, Haunted House, Scarfo, Garber and Scarfo, Garber and Lippman found Lippman had to stock the bar, but in- out that “Cadillac Joe” Carey was stead of purchasing the liquor, they interested in selling Harlow’s Haunted stole it. Lippman, who was a liquor House. In 1976, sometime before the salesman at the time, took Garber, casino gambling referendum passed Falcone and Leonetti to an Atlantic in November, Scarfo, Garber and City liquor store where they got cases Lippman agreed to purchase Harlow’s of alcohol. They cleared out almost Haunted House from Carey for a cer- the entire store of some kinds of li- tain amount of money. Leonetti was quor. After taking what they wanted, not sure of the amount. they just left without paying the owner. Lippman had told them be- After casino gambling passed, Carey fore he took them there that they were went to Scarfo and said that he not going to pay for the liquor. Over wanted more than the original sale the years, they all joked about how price because the bar was worth more they just took the liquor. After the after casino gambling passed. A dis- incident, Leonetti saw the owner of pute developed and a sit-down was the store around the Atlantic City area needed to settle the matter. once or twice, but he never said any- thing to Leonetti. Leonetti has for- The sit-down took place in Philadel- gotten the owner’s name. phia in 1976 and was attended by Bruno, Scarfo and Carey. Scarfo and Leonetti made the trip from Atlantic Scarfo’s second ownership interest in the bar was City to Philadelphia for the sit-down, also of brief duration: but Leonetti did not participate in the discussion. After the sit-down, Scarfo Scarfo, Garber and Lippman had told Leonetti that Bruno had sided Harold’s Haunted House for only with him and had told Carey that he about a year. They sold the liquor had to accept the original sale price. license, business and building for about $175,000 to an individual from percent of each commission to Scarfo the Atlantic City area named and Leonetti. Lippman used to give “Johnny Patches.” Scarfo told Leonetti the money and Leonetti Leonetti that he, Garber and passed it on to Scarfo. Scarfo and Lippman made about $30,000 over Leonetti split the money, but Scarfo what they paid for Harold’s Haunted kept Leonetti’s half for him. Scarfo House and that they split the $30,000 and Leonetti made about $100,000 equally. from this arrangement. Lippman gave Scarfo and Leonetti the kick- backs because Scarfo arranged for Leonetti revealed the disreputable character of him to get Shapiro’s business and be- Scarfo’s two partners: cause he was “with” Scarfo.

Garber was a good friend and attor- Garber assisted Scarfo in an attempt to suborn ney of Scarfo’s and Leonetti’s during the of a witness against Judge Helfant, who was the 1970s and 1980s. He was also himself indicted in January 1973 for obstructing justice, an associate of the Family who was misconduct in office, false swearing and conspiracy: “with” Scarfo. He represented sev- eral other members and associates of the Family and was friendly with In the 1970s, Scarfo and Harold many of them. During the years that Garber tried to help Judge Helfant he was involved with Scarfo and beat a criminal case. In the early Leonetti, he was involved in theft, ob- 1970s, Judge Helfant was indicted in structing justice, the unethical prac- New Jersey for attempting to fix a tice of law and “fronting” for Scarfo court case for a man named Johnny on a liquor license. In the mid-1980s, Cantoni. Cantoni and another man Garber was suspended from practic- involved in the case, named Shelly ing law because he represented a state Kravitz, wound up cooperating and witness in the case charging Leonetti testifying against Judge Helfant. The with the murder of Guiseppi “Peppe” case dragged on for a long time be- Leva in 1977, after previously repre- fore it went to trial in early 1978. senting Leonetti in a couple of cases. Helfant was on trial at the time that Scarfo, “Nick the Blade” Virgilio and Alvin Lippman was an associate of Leonetti killed him. the Family who was “with” Scarfo. Leonetti had been friendly with Sometime in 1976, Helfant asked Lippman for about ten years or so and Scarfo if he and Garber would try to Scarfo had been friendly with him get Shelly Kravitz to recant his state- even longer. Lippman was a former ments against Helfant in order to liquor salesman who later became a weaken the case. Scarfo agreed and real estate broker. Scarfo got to know he and Garber flew to Atlanta, where Lippman through Harold Garber. Kravitz had moved after he began co- During the years that Leonetti knew operating. Scarfo agreed to help him, he was involved in the theft of Helfant even though Scarfo knew at liquor with Leonetti and others and that point that he would probably kill in the “fronting” of a liquor license Helfant in a few years for what he for Scarfo. In the mid-1980s, Scarfo had done to Nicholas Virgilio. Scarfo had Kenny Shapiro, who was a real told Leonetti that it would be a good estate developer and associate of the idea to try and help Helfant because Family, steer his Atlantic City-area law enforcement authorities might not real estate deals to Alvin Lippman for look at Scarfo so hard as a suspect in Lippman to get the commissions from Helfant’s murder when they deter- the sale of the properties. Lippman mined that Scarfo had played a part then kicked back approximately 20 in getting Kravitz to recant in order to help Helfant. after Scarfo appeared before the grand jury, Judge Helfant went on In Atlanta, Garber met with Kravitz trial. Before the trial began, Kravitz at a bar or restaurant. They sat at a agreed to testify to what he originally table and Garber tried to convince told law enforcement authorities Kravitz to change what he had said about Helfant. Both Kravitz and earlier about Helfant. Scarfo sat at Johnny Cantoni testified for the pros- a nearby table. In order to intimi- ecution, but Virgilio killed Helfant date Kravitz during their conversa- before the trial ended. tion, Garber pointed to Scarfo and indicated that Scarfo was concerned about Helfant and would not be Garber also proved instrumental to Scarfo when pleased if he was convicted. The in- he represented him in the Vincent Falcone murder case. timidation worked because Kravitz After Scarfo’s arrest for the murder in December 1979 gave Garber a statement that re- and his release on bail the following month, his travel canted his earlier statement implicat- was restricted to Atlantic County. Garber concocted ing Helfant. To make it seem like an argument that won Scarfo court approval to travel Scarfo didn’t plan the trip just to in- outside of Atlantic County. Leonetti explained why the timidate Kravitz, Scarfo and Garber bail condition was onerous for Scarfo and Garber’s ruse said that Scarfo went to keep Garber to circumvent it: company because either his wife or girlfriend didn’t want to go. Scarfo and Garber discussed with Leonetti In December of 1979, Leonetti shot what happened with Kravitz many Vincent Falcone to death in Margate. times. Scarfo and Lawrence Merlino also took part in the murder. About a week When the prosecutors found out that after the killing, Scarfo, Leonetti and Kravitz recanted and that Scarfo had Merlino were arrested for Falcone’s made the trip to Atlanta, they called murder and held in the Atlantic Scarfo before a state grand jury in County Jail. They remained in jail Trenton to ask him questions about for about until they made what had happened in Atlanta. How- bail.... ever, Scarfo refused to testify even after a judge ordered him to. He was Scarfo, Leonetti and Merlino were out then held in contempt and incarcer- on bail from January of 1980 until ated in the Mercer County Jail for their in early October of about two weeks. When Scarfo was that year. As a condition of bail, they incarcerated, the Family boss, Angelo were not allowed to leave Atlantic Bruno, went to the apartment where County. That became a problem for Leonetti was living and told them because in March of 1980, the Leonetti... [who would] represent Family boss, Angelo Bruno, was mur- Scarfo. That took place in the sum- dered. Because of Bruno’s murder, mer of 1976, around the time that there was a lot going on in the Fam- Harold’s Haunted House opened for ily and it was important for Scarfo to business. During the time that Scarfo meet with the underboss, Philip Testa, was in jail, Vincent Falcone and and other members of the Family. Leonetti made several trips to visit Many of them lived in Philadelphia Scarfo. After Scarfo was in prison and other places that were outside the for about two weeks, he testified be- area where Scarfo, Leonetti and fore the grand jury, but didn’t say any- Merlino were allowed to travel. An- thing that hurt anyone. He testified other reason why the restriction on only after getting permission from their travel became a problem was Bruno. No charges were ever brought because Testa was having Scarfo go against Scarfo or Garber. to New York to meet with La Cosa In early 1978, about a year and a half Nostra members for him. Testa did that because Scarfo had developed a lot of contacts with New York La Cosa Nostra members over the years. Garber and Lippman also acquired an interest in Testa sent Scarfo to New York to another bar, the Purple Villa, in Egg Harbor Township push for Testa to become the new (Atlantic County). They became 50% partners with the boss of the Family. Scarfo also had owner in approximately the beginning of 1974. to go to New York to meet with rep- Lippman’s solicitor’s permit again precluded him from resentatives of the Commission of La appearing in the records of ownership. In February Cosa Nostra, which was investigat- 1975, the license was transferred to Scarfo Family as- ing Bruno’s unsanctioned killing. The sociate Andrew Cornaglia. Garber and Lippman did Commission representatives had not include Scarfo in the bar’s ownership. According Scarfo help them to try and find out to Leonetti: who in the Family murdered Bruno so that they could be killed.... During the early to mid-1970s, Harold Garber, who represented Harold Garber and Alvin Lippman Scarfo in the Falcone murder case, also owned the Purple Villa, a bar developed ways to get around the bail located on the Longport-Somers restriction. Garber gave the court Point Boulevard in Egg Harbor false reasons why Scarfo, Leonetti Township. Garber and Lippman and Merlino had to travel outside of struck a business deal with a man Atlantic County. He told the court named Don Dunleavy for them to that they needed to meet with investi- operate the Purple Villa. Leonetti did gators and attorneys, such as Bobby not remember any of the specifics of Simone in Philadelphia, to prepare the deal. Before Garber and Lippman their defense. Simone represented opened the Purple Villa, Dunleavy Merlino. They often used that excuse operated a bar at the same site which when they had to meet with La Cosa was known as The Mug. Leonetti Nostra members and associates out- knew that Garber and Lippman side of Atlantic County. However, owned the Purple Villa from conver- there were also occasions when they sations he had with Scarfo, Garber, had to attend important Family meet- Lippman and Dunleavy. ings when they did not have Garber arrange an excuse because they did Scarfo was upset with Garber and not want to run the risk of law en- Lippman because they didn’t include forcement authorities finding out him in their Purple Villa plans. He where they were going and following let them know that he was angry about them. being left out. To make Scarfo’s trips to New York Garber and Lippman operated the appear legitimate, Garber set up a Purple Villa for only about a year or scheme with an attorney in New York two. Andrew Cornaglia bought the City. Garber arranged for the attor- business and building and operated ney to have Scarfo sign some kind of the bar under the name of Mother’s document to indicate that Scarfo had for a few years.12 been at the attorney’s office each time he needed to go to New York. When In May 1990, Garber, Lippman, who was no Scarfo made the trips to the attorney’s longer a liquor salesman, and a third individual acquired office, he left right after signing the a retail distribution liquor license to operate A.C. Dis- document and then attended the count Liquors, a liquor store at 1098 Albany Avenue in meetings with other La Cosa Nostra Atlantic City. In June 1992, Garber and Lippman be- members. Garber made some of came sole owners of the license. In the summer of 1992, these trips to New York with Scarfo. Garber and Lippman individually filed for bankruptcy.

2Mother’s appears at pages 76 and 77 of this report. Their only significant asset was the liquor license, which interest and get away from Kendis, was placed with the bankruptcy trustee when the cases but couldn’t get the money out of were consolidated. Kendis. Scarfo told Wise that he was sorry, but there really wasn’t anything he could do for him. Scarfo said that * * * * Wise should have come to him before ever getting involved with Kendis and if Wise had, Scarfo would have Leonetti reported that Scarfo was interested in told him that Kendis was a con-art- acquiring yet another bar in the mid-1980s. However, ist and that Wise shouldn’t get in- the deal was never consummated because one of Scarfo’s volved with him. Leonetti did not intended partners was convicted of a crime. Leonetti’s know if Wise ever got his money from account of the events included information about the Kendis. unsavory reputation of the owner and the existence of an undisclosed partner: Scarfo got to know Sammy Wise through Alvin Feldman during the 1960s. In the late 1960s, Wise and In 1985 or 1986, Scarfo, Leonetti, Feldman were business partners in a Saul Kane and Gary Levitz, who was horse stable, which was located in an associate of Saul Kane’s, were Atlantic County just off the Atlantic planning to buy a bar on Longport- City Expressway.... Leonetti learned Somers Point Boulevard in Egg Har- about Wise’s activities from conver- bor Township. At the time, the bar sations with Scarfo over the years. was known as Jeffrey’s and was owned by an Atlantic City attorney and con-artist named Sherman Sherman L. Kendis held the liquor license for Jeffrey’s Kendis. Saul Kane was negotiating in the name of B.M.L.A., Inc., from July 1984 to 1987. the purchase of the bar with Kendis. In February 1987, Kendis pled guilty to two federal Leonetti was not aware of the details. charges of bank fraud and, in March 1977, was dis- However, before an agreement was barred by the New Jersey Supreme Court. Thereafter, reached, Kane was arrested on drug Kendis’ corporation filed for bankruptcy and, in June trafficking charges in September of 1987, the license was transferred to the trustee. The 1986. Around the time that Leonetti license was sold in August 1988. was incarcerated in April of 1987, Kendis was convicted of fraud for conning people out of their money. In late 1985 or early 1986, a man GERALD “JERRY” BLAVAT13 named Sammy Wise visited Scarfo at his Fort Lauderdale, Florida, home while Scarfo and Leonetti were va- Since the early 1960s, Gerald “Jerry” Blavat cationing there. Wise was an old- has been a disc jockey personality who features “old- time...racketeer from the Atlantic City ies” music in his radio and T.V. shows and night club and Philadelphia area that Scarfo appearances in the south Jersey and Philadelphia area. had known for many years. Wise He is known as “the Geator with the heater” and “the came to Scarfo for help concerning boss with the sauce.” Blavat’s affiliation with organized Jeffrey’s. Wise explained that he and crime has been well-documented. His association with Kendis each owned 50 percent of La Cosa Nostra commenced with the Bruno Family and Jeffrey’s, but that Wise’s half was a continued with the Scarfo Family. Surveillances of or- hidden ownership. He told Scarfo ganized crime meetings and activities by law enforce- that he wanted to sell his 50 percent ment authorities from 1978 through 1986 placed Blavat

13Blavat appears at pages 8 through 14 of the Commission’s 1992 re- in frequent and close contact with numerous Bruno/ Margate, N.J., known as Memories. Scarfo Family members and associates, including bosses Leonetti knew this from direct con- Angelo Bruno and Nicodemo Scarfo. Nevertheless, versation with Blavat. Blavat was able to obtain a liquor license in March 1974 under the corporate name of New Gold, Inc., and open a night club called Memories in Margate City (Atlantic Memories County). The initial background investigation for Blavat’s purchase of the license was conducted by the munici- pality, which also approved the renewal of his license Certain responsibilities devolved upon Blavat every year thereafter. Despite the Commission’s exten- because he was “with” Scarfo. They included sive information on Blavat, which was released during Scarfo’s expectation that Blavat pay tribute for his the 1992 public hearing and provided to the municipal- Memories operation: ity, the Council of Margate City nevertheless chose to renew Blavat’s liquor license in July 1992, July 1993 and July 1994. The Commission also provided the in- In 1981, shortly after becoming the formation, as well as extensive supporting documenta- boss, Scarfo sent Leonetti and Scarfo tion acquired during its investigation, to the Division of Family associate Saul Kane, on sepa- Alcoholic Beverage Control [ABC]. To date, no charges rate occasions, to inform Blavat that have been filed against the licensee. he had to give Scarfo a $500 pay- ment every week during the summer Leonetti knew Jerry Blavat very well. He painted months when Memories was open full a chilling picture of “the Geator” meeting with Nicodemo time for business. This was a tribute Scarfo at regular Sunday meetings at Scarfo’s Atlantic payment. After Leonetti and Kane City apartment, entreating Scarfo for favors to promote spoke to Blavat, Scarfo called Blavat his career, bestowing favors upon Scarfo, eagerly fulfill- to his apartment at 26 North Geor- ing requests by Scarfo to benefit other La Cosa Nostra gia Avenue in Atlantic City and, in members and associates, engaging in loanshark activi- Leonetti’s presence, told Blavat that ties, and even discussing murder with Scarfo. Blavat he would have to make payments for not only provided assistance in the planning of an in- the privilege of being “with” Scarfo. tended “hit,” but also requested Scarfo to eliminate a Scarfo stated that he didn’t know how competitor. Leonetti’s declarations demonstrate Blavat’s Angelo Bruno and Philip Testa dealt successful intermingling of his careers in both the enter- with Blavat, but if Blavat wanted to tainment industry and organized crime. be associated with Scarfo, he would have to show his gratitude. Scarfo Leonetti labelled Blavat “an associate of the explained that if Blavat liked the idea Scarfo Family of La Cosa Nostra”: of being under his protection, wanted favors done and wished to use Scarfo’s name and reputation in his Blavat was directly accountable to travels, then Blavat would have to pay Nicodemo Scarfo from the spring of the $500 a week in tribute. 1981, when Scarfo became the boss of the Family, until at least June of 1989, when Leonetti began cooper- Scarfo also informed Blavat: ating with federal law enforcement authorities. During that time, Blavat was “with” Scarfo. Although Blavat “I don’t live on oxygen alone. I need wasn’t “with” Scarfo until he became money.” the boss of the Family, they had known each other since approxi- Leonetti detailed Blavat’s payments to Scarfo: mately the mid-1970s. Before Scarfo, Blavat was “with” Philip Testa and, before that, Angelo Bruno. From the Blavat began making the weekly pay- mid-1970s until Leonetti began co- ments of $500 for Memories in the operating, Leonetti knew Blavat to summer of 1981 and made them for be the owner of a night club in at least eight years. He normally gave the money to Scarfo at Scarfo’s Scarfo assigned the collection of Blavat’s tribute pay- Atlantic City apartment on Sundays ments to his son, Nicky. Scarfo’s son recorded Blavat’s when he visited Scarfo and Leonetti. payments on collection sheets that he presented to his The three of them met at Scarfo’s father and Leonetti during prison visits: apartment on most Sundays of the year. Blavat continued making the payments in the same manner during From viewing and discussing the col- the summer of 1982 until approxi- lection sheets, Leonetti knew that mately August of that year, when Blavat continued to make the weekly Scarfo began serving a federal prison $500 tribute payments during the sentence for illegally possessing a summers of 1987 and 1988 and that handgun. For the remainder of the Nicky collected the money from summer of 1982 and the entire sum- Blavat. mer of 1983, while Scarfo was in prison, Leonetti collected the tribute from Blavat every week at Memories. Leonetti revealed that Scarfo expected more than weekly summer payments from Blavat’s Memories op- eration: When Leonetti made the collections during Scarfo’s in- carceration, Blavat sometimes turned over less than the required $500: In approximately 1985, Scarfo de- cided that if Blavat ever sold Memo- ries, he wanted a third of the profit When Scarfo was in prison and from the sale. Scarfo used the same Leonetti was collecting the payments method to notify Blavat about his in- from Blavat during the summers of terest in a share of the profit from a 1982 and 1983, Blavat “shorted” sale of Memories that he used when Leonetti on a couple of occasions. he notified Blavat of the $500 weekly Instead of the required $500, Blavat tribute payment. Scarfo first sent gave Leonetti only about $350. On Family associate Saul Kane to tell these few instances, Leonetti asked Blavat what he wanted and later sent Blavat why the full payment was not Leonetti. Scarfo often used this made. Blavat told Leonetti that he method to plant a seed in someone’s took the weekly payments out of the mind or to determine if someone ob- cover charge fees collected from pa- jected to his plan. Shortly after Saul trons at Memories and blamed pay- Kane and Leonetti had contacted ments of less than $500 on reductions Blavat, Scarfo told Blavat in person in the fees because of low attendance. that he wanted a third of the profit if Memories was ever sold. Scarfo’s conversation with Blavat took place Following Scarfo’s release from prison in January at Scarfo’s apartment in Leonetti’s 1984, presence.

Blavat again started making the pay- Scarfo also exacted weekly payments from ments personally to him at the Sun- Blavat when he operated Memories West, a night club day meetings at Scarfo’s apartment. featuring Blavat and his “oldies” program at the Betsy The payments continued to be made Ross Inn in Pennsauken (Camden County). Memories in this fashion during the summers of West was open from the spring of 1986 to the fall of 1984, 1985 and 1986. 1987. The owner of the hotel was a close associate of Genovese/Gigante Family member Anthony “Fat Tony” Salerno. Leonetti related to the Commission: During the summers of 1987 and 1988, when both Scarfo and Leonetti were incarcerated in the Phila- delphia prison system on federal and state charges, In approximately 1985, Blavat opened a night club, called Memories Because Blavat was a trusted associate of West, in the Camden County area. Scarfo’s, Scarfo and other Family members and asso- Leonetti was present at different times ciates felt comfortable in his night club not only to so- at Scarfo’s Atlantic City apartment cialize, but also to discuss their illegal activities. Those when Scarfo, Blavat and Leonetti dis- who frequented Memories provided a “who’s who” of cussed Memories West. Blavat rented organized crime figures of the Scarfo Family: space for Memories West from Ed- ward “Biff” Halloran, who owned the hotel where the club was located. Scarfo and Leonetti, as well as other Blavat, who was friendly with members and associates of the Halloran, told Scarfo and Leonetti Scarfo Family, used Memories as a that when he was in , he place to socialize. While there, they occasionally met with Halloran at the often discussed their criminal activi- Doral Inn. Blavat informed Scarfo ties. Among the La Cosa Nostra and Leonetti that Halloran was close members of the Scarfo Family that to Anthony “Fat Tony” Salerno, a Leonetti saw at Blavat’s bar, over the high-ranking La Cosa Nostra mem- years, were Lawrence “Yogi” ber in the Genovese Family. Leonetti Merlino, Salvatore “Salvie” Testa, did not know Halloran and did not Joseph “Joey Pung” Pungitore, An- believe that Scarfo did either. thony “Tony” Pungitore, Jr., Thomas “Tommy Del” DelGiorno, Francis Normally, Blavat gave Scarfo a por- “Faffy” Iannarella, Salvatore tion of each week’s profits from “Wayne” Grande, Joseph “Joey” Memories West. The amount of Grande, Charles “Charlie White” money varied from week to week. Iannece, Salvatore “Chuckie” When Blavat handed the money to Merlino, Joseph Ligambi, Nicholas Scarfo, he often remarked whether it “Nick the Blade” Virgilio, Philip was a good or bad week in terms of Narducci, Frank Narducci, Jr., Eu- profits. Blavat always passed the gene Milano and Nicholas “The payments directly to Scarfo, usually Whip” Milano. Leonetti also used to at the weekly Sunday meetings at see associates of the Scarfo Family Scarfo’s Atlantic City apartment. there, including Salvatore “Chuckie” Merlino’s son, Joseph “Joey” Blavat informed Scarfo and Leonetti, Merlino, Saul Kane, Ralph Pungitore, during one of their conversations, Rick Casale, Phillip “Moe” McFillin, that he and Halloran were having a Martin Angelina and the sons of financial disagreement over the op- Steve Traitz, Joe and Stevie. eration of Memories West at Halloran’s hotel. Leonetti did not . . . know the specifics of the disagree- ment. When Scarfo was the boss, he social- ized at Memories approximately ten nights a summer, except when he was According to Leonetti, it was Blavat who informed in prison. At times during the sum- Scarfo and him that mers, Scarfo also visited Blavat at his night club during the day when it Halloran and Anthony “Fat Tony” wasn’t open to the public. Leonetti Salerno were indicted in New York on went to Memories at least one, and federal racketeering charges involv- often two, nights a week during the ing the concrete industry. Halloran summer. Any time that Scarfo went was a concrete supplier in New York. there, Leonetti always accompanied him. Scarfo and Leonetti always vis- ited with Blavat whenever either or * * * * both of them were there. During the rest of the year, Memo- “Chuckie” Merlino, his son Joseph ries was closed during the week, al- “Joey” Merlino and Leonetti. Scarfo though Blavat usually opened it on also minimized the fights and prop- most weekends. During the off-sea- erty damage occasionally caused by son, Leonetti didn’t go there as often Margate roofing contractor Rick as in the summer, but he did go ap- Casale and his workers and friends. proximately one night of every other Scarfo was able to do that because weekend. Scarfo only went there oc- of the influence he had over Casale, casionally during the off-season and who was an associate of the Scarfo if he did, it was always with Leonetti. Family. Following disturbances at Memories, When Scarfo patronized Memories, he did not when Blavat knew that the trouble- have to pay for his drinks: makers were associated with Scarfo, Blavat went to see Scarfo at his apart- ment to complain about them. Dur- During all the years that Scarfo went ing the period that Scarfo was boss, to Memories, Blavat always made Blavat complained about Casale or sure that Scarfo was not charged for his people approximately four times drinks. Leonetti paid for his drinks and about Scarfo Family members because he ran a bar tab because he and other associates about 15 times. bought a lot of drinks for friends. Scarfo usually sent word to the people involved in a fight or disturbance that he was not pleased with their conduct. Blavat clearly enjoyed the nature of his clien- However, on a couple of occasions, tele: Scarfo told Blavat to forget about the incident. Blavat told Scarfo and Leonetti that he was fearful of losing Blavat never tried to hide the fact his liquor license if word got out that that Memories was frequented by a lot of Scarfo’s people were involved members and associates of the in fights at his night club. Scarfo Family. He often took photo- graphs of the patrons at Memories, had them developed as slides and * * * * showed them inside the night club when the music was playing. Blavat included in the slide show pictures of It was not uncommon for Scarfo to find le- Scarfo, Leonetti and other Family gitimate employment for the members and associ- members and associates. ates of his Family. In one case, Scarfo found work at Memories for Family member Sam Scafidi, who died in October 1990. At Scarfo’s request, Blavat employed However, Blavat was not pleased with the fist-fights Scafidi, and later Scafidi’s son-in-law, not only at Memo- that broke out between his organized crime custom- ries, but also at some of his night club acts at other loca- ers and the other patrons and constantly sought tions. However, Blavat knowingly placed his liquor li- Scarfo’s assistance to restrain them: cense in jeopardy when he hired Sam Scafidi, who had criminal convictions. Regulations promulgated by the ABC prohibit employment of convicted felons on li- Scarfo also helped Blavat by control- censed premises and require suspension of the licensee ling members and associates of the when such employment is discovered. Leonetti reported: Scarfo Family who caused distur- bances and fights while frequenting Memories. Among the members and Either shortly before Scarfo went to associates involved in fights at prison in August of 1982 or soon af- Memories were Salvatore “Wayne” ter he was released in January of Grande, Martin Angelina, Salvatore 1984, Samuel “Sam” Scafidi visited Scarfo at his apartment and, in charges, in approximately 1983 or Leonetti’s presence, asked Scarfo to 1984, as a result of lying before a New help him find a job. Scafidi was a La Jersey state grand jury about an as- Cosa Nostra member in the Scarfo sault that involved Family associates Family who lived in the Bridgeton, Salvatore “Torre” Scafidi and Joseph N.J., area. When Leonetti was made “Joey” Merlino, whose father was the a captain in May or June of 1981, Family underboss at the time. The Scafidi was one of the members of the assault took place at an Atlantic City Family that was assigned to Leonetti. bar known as the Lido Restaurant, In January of 1986, when Leonetti where Samuel Scafidi was employed was elevated to underboss, he offi- at the time. Scafidi was still working cially had to give up Scafidi and the at Memories when Leonetti went to other members that were assigned to prison in early 1987. him as a captain because the underboss is technically prohibited Some time in the mid-1980s, after from having his own crew. Scafidi Scarfo got Scafidi his job at Memo- was then assigned to Scarfo, who ries, Scafidi went to Scarfo’s apart- formed his own crew. However, un- ment with his son-in-law, John officially, Scafidi continued to be Hansen, and asked Scarfo to help accountable to Leonetti because Hansen get a job because he was un- Scarfo had Leonetti handle his crew. employed. At Scarfo’s direction, Scafidi’s father, Joseph Scafidi, who Leonetti later asked Blavat to give was also from the Bridgeton area, was Hansen a job, which Blavat did. at one time a captain in the Family. Scarfo and Leonetti used to see Joseph Scafidi was “taken down” as Scafidi and Hansen working at a captain by Scarfo around May or Memories. Leonetti saw Hansen act- June of 1981 because he was very old. ing as a bouncer and helping Scafidi Scarfo made Leonetti a captain when collect cover charges at the door. he took Joseph Scafidi down and Scafidi then reported to Leonetti un- . . . til his death in the mid-1980s. Both Blavat and Samuel Scafidi told After Samuel Scafidi saw Scarfo Leonetti that Scafidi also worked for about a job, Scarfo asked Blavat to Blavat at Memories West in the same hire him at Memories. Scarfo in- capacity as he did at Memories in formed Blavat that Scafidi had a Margate, N.J. criminal record, which meant that Scafidi wasn’t permitted to work at a place with a liquor license. Blavat Scafidi also asked Scarfo to secure member- said that Scafidi’s record would not ship for his son-in-law in Roofers Local 30. Scarfo’s be a problem and agreed to give him control of the union insured Hansen’s membership: a job at Memories. Scarfo’s conver- sation with Blavat took place at On another occasion in the mid- Scarfo’s Atlantic City apartment in 1980s, Scafidi brought Hansen to Leonetti’s presence. Scafidi became Scarfo’s Atlantic City apartment and, a doorman and floor manager, col- in Leonetti’s presence, asked Scarfo lecting cover charges and directing if he could arrange for Hansen to be- bouncers. Scafidi told Leonetti that come a member of Roofers Local 30. Blavat paid him $100 in cash each At Scarfo’s direction, Leonetti con- time he worked at Memories. Scafidi tacted Family associate Saul Kane had been convicted of gambling many within a few days, gave him Hansen’s years before he began working at name and asked him to arrange with Memories. Also, Blavat employed Steve Traitz to make Hansen a mem- Scafidi at Memories even though he ber of Local 30. Kane later informed had been convicted of state perjury Leonetti that Traitz made Hansen a member and arranged work for him. Deptford Mall in Deptford, N.J. The Deptford Tavern was owned by Sy Hoeflich and Sonny Gutin, who were In relating these events, Leonetti recalled the fol- associates of the Family. Scarfo lowing: asked Hoeflich to give Blavat the job as a favor to Scarfo. Scarfo made the request after Blavat asked him to In June of 1982, Leonetti attended do so. Leonetti was not certain how Hansen’s wedding reception, which, long Blavat worked at the Deptford Leonetti believed, was held at a Tavern, but recalled seeing Blavat Moose Lodge in Bridgeton, N.J. The perform there on at least a couple of reception was on the same day that occasions. Scarfo held a making ceremony to induct Anthony “Tony Meats” Ferrante and Nicholas “Nick the Leonetti cited three significant benefits that in- Blade” Virgilio into La Cosa Nostra. ured to Blavat because of his relationship with Scarfo. During the induction ceremony, One advantage was Scarfo announced that his uncle, and Leonetti’s great uncle, Nicholas “Nicky Buck” Piccolo, was now the the recognition that he derived from Family’s consigliere. The Family’s being so closely associated with previous consigliere, Frank Monte, Scarfo. When Blavat travelled locally had been killed by a rival faction in or to cities such as New York City, the Family. The making ceremony everybody knew that he was “with” was held at a house belonging to an Scarfo and, as a result, he was treated uncle of Robert “Toro” Locicero in with respect. Blavat used to mention or near Vineland, N.J. Locicero was Scarfo’s name to people that he an associate of the Family. Leonetti, wanted to impress. Lawrence “Yogi” Merlino, Virgilio and others attended Hansen’s recep- tion. They travelled from the making The second advantage described by Leonetti ceremony to Hansen’s reception in related to Blavat’s Memories operation: Bridgeton. Scarfo did not attend the reception because it was outside of Atlantic County. At the time, Scarfo’s Another major benefit that Blavat re- travel was limited to Atlantic County ceived from making the payments was as a condition of bail following his that Scarfo insured that Local 54 of firearms conviction. the Bartenders and Hotel Workers Union in Atlantic City did not union- ize Memories. Scarfo was able to keep Local 54 out of Blavat’s bar be- cause he controlled the union. The Benefits for Blavat The third benefit, and one that enhanced Blavat’s career and profits, pertained to “Blavat’s use of Scarfo’s Blavat benefitted greatly from his close alli- contacts in La Cosa Nostra.” The first example given ance with Scarfo and his payment of tribute. Leonetti by Leonetti illustrated the depth of Blavat’s relationship offered the following example of the variegated favors with Scarfo, as well as the interaction between the Scarfo that Scarfo bestowed upon Blavat: Family and the Genovese/Gigante Family:

In approximately 1981 or 1982, In the early 1980s, Blavat wanted to Scarfo arranged for Blavat to work produce an “oldies” record album as a disc jockey at the Deptford Tav- featuring the famous songs of past ern, which was located in the artists. To do this, Blavat needed releases from the art- In 1987 or 1988, while in the Phila- ists, giving him permission to use delphia prison system, Leonetti read their songs on his album. Blavat con- that Levy had been convicted of fed- tacted Morris Levy, a major record- eral racketeering charges in a case ing industry executive in New York, involving the recording industry. for assistance in obtaining the re- leases. Levy was an associate of the Genovese Family of La Cosa Nostra According to Leonetti, Blavat knew the extent who was “with” Vincent “The Chin” of Scarfo’s assistance in facilitating production of the Gigante. Levy told Blavat that he record. His recounting of events also evinced Blavat’s could not help him obtain the releases familiarity with the nicknames of organized crime fig- unless Levy had the approval of “The ures: Chin.” Gigante, who lived in New York City, was the boss of the Genovese Family. After Levy refused Blavat was completely aware of the Blavat’s request, Blavat went to steps taken in obtaining the blessing Scarfo’s apartment and, in Leonetti’s of “The Chin” because he partici- presence, told Scarfo what Levy had pated in conversations about the said. Blavat then asked Scarfo to matter with Scarfo and Leonetti at pave the way with “The Chin.” Scarfo’s Atlantic City apartment. Scarfo agreed and relayed a request Whenever Scarfo, Leonetti or any of to “The Chin” through Scarfo Fam- their associates wanted to mention ily captain Ralph “Blackie” Napoli “The Chin,” the person tugged on his and Genovese Family consigliere chin instead of taking the chance of Bobby Manna. Napoli and Manna being overheard saying his name. It both resided in northern New Jersey. was a code that everyone used when At the time, Napoli was the captain referring to “The Chin,” including who oversaw the Family’s northern Blavat. New Jersey crew. Scarfo knew both Manna and Napoli well because they had all served time in the same sec- Following production of the record, Blavat tion of the State Prison at Yardville made a second request of Scarfo and, this time, Scarfo in the early 1970s for refusing to tes- utilized his union contacts to fulfill it: tify before the New Jersey State Com- mission of Investigation. After the record was produced, Blavat Scarfo was notified through Manna went to Scarfo’s apartment to give and Napoli that “The Chin” ap- Scarfo and Leonetti a few copies of proved Scarfo’s request and directed it. Blavat then asked Scarfo for an- that Levy assist Blavat in obtaining other favor. He asked Scarfo to ar- the releases. In addition, “The Chin” range for labor unions under Scarfo’s demanded that Blavat give Scarfo one control to purchase the records to sell half of any profits from the sale of to their memberships as a way of in- the record. “The Chin” insisted on a creasing record sales. Scarfo agreed split of the proceeds as a gesture of to help Blavat and told Frank respect and friendship towards Gerace, who was president of Local Scarfo. 54, to purchase a large quantity of records to sell to Local 54’s members. After Scarfo received the message Scarfo told Gerace to buy the records from “The Chin,” he informed Blavat during a meeting in Lillian Gerace’s that “The Chin” approved the idea apartment at 26 North Georgia Av- and told him to contact Levy again. enue, Atlantic City. Leonetti was also Levy then helped Blavat obtain the present at the meeting. Lillian releases and the record was pro- Gerace was Frank Gerace’s duced. mother.... Gerace did not balk at purchasing Strawberries was located when he solicited and obtained Blavat’s “oldies” records because he Scarfo’s assistance on behalf of an associate of the did whatever Scarfo told him to do. Genovese/Gigante Family. Scarfo’s control over Roof- Blavat told Scarfo and Leonetti that ers Local 30 was critical to the building’s renovation. he delivered the records to the offices The incident, which revealed Scarfo’s hidden owner- of Local 54 in Atlantic City for ship of a construction company, also illustrated the in- Gerace to purchase. terplay between Scarfo and the Genovese/Gigante Fam- ily: Scarfo also had Steve Traitz, the head of Local 30 of the Roofers Union, purchase a large number of records. In 1986, Blavat went to Scarfo’s This was arranged through Leonetti apartment to see Scarfo and Leonetti meeting with Family associate Saul about a matter that involved the Kane and directing him to deliver the Genovese La Cosa Nostra Family. message to Traitz. Kane was often He brought blueprints from a build- used by Scarfo and Leonetti to get ing on Chestnut Street in Philadel- messages to Traitz. Kane later told phia that was going to be rehabili- Leonetti that he delivered the mes- tated. Blavat informed Scarfo and sage and that Traitz did not object to Leonetti that he had been in contact buying the records. Blavat later told with Morris Levy in New York City Scarfo and Leonetti that he had and that Levy wanted to rehabilitate dropped off the records at the Phila- the building to open a record store delphia headquarters of Roofers Lo- known as Strawberries. Levy owned cal 30 for Traitz’s members to pur- a chain of record stores under that chase. Traitz was an associate of the name. Blavat said that Levy gave him Family who was directly “with” the blueprints to give to Scarfo and Scarfo. Through Traitz, Scarfo was Leonetti. Blavat also informed able to control not only Local 30, but Scarfo and Leonetti that Levy would also other trade unions that Traitz had make sure that they got the concrete influence over. work for the project if they wanted it. Scarfo and Leonetti owned a con- finishing business known as As instructed, Blavat shared with Scarfo the Scarf, Inc., which did work in the profits from the sale of his “oldies” record: southern New Jersey and Philadel- phia area. Levy also had Blavat ask Scarfo and Leonetti to see to it that At some point after the record had there was no union involvement in the been on the market for awhile, Blavat Strawberries project in order to keep met with Scarfo and gave him ap- construction costs down. Blavat in- proximately $10,000 in cash, which formed Scarfo and Leonetti that Levy Blavat said was Scarfo’s share of the wanted them to know that Vincent profits from the record. Blavat gave “The Chin” Gigante was aware of the money to Scarfo, in Leonetti’s the situation and had approved ev- presence, in the kitchen of Scarfo’s erything. The conversation was an- apartment. other instance where Scarfo, Leonetti and Blavat met in Scarfo’s kitchen and protected their conversation by Leonetti related a second incident that demon- lowering their voices and playing two strated not only Blavat’s favorable use of Scarfo’s posi- televisions and a radio loudly. It was tion, but also his successful integration of a music career also another instance where Scarfo, with his involvement in organized crime. As a result of Leonetti and Blavat tugged on their Blavat’s intervention, the Strawberries chain of record chins when they referred to “The stores, was able to open a store on Chestnut Street in Chin” instead of speaking his name. Philadelphia in June 1986. Blavat became instrumental in facilitating the rehabilitation of the building where Shortly after Blavat’s visit, Scarfo and Leonetti drove to Manhattan to Kane advised Leonetti that Traitz meet with Bobby Manna in order to assured him that he would contact discuss the Levy matter and confirm other unions and that there would be that “The Chin” had given his ap- no unions on the Strawberries proval. Scarfo and Leonetti met with project. Manna and his driver on the corner of 59th Street and Second Avenue. Scarfo usually had Leonetti deliver Leonetti and Manna’s driver were not messages to Saul Kane in order to present for the conversation between limit the occasions when Scarfo and Scarfo and Manna. However, as soon Kane were seen together. Scarfo as Scarfo and Leonetti left, Scarfo re- knew that he was under constant sur- lated the conversation to Leonetti. veillance by law enforcement authori- Scarfo discussed with Manna, who ties and didn’t want to bring any more indicated that he was familiar with attention than necessary to Kane or the situation, the fact that Blavat had himself. Also, there were periods relayed Levy’s message to Scarfo and when Kane and Scarfo were forbid- Leonetti and brought them the blue- den from seeing each other because prints. Manna said that Levy’s re- of bail and parole restrictions. Kane quest concerning the unions was le- met with Leonetti at many different gitimate and that “The Chin” had places in the Atlantic City area in or- given his approval. der to relay messages to Scarfo. Just prior to the start of the Straw- Once the Strawberries job was com- berries construction project, Levy pleted, Levy refused to pay Triangle became upset because he felt that Builders, Inc., the remaining $5,000 many of the subcontractors were or so. In an attempt to get the money charging too much. As a result, Tri- from Levy, Scarfo and Leonetti made angle Builders, Inc., completed much another trip to Manhattan to meet of the work. Scarfo, Leonetti and with Bobby Manna. Scarfo and Scarfo Family associate John Leonetti again met Manna and his “Johnny” Palumbo each had a one- driver on the corner of 59th Street and third interest in Triangle Builders, Second Avenue. As before, Leonetti Inc., although Palumbo was the and Manna’s driver were not part of owner of record. Scarfo and Leonetti the discussion between Manna and owned 50 percent of the business and Scarfo, but Scarfo informed Leonetti Palumbo owned 50 percent. Palumbo about the conversation after they left. “fronted” the business for Scarfo and Scarfo explained the situation to Leonetti. Scarf, Inc., completed the Manna, but Manna told Scarfo to concrete work on the project. Scarfo forget about the money that Levy and Leonetti each owned 50 percent owed. Scarfo and Leonetti became of Scarf, Inc., although Scarfo’s in- even more angry at Levy as a result terest was hidden. of that meeting. It was obvious to them from Manna’s position that Scarfo and Leonetti made sure that Levy must have lied to Manna about the unions were kept away from the the money and that Manna believed Strawberries project. At Scarfo’s di- Levy. rection, Leonetti arranged that by meeting with Family associate Saul Kane in the Atlantic City area. In May 1987, Morris Levy, a Genovese/Gigante asso- Leonetti directed Kane to tell the head ciate, was convicted in a federal RICO case of con- of Roofers Local 30, Steve Traitz, spiracy to extort $1.25 million from a Pennsylvania that there was to be no union involve- wholesale record distributor and, in October 1988, was ment on the job. After Kane con- sentenced to 10 years in prison. Also convicted was tacted Traitz, Kane and Leonetti Genovese/Gigante member Dominick “Baldy Dom” again met in the Atlantic City area. Canterino. Morris Levy sold Strawberries Records in June 1989. The Chestnut Street location is still open. lunch at The Diplomate Resort and Country Club in Hollywood, Florida, with Joseph Todaro, Todaro’s son and Joseph “Joe Black” Gorgone. Joseph Todaro was the boss of the La Cosa The Benefits for Scarfo Nostra Family in the Buffalo, N.Y., area and Gorgone was a member of the Colombo Family of La Cosa Just as Scarfo wielded his position and power Nostra. Joseph Todaro introduced in organized crime to benefit Blavat, Blavat utilized Scarfo and Leonetti to Gorgone at his stature and contacts in the entertainment world that lunch, which occurred on the day to assist Scarfo. One example presented by Leonetti that the space shuttle exploded in was Blavat’s arrangement of a hotel suite at a con- Florida. siderable discount whenever Scarfo visited New York City: From the time of their introduction to Gorgone until they were incarcer- ated in early 1987, Scarfo and On a few occasions during the period Leonetti frequently socialized with when Scarfo was boss, Blavat ob- Gorgone. Scarfo, Leonetti and other tained a two-bedroom suite for him members and associates of the Fam- at a discounted rate at the Doral Inn ily met with Gorgone in various at 49th Street and Lexington Avenue places, including Fort Lauderdale, in Manhattan. With the discount, Philadelphia, New York City and the Scarfo paid only about $100 a night Atlantic City area. for the suite. Whenever Scarfo trav- elled to New York City and used the suite, Leonetti was with him. On a Leonetti reported that “Blavat was one of the associ- few occasions, Lawrence “Yogi” ates of the Scarfo Family that became friendly with Merlino accompanied them. Gorgone.” In fact, “Scarfo and Leonetti took Gorgone to visit Blavat at Memories on a couple of Blavat told Scarfo and Leonetti that occasions.” he used a contact at the hotel to ob- tain the discount. Blavat offered to get the suite for Scarfo any time that Leonetti then related the request that Gorgone he wanted. He did that as a favor to made of Scarfo and Blavat’s role in its fulfillment: Scarfo because he was “with” Scarfo. Blavat informed Scarfo and Leonetti that he also received the discount During 1986, Gorgone asked Scarfo, whenever he stayed at the Doral Inn. in Leonetti’s presence, if Scarfo had any contacts to help his son get a job in a New York City stagehand union. Blavat also utilized his contacts in the enter- Gorgone said that Vincent “The tainment industry to enable Scarfo to grant a favor Chin” Gigante usually got his son a requested by Joseph “Joe Black” Gorgone, a member job with the stagehand union when of the Colombo Family. According to Leonetti, his son needed work, but he didn’t “Gorgone resided in New York City, where he was want to ask Gigante for help this time involved in gambling and loansharking.” The inci- because of a minor disagreement. dent exemplified the interaction of La Cosa Nostra fami- Gorgone informed Scarfo and lies. Leonetti’s account began with background infor- Leonetti that he and Gigante were mation on how he and Scarfo were introduced to usually on very good terms and had Gorgone and the relationship that developed: been friendly since their youth. In January of 1986, while Scarfo and After Gorgone asked for Scarfo’s Leonetti were vacationing at Scarfo’s help, Scarfo and Leonetti asked Fort Lauderdale home, they had Blavat if he had any contacts in the entertainment industry to get Gorgone’s son into the stagehand union. Blavat indicated that he did. In early 1984, not long after Scarfo Scarfo told Blavat that, before Blavat was released from prison, Leonetti arranged a job, he wanted to touch travelled to the Fort Lauderdale area base with “The Chin” to make sure of Florida with Scarfo Family mem- it was alright. Scarfo didn’t want to ber Salvatore “Salvie” Testa to visit take a chance of going over Gigante’s “Stumpy” Orman. Orman was an head if there was some reason why old-time Atlantic City racketeer who Gigante didn’t want to help Gorgone. retired to Florida. After visiting with Because of this concern, Scarfo had Orman, Leonetti and Testa were Gorgone get the approval of “The driven to the airport for a return flight Chin.” to Philadelphia by Jake Rosen, a loanshark who had been friends with After Gorgone informed Scarfo that Orman for years. Because Leonetti he had received approval from “The and Testa had some time before their Chin,” Scarfo talked to Blavat in flight left, Rosen showed them a beau- Leonetti’s presence at Scarfo’s apart- tiful Fort Lauderdale residence that ment. Scarfo informed Blavat that Rosen owned and was interested in “The Chin” gave his approval and selling. that Blavat could now go ahead and arrange a job. Blavat was success- When Leonetti returned, he told ful in getting a job for Gorgone’s son. Scarfo that Rosen’s residence was for Gorgone was impressed that Blavat sale and how nice it was. Scarfo sub- had the necessary contacts to do that sequently made a trip to Florida to and let Blavat know how much he ap- look at houses, including Rosen’s, preciated his efforts. during 1984. He may have been ac- companied by underboss Salvatore “Chuckie” Merlino. Scarfo was so * * * * impressed with Rosen’s house that he began negotiations with Rosen to purchase it. Blavat assisted Scarfo in other ways, too. When Scarfo decided to purchase a house in Florida, When Scarfo was negotiating with he demonstrated his financial ability to do so with Rosen, he learned that even though the aid of Blavat and others: Rosen actually owned the house, it was in the name of real estate busi- nessman Leonard Mercer. Mercer Soon after his release from federal acted as a front for Rosen because, prison in January of 1984, Scarfo de- as a loanshark, Rosen was not able cided that he wanted to buy a house to demonstrate sufficient legal in- in Florida. He hoped to spend much come to own it. Rosen and Mercer of the winter in Florida and the re- were both associates of the Scarfo mainder of the year in Atlantic City. Family. Blavat, along with several other members and associates of the In the summer of 1985, Scarfo Scarfo Family, helped with a scheme bought the house from Rosen for ap- that made it possible for Scarfo to proximately $450,000 in cash. purchase an expensive home in Leonetti delivered a large bag con- Florida. taining the cash to Rosen outside of a restaurant, known as Dear’s Place, in the Margate Towers on Atlantic The events leading to Scarfo’s purchase of the Avenue in Margate, N.J. When Rosen Florida house revealed another example of the use of pulled up to the restaurant in a car, fronts by organized crime: Leonetti handed him the bag and Rosen drove off. The cash that was paying the company a yearly rental used to purchase the Florida house fee of $12,000 for use of the house came from illegal activities of the and a boat. These individuals gave Scarfo Family. Scarfo called the Scarfo checks made payable to Florida house “Casablanca South” Casablanca South Leasing Company, and had a plaque with this name put Inc., and received the cash back from on the front of the house. Scarfo. The checks were then depos- ited by Scarfo or Leonetti into the company checking account. Assisted by his attorney Robert Simone, Scarfo then crafted a scheme to establish a trail of “legitimate” income to support the purchase: Blavat was one of the individuals who gave Scarfo a $12,000 check for the yearly rental fee and was subse- Even though Scarfo actually bought quently given back that amount in the house, it was impossible for him cash. Others who took part in the to document the purchase due to his scheme were Scarfo Family associ- lack of legitimate income. Scarfo ates Anthony “Tony” DiSalvo, knew that he would have a problem Tyrone DeNittis, Peter Pelullo and showing where he got the money to Robert “McGoo” McGowan. Both buy the house if law enforcement au- DiSalvo and McGowan were thorities investigated the deal. As a loansharks. Nicholas “Nicky Crow” result, Scarfo came up with a scheme Caramandi, a Scarfo Family mem- to make it appear as though he could ber who later became a government legally afford to purchase the house. witness, got...the owner of a Phila- Scarfo had his attorney, Robert delphia luncheonette ...to provide a “Bobby” Simone, who was an asso- check. Pasquale “Patty Specs” ciate of the Family directly account- Martirano, who at the time was the able to Scarfo, draw up the necessary captain of the northern New Jersey documents. In the summer of 1985, branch of the Scarfo Family, got Scarfo had Simone create a corpo- Scarfo Family associates Joseph ration known as Casablanca South “Scoops” Licata and Nicholas Leasing Company, Inc., which was Olivieri to furnish checks for the controlled by Scarfo. Around the scheme. In 1986, Scarfo inducted same time, Simone drew up a lease- Licata into La Cosa Nostra. Phillip purchase agreement, which called for “Moe” McFillin, who was also called Casablanca South Leasing Company, “Phil Disney” and was an associate Inc., to purchase the house from of the Family, got Joseph “Joe Sea- Rosen’s “front,” Leonard Mercer. The side” Rocco, another associate of the lease-purchase agreement was a Family, to provide a check. Rocco’s sham used to create the appearance family owned pizza parlors at the that Scarfo was purchasing the house New Jersey shore around Seaside. from Mercer. To make it seem as McFillin and Rocco were good though the company had the funds to friends. They were involved in ille- make monthly lease-purchase pay- gal gambling together and began ments and operate the house, two operating a sports betting business in steps were taken. First, $50,000 was the Philadelphia area in the late borrowed from Scarfo Family asso- 1970s. They were still operating it ciate Robert “Bobby” Stone to show when Leonetti was incarcerated in that the company had operating April of 1987. Rocco used the code funds. Scarfo later returned most, if name “Sugar” for the bookmaking not all, of the money to Stone. Then, business. Scarfo never made McFillin to show that the company was gen- and Rocco pay any shake-down pay- erating income, Scarfo had several ments because McFillin was “with” individuals act as though they were Scarfo. Besides being a bookmaker, Rocco was also a school teacher in “Joey Pung” Pungitore, Salvatore Philadelphia. McFillin and Rocco vis- “Wayne” Grande, Thomas “Tommy ited Scarfo and Leonetti at Scarfo’s Del” DelGiorno and Lawrence Florida house on a few occasions dur- “Yogi” Merlino. Also in attendance ing 1985 and 1986. One of the last at the party were Scarfo Family as- times that Leonetti talked to Rocco sociates Nicholas “The Whip” was at Christine Lee’s, a restaurant Milano, Philip Narducci, Ralph “Jun- and bar where La Cosa Nostra mem- ior” Staino and Anthony “Tony” bers and associates used to meet and Pungitore, Jr. At the time of the party, socialize. Christine Lee’s was located these three were not yet members of in the Thunderbird Hotel around the Scarfo Family, but were inducted Hallandale, Florida. by Scarfo into La Cosa Nostra later that year. Other Scarfo Family asso- ciates at the party included Joseph With the financial purchase of the house docu- “Joey” Merlino, Saul Kane, Tyrone mented, Scarfo endeavored to create the appropri- DeNittis, Sy Hoeflich, Salvatore “Sam ate appearance: the Barber” LaRussa, Phillip “Moe” McFillin, Robert “Bobby” Stone and Anthony “Spike” DiGregorio. Scarfo wanted those who acted as renters to appear at the house from time to time because he knew law * * * * enforcement authorities had the house under surveillance. Scarfo thought that if their presence at the Scarfo again called upon Blavat when he house was documented, the rental wanted to acquire a boat. He solicited Blavat to front scheme would seem more believable. in the purchase of a 40-foot Silverton. Whereas Blavat and some of the other renters Scarfo was unable to substantiate legitimate income visited the house for that reason. for ’s purchase, Blavat was able to do so: Most individuals who visited Scarfo, including the renters, visited during the day, but slept at nearby hotels. During the latter half of 1984 and the Blavat, who visited Scarfo at the beginning of 1985, Scarfo was inter- house on a few occasions, actually ested in purchasing a boat. Scarfo slept there once or twice. and Leonetti visited boat dealerships in New Jersey and Florida. While Scarfo was in Florida to look for a Within a few days of New Year’s Day in 1986, house, Anthony “Tumac” Accetturo Scarfo held a New Year’s party at the Florida house took Scarfo and Leonetti shopping for his Family. Blavat was among the guests invited for a boat. Accetturo, who was a by Scarfo: member of the Lucchese Family of La Cosa Nostra, resided in Holly- wood, Florida, at the time. A few days after New Year’s Day of 1986, Scarfo threw a New Year’s In the spring of 1985, Blavat allowed party at his Florida home. Blavat at- Scarfo to use him as a front in the tended the party and socialized with purchase of a boat. Blavat was used the other guests. He also stayed over- for this purpose because he could night at the house on the night of the substantiate enough income to pur- party. La Cosa Nostra members of chase a boat, while Scarfo could show the Scarfo Family who attended the little legitimate income. party included Leonetti, Salvatore “Chuckie” Merlino, Joseph Grande, In approximately May of 1985, Francis “Faffy” Iannarella, Charles Scarfo and Leonetti travelled to “Charlie White” Iannece, Joseph Stevens Cruiser Sales in Bricktown, N.J., to look at boats. Scarfo liked a account of Casablanca South Leas- 1985, 40-foot Silverton, with a list ing Company, Inc., directly to Blavat, price of approximately $107,000. A who used the money to make the few days later, Scarfo, Blavat and monthly boat payments. Payment of Leonetti returned to the boat the boat loan was normally handled dealership to discuss the details of the in this fashion from about the time purchase. Blavat gave the salesman that the lease-purchase agreement the impression that he was making the was created until Scarfo and Leonetti purchase. entered the Philadelphia prison sys- tem in early 1987. As with the purchase of the house in Florida, Leonetti knew from conversations Scarfo shrewdly cloaked the financing of the boat in with Scarfo that Scarfo paid the ma- an appearance of legitimacy: jority of the monthly boat payments from the time the boat was purchased until Scarfo and Leonetti were incar- Shortly after that, at Scarfo’s apart- cerated in early 1987. However, ment, Scarfo gave Blavat approxi- Blavat did make some of the monthly mately $35,000 in cash to use as a boat payments out of his own pocket. down payment towards the purchase of the boat. Blavat then made a down Scarfo and Blavat met at various lo- payment of approximately $35,000 by cations to pass the cash and checks check. The money for the down pay- for the boat. The exchanges often ment came from illegal activities of took place at the Sunday meetings the Scarfo Family. that Scarfo, Leonetti and Blavat held at Scarfo’s Atlantic City apartment, The balance of the purchase price but also occurred at Scarfo’s Florida was financed through a loan which residence a few times. Leonetti per- Blavat arranged with a bank. The sonally observed the transactions. loan payments were about $800 a month. Usually, Scarfo gave Blavat the cash for the loan payment and Scarfo undertook all necessary steps to rein- Blavat paid the bank. Payment of the force the appearance that Blavat purchased and loan was normally handled in this owned the boat: way for several months from the time of the boat’s purchase until some time after Casablanca South Leasing After Blavat acted as the front in the Company, Inc., was created. purchase of the boat, he and Scarfo took steps to continue the appearance . . . that Blavat owned it. The boat was registered with the State of New Jer- Some time in late 1985 or early 1986, sey under Blavat’s name and Blavat’s after Casablanca South Leasing nickname, “Geator,” was painted on Company, Inc., had been created, the back of the boat. Also, a slip was Scarfo and his company entered into rented under Blavat’s name at Farley a lease-purchase agreement to buy State Marina in Atlantic City, N.J., the boat. Scarfo had Casablanca where the boat was first kept during South Leasing Company, Inc., assume the spring and summer of 1985. the monthly payments on the boat Scarfo told Blavat that if law enforce- loan that Blavat had arranged. ment authorities asked about the Scarfo felt that his company could boat, to tell them that Blavat owned document enough bogus income at it and that Leonetti piloted it for that point to afford the purchase of a Blavat because Leonetti was the only boat. From then on, Scarfo usually one who knew how to operate it. had checks issued from the checking Scarfo also said that if Blavat was asked why Scarfo, Leonetti and their friends spent so much time on the boat, Blavat was to say that he let Blavat’s Loanshark Activities them use the boat as a favor because Leonetti piloted the boat for Blavat whenever Blavat wanted. When Blavat wanted to go into the loanshark business with the grandson of Angelo Bruno, he re- quested and received Scarfo’s permission: Leonetti also disclosed the movement of the boat and the reason for its change of name: Once, while Scarfo and Leonetti were at Memories in the early 1980s, When the boat was first purchased in Blavat asked Scarfo if it would be May or June of 1985, James “Dukie” alright for him and Angelo Bruno’s Dilemmo drove Leonetti and grandson, Marc Puppo, to go into the Lawrence “Yogi” Merlino from Atlan- loanshark business. Blavat had be- tic City to Stevens Cruiser Sales in come friendly with Puppo as a result Bricktown to pick up the boat. of Blavat’s relationship with Angelo Leonetti and Merlino, together with Bruno. The conversation occurred a hired captain, then took it to Farley after Scarfo became boss in March State Marina in Atlantic City. The of 1981 and before he went to fed- boat was kept there during the sum- eral prison for a firearms conviction mer of 1985, when Scarfo changed in August of 1982. Blavat explained the name of the boat to to Scarfo and Leonetti that Puppo “Casablanca” because he didn’t like and another individual were involved the sound of the original name, in a loanshark business and that “Geator.” Underneath the name Puppo was in a position to take over Casablanca, Scarfo had painted the entire business. Blavat said that “Usual Suspects.” In the fall of Puppo had asked him to become a 1985, Leonetti paid a captain to pi- partner in the business. Puppo was lot the boat to Scarfo’s Fort Lauder- present at Memories when Blavat dale residence, where it remained until was speaking to us, but did not par- Scarfo and Leonetti were imprisoned ticipate in the conversation. At the in early 1987. Not long after their time, Puppo was young and may have incarceration, the bank repossessed been only in his late teens or early the boat. twenties. Scarfo told Blavat that it would be Scarfo’s name for both the Florida house and alright for him to become partners his boat stemmed from his penchant for the movie with Puppo, but that he was to over- Casablanca: see Puppo’s loanshark activity. Scarfo also told Blavat that Puppo, Blavat and Scarfo were each to re- Because Scarfo liked the movie ceive one third of the profits from the Casablanca, he named his Florida loanshark business. After obtaining house “Casablanca South” and his Scarfo’s approval, Puppo and Blavat boat “Casablanca.” On the back of did engage in loansharking. Leonetti the boat, under the name was present at Scarfo’s apartment on “Casablanca,” Scarfo had “Usual a few occasions when Blavat dis- Suspects” painted, which referred to cussed his loanshark business and the line in the movie, “Round up the gave Scarfo his share of the profits. usual suspects.” Scarfo liked that phrase because it reminded Scarfo of himself and Leonetti, who were sus- pects in so many crimes. D’Alfonso a beating to try to con- vince him to pay attention to Scarfo. Talk of Murder Instead of immediately killing D’Alfonso, Scarfo discussed the mat- ter with Manna because D’Alfonso Leonetti related three episodes when Blavat par- was partners with Genovese Family ticipated in conversations with Scarfo about killing member “Benny Eggs” Mangano in people. The first concerned the murder of Scarfo Fam- carnival amusement games at the an- ily associate Frank “Frankie Flowers” D’Alfonso, who nual Feast of San Gennaro in the was targeted by Scarfo because of his refusal to show Little Italy section of Manhattan. loyalty by paying street tax. Leonetti recited Blavat’s Soon after Scarfo and Leonetti re- offer to Scarfo to set up D’Alfonso for a beating. In turned from meeting with Manna, doing so, he again exposed Scarfo’s predilection toward Scarfo held a meeting in the Atlantic murder and the protocol followed by La Cosa Nostra City area and assigned Salvatore families: “Salvie” Testa to give a beating to D’Alfonso. The meeting was at- tended by Scarfo Family members Within a month or two of becoming Salvatore “Chuckie” Merlino, the boss, Scarfo sent Scarfo Family Lawrence “Yogi” Merlino, Joseph consigliere Frank Monte to tell “Chickie” Ciancaglini, Scarfo, Testa Frank “Frankie Flowers” D’Alfonso and Leonetti. that Scarfo wanted a portion of D’Alfonso’s profits from his business interests. D’Alfonso, who was However, Blavat unwittingly interfered with friendly with Blavat, was an associ- Testa’s attempts to inflict the beating: ate of the Scarfo Family. Scarfo knew that D’Alfonso was a moneymaker who had been close with Angelo After tracking D’Alfonso for only a Bruno. Scarfo thought that Monte few days, Testa contacted Scarfo and might be able to get D’Alfonso to informed him, in Leonetti’s presence, make extortion payments to Scarfo that Blavat was making it difficult for because Monte and D’Alfonso had Testa to beat up D’Alfonso. Testa told known each other for many years, Scarfo that Blavat was getting in the but D’Alfonso resisted. D’Alfonso way because he was always with kept making excuses, even after D’Alfonso. D’Alfonso did business Scarfo had Monte make additional from an office, which used to be a trips in an attempt to persuade him flower shop, located near the Italian to make the payments. Market in south Philadelphia. By the fall of 1981, Scarfo decided that he wanted D’Alfonso killed for As a result, Scarfo spoke with Blavat: ignoring his demand. After receiving Testa’s information Before killing D’Alfonso, Scarfo sought the ap- about Blavat, Scarfo called Blavat to proval of the boss of the Genovese/Gigante Family be- his Atlantic City apartment, where cause of the potential impact of D’Alfonso’s death on a Scarfo and Leonetti spoke to him. member of that Family: Scarfo told Blavat that he was trying to have D’Alfonso beaten and that Blavat was getting in the way. Scarfo Scarfo and Leonetti travelled to New instructed Blavat to stay away from York City to discuss the matter with D’Alfonso. When Scarfo explained Bobby Manna. Scarfo explained the the situation to Blavat, Blavat offered situation to Manna and informed him to set up D’Alfonso for the beating. that he wanted to have D’Alfonso Blavat said that he could “walk” killed. Manna told Scarfo to first give D’Alfonso some place where it would be easy for Scarfo’s people to beat sage delivered by the beating, he failed to make regular him. Scarfo turned down Blavat’s payments to Scarfo and Scarfo once again sought to offer and told Blavat to just stay have him killed. This time, however, the Genovese/ away from D’Alfonso because Scarfo Gigante Family approved the “hit”: already had people working on it. Some time during the year after the Blavat apparently complied with Scarfo’s or- beating, D’Alfonso turned over der to avoid D’Alfonso and the beating was adminis- $50,000 in cash to Scarfo. Scarfo tered: told Leonetti that the $50,000 came from D’Alfonso’s profits from setting up the showing of a closed-circuit In October of 1981, a few weeks af- telecast of the World Heavy Weight ter Scarfo and Leonetti met with Championship fight between Gerry Manna, Salvatore Testa and a friend Cooney and Larry Holmes. of his, Eugene “Gino” Milano, se- verely beat D’Alfonso a short dis- After D’Alfonso gave Scarfo the tance from D’Alfonso’s residence. At $50,000, he never turned over any the time of the beating, Milano was more money to Scarfo. By the middle an associate of the Scarfo Family. In of 1985, Scarfo was so angered by January of 1982, a few months after the D’Alfonso matter that he again the beating, Milano was inducted into decided to have D’Alfonso killed. La Cosa Nostra by Scarfo. Within a Scarfo and Leonetti again travelled few days of the beating, Testa trav- to New York City to see Manna. elled to the Atlantic City area to re- Scarfo explained that D’Alfonso had port to Scarfo and Leonetti about the not given Scarfo any more money beating. Among other things, Testa since D’Alfonso turned over the told them that he used a baseball bat $50,000 two or three years earlier and Milano used a metal pipe or bar. and that Scarfo was tired of not re- ceiving respect from D’Alfonso. About six months after the beating, Manna told Scarfo that he didn’t ob- Scarfo called for D’Alfonso to meet ject to the killing. Manna also said with him. D’Alfonso and Frank that he would advise “Benny Eggs” “Blinky” travelled to Mangano of the situation and have Margate, N.J., where they met with him wrap up his business dealings Scarfo, Leonetti and underboss with D’Alfonso. Shortly after he and Salvatore “Chuckie” Merlino at a res- Leonetti returned, Scarfo made plans taurant. Scarfo and Merlino told to have D’Alfonso murdered. D’Alfonso that, in the future, they D’Alfonso was shot to death near his wanted a portion of the profits from south Philadelphia home in July of all the business deals he became in- 1985.14 volved in. During the meeting, D’Alfonso stated that he wasn’t sure * * * * what caused his injuries, but thought that he had been hit by a truck. D’Alfonso said that to let Scarfo, Blavat also discussed a killing with Scarfo Leonetti and Merlino know that he when he requested the murder of a competing Phila- had not said anything to law enforce- delphia disc jockey: ment authorities about the beating. During the year following Scarfo’s Although D’Alfonso initially yielded to the mes- release from prison in January of

4On April 5, 1989, six Scarfo members and associates were convicted for their involvement in D’Alfonso’s murder. The convictions were overturned on appeal and a re-trial is scheduled. Leonetti is expected to testify. 1984, Blavat went to Scarfo’s apart- by Michael Matthews, who advised ment on at least two occasions to him that he wanted to run for mayor complain about Philadelphia disc of Atlantic City. Matthews informed jockey Hy Lit. Leonetti was present Gerace that if the Scarfo Family pro- at Scarfo’s apartment during these vided him with campaign financing conversations. The first time that and support, he would assist the Fam- Blavat went to Scarfo, Blavat com- ily if elected. Scarfo thought that it plained that Lit was taking business was an idea that would pay off in the away from him by competing with future. Scarfo told Gerace to do Blavat’s rock and roll “oldies” busi- whatever he could at Local 54 to sup- ness and radio show and asked Scarfo port Matthews’ run for mayor. He to have Lit killed. Scarfo told Blavat also told Gerace to meet with that he was “crazy” and that he Matthews and tell him to contact Ken- couldn’t just kill Lit because Lit was neth “Kenny” Shapiro, who would competing with Blavat. Blavat then provide Matthews with money and asked if Scarfo could have Lit beaten. support. Shapiro, an associate of the Scarfo didn’t want to do that either, Scarfo Family, was a businessman so he put Blavat off by telling him from Philadelphia and the owner of that he wanted to think about Blavat’s a real estate development company, request and learn more about the situ- known as Sea Tex Associates, on At- ation. lantic Avenue in Atlantic City. Gerace told Scarfo and Leonetti that Within a couple of months of asking he would get Local 54 to endorse Scarfo to kill Lit, there was at least Matthews for mayor and would ar- one other time, at Scarfo’s apartment, range for the union to pay for cam- when Blavat brought up the Lit situ- paign materials, such as signs and fly- ation. On that occasion, Blavat told ers. Gerace also said that he could Scarfo and Leonetti that he and Marc have the union hold a rally or parade Puppo were considering damaging a for Matthews. car or other property owned by Lit. Scarfo delegated Leonetti to make the appro- * * * * priate arrangements with Shapiro: The final incident concerned Scarfo’s plan to kill Kenneth Shapiro, a Family associate, Philadelphia The day after Scarfo and Leonetti met businessman and owner of an Atlantic City real estate with Gerace, Scarfo sent Leonetti to development company. Shapiro was targeted in the meet with Shapiro at Sea Tex Associ- 1982-1983 federal probe of the activities of then Atlan- ates and explain the situation to him. tic City Mayor Michael J. Matthews. When Shapiro Leonetti told Shapiro that Matthews was subpoenaed before a federal grand jury, Scarfo dis- would be contacting him and that patched Blavat to warn him against implicating the Scarfo Scarfo wanted Shapiro to provide Family in his prior dealings with Matthews. When Scarfo Matthews with financial assistance feared that Shapiro was going to cooperate with the fed- and any other help that he needed. eral government, he plotted his murder with Blavat’s Leonetti explained to Shapiro that assistance. Leonetti set the stage for Shapiro’s early Matthews had agreed to help the involvement with Matthews: Scarfo Family if he got elected and that if Matthews was elected, the Scarfo Family could make a big score In late 1981 or early 1982, Local 54 and influence things like city con- president Frank Gerace sent word for tracts, zoning and land deals. Shapiro Scarfo and Leonetti to meet him at was in full agreement. After speak- his mother’s Atlantic City apartment. ing to Shapiro, Leonetti then met with There, Gerace told Scarfo and Gerace on the same day to inform Leonetti that he had been contacted Gerace that he had spoken to Shapiro and that it was alright for Gerace to Several different locations were used have Matthews contact Shapiro. Not to meet with Matthews, including long after Leonetti contacted Shapiro Shapiro’s condominium at the Island about Matthews, Scarfo and Leonetti House on Atlantic Avenue in both went to Sea Tex Associates to Margate, N.J. Leonetti met with discuss the matter further with Matthews and others at Shapiro’s con- Shapiro. dominium at least two different times. On one of those occasions, Leonetti met with Matthews, Shapiro, Bobby As intended, Shapiro became the conduit of Simone and Stanley Branche. Simone monies for Matthews’ campaign: was an associate of the Scarfo Fam- ily and an attorney who represented Scarfo and Leonetti. Branche was a In the early 1980s, Leonetti visited Philadelphia businessman who was Sea Tex Associates several times a friendly with Simone. Branche was week to see Shapiro, including the at the meeting to obtain Matthews’ periods when Matthews was cam- support for a grand prix auto race in paigning for mayor and while he was Atlantic City. Leonetti was there to mayor. Shapiro often talked to get Matthews to push for the sale of Leonetti about Matthews’ campaign. some city-owned property that Shapiro told Leonetti about the cam- Leonetti thought, at the time, might paign expenses that he was paying financially benefit him, Scarfo and for, such as advertising, signs, hand- members and associates of the outs, bands, as well as personal and Scarfo Family. As it turned out, the entertainment costs for Matthews. city-owned property was related to an Shapiro complained more than once FBI investigation that later resulted about how much money it was cost- in the conviction of Matthews and ing him and that Matthews was wast- Scarfo Family associate Frank ing money on personal expenses. Lentino. On another occasion, Matthews was elected mayor of At- Leonetti met with Matthews, Shapiro lantic City a couple of months before and a Scarfo Family associate named Scarfo went to federal prison in Au- Arthur “Artie” Pelullo. Leonetti ar- gust of 1982 on his firearms convic- ranged for the meeting because he tion. Shortly after Matthews was wanted Pelullo to apologize to elected, Shapiro told Leonetti that he Matthews for threatening him. Dur- had funneled about $150,000 into ing 1982 or 1983, when the Scarfo Matthews’ campaign. Family was involved with Matthews, Pelullo asked Matthews to help him get some type of license so that his After he was elected mayor, Matthews acted in limousine company could operate in the interest of the Scarfo Family and Shapiro continued Atlantic City. When Pelullo was hav- to be involved with him: ing trouble getting the license, he threatened to kill Matthews, who con- After Matthews became mayor, he tacted Leonetti for help. Leonetti set used his influence to lobby for cer- up a meeting at Shapiro’s condo- tain land deals, city contracts and minium to settle the matter and made real estate development projects for Pelullo apologize to Matthews. the Scarfo Family. Shapiro, Leonetti Leonetti also met Matthews at the and Frank Lentino, an associate of Mars Restaurant, a bar and restau- the Scarfo Family, were in regular rant owned by Pelullo on South Street contact with Matthews about mat- in Philadelphia.15 ters that he was pushing for the Scarfo Family.

15The Mars Restaurant appears at pages 99 through 101 of this report. The relationship between Matthews and the Scarfo told Blavat to just deliver the Scarfo Family abruptly ended when the federal investi- message to Shapiro and not worry gation into Matthews’ activities with organized crime be- about killing him. came known: A short time later, Blavat met with In late 1983, a month or two before Scarfo and Leonetti at Scarfo’s At- Scarfo was released from prison in lantic City apartment and told them January of 1984, Leonetti found out that he had spoken to Shapiro. that the FBI was investigating the il- Blavat explained that Shapiro agreed legal activities between the Scarfo not to say anything damaging in the Family and Matthews. Leonetti grand jury, but wanted to talk directly learned about the investigation a day to Scarfo about the $100,000 for or two before it made the news. At Leonetti’s expected legal fees. Scarfo first, Matthews decided to help the and Leonetti never received the FBI and gave them a confession, but $100,000 because Scarfo didn’t trust shortly thereafter decided against co- Shapiro enough at that point to meet operating. with him.

When the federal government turned its at- Scarfo then began making plans for Shapiro’s tention to Shapiro, Scarfo became concerned about his murder, but later abandoned them. However, when loyalty and selected Blavat, who resided in the same Scarfo was plotting the murder, he again turned to complex as Shapiro and was friendly with him, to de- Blavat for assistance: liver a message. During Scarfo’s meeting with Blavat, Blavat offered to kill Shapiro: Right after Blavat came back from meeting with Shapiro, Scarfo started After Scarfo’s release from prison in making plans to have Shapiro killed. January of 1984, he and Leonetti Scarfo told Blavat that he might have learned that Shapiro was called be- to kill Shapiro. He also told Blavat fore a federal grand jury concerning that he had Thomas “Tommy Del” the Matthews investigation. Because DelGiorno and Francis “Faffy” Scarfo and Leonetti were worried Iannarella checking out the area that Shapiro might give information around the Society Hill Towers for a to the grand jury that would hurt possible location to kill Shapiro. them and their people, they met with DelGiorno and Iannarella were made Blavat at Scarfo’s apartment. Scarfo members of the Scarfo Family. told Blavat to contact Shapiro to tell Blavat agreed to assist Scarfo in any him not to say anything to the grand way that he could. Blavat helped jury that would implicate anyone as- Scarfo make plans for the possible sociated with the Scarfo Family. “hit” by feeding Scarfo information Scarfo also directed Blavat to inform about Shapiro’s condominium, hab- Shapiro that Scarfo wanted $100,000 its and movements around the Soci- to pay for Leonetti’s expected legal ety Hill Towers. expenses from the federal investiga- tion. After Scarfo explained what he Scarfo and Leonetti met with Scarfo wanted Blavat to do, Blavat offered Family captains Thomas “Tommy to murder Shapiro by poisoning his Del” DelGiorno and Francis “Faffy” coffee. Blavat told Scarfo and Iannarella at the Saloon Restaurant Leonetti that he and Shapiro often on South 7th Street in Philadelphia had coffee in the morning. They both to tell them to begin making plans for lived in the Society Hill Towers, which a possible “hit” on Shapiro. Scarfo were high-rise condominiums in the told them to check out the area Society Hill section of Philadelphia. around the Society Hill Towers be- cause they might have to kill him DelGiorno and Francis “Faffy” there. Scarfo also said that Blavat Iannarella. Associates of the Family was informing him about Shapiro’s who were regular customers were movements. Scarfo later became sat- Saul Kane, Rick Casale, Phillip isfied that it was not necessary to kill “Moe” McFillin, Joseph “Joey” Shapiro. Merlino and Joseph “Joe” Ligambi. Ligambi was later inducted as a La Michael Matthews and Frank Cosa Nostra member in the Family Lentino both pleaded guilty to fed- by Scarfo. eral charges and were sentenced to federal prison. Leonetti was indicted in the same case, but the charges In fact, in January 1982, the Lido Restaurant was the against him were later dismissed. site of a celebration party that was held following one of Scarfo’s induction ceremonies: In November 1984, Matthews pled guilty to extortion by a public official and, in January 1985, was sentenced In January of 1982, Scarfo held a La to 15 years in federal prison. Cosa Nostra induction ceremony at the Vineland, N.J., home of Family associate Robert “Toro” Locicero and inducted several proposed members into the Family. Among those in- ducted were Thomas “Tommy Del” LIDO RESTAURANT/MAYNARD’S DelGiorno, Francis “Faffy” Iannarella and Pasquale “Pat the Cat” Spirito. After the ceremony, Albert A. Troiano is the current owner of Scarfo, Leonetti, DelGiorno, Spirito, Maynard’s in Margate (Atlantic County) and the former Iannarella and Lawrence Merlino owner of the Lido Restaurant in Atlantic City (Atlantic travelled from Locicero’s house to the County). In February 1966, Troiano and a relative ob- Lido Restaurant to celebrate. Scafidi tained the liquor license for Maynard’s. In September was working at the Lido Restaurant 1968, Troiano obtained 100% interest in the license and that night and talked with Scarfo, presently holds the license under the name of Maynard’s, Leonetti and the others. Inc. Troiano held the liquor license for the Lido Restau- rant under the name of Cotroy, Inc., from January 1974 until November 1982, when he sold the restaurant and Leonetti also provided an example of a favor license. However, in 1983, Troiano resumed control- that Scarfo requested of Troiano. The favor related, ling interest in the license when the corporate owner filed once again, to obtaining employment for Family mem- for bankruptcy and Troiano was appointed the receiver. ber Sam Scafidi: The license was ultimately sold in January 1985. Leonetti disclosed information about Troiano that In 1980 or 1981, Scarfo Family mem- bears upon his qualifications to hold a liquor license. He ber Samuel Scafidi went to Scarfo’s related that one of Troiano’s bars was frequented by Atlantic City apartment and asked Scarfo Family associates and members: Scarfo, in Leonetti’s presence, to find him a job. Scarfo told Leonetti to see Albert “Al” Troiano about giv- Scarfo, Leonetti and several other ing Scafidi a job. At the time, Troiano made members of the Family often owned a bar and restaurant known gathered at the Lido Restaurant to as the Lido Restaurant on Atlantic socialize and discuss Family business. Avenue in Atlantic City and a bar Some of the Family members who known as Maynard’s on Amherst Av- went there were Lawrence “Yogi” enue in Margate. Leonetti knew Merlino, Salvatore “Chuckie” Troiano from going to the Lido Res- Merlino, Thomas “Tommy Del” taurant with other members and as- sociates of the Family. Scarfo also who at the time was the underboss knew Troiano from occasionally go- of the Family. Samuel Scafidi was at ing to the Lido Restaurant. the Lido on the night of the assault. The next day, Samuel Scafidi related When Leonetti went to see Troiano, the incident to Scarfo and Leonetti he took Rick Casale with him be- at Scarfo’s apartment. They dis- cause he and Scarfo knew that cussed how to cover up Merlino’s and Casale was very friendly with Salvatore Scafidi’s involvement so Troiano. Casale was an associate of that they wouldn’t be charged. the Family who was a big customer Samuel Scafidi told Scarfo and at both of Troiano’s bars. As soon as Leonetti that he got rid of a knife and Leonetti asked Troiano if he could put bar stool that were used to stab and Scafidi to work, Troiano offered to beat the victims. He wiped their fin- give him a job as a cook at the Lido. gerprints from things in the bar that Leonetti told Troiano that Scafidi had they touched, like glasses, as well as a past conviction for gambling, be- the knife and bar stool before he got cause Leonetti knew that a person rid of them. He also told Scarfo and with a criminal record wasn’t allowed Leonetti that he helped Salvatore to work in a bar. Leonetti wanted Scafidi and Merlino get out of the res- Troiano to know that Scafidi had a taurant quickly after the stabbings. criminal record so as not to cause him Since Leonetti was Samuel Scafidi’s any problems. Troiano indicated that captain, he kept Leonetti aware of he wasn’t concerned about Scafidi’s everything that happened. Merlino conviction. Troiano gave Scafidi a was later convicted of the stabbings, job as a favor to Scarfo, Casale and but Salvatore Scafidi was never Leonetti. charged. Soon after Troiano agreed to hire him, Samuel Scafidi stopped working at Scafidi began working at the Lido the Lido Restaurant after the assault. Restaurant as a cook at night. Scarfo Since he was at the restaurant when and Leonetti used to visit him there the stabbings happened, he was sub- frequently. During part of the time poenaed to testify as a witness before that Scafidi worked there, Leonetti the New Jersey state grand jury that was his captain. As a result, they had was investigating the matter. Scafidi regular contact. contacted Leonetti when he was sub- poenaed and they discussed what he Leonetti described an altercation that occurred could tell the grand jury to make it at the Lido Restaurant in 1982 and involved the stab- appear that Merlino wasn’t involved. bing of two individuals by a Scarfo Family associate Scafidi was later convicted of perjury and the son of an underboss. The incident repre- for lying to the grand jury to protect sented another attempt by the Scarfo Family to subvert Merlino. the criminal justice system: Jerry Blavat continued to employ Scafidi at his bar, In approximately 1982, Joseph Memories, even after Scafidi’s perjury conviction in “Joey” Merlino and Salvatore November 1984. It is further noted the Stephen Troiano, “Torre” Scafidi stabbed and beat two Albert’s son, was convicted in March 1985 of two counts men at the Lido Restaurant one night. of tampering with a witness in connection with the in- Salvatore “Torre” Scafidi was dis- vestigation of the at the Lido Restaurant. De- tantly related to Samuel Scafidi. spite the fact that Troiano’s perjury conviction stemmed Salvatore Scafidi, who was an asso- from organized crime-related stabbings on liquor-licensed ciate of the Family at the time of the premises where he was the manager, the ABC allowed incident, later became a made mem- him to resume employment at licensed premises by ap- ber in 1986. is the son proving his applications for a Temporary Work Letter of Salvatore “Chuckie” Merlino, and then a Rehabilitation Employment Permit and, in Sep- tember 1990, granting him a Disqualification Removal. In February 1979, Scarfo placed Viesti in the position of business agent for Local 54: At Scarfo’s direction in 1978 or 1979, Frank Gerace appointed both Lumio and Viesti to positions at Local 54 of the Bartenders and Hotel Workers WINSLOW TOWNSHIP BAR/ Union. Gerace, Lumio and Viesti HOOTY MOO’S BEEF & ALE were just three of the members and associates of the Family that Scarfo used to control Local 54 during the late 1970s and 1980s. Leonetti identified Anthony “Weasel” Viesti as an associate of the Scarfo Family, an officer of Local 54 and the owner or manager of a bar in Winslow Town- Viesti has a history of involvement in criminal ship during the mid-1980s: activities and association with organized crime. He has been involved in loansharking and illegal gam- bling. In 1969 and 1989, Viesti was convicted of ABC- Anthony “Weasel” Viesti was an as- related offenses. In November 1982, he pled guilty to a sociate of the Family, who Scarfo and federal charge arising from the arson of a building in Leonetti got to know through Robert Oaklyn Borough (Camden County), where he operated “Bobby” Lumio. Viesti and Lumio a deli on the ground floor and lived on the second floor. were cousins. Lumio and Leonetti According to one of the conspirators, who cooperated were inducted into La Cosa Nostra with federal authorities, the arson was ordered by Ralph at the same ceremony in 1980. Natale as part of a plan for Viesti to collect the insur- ance proceeds in order to pay a debt owed to Natale. Scarfo and Leonetti met with Viesti Viesti is a close associate of Natale’s, who is reputed to a few times in the late 1970s and early be the current boss of the Southeastern Pennsylvania- 1980s. They usually met him at South Jersey Family of La Cosa Nostra. In the late Lumio’s apartment, which was in the 1970s, Viesti and Natale were partners in the operation same apartment building as Scarfo’s of Oop’s Disco for teenagers in Ocean City (Cape May apartment. They first met him there County). Viesti was also a partner with Family member in about 1978 or 1979. During one Joseph “Mousie” Massimino in the Casa Nonna Sea- of the first times that Scarfo and food Italiano, which was located at 1080 Fries Mill Road Leonetti met Viesti there, he told them in Washington Township (Gloucester County). The res- that he had a bookmaking operation taurant, which did not have a liquor license, was open in Philadelphia. Leonetti heard in the from April 1991 to 1993. Viesti and Massimino had early 1980s that Viesti had a convic- their wife and girlfriend, respectively, front as the cor- tion for arson. porate owners of the business. Massimino has nine con- victions for various offenses, including distribution of . . . drugs. He is currently serving a 10-year New Jersey State Prison term for his conviction on a racketeering The last time that Leonetti saw Viesti charge related to loansharking and bookmaking.16 was in 1984 or 1985 at a motel around Winslow Township, N.J., The Commission recently uncovered Viesti’s hid- where he was operating a bar and den ownership of Hooty Moo’s Beef & Ale at 173 White restaurant. The motel was near Horse Pike in Waterford Township (Camden County). where Route 73 and the Atlantic City The bar and restaurant opened in September 1994 and Expressway meet. has been closed since mid-March 1995. To operate Hooty Moo’s, Viesti used the liquor license held by

16Massimino is also discussed at page 70 and 71 of this report. Maurice Thompson, who exercised no apparent con- who is now retired in Florida, successfully obtained one trol over the license or business. The Commission’s in- liquor license after another, despite his organized crime vestigation established that on September 19, 1994, activities and his open affiliation with Scarfo and other Viesti opened a business checking account at Equity Family members and associates. The licensing munici- National Bank; the signatory card for the account bears palities failed to uncover the information that would have the signatures of Viesti and his wife, Geraldine M. Viesti; disqualified Hoeflich from obtaining and renewing the the corporate resolution filed with the bank bears the licenses. name of Inept Corporation, trading as Hooty Moo’s Beef & Ale, and was signed by Geraldine M. Viesti as presi- Hoeflich owned the Stanley Restaurant in At- dent and Anthony Viesti as manager, and the trade name lantic City from 1973 until November 9, 1974, when it registration filed with Camden County and dated Au- was destroyed by fire. He then opened the Deptford gust 31, 1994, was signed by Viesti’s wife. Surveil- Tavern in Deptford (Gloucester County) in August 1975 lances of the bar by Commission staff in October 1994 under the corporate name of Sonny-Sy, Inc., in which established Viesti’s control of the business. Not only he and his brother-in-law each held 25% of the stock. was Viesti identified as the owner in overhead conver- In December 1988, the restaurant and bar closed when sation, but Viesti was observed giving orders to the bar- the premises were destroyed by fire. In the same month, tender and bouncers, receiving cash that was removed following , the license was transferred to S.J.S. by the bartender from the cash register at the bar, and, Associates, a partnership in which Hoeflich held 47% shortly before closing time at about 3:00 a.m., removing of the stock. The license became a “pocket license” the cash from the bar’s cash register and placing it in a that Deptford Township continued to renew each year, bank pouch. despite Hoeflich’s controlling interest in it, until July 1993, when the license was sold. For a brief period of time On May 8, 1995, Commission staff questioned from April 1977 to July 1978, Hoeflich also had an Thompson about his liquor license and Hooty Moo’s. interest in the My Way Lounge in Atlantic City with Fam- When asked if he had any partners, Thompson re- ily associate Saul Kane.18 In April 1983, Hoeflich opened sponded “yes and no.” He stated that Viesti was “run- the Coral Reef in Bellmawr (Camden County), under ning” Hooty Moo’s,” “was supposed to buy it” and the corporate name of One-Sixty-Eight, Inc. Hoeflich “was using my license.” Thompson admitted that he and his brother-in-law each held 32% of the stock. In “had nothing to do with it once [Viesti] took over.” February 1990, Hoeflich, who held 60% of the stock at He stated that Viesti was supposed to purchase the that point, sold the liquor license and business to Will- business and license for $30,000, but only paid $300. iam Pulcinello, an individual about whom Leonetti pro- When Thompson stated that Viesti was “ a wanna- vided information that bears upon his qualifications to be” and “never had any money,” he was asked how hold a license. For each bar, Hoeflich paid the obliga- he expected to sell the business and license to him. tory tribute to Scarfo and was thereby assured of oper- He replied, “Wishful thinking.” Thompson advised ating without threat of unionization by Local 54. that the business closed after about six months. In revealing his knowledge about Hoeflich, Leonetti divulged extensive data about Scarfo and the Scarfo Family, including Scarfo’s hidden ownership in one of Hoeflich’s bars; Scarfo’s interest in opening a STANLEY RESTAURANT/ bar; Scarfo’s methods for collecting tribute from bar DEPTFORD TAVERN/CORAL REEF17 owners; the activities of Saul Kane, a Scarfo Family as- sociate who generated substantial income for the Scarfo Leonetti furnished extensive information about a Family from his loanshark and gambling activities; Scarfo Family associate who held controlling interests Scarfo’s loanshark activities; information on Toro Con- in several bars in different municipalities. Sy Hoeflich, struction, which was owned by a Scarfo Family associ-

17The Deptford Tavern and Coral Reef ap- pear at pages 46 through 48 of the Commission’s ate; Scarfo’s use of Local 54 to direct construction work agreed to be the host. Scarfo agreed to Toro Construction and his and Leonetti’s company, to take the position only if his friend, Scarf, Inc.; Scarfo’s control of Local 54 through its presi- Richard “Dickie” Wells, became the dent, Frank Gerace, and Scarfo’s role in the selection bartender and also a hidden partner. of Roy Silbert as Gerace’s successor when Gerace was As a bartender, Wells had a large fol- ordered to surrender the position. lowing and made big tips, which Scarfo told Hoeflich would be split among them. Hoeflich agreed to the * * * * arrangement. Hoeflich, Scarfo and Wells each held a one-third interest in the bar business and split the prof- Leonetti explained how Scarfo and Hoeflich first its and Wells’ tips three ways. met: Hoeflich, Scarfo and Wells were there almost nightly. Hoeflich held the li- quor license for the bar. It was A year or two before Scarfo went to Leonetti’s belief that Sy Hoeflich and prison in 1971 for refusing to testify Sonny Gutin held the liquor license. before the New Jersey State Commis- sion of Investigation, he agreed to collect a loanshark debt for a New However, the business was of short duration: York loanshark. Scarfo collected the debt from Sy Hoeflich and passed on the payments to the loanshark. As a The bar business at the Stanley Res- result of collecting the debt, Scarfo taurant lasted for about a year. In and Hoeflich developed a relation- approximately 1974 or 1975, a fire ship that lasted at least until Scarfo’s totally destroyed the building where November 1988 federal racketeering the bar and restaurant were located. conviction. Hoeflich was an associ- The Stanley Restaurant never re- ate of the Family. opened. Wells was charged with set- ting the fire, but the charges were later dismissed. Wells told Scarfo that The Stanley Restaurant first opened in 1936, he didn’t have anything to do with the perhaps under a different name. In the late 1960s, fire. Hoeflich began operating the restaurant. In late 1973 or early 1974, when Hoeflich decided to include a bar in the restaurant, his plans included Scarfo: * * * *

Hoeflich, who had moved from New With the destruction of the Stanley Restaurant York to Atlantic City, operated the on November 9, 1974, Hoeflich searched for another Stanley Restaurant on Atlantic Av- location to operate a restaurant and bar and decided enue in Atlantic City with his brother- upon the Deptford Mall. Scarfo happened to be inter- in-law, Sonny Gutin. In mid-1973, ested in the same location for a bar and restaurant and after Scarfo was released from prison intended on using others to front for him in the owner- for his refusal to testify before the ship of the business. However, he was dissuaded from State Commission of Investigation, proceeding by boss Angelo Bruno, who had a different Hoeflich informed him of his plan to objective in mind. Leonetti recounted: open a bar in the Stanley Restaurant and asked Scarfo to act as an unoffi- cial host. Hoeflich knew that Scarfo In approximately 1975 or 1976, would be good for business because shortly after the fire destroyed the he had a lot of friends who would fre- Stanley Restaurant, Sy Hoeflich and quent the bar to see him. Hoeflich Sonny Gutin began making plans to told Scarfo that he would make him open a restaurant and bar at the a hidden partner in the bar if he Deptford Mall in Deptford, N.J. Dur- ing the same time, Scarfo was also “to do the right thing” for Scarfo. looking into the possibility of oper- ating a restaurant and bar at the By making the tribute payments, same location with Harold Garber Hoeflich was able to use Scarfo’s and Alvin Lippman. Garber and name to let people know that he had Lippman were associates of the Fam- Scarfo’s power behind him. After ily. Their plan was for Scarfo, Garber Scarfo gained control of Local 54 of and Lippman to be equal partners, the Bartenders and Hotel Workers with Garber and Lippman Union, the payments also insured that “fronting” for Scarfo. However, Hoeflich received sweetheart union when Scarfo asked the Family boss, arrangements for the Deptford Tav- Angelo Bruno, to approve the plan, ern. Bruno told Scarfo not to get involved because it was a bad deal. Scarfo After the Deptford Tavern had been later found out that soon after his open for a couple of years, Scarfo plan had been turned down, Bruno raised the weekly payment to $200, sent a relative involved in real estate which was still rather low. Scarfo to attempt to obtain the restaurant kept Hoeflich’s payment on the low and bar operation for himself. side because Hoeflich had made Scarfo and Dickie Wells partners in the bar at the Stanley Restaurant. Bruno’s efforts proved unsuccessful because Hoeflich’s Also, Hoeflich had treated Scarfo well plan to acquire the location had progressed too far. over the years. Hoeflich, together with his brother-in-law, then opened the Deptford Tavern: Leonetti delineated Hoeflich’s payment of trib- ute: In approximately 1975 or 1976, about a year after the fire destroyed the From the time that the Deptford Tav- Stanley Restaurant, Hoeflich and ern opened in approximately 1975 or Gutin opened a restaurant and bar 1976 until Scarfo began serving the at the Deptford Mall. They named it sentence for his federal firearms con- the Deptford Tavern. The restaurant viction in August of 1982, either and bar were still operating at the Scarfo or Leonetti collected the pay- time of Leonetti’s November 1988 ments at the Deptford Tavern. When conviction on federal racketeering Scarfo picked up the payments, charges. Leonetti always accompanied him. During the period of Scarfo’s incar- ceration from August of 1982 until From the outset, Hoeflich made weekly payments January of 1984, Leonetti picked up to Scarfo and, in return, received the usual benefits: the payments. Soon after his release from prison, Scarfo turned the job over to Family associate Saul Kane. At about the time that the Deptford Tavern opened, Hoeflich began pay- During the time that Leonetti went ing Scarfo $150 a week in tribute. by himself or with Scarfo to make col- Hoeflich was an associate of the lections at the Deptford Tavern, the Family who was directly “with” tribute payments were usually made Scarfo. He had to make these pay- by Sy Hoeflich or Sonny Gutin. How- ments for the right of being under ever, the payments were also turned Scarfo’s protection. In addition, over fairly often by one of the man- Hoeflich and Scarfo were friendly agers, Jack “Rocky” Rackover. and, out of respect for Scarfo’s posi- Rackover, whom Scarfo knew for tion in the Family, Hoeflich wanted many years, was often present when Hoeflich made the payments. From McKee City, N.J., bakery owner in conversations that Leonetti had with return for labor peace. Kane was Rackover when Rackover turned sentenced to probation and served over the payments, it was clear that about a year in federal prison for vio- Rackover knew what the money was lating his probation. Soon after for and that it went to Scarfo. It was Scarfo’s release from prison, he as- also clear from those conversations signed Kane to pick up the payments that Rackover knew a lot about at the Deptford Tavern. When Kane Hoeflich’s illegal activities and that began collecting the payments, Hoeflich trusted Rackover. Scarfo Scarfo gave him one third of each had known Rackover at least since $200 payment. Scarfo and Leonetti the mid-1960s. Rackover used to be each received one third also. Kane friendly with a former associate of collected the payments until Septem- Scarfo’s, named Alvin Feldman, who ber of 1986, when he was arrested ultimately was killed on Scarfo’s or- and held for trial on federal drug traf- der. Leonetti knew that Rackover had ficking charges. Kane was later con- a criminal record, but was not sure victed of those charges and sentenced for what. Steve Love, another busi- to a long prison term. Scarfo had ness partner with Hoeflich and Gutin Kane pick up the payments because in the Deptford Tavern, also knew Kane and Hoeflich were good friends about the payments. On occasion, and because the stops were conve- Leonetti received the payments in nient on Kane’s regular trips between Love’s presence. Hoeflich introduced his home in Margate, N.J., and Phila- Leonetti to Love at the Deptford Tav- delphia. ern sometime after it opened. Kane often travelled to Philadelphia When Leonetti picked up the pay- because a lot of his illegal activities, ments at the Deptford Tavern, he usu- such as loansharking, gambling, ex- ally accompanied the person to the tortion and labor racketeering, took office while that person removed the place in the Philadelphia area, where cash from a safe. Hoeflich made the several of his criminal associates payments appear as though they were lived. Because Scarfo, Kane and the wages for an employee of the busi- Leonetti were equal partners in the ness. Each payment, which was al- illegal businesses that Kane operated, ways in cash, was contained in a pay- the profits were split three ways. roll envelope with the name of a fake Kane’s associates included Harry Jo- employee on it. The person who gave seph, Alfonso Parisse, Steve Traitz Leonetti the envelope often made fun and Michael “Nails” Mangini, who of the situation by calling Leonetti were all associates of the Scarfo Fam- the name of the fake employee. It ily. became a running joke between Leonetti and whoever gave him the After his arrest in September of 1986, money. When Leonetti went with Kane had Harry Joseph make the col- Scarfo to the Deptford Tavern so that lections not only for the gambling, Scarfo could pick up the payments, loansharking and extortion busi- Scarfo also received them in a pay- nesses that Kane ran, but also from roll envelope with the fake employee’s the Deptford Tavern. This was done name on it. with Scarfo’s permission. Leonetti used to meet Joseph outside of Bobby Around the time that Scarfo was re- Simone’s law office in Philadelphia, leased from prison in January of where Joseph gave Leonetti the 1984, Saul Kane was also released Deptford Tavern payments and from federal prison. Kane and two Scarfo’s and Leonetti’s share of Teamsters had been convicted of at- Kane’s illegal activities. Joseph con- tempting to extort money from a tinued to give Leonetti these pay- ments until April of 1987, when Hoeflich steered the construction Leonetti was arrested and held for work to Leonetti because he knew trial with other members of the that Leonetti was in the construction Scarfo Family for the September business and would appreciate the op- 1984 murder of Salvatore Testa. Jo- portunity to make legitimate income. seph was an associate of the Family who had been close friends with Kane Leonetti passed the project on to Rob- for years. Joseph had his own gam- ert “Toro” Locicero, the owner of bling business. Toro Construction, which was lo- cated in the Vineland, N.J., area. Toro Scarfo and Leonetti were in the Construction became the general Philadelphia prison system from contractor for the project. Scarfo and early 1987 until shortly after they Leonetti worked closely in the con- were convicted on federal racketeer- struction industry with Locicero, who ing charges in November of 1988. was an associate of the Family. Since During that period, Scarfo’s son, Leonetti referred the project to Nicky, visited Scarfo and Leonetti in Locicero, Locicero had Scarfo’s and prison at least once a week and re- Leonetti’s concrete finishing business, viewed the collection sheet with Scarf, Inc., complete the concrete them. Leonetti knew from seeing and work. Leonetti stopped by the Coral discussing the collection sheets that Reef on a couple of occasions to Hoeflich continued to make the trib- check on his workers. Because ute payments for the Deptford Tav- Leonetti gave the construction job to ern at least until Scarfo and Leonetti Locicero, Locicero gave Leonetti “a were convicted of federal racketeer- piece” of his profit. ing charges in November of 1988. Over the years, Locicero often pro- vided Scarf, Inc., with concrete work * * * * on construction projects where Toro Construction was the general con- tractor. While operating the Deptford Tavern, Hoeflich opened a second restaurant and bar: Leonetti disclosed the following about Robert Locicero and his company, Toro Construction: In approximately 1983, when Scarfo was in federal prison serving a sen- In the late 1970s, when Local 54 reno- tence for illegally possessing a fire- vated an Atlantic City building for arm, Sy Hoeflich opened a bar in use as offices, Scarfo and Frank Bellmawr, N.J. The bar was known Gerace, the president of Local 54 and as the Coral Reef, which was still in an associate of the Family, made sure business at the time that Leonetti and that Toro Construction was the gen- Scarfo were convicted on federal eral contractor. Scarf, Inc., was racketeering charges in November of given the concrete work on the job. 1988. Locicero told Leonetti that he skimmed money from the Local 54 Hoeflich purchased not only the liquor renovation funds on the Atlantic City license for the Coral Reef, but also building project. the building, which needed extensive work done to it. In January of 1982, Scarfo inducted several individuals into the Family at As a loyal Scarfo Family associate, Hoeflich re- Locicero’s residence in the Vineland, ferred the construction work to Leonetti, who brought N.J., area. Inducted at that making in another Family-related construction company: ceremony were Thomas “Tommy Del” DelGiorno, Francis “Faffy” Iannarella, Pasquale “Pat the Cat” Scarfo’s release from prison in Janu- Spirito, Felix “Little Felix” Bocchino, ary of 1984. Hoeflich and Jack Joseph “Joey Pung” Pungitore, Eu- “Rocky” Rackover were the only two gene “Gino” Milano, Albert “Reds” people who turned over the payments Pontani, Michael “Micky” Ricciardi, to Leonetti there. They used to re- “Jerry” Fusella, Joseph Sodano and move the money from a safe in the “Happy” Bellina. Salvatore “Salvie” office at the Coral Reef in Leonetti’s Testa was elevated to a captain by presence and give it to him. To Scarfo at that ceremony. Leonetti’s knowledge, Scarfo never picked up any payments at the Coral In December of 1979, when Scarfo, Reef by himself or when Leonetti was Leonetti and Lawrence “Yogi” present. Merlino were arrested for the mur- der of Vincent Falcone, Locicero During the period that Leonetti col- posted $45,000 in cash from Toro lected the tribute payments from the Construction to help them make bail. Coral Reef, Leonetti continued to Falcone was an associate of the Fam- pick up the payments from the ily. Deptford Tavern. Normally, Leonetti stopped at both the Coral Reef and the Deptford Tavern and collected Hoeflich also paid Scarfo tribute for his op- separate payments. On a few occa- eration of the Coral Reef: sions, however, the payments for both bars were left for him at the Deptford Tavern. Payments were not always When the Coral Reef opened for busi- collected every week from either bar ness, Hoeflich began making tribute because it was not something that was payments of $200 a week, just as he scheduled. The payments were usu- had been doing for the Deptford Tav- ally collected every couple of weeks ern. As with the Deptford Tavern, to a month. If payments were not col- Hoeflich made payments for the lected, they just accumulated until Coral Reef because he was under picked up. Soon after Scarfo was re- Scarfo’s protection. With the added leased from prison in January of payments from the Coral Reef, 1984, he gave Saul Kane the job of Hoeflich was able to use Scarfo’s in- collecting the payments from both the fluence and reputation even more. Coral Reef and the Deptford Tavern. Since Scarfo was in firm control of Local 54, Hoeflich also got a sweet- Just as Scarfo allowed him to do with heart union deal for the Coral Reef. the Deptford Tavern payments, Hoeflich began making the tribute Scarfo allowed Kane to keep a third payments for the Coral Reef without of each $200 payment from the Coral being asked for them because he knew Reef. The other two thirds was again “to do the right thing.” Leonetti split between Scarfo and Leonetti. never had to ask Hoeflich to make Kane collected the Coral Reef pay- the payments for the Coral Reef and ments until September of 1986, when neither did Scarfo, who was in fed- he was arrested on federal drug traf- eral prison at the time it opened. ficking charges. After Kane was arrested and held for Leonetti again outlined Hoeflich’s weekly pay- trial in September of 1986, Harry Jo- ment of tribute: seph began picking up the tribute payments from both the Coral Reef and the Deptford Tavern. Joseph also Leonetti collected the Coral Reef pay- began making the collections for the ments from the time it opened in ap- gambling, loansharking and extor- proximately 1983 until shortly after tion businesses that Kane operated. Kane obtained Scarfo’s permission Whenever Scarfo and Leonetti went for Joseph to make the collections. to the Coral Reef or Deptford Tav- The profits from Kane’s illegal activi- ern, they never paid for what they ate ties were split equally among Scarfo, or drank. If Leonetti went alone to Kane and Leonetti because they were either bar, when his uncle was in partners. Joseph used to give prison for instance, he usually paid Leonetti the money from the collec- for his food and drinks. There were tions outside of Bobby Simone’s law many bars and restaurants where office in Philadelphia. The Coral Reef Leonetti and others didn’t have to pay and Deptford Tavern payments, as for the food and drinks if they were well as Scarfo’s and Leonetti’s share with Scarfo because the owners knew of Kane’s illegal businesses, contin- of Scarfo’s reputation and that he was ued to be turned over to Leonetti by the boss. Joseph until April of 1987, when Leonetti and other members of the Scarfo Family were arrested and held Leonetti reported that Hoeflich was a guest at for the 1984 murder of Salvatore Scarfo’s Florida home on several occasions and was Testa. also invited by Scarfo to Family parties: Scarfo and Leonetti were in the Phila- delphia prison system from early Sy Hoeflich visited Scarfo at his Ft. 1987 until shortly after their convic- Lauderdale, Florida, house a few tions on federal racketeering charges times after Scarfo purchased the in November of 1988. During that home in the summer of 1985 and be- period, Scarfo’s son, Nicky, visited fore his incarceration in January of them regularly in prison and showed 1987. On a couple of occasions, them the collection sheets. From see- Scarfo invited Hoeflich to the house ing and discussing the collection when Scarfo and Leonetti stopped at sheets, Leonetti knew that Hoeflich the Coral Reef or Deptford Tavern to continued to make the $200 weekly see him. Hoeflich was at the house tribute payments for the Coral Reef with several other members and as- and for the Deptford Tavern at least sociates of the Family in January of until the federal racketeering convic- 1986, when Scarfo threw a New tions of Scarfo and Leonetti in No- Year’s party shortly after New Year’s vember of 1988. Day. Scarfo decided who was invited to the party. Once, when Hoeflich was at the Florida house, he told Scarfo and Leonetti were regular visitors at both Scarfo, in Leonetti’s presence, that he the Deptford Tavern and Coral Reef, where Hoeflich was interested in buying a restaurant allowed them to eat and drink without charge: in the Ft. Lauderdale area. Hoeflich showed Scarfo one restaurant that he was interested in buying in Ft. Lau- After Saul Kane and Harry Joseph derdale at Commercial Boulevard began collecting the payments at the and the beach. When Hoeflich was Coral Reef and Deptford Tavern, in Ft. Lauderdale, he usually stayed Scarfo and Leonetti still visited regu- at the Irelands Hotel. larly with Hoeflich at his bars. Scarfo and Leonetti stopped by the Deptford In December of 1984 and December Tavern more often because it was just of 1985, Scarfo held Christmas par- off Route 42, which they usually took ties for the Family at a bar and res- when travelling between Atlantic City taurant known as LaCucina on South and Philadelphia. Because the Coral Street, near Second Street, in Phila- Reef was a little out of their way, they delphia. Scarfo approved all the stopped there less often. members and associates of the Fam- ily who attended. Hoeflich was with bookmakers. From conversa- among the associates that Scarfo in- tions with Hoeflich, Leonetti knew vited. He was at one of the parties in that it was nothing for Hoeflich to bet the company of Jack “Rocky” $1,000 on one game. Rackover. LaCucina was owned by an associate of the Family named Sometime in 1984 or 1985, when Salvatore “Sam the Barber” Scarfo and Leonetti were visiting LaRussa.19 Hoeflich at the Deptford Tavern, Hoeflich indicated that he needed an- other bookmaker and asked if Scarfo Leonetti disclosed two of Hoeflich’s vices — and Leonetti knew anyone who could drugs and gambling: take his gambling action. Leonetti then contacted Joseph “Joey Pung” Pungitore and told him to have a Scarfo and Leonetti knew that bookmaker from one of his gambling Hoeflich had a drug abuse problem, offices call Hoeflich and supply him which was a big concern especially with a telephone number to that of- to Scarfo. Scarfo didn’t like to have fice. Pungitore was a member of the people around that were directly in- Family. From talking to Hoeflich volved with handling or using drugs. about his gambling, Leonetti knew Scarfo and Leonetti first became that he placed bets with gambling aware of Hoeflich’s drug problem in operations in addition to Pungitore’s approximately the late 1970s when operation. Hoeflich’s close friends, including Saul Kane and Jack “Rocky” Because Hoeflich ran up big gam- Rackover, told Scarfo and Leonetti bling debts from his sports betting, about it. he had to borrow loanshark money to pay the bookmakers. Between ap- In approximately 1985, Scarfo and proximately 1979 and 1986, Scarfo Leonetti found out that the New Jer- and Leonetti loansharked money to sey State Police arrested Hoeflich at Hoeflich on about five or six occa- the Coral Reef for having cocaine in sions. These loans ranged from ap- his office. Shortly after the arrest, proximately $10,000 to $25,000, with Scarfo and Leonetti went to the the average loan about $15,000. Coral Reef to question him about it. Scarfo and Leonetti ran a loanshark Hoeflich told them that he did have business, which they used to lend the drugs, but tried to make it sound money to people who were close to as though he was holding them as fa- them. Either Scarfo or Leonetti used vor for someone else. Scarfo was very to give the loan money to Hoeflich at upset with Hoeflich and strongly rep- either the Deptford Tavern or the rimanded him. Coral Reef. The weekly “juice” pay- ments that Hoeflich had to make on the loans were given to Scarfo or Hoeflich was a heavy gambler and borrowed Leonetti in a couple of different ways. extensively from Scarfo and Leonetti to pay his losses: When Scarfo and Leonetti were pick- ing up the weekly tribute payments from Hoeflich’s two bars, they also From the contact that Scarfo and collected any “juice” payments that Leonetti had with Hoeflich over the Hoeflich had to make. There were years, they knew that he bet large amounts of money on sports events

9LaCucina appears at pages 95 and 96 of this report. also loans where Scarfo had Tyrone Hoeflich was surprised and told DeNittis, a Family associate, collect Scarfo and Leonetti that he had given the “juice” payments from Hoeflich DeNittis the $15,000 months ago. and drop them off to Scarfo or Leonetti at Scarfo’s Atlantic City After talking to Hoeflich, Scarfo apartment. Scarfo had DeNittis spoke with DeNittis about the mat- make the collections because DeNittis ter. DeNittis admitted that Hoeflich often stopped at Hoeflich’s bars on had given him the $15,000 to pay off trips between his home near Phila- the loan a few months earlier, but he delphia and Scarfo’s apartment. decided to keep the money and con- DeNittis used to stop at Scarfo’s tinue making the $300 weekly inter- apartment because Scarfo, DeNittis est payments as if they were still com- and Leonetti were partners in a busi- ing from Hoeflich. Scarfo yelled at ness involving video jukeboxes. DeNittis, who told Scarfo that he Scarfo and Leonetti were silent part- needed the money for the video juke- ners. The business never made any box business. Scarfo told DeNittis to money. DeNittis spent a lot of time forget about paying the money back at Hoeflich’s bars because he was until the business began making friendly with Hoeflich and also be- money. cause he was a booking agent that Hoeflich used to line up bands for his bars. One of the loansharks from whom DeNittis had borrowed money, for which Hoeflich agreed to be re- sponsible, was William Pulcinello, the individual who later Leonetti recalled the following episode regard- purchased the Coral Reef from Hoeflich. When DeNittis ing one of Hoeflich’s loanshark debts: and Hoeflich experienced difficulty in repaying the loan, they were compelled to apprise Scarfo and Leonetti of the problem and seek their assistance: Scarfo and Leonetti had a problem with one of the loans that they made to Hoeflich. In 1984 or 1985, they Hoeflich and DeNittis got involved in loaned Hoeflich $15,000, which was another loanshark arrangement, given to Hoeflich at either the without the knowledge of Scarfo and Deptford Tavern or the Coral Reef. Leonetti, where a problem occurred. After Hoeflich received the money, he Although Hoeflich and DeNittis origi- began paying them $300 a week in nally tried to hide the problem from interest, which was to continue until Scarfo and Leonetti, they finally had he paid the $15,000 in principal. to tell them because a loanshark got Scarfo had Tyrone DeNittis collect upset when Hoeflich and DeNittis the $300 weekly “juice” payments weren’t paying back a $50,000 loan. and drop them off at Scarfo’s Atlan- Hoeflich told Leonetti about the prob- tic City apartment. lem in approximately 1986 at the Coral Reef. Hoeflich said that DeNittis dropped off the weekly $300 DeNittis borrowed $50,000 from a interest payments for about six loanshark named Billy, who worked months, when Scarfo began to won- as a manager or bartender at the der why Hoeflich had not yet repaid Coral Reef. Hoeflich added that Billy the $15,000 in principal. Scarfo was loaned the money to DeNittis only concerned because, on other occa- after Hoeflich agreed to be respon- sions, Hoeflich always paid back the sible for the loan if DeNittis didn’t principal within two or three months. repay it. Hoeflich explained that the As a result, when Scarfo and Leonetti loan had been out for awhile and that were at the Coral Reef one day visit- Billy was complaining that DeNittis ing Hoeflich, Scarfo asked him when wasn’t making the weekly interest he was going to pay off the loan. payments or paying back anything on the principal. Billy wanted Hoeflich debt from the sale price and if he sold to pay off DeNittis’s debt because to someone else, he would pay off Hoeflich “stood” for it, but Hoeflich DeNittis’ debt out of his profit. told Billy that he didn’t have the Leonetti assumed that Hoeflich money to do that. Hoeflich informed reached an agreement with Billy be- Leonetti that it had reached the point cause he didn’t have any further in- where Billy was pushing to meet with volvement in the matter. Scarfo in the hope that Scarfo would force DeNittis or Hoeflich to pay the debt. After talking to Hoeflich, As a result of its investigation, the Commission reported Leonetti told Scarfo about the mat- in 1992 that Pulcinello was unable to document a sub- ter. stantial portion of the $100,000 down payment made to Hoeflich for the business and license. Not long after Hoeflich informed Leonetti of the problem, DeNittis met The Commission’s recent investigation and sur- Leonetti in the Atlantic City area and veillances of the Coral Reef disclosed that Pulcinello has told Leonetti the same thing that employed two Family associates — Felix Bocchicchio Hoeflich had. When Leonetti told and Anthony Zanghi — and has violated the tax laws in Scarfo what DeNittis had to say doing so. The Commission notes that despite their docu- about the problem, Scarfo wanted a mented involvement in organized crime, no ABC regu- meeting. Shortly after that, Scarfo, lation prohibits their employment by a licensee in the Hoeflich, DeNittis and Leonetti met absence of a criminal conviction. Ironically, although at the Coral Reef and discussed the their employment is technically proper, they are prohib- matter. When they met, DeNittis and ited from patronizing the premises under N.J.A.C. 13:2- Hoeflich explained the situation to 23.5(a). Scarfo and told him that neither of them had the money to repay Billy. Pulcinello’s records disclose that Bocchicchio Scarfo told Hoeflich and DeNittis to was employed as a bartender from August 1993 until tell Billy that Scarfo didn’t want to January 1994. The Commission’s investigation estab- meet with him. Scarfo never liked to lished that he also worked there during the latter part of discuss the Family’s activities with 1994 and beginning of 1995, but was not listed in people he didn’t know. Scarfo yelled Pulcinello’s business records. In March 1995, when at DeNittis for getting into the situa- Commission staff questioned Pulcinello about tion with Billy. Scarfo also told Bocchicchio’s employment status, Pulcinello admitted Hoeflich and DeNittis to tell Billy to to paying him off the books since June or July 1994 and forget about getting his money back indicated that he may not be working there much longer. because he was loansharking without In addition, Pulcinello failed to produce the employment being “with” someone in the Family list (ABC Form E-141-A) required to be maintained by and without making shake-down pay- all licensees. ments to the Family. However, Hoeflich told Scarfo that he would Bocchicchio was one of the Local 54 officers work something out with Billy be- whose resignations were prompted by the federal cause Hoeflich had “stood” for the government’s 1990 civil RICO suit against Local 54 and loan and wanted to remain friendly its officials. The government’s complaint included the with Billy. Hoeflich explained that following about Bocchicchio: he wanted to stay on good terms with Billy because he was hopeful of sell- ing the Coral Reef to Billy. Hoeflich Felix Bocchicchio, Jr.,... is the Vice told Scarfo and Leonetti that he President of Local 54. He has held would work something out between this position since 1984, when he was himself, DeNittis and Billy and would appointed by Gerace with the ap- pay back the money if DeNittis proval of Nicodemo Scarfo to replace couldn’t. Hoeflich said that if he was Silbert. He had previously served as able to sell the Coral Reef to Billy, he Vice President in 1982. Prior to 1982, would deduct DeNittis’ loanshark Bocchicchio was Local 54’s Business Agent for Great Adventure Amuse- Thelma Hilferty, Felix Bocchicchio, ment Park. Bocchicchio is a long- Jr. and Dan Daidone have improperly time associate of defendants Albert used union funds for their personal Daidone and Raymond “Long John” benefit and for the benefit of family Martorano and other organized crime members and friends. members and associates. Following Scarfo’s arrest in 1987 on federal More specifically, the complaint stated: and state charges, Albert Daidone and Raymond Martorano sought to usurp Scarfo’s control of Local 54 by ousting Gerace from the union. Daidone and In September 1982, Albert Daidone Martorano, who were incarcerated at the time for the was indicted for the murder of John murder of John McCullough, endeavored to effectuate McCullough. Frank Gerace removed the ouster through Bocchicchio, the union’s Vice Presi- Albert Daidone as Local 54 Vice dent. In his declaration filed in the federal civil RICO President and replaced him with Felix suit, Leonetti related Scarfo’s response to their plan: Bocchicchio, Jr. In September 1982, in connection In 1988, during our racketeering with an investigation into racketeer- trial, Gerace sent word to Scarfo that ing in Local 54, Felix Bocchicchio, Al Daidone had sent for Gerace. Jr. refused to cooperate with federal Gerace visited Daidone in prison law enforcement authorities. where Daidone told him that Daidone Bocchicchio was, however, retained and Martorano would be taking over as Local 54 Vice President. Local 54. Daidone told Gerace to leave the union or be killed. Scarfo . . . sent Shotsie Sparachio [sic] to see Felix Bocchicchio, who had always On December 8, 1984, immediately been with Daidone and Martorano. after his resignation as Local 54 Scarfo told Sparachio [sic] to tell President, Frank Gerace was ap- Bocchicchio to leave the union. pointed by Local 54’s Executive Scarfo later told Sparachio [sic] to Board as a consultant to the union kill Bocchicchio. regarding “non-casino matters.” Shortly after this incident, Scarfo, Merlino and I were convicted in the ...Roy Silbert and Local 54’s Execu- federal racketeering trial. tive Board (which at the time included...Felix Bocchicchio, Jr.) con- tinued to pay $48,000 per year to Investigation by the Commission revealed that Gerace, the amount of his salary Anthony Zanghi was working at the Coral Reef as a when Gerace was Local 54’s Presi- bartender/host during 1992 and 1993. However, by dent, for Gerace’s new position as Pulcinello’s own admission to Commission staff, Zanghi “consultant.” In fact, Gerace con- never appeared in any business records. Although tinued to run the union through Pulcinello claimed that Zanghi was not an employee, but Silbert and Hilferty, at the direction only worked there without pay “just to get out of the of and for the benefit of Nicodemo house,” Zanghi is deemed to have been an employee Scarfo. In early 1985, the same Lo- under ABC regulations. Further, Pulcinello only admit- cal 54 Executive Board voted to ted to Zanghi’s working at the Coral Reef from March award as a “gift” an automobile val- 1993 to November 1993. Pulcinello stated that he and ued at $15,000 to Gerace. Zanghi have been friends for approximately 30 years and became acquainted when Pulcinello patronized a . . . south Philadelphia speakeasy that Zanghi was operating at 7th and Carpenter Streets. On numerous occasions, Roy Silbert, Zanghi is a long-time gambling operative for the received average monthly payments of $3,000 from Southeastern Pennsylvania-South Jersey Family. In re- Kane’s illicit activities. Kane also headed one of Scarfo’s cent years, he was involved with Family member Jo- shake-down crews for the collection of street tax and, seph “Mousie” Massimino in illicit gambling activities. when directed by Scarfo, collected the tribute payments Massimino has numerous state and federal drug-related from bar owners. Kane began collecting extortion pay- convictions, including a federal conviction in 1987 for ments from racketeers in his area even before Scarfo his involvement in a drug trafficking network controlled formally instituted the practice as boss. Leonetti re- by the Bruno/Scarfo organization. In February 1993, ported: Massimino was imprisoned in the New Jersey State Prison for a racketeering conviction related to loansharking and bookmaking. Prison records docu- Saul Kane put together a shake-down ment visits by Zanghi once or twice every month in 1993 crew around the time in early 1982 and numerous times in 1994. On a visit in January 1994, when Scarfo ordered that drug deal- Zanghi was accompanied by Joseph Ciancaglini, ers, loansharks, bookmakers and underboss to then boss John Stanfa. A 1977 federal other racketeers start making cash ex- wiretap, later disclosed at the 1982 RICO prosecution tortion payments to the Family. of the Bruno Family, revealed a conversation by Zanghi Kane’s crew was one of several that with then soldiers Harry Riccobene and Joseph “Chickie” were formed to collect the extortion Ciancaglini. In 1978, 1983, 1984, 1986, 1987, 1993 payments. Kane’s crew, which oper- and 1994, law enforcement surveillances placed Zanghi ated in the northeast Philadelphia in the company of many members and associates of the area, was made up of himself, Harry Family and at known organized crime gambling loca- Joseph and Alfonso Parisse. Al- tions. though Kane lived in Margate, N.J., he operated his illegal businesses primarily in northeast Philadelphia. Kane also took Andrew Cornaglia MY WAY LOUNGE20 under his wing and occasionally used him to help collect the extortion pay- ments, as well as the payments from Leonetti revealed new information about Family Kane’s gambling and loansharking associate and bar owner Saul Kane. Kane was the prin- businesses. Kane had Scarfo’s per- cipal owner of the My Way Lounge in Atlantic City from mission to use Joseph, Parisse and April 1977 to September 1981, when the Pageant Ho- Cornaglia.... tel in which it was located was sold to casino interests. At first, his partner was Family associate Sy Hoeflich Besides collecting “the shakes,” Jo- and, later, Family associate Andrew Cornaglia became seph and Parisse had their own ille- a partner. Kane’s interest was properly disclosed on gal businesses in northeast Philadel- the license application until December 1979, when the phia where they lived. Joseph had a ABC forced his removal because of a criminal convic- gambling business and Parisse had a tion. Although he appeared to transfer his 50% interest gambling business and also a to his sole partner, he retained a hidden interest in the loansharking business. ownership. In February 1987, Kane was convicted on federal drug-trafficking charges and, in May 1987, was Saul Kane started collecting extor- sentenced to 95 years in prison. In March 1989, the tion payments in northeast Philadel- sentence was reduced to 25 years. phia as early as 1978, with Scarfo’s approval. Back then, Kane made the Kane generated a great deal of money for Scarfo collections by himself and it was done from his illegal businesses involving extortion, in a very limited fashion. Between loansharking and bookmaking. Scarfo and Leonetti each 1978 and 1982, Kane collected only

20The My Way Lounge appears at pages 49 and 50 of the about $400 or $500 a week, which didn’t continue making the collec- he split with Scarfo. It was during tions because he wasn’t dependable. this period that he was a part owner From that point until Kane got out in the My Way Lounge. Then, in of prison in late 1983, Leonetti usu- 1982, about a year after Scarfo be- ally met Joseph and Parisse once a came the boss, Kane formed his month to pick up Scarfo’s and his shake-down crew when Scarfo had share of the profits. They used to the other crews set up to collect the meet outside of the Philadelphia law extortion payments on a large scale. office of Bobby Simone, where Joseph showed Leonetti a list and explained In late 1982, Kane went to federal what collections had been made. prison for about a year for extorting Once Leonetti began meeting Joseph a McKee City, N.J., bakery owner for and Parisse, Joseph started holding labor peace. Kane was originally sen- Kane’s share of the profits. Leonetti tenced to probation, but was sent to continued to pick up the money from prison after he violated probation. Joseph and Parisse until Kane got out He remained there until approxi- of prison. mately December of 1983, which was just before Scarfo was released from When Kane was released from fed- federal prison in January of 1984 for eral prison for the extortion convic- his firearms violation. tion in late 1983, he resumed making the collections from his loansharking, While Kane was in prison, he had Jo- bookmaking and shake-down busi- seph, Parisse and Cornaglia make the nesses. Joseph and Parisse contin- collections for the loanshark, gam- ued to assist Kane with “the shakes” bling and shake-down businesses that collections. After his release, Kane he operated. Because Scarfo, Kane gave Scarfo’s and Leonetti’s share of and Leonetti were equal partners in the profits to Leonetti. Things oper- the illegal activities that Kane oper- ated that way until September of ated, they split the profits three ways. 1986, when Kane was arrested by the Cornaglia used to travel from his FBI and held on federal drug traffick- home in Somers Point, N.J., to north- ing charges. Kane was never released east Philadelphia to make the extor- prior to being convicted on the drug tion collections and to pick up the charges. He was later sentenced to a money that Joseph and Parisse col- lengthy prison term. lected. Cornaglia held Kane’s share of the profits and turned over Scarfo’s When Kane was arrested in Septem- and Leonetti’s share of the profits to ber of 1986, Joseph and Parisse be- Leonetti. Leonetti assumed that gan making the collections from Kane probably gave Cornaglia a Kane’s bookmaking and loanshark share of his profits for making the col- businesses again and continued mak- lections. Cornaglia used to give ing the collections for “the shakes.” Leonetti the money at Shoobie’s, Leonetti again started meeting Jo- which was a bar located on the traf- seph and Parisse outside the Phila- fic circle in Somers Point, N.J., near delphia law office of Bobby Simone the bridge to Ocean City. When they about once a month to receive his and met, Cornaglia went over a list and Scarfo’s shares. This went on until explained to Leonetti the collections Leonetti was arrested and held for that he, Joseph and Parisse had Salvatore Testa’s murder and other made. state and federal charges in April of 1987. Cornaglia only made the collections for about six months of the year or The average amount in profits that so that Kane was in prison. Leonetti Scarfo and Leonetti each received decided that it was best if Cornaglia from all of Kane’s illegal operations was approximately $3,000 a month. mained constant from the time it The most that they ever received for opened until it closed. Kane, one month was $8,000 each. At Hoeflich, Gutin and Cornaglia were Scarfo’s request, Leonetti oversaw all associates of the Family. Although Kane’s illegal activities beginning in Scarfo was never a partner in the My 1982. At that point, Leonetti began Way Lounge, he had a great deal of receiving a third of the profits from influence over its operation because Kane’s illegal businesses. all of the owners were “with” him.

Under ABC regulations, Saul Kane’s May 1978 Kane gave Scarfo the expected tribute payments federal conviction for conspiracy and extortion triggered from the My Way Lounge operation and received the his disqualification from holding an interest in the My usual benefits in return: Way Lounge. Nevertheless, Kane continued his own- ership by arranging for a “paper” transfer of his interest to his partner: Scarfo got “a piece” of the My Way Lounge. He received tribute pay- ments of between $200 and $500 a In approximately 1978, Saul Kane week from Saul Kane during all the was convicted with two Teamsters of- years that the My Way Lounge was ficials for attempting to extort money open for business. The amount var- from the owner of a McKee City, N.J., ied from week to week depending on bakery in exchange for labor peace. how good business was. Leonetti al- Because of his conviction, New Jer- ways accompanied Scarfo when he sey Alcoholic Beverage Control au- collected the weekly payments from thorities filed charges against Kane Kane at the My Way Lounge. because he remained on the My Way Lounge liquor license as an owner. The tribute payments were made to After the charges were filed, Kane Scarfo because the owners of the My took his name off the liquor license Way Lounge were “with” Scarfo, and “sold” his interest in the My Way which entitled them to his protection Lounge to Andrew Cornaglia, who and the use of his name and reputa- was already Kane’s partner at the tion. The payments insured that the time. Leonetti knew from conversa- My Way Lounge, just like the Coral tions that he and Scarfo had with Reef and the Deptford Tavern, re- Kane that although Kane made it ceived a sweetheart union arrange- appear on paper as though he had ment from Local 54 of the Bartend- sold his interest in the liquor license, ers and Hotel Workers Union. The he actually kept a hidden interest in tribute payments were made to the My Way Lounge until it closed. Scarfo out of friendship and respect for his position. Scarfo exerted significant influence over the My Way Lounge because he controlled Kane and the other The My Way Lounge provided another safe ha- owners, who were also associates of the Family: ven for the members and associates of the Scarfo Fam- ily: At various times between approxi- mately 1977 and 1981 or 1982, Saul The My Way Lounge was another Kane, Sy Hoeflich, Sonny Gutin and spot where members and associates Andrew Cornaglia were owners of of the Family met to socialize. They the My Way Lounge, which was a bar often discussed their criminal activi- located in the Pageant Motel on Pa- ties and Family matters there. Among cific Avenue in Atlantic City. Kane’s the members and associates of the ownership in the My Way Lounge re- Family that gathered at the My Way Lounge were Scarfo, Leonetti, to the police. Leonetti beat Leva out- Lawrence “Yogi” Merlino, Salvatore side the Flamingo Motel in Atlantic “Chuckie” Merlino, Nicholas “Nick City, where Leva had been drinking. the Blade” Virgilio, Rick Casale, Leonetti figured that if he had an Phillip “Moe” McFillin, Frank alibi, he would not be suspected of Gerace, Joseph Salerno, Vincent being the triggerman. On the night Falcone and Alfredo Ferraro. that Leva was killed, Ferraro and Leva went to the My Way Lounge for There were so many members and some drinks. When Ferraro and Leva associates of the Family that went to arrived, Leonetti was already there the My Way Lounge that Saul Kane socializing with Salvatore “Salvie” once placed an advertisement in the Testa and Vincent Falcone to set up Atlantic City Press that said, “Join his alibi. While at the My Way the Mob at the My Way Lounge.” Al- Lounge, Leonetti, Testa and Falcone though Scarfo was a little upset at discussed that Ferraro was going to Kane for running the advertisement, kill Leva later that night. he also thought it was funny. Scarfo told Kane that he was crazy to run it. Leonetti was indicted for Leva’s mur- der, but the charges were later dis- Scarfo ate and drank for free at the missed. The Leva murder was a sanc- My Way Lounge, as he did at the tioned “hit.” Scarfo got permission Deptford Tavern, the Coral Reef and from the Family boss, Angelo Bruno, other bars and restaurants where he to kill Leva because Leva was shak- had influence. Scarfo and Leonetti ing down old Italian people from went there a few times a week. Every Scarfo’s neighborhood for money. time that Scarfo went to the My Way Also, Leva had borrowed money from Lounge, Leonetti was with him. Vincent Bancheri and didn’t pay Leonetti also went there without Bancheri back. Bancheri was Scarfo. Scarfo’s and Leonetti’s partner in Scarf, Inc., when they first started the business. The reason why Leonetti In fact, Leonetti felt so secure there that he used the bar beat Leva shortly before his murder to create an alibi in a murder case: was because Leva wasn’t paying Bancheri the money he owed him. In the summer of 1977, Leonetti used the My Way Lounge to create an alibi According to Leonetti, “Not only were all the to show that he was not at the murder owners accountable to Scarfo, but so were many of scene of a person that the Family had the employees.” He continued: killed. Leonetti made his presence known at the My Way Lounge so that everyone could see him at the time Scarfo controlled who was employed that an Atlantic City tailor, named at the My Way Lounge. He instructed Guiseppi “Pepe” Leva, was mur- Saul Kane to hire Robert “Bobby” dered. Leva was shot to death near Lumio and gave his approval for the a dump in Egg Harbor Township, hiring of others, including James N.J., by Alfredo Ferraro, an associ- “Jimmy” Lang, Roy Silbert and ate of the Family at the time. Scarfo, Michael Fornaro. Lumio, a bartender Leonetti, Ferraro, Lawrence Merlino at the My Way Lounge, was an asso- and Vincent Falcone took part in the ciate of the Family and was directly conspiracy to murder Leva. Leonetti “with” Scarfo. Lang, Silbert and used the My Way Lounge as an alibi Fornaro were all bartenders who because he had beaten Leva about a were associates of the Family and week earlier and had been arrested close to Saul Kane. Because of for it after Leva reported the incident Scarfo’s close relationship with Kane, Scarfo had influence over them. lantic City as Scarfo. Lang and Fornaro were involved in drug trafficking with another asso- Bobby Lumio was placed in the position of secretary/ ciate of Scarfo’s, Richard “Dickie” treasurer of Local 54: Wells. Scarfo and Leonetti knew that Lang and Fornaro were involved in drug trafficking from discussions they In approximately 1978 or 1979, had with Saul Kane. Wells informed Scarfo and Local 54 president Frank Scarfo that he was going to get in- Gerace met to discuss who should volved in drug dealing because he hold certain positions at Local 54 to needed to do it to make a living. make certain that their control over Scarfo then told Wells that he would the union continued. Leonetti was have to keep his distance from Wells present at the meeting, which was one from then on. of the regular monthly meetings that Scarfo, Leonetti and Gerace began holding in 1978 to discuss Local 54 Employment at the My Way Lounge frequently matters.... Scarfo wanted Gerace to led to positions at Local 54 of the Bartenders and Hotel appoint Robert “Bobby” Lumio as Workers Union: the vice president, but Gerace thought that he should be the secretary-trea- surer. After talking it over, it was de- Roy Silbert and Robert “Bobby” cided that Lumio would be made sec- Lumio were employees of the My Way retary-treasurer. Lumio, who was al- Lounge who were chosen by Scarfo ready working at Local 54, was then for high-level positions with Local 54. appointed to that position. One reason why Scarfo knew that he could trust Lumio was because they had been involved in committing a Shortly thereafter, Lumio became a made member of murder together. In 1979, Salvatore La Cosa Nostra: “Chuckie” Merlino, Salvatore Testa, Lumio and Scarfo all took part in the murder of Michael “Coco” Cifelli. Soon after becoming the boss in May He was killed because he was selling of 1980, Philip Testa held a making drugs to the son of Frank Monte, a ceremony at the south Philadelphia member of the Family. The murder home of John Cappello, a captain in was approved by Angelo Bruno. the Family at the time, and inducted Cifelli was killed while he was talk- Lumio, Leonetti and seven others into ing on a telephone just inside the front La Cosa Nostra. Also inducted were door of a south Philadelphia bar, Salvatore “Chuckie” Merlino, known as Priori’s, at 10th and Wolf Lawrence “Yogi” Merlino, Salvatore Streets. Merlino and Testa were the “Salvie” Testa, Salvatore “Wayne” shooters and Scarfo drove the get- Grande, Frank Narducci, Jr., An- away car. Lumio set up Cifelli by thony “Blonde Babe” Pungitore, Sr., calling him on the telephone at the and Anthony Casella. bar and talking to him. This made it easier for Merlino and Testa to locate Cifelli to shoot him. Scarfo also Scarfo’s control of Local 54 was not interrupted knew that he could trust Lumio at Lo- in 1984 when Frank Gerace was ordered by the state cal 54 because they had been friends to relinquish the presidency because of ties to organized since the time that they both lived in crime: Philadelphia many years earlier and because Lumio worked at the My Way In approximately 1984, the New Jer- Lounge without causing the owners sey Casino Control Commission or- or Scarfo any problems. Lumio lived dered Frank Gerace to resign as in the same apartment building in At- president of Local 54 because of his relationship with Scarfo. After that owned three liquor licenses in three different municipali- decision, Scarfo, Leonetti and ties, in addition to his ownership interest in the My Way Gerace met at the apartment of Lounge from August 1978 to September 1981. Scarfo’s mother to discuss the mat- Cornaglia owned Mother’s, a bar in Egg Harbor Town- ter. At the meeting, Gerace suggested ship (Atlantic County) from February 10, 1975, until that he remain at Local 54 as a con- 1978, when he sold the liquor license and business. sultant so that he and Scarfo could From December 1976 to June 1978, he owned and continue to control the union. Gerace operated the Bottom Line, a restaurant and bar on Pa- proposed that they make Roy Silbert cific Avenue in Atlantic City. Cornaglia owned the An- the president and control the union chorage Tavern in Somers Point (Cape May County) through him. At first, Scarfo didn’t from 1965 until he sold it in September 1993. like the idea because, even though Scarfo knew Silbert from the My Way Leonetti characterized Cornaglia as an associ- Lounge, he wasn’t certain that Silbert ate of the Scarfo Family and provided the following or- could be completely trusted. ganized crime profile: After the meeting with Gerace, Scarfo spoke to Saul Kane about Cornaglia was an associate of the Silbert. Kane then went to Silbert Family who was “with” Scarfo and and told him that if he agreed to do under his protection. Cornaglia and what Gerace told him to do and didn’t Scarfo were friends as well. interfere with Gerace’s control of the Cornaglia was a close friend of Saul union, he would be appointed as Kane’s. president. Kane also warned Silbert that he would be killed if he didn’t do as he was told. After meeting with According to Leonetti, “Cornaglia assisted Silbert, Kane informed Scarfo that Saul Kane in the collections for his loanshark, gam- Silbert agreed to the conditions. bling and shake-down businesses.”22 Cornaglia and Scarfo then approved the appoint- Kane were also involved in extorting money from a con- ment of Silbert as president of Local tractor in exchange for labor peace: 54. In the summer of 1986, Cornaglia The agreement reached between Scarfo and Gerace and Kane were planning to extort was implemented. Silbert became the president of Lo- money from a contractor involved on cal 54 in December 1984. Gerace continued his asso- a construction project to build a new ciation with the union as a paid consultant for non-ca- Longport-Somers Point Bridge and sino matters until 1988, when he became a business roadway. Kane set up a scheme to agent. He even retained the office that he had occupied collect a $1,000 a week from the con- as president. Both Gerace and Silbert were completely tractor in exchange for labor peace. ousted from the union in April 1991, when they resigned Cornaglia had known the contractor as part of the settlement in the federal civil RICO suit and introduced him to Kane. Before brought against Local 54 and its officials. Cornaglia made the introduction, he laid the foundation so that the con- tractor knew that Kane was going to demand money from him. MOTHER’S/BOTTOM LINE/ ANCHORAGE TAVERN21 When they were introduced, Kane told the contractor that he would Over the course of 28 years, Andrew Cornaglia

21The An- chorage Tavern22Cornaglia’s close association with Saul Kane and his involvement in Kane’s collection of street tax for Scarfo are detailed at pages 71 and 72ap- of pearsthis report. at pages 49 and 50 of the Commission’s make certain that the contractor had walked away from the situation. no problems with the Teamsters Union, but it would cost him $1,000 a week. The contractor agreed to the * * * * arrangement, but before Kane col- lected any money, he was arrested by the FBI and held on drug trafficking Leonetti’s recollection of Mother’s was brief: charges in September of 1986. Scarfo and Leonetti had the power During the mid to late 1970s, Andrew to control the Teamsters Union Cornaglia owned a bar, which was through associates of the Family that known as Mother’s, on the Longport- were Teamsters officials. Any union Somers Point Boulevard in Egg Har- problems that the contractor might bor Township, N.J. Leonetti social- have had would have been taken care ized there with friends a few times, of by contacting Jack Miller, who was but it wasn’t a regular stop. Mother’s the head of Teamsters Local 331 and was a biker hangout during some of an associate of the Family. Local 331 the years that it was open. covered the Atlantic City area. Frank Lentino, who was an associ- ate of the Family, was an official of However, he clearly recalled that Mother’s was Teamsters Local 158 in Philadelphia “torched”: until the early 1980s, but still had in- fluence over the Teamsters even af- ter he left. After leaving Local 158, Leonetti knew from conversations Lentino held positions with Local 54 that he had over the years with of the Bartenders and Hotel Workers Scarfo, Saul Kane and Cornaglia that Union in Atlantic City. Also, Joseph Cornaglia “torched” Mother’s. Cimino of Teamsters Local 107 in Leonetti believed that the fire took Philadelphia was an associate of the place in the late 1970s. Cornaglia Family. needed money for something and was hoping to collect the insurance Shortly after Kane was arrested and money from the fire. Leonetti did not held on the drug trafficking charges, remember if Cornaglia actually set Leonetti was contacted by Cornaglia the fire or if he had someone else start for some advice concerning the con- it. Cornaglia was never charged with tractor. Cornaglia told Leonetti that the arson. the contractor had reached out for him on several occasions to try and give the payments to Cornaglia, since * * * * Kane was in prison. Cornaglia was a little suspicious of the contractor Leonetti knew of Cornaglia’s ownership of the because he seemed too anxious to Bottom Line: make the payments and Cornaglia felt that the contractor might be set- ting him up. Leonetti told Cornaglia During the mid to late 1970s, Andrew that Cornaglia knew the contractor Cornaglia owned the Bottom Line, a and if he felt comfortable with col- bar and restaurant on Pacific Avenue lecting the payments to go ahead, but in Atlantic City. The Bottom Line if he felt that something was at all was located across the street from the wrong, to just drop it. After discuss- My Way Lounge. ing it more, Leonetti told Cornaglia not to collect the payments and they rest in tips. He told Leonetti that, one night, he made $1,000 in tips only. As an associate who was “with” Scarfo, Virgilio used to get big tips from Cornaglia allowed Scarfo to enjoy the food and drink at people that knew he was connected the Bottom Line free of charge and, concomitantly, en- to Scarfo. joyed a sweetheart contract with Local 54:

Virgilio never paid income tax on his earnings from the The Bottom Line was another loca- Bottom Line. His employment there exemplifies the di- tion where Scarfo used to eat and version of income tax revenue that typically occurs when drink for free. When Leonetti was organized crime members work at bars. with Scarfo, he never had to pay ei- ther. Scarfo and Leonetti used to eat and drink there once or twice a week. Leonetti disclosed that the Bottom Line was considered as the site for the murder of tailor Guiseppi Scarfo made sure that Cornaglia got Leva: a sweetheart union arrangement for the Bottom Line from Local 54 of the Scarfo and Leonetti considered mur- Bartenders and Hotel Workers Union. dering Guiseppi “Pepe” Leva inside Cornaglia also got to use Scarfo’s the Bottom Line when they were first name and reputation to impress or trying to decide who they were going intimidate people when he needed to, to use to kill Leva and where it would since he was under Scarfo’s protec- be done. They originally thought tion. about using the Bottom Line because they knew it would be no problem to get inside when it was closed, since Cornaglia’s Bottom Line provided another Nick Virgilio worked there and had a means of employment for Family members and associ- key. They decided against using the ates. Despite a prior conviction for murder in 1952 and Bottom Line because it had a large a plea of non vult to murder in July 1971, Nicholas “Nick window in the front of the building, the Blade” Virgilio was hired by Cornaglia at Scarfo’s which faced the street. They didn’t request. When ABC authorities discovered his employ- want to take the risk that someone ment in April 1977, they required his dismissal and im- might see the murder take place posed a fine against the licensee. According to Leonetti: through the window. Cornaglia did not know that Scarfo and Leonetti were considering this plan. At Scarfo’s request, Cornaglia gave Nicholas “Nick the Blade” Virgilio a job as a maitre’d at the Bottom Line. * * * * At the time, Virgilio was an associate of the Family. In June of 1982, Scarfo inducted Virgilio into La Cosa The Anchorage Tavern was owned and oper- Nostra. Virgilio worked at the Bot- ated by Cornaglia’s family from May 10, 1956. In 1965, tom Line until the New Jersey Alco- following the death of his father, Andrew Cornaglia be- holic Beverage Control authorities came the controlling shareholder of the corporate lic- forced him to give up the job because ensee, with his mother and sister also holding interests. of his criminal record. At the time, Cornaglia sold the license and premises in September Virgilio had two convictions for ho- 1993. Leonetti micide. While Virgilio was working at the Bot- knew Andrew Cornaglia to be the tom Line, he told Leonetti that he owner of the Anchorage Tavern in used to make at least $1,000 a week. Somers Point, N.J., from the time that He said that Cornaglia gave him they met in the mid-1970s until $100 a night and that he made the Leonetti was arrested and held on various state and federal charges in and Ferraro had been voicing the early 1987. same criticisms to Leonetti as far Cornaglia played a significant role in the acquit- back as the Leva murder, but tal of Scarfo, Leonetti and Lawrence Merlino in 1980 Leonetti never told Scarfo because he for the 1979 murder of Vincent Falcone, a Family asso- knew that Scarfo would be furious. ciate. Prior to becoming boss, Scarfo had targeted Falcone for murder because of his lack of respect. Along with others, including two other bar owners, Cornaglia An organized crime-owned bar provided perjured himself at the trial by fabricating an alibi for Scarfo with the safe atmosphere necessary to plan Scarfo, Leonetti and Merlino. Leonetti described the one of the details of Falcone’s murder and a second murder and related Scarfo’s reasons for ordering it: such bar was the site of a conversation following the murder. Joseph Salerno, one of the participants to the On , 1979, Leonetti shot killing, testified about the conversations at each bar at and killed an associate of the Family the 1988 federal RICO prosecution of Scarfo and his named Vincent Falcone. The “hit” cohorts. Virgilio’s,23 Philip Testa’s bar in Philadelphia, was done on Scarfo’s order, but it had was the site of Scarfo’s selection of the gun to be used not been sanctioned by the Family in the shooting: boss, Angelo Bruno. The murder took place in a Margate, N.J., beach Q. All right, where did that con- house apartment of Phillip “Moe” versation take place? McFillin, who was an associate of the A. It took place in a restaurant Family and “with” Scarfo. in Philadelphia, Virgilio’s Restaurant. Scarfo, Lawrence “Yogi” Merlino Q. And who was present during and Joseph “Joe” Salerno were that conversation? present when Leonetti shot Falcone. A. Myself, Philip Leonetti, Each helped in various ways, such as Lawrence Merlino, Chuck Merlino luring Falcone to the apartment, and Nick Scarfo. moving his body, discarding the gun and cleaning the apartment after the Q. And what was said during the murder. At the time, Merlino and conversation? Leonetti were proposed members and A. Nicky Scarfo asked me, he Salerno was an associate. says, “Do you have any guns, Joe,” so I says, “Yeah, I got some guns.” Scarfo wanted both Vincent Falcone And he asked me what kind they were and Alfredo Ferraro killed because and I described these guns to him that Scarfo learned from Salvatore I had. “Chuckie” Merlino that they were criticizing him. Merlino told Scarfo Q. What guns did you describe that Falcone and Ferraro felt that to Nicodemo Scarfo at that time? they should each get $500 a week for A. I had an old .32 handgun and being Scarfo’s associates and help- I had a 30 aught 6 rifle. ing him. They also told Merlino that when Leonetti was charged with the Q. And after you described those murder of Leva, Scarfo should have guns to Nicodemo Scarfo what if any- gotten Leonetti a better lawyer. thing else was said? Scarfo was extremely angry when he A. He said, “Somebody,” he learned what Falcone and Ferraro says, “bring them things around,” he had been saying to Merlino. Scarfo says, “I want to look at them.” had to back off his plan to kill Ferraro because of the heat brought on them Q. And what did you say? after they killed Falcone. Falcone A. I says, “Okay, I will; I’ll do

23Virgilio’s appears at pages 9 through 11 of this report. that.” about the possible tracing of the gun to him: Q. Now, at that time where were I called Scarf, Inc.’s office from Brig- those guns being kept? antine and I wanted to know where A. They were at my father’s Nicky was or Philip and I talked to house in Philadelphia. Philip’s mother and she said they were at Scanucchio’s [sic] Restaurant. So . . . I went to the restaurant and I was Q. And where did you take those worried about the gun, because the guns after you picked them up in gun was an old style gun and eventu- Philadelphia? ally this man’s body was going to be A. Back to Scarf, Incorporated, found with bullets in it. And I don’t on Georgia Avenue. know - didn’t know too much about guns, this and that and the other Q. And when you arrived back at thing, and I was afraid if my father Georgia Avenue was it day or night- read this thing in the paper, okay, he time? would get suspicious and I was wor- A. Nighttime. ried about it and I needed answers. Q. And who was there, if any- So I went down there and one? talked to Nicky about it. He said, A. Philip Leonetti, Nicky Scarfo, “Just don’t even ask me anything Lawrence Merlino and myself. about that.” Q. And what if anything was said about the guns or done with the Q. You talked to Nicky about guns? what? A. They were passed around the A. About the gun. room, they looked at them, they said they were nice, back and forth, and Q. Who was present during that Nicky says, “Well, what we’re gonna conversation? do is we’re going to stash these guns A. Philip Leonetti and Nicky for you.” Scarfo. Q. And did you leave the guns Q. And when Nicky Scarfo said, with Nicodemo Scarfo at that time? “Don’t ask me anything about it,” A. Yes. what happened after that? A. After that Nicky left, okay? . . . And I eventually got to talk to Philip by myself and he said, “You should Q. What gun did Phil Leonetti have never asked my uncle that, you use to shoot Vincent Falcone? got him worried.” A. It was the gun that I brought over to Scarf, Inc.’s, the .32 revolver; Q. What was Philip referring to he used that. when he said, “You never should have asked my uncle that”? What was he talking about? Scannichio’s24 in Atlantic City was the location where A. My trust anymore, he was Salerno attempted to speak to Scarfo after the murder

24Scannichio’s appears at pages 89 through 91 of this report. worried about my trust probably. alibi witness at their trial. He testi- fied that he stopped at the office of Q. And what did he mean that Scarf, Inc., in Atlantic City and you should not have asked about? wished Merlino and Leonetti a A. The gun, “You never should “Merry Christmas” at the time that have asked him about the gun.” they were actually involved in mur- dering Falcone in Margate. Scarfo, Q. Do you know who owns Leonetti and Merlino were acquitted Scanucchio’s [sic] Restaurant? at the trial. A. Yes, I do. Q. Who? In February 1991, when Cornaglia was subpoe- A. Vince Salsto [sic]. naed before the Commission regarding his ownership of bars and involvement in organized crime, he displayed Scarfo, Leonetti and Merlino were indicted for an utter lack of recall about the Falcone homicide: Falcone’s murder in January 1980. At a meeting at the Anchorage Tavern, they crafted an alibi defense that won them at the trial in October of that year: Q. And in connection with [the Falcone murder], charges were brought against Scarfo, Leonetti and About a week after the Falcone kill- Merlino. Do you recall that? ing, Joe Salerno decided to cooper- A. Yeah, but I blacked out that ate with the Atlantic County whole situation, ma’am. That was an Prosecutor’s Office. Scarfo, Leonetti incident that I don’t even think about and Merlino were then arrested and any longer. charged with the murder. They made bail about two weeks after their ar- Q. If I can just delve into it a little rests. From that point until their trial bit. At that time you testified at in September of 1980, they worked Scarfo’s trial for the murder of Vince on their defense. Shortly after get- Falcone. His co-defendants were ting out on bail, they contacted sev- Leonetti and Merlino. You appeared eral Family associates and friends to as an alibi witness. Do you recall provide false alibis for them. Scarfo that? lead the effort. A. I recall that, yeah, vaguely. Andrew Cornaglia was one of the as- Q. Did you give an alibi for sociates of the Family who agreed to Scarfo as well as Leonetti, Merlino give a fake alibi. Scarfo, Leonetti, or just Scarfo? Merlino and Saul Kane met with A. Ma’am, I don’t remember any Cornaglia at the Anchorage Tavern, of that incident. I blacked that out not long after making bail, to ask him of my mind. if he would be an alibi witness. Cornaglia didn’t balk at doing that. Q. Since then? While they were at his bar, they came A. Yes. I don’t recall any of that up with a bogus story that Cornaglia - those statements. could testify to. They didn’t actually tell Cornaglia that they were involved Q. At the time you testified at the in Falcone’s murder, but Leonetti in- trial, did you testify truthfully? dicated that it had to be obvious to A. I don’t recall anything about Cornaglia that they were, since they that situation, Miss. asked him to lie about their where- abouts at the time of the murder. Q. Who asked you to give them an alibi? Cornaglia gave an alibi statement to A. No one asked me to do any- the defense and also testified as an thing. If I recall, I mean - I just don’t recall that. That’s 13, 14 years ago. tigator with statements that they saw Scarfo, Leonetti and Merlino at the Q. Were you rewarded in any way diner later in the afternoon than they for having given them an alibi? actually did. Scarfo, Leonetti and A. Ma’am, I don’t - I wasn’t re- Merlino then had an alibi for part of warded by anybody at any given time the time that they were involved in in my whole life. committing the murder. DiNatale and [his friend] also testified at the trial and lied about the time that they saw According to Leonetti, Cornaglia was not the them at the diner. Everyone provided only individual to provide Scarfo, Leonetti and Merlino the false statements and testimony with a phony alibi: willingly when they were asked. ...Scarfo also asked for help from bar A private investigator, who was hired owners besides Andrew Cornaglia. by Bobby Simone, took the false Scarfo got James “Jimmy the Brute” statements at the Silly Gator Bar in DiNatale,...a couple of DiNatale’s Hammonton, N.J. The bar was owned employees [and another individual] by [DiNatale’s friend]. Scarfo, to provide false alibis for them. Leonetti and Merlino were present DiNatale was an associate of the when the statements were given. Family and [the other individual] was Simone represented Merlino and a good friend of his. DiNatale owned Harold Garber represented Scarfo in a couple of bars and [his friend] the Falcone homicide trial. Both at- owned one bar in the Atlantic County torneys were associates of the Fam- area.... ily. Neither the attorneys nor the pri- vate investigator knew that Scarfo, A few hours before they killed Leonetti and Merlino had arranged Falcone, Scarfo, Leonetti and for DiNatale, [his friend] and the Merlino ate lunch at the Country others to lie in their statements and Squire Diner, which was located on when testifying. the Cardiff Traffic Circle in Egg Har- bor Township, N.J. While there, they saw and spoke with DiNatale, [his In discussing DiNatale, Leonetti unmasked friends and] a few of his workers.... Scarfo’s scheme to channel his money from illicit After leaving the diner, Scarfo, activities into legitimate areas: Leonetti and Merlino went back to the office of Scarf, Inc., in Atlantic City and prepared to murder Falcone. In the very late 1970s and early 1980s, Scarfo was planning on pur- Shortly after they were released on chasing many of the businesses and bail, Scarfo and Leonetti went to see properties that DiNatale owned. DiNatale at his construction supply Scarfo wanted to invest the money company in Egg Harbor Township. that he and Leonetti were making Merlino may have gone with them from their illegal activities into legiti- also. They asked DiNatale to lie mate areas. At the same time, about the time that he actually saw DiNatale was getting old and wanted them at the Country Squire Diner in to sell off his assets. Scarfo handled order to give them an alibi for the time almost all of the money that Leonetti frame of the Falcone murder. They made from their illegal activities. also asked DiNatale to arrange for They were going to purchase [his friend] and the workers who saw DiNatale’s businesses and properties them at the diner to do the same. in the name of their concrete com- DiNatale agreed. DiNatale, at least pany, Scarf, Inc. Scarfo and Leonetti one of his workers and [his friend] liked dealing with DiNatale because then provided a defense team inves- he knew their background and was willing to accept cash without ask- members and associates of the Gambino Family and Si- ing any questions. Among the things cilian relocated to the southern New Jersey-Phila- that Scarfo and Leonetti planned to delphia area. At the time, boss Angelo Bruno extended buy from DiNatale were his bars, a a warm welcome, although his apparent friendship an- fuel oil company, a vending business, gered his own members and associates and eventually apartment buildings, a construction contributed to his murder. Later, during Scarfo’s reign supply company and various other as boss, Gambino Family members and associates cre- properties. He also owned a car ated serious problems that had to be addressed in sit- dealership, but they weren’t interested downs between the two families. Some of the prob- in that. Leonetti knew from his con- lems related to bars. Leonetti accompanied his uncle to versations with DiNatale and Scarfo sit-downs with Gambino boss Paul Castellano and with that DiNatale used the money he had Castellano’s successor, John Gotti. Among the busi- made from bootlegging during his nesses that the Gambinos established in southern New younger years to invest in legitimate Jersey were two restaurants with cocktail lounges. businesses and real estate in the At- lantic County area. Leonetti outlined the migration of the Gambino Family and to the south Jersey and Phila- Shortly after Scarfo became boss, he delphia area and their reception by Bruno: and Leonetti started to make a lot of money and Scarfo wanted to begin buying DiNatale’s assets. However, In the early part of the 1970s, sev- the only thing they ever purchased eral people associated with the was one piece of property because Gambino Family of La Cosa Nostra Scarfo went to federal prison only a and Mafia began moving year and a half after becoming boss. to the southern New Jersey and While Scarfo was in prison from Au- Philadelphia area. They were mostly gust of 1982 until January of 1984, Sicilian immigrants who had been liv- DiNatale died. Leonetti attended ing in New York. Among those who DiNatale’s wake with Lawrence moved into the area from New York Merlino and Harold Garber. The were Rosario “Sal” Gambino, property that Scarfo and Leonetti Emanuel “Matty” Gambino, bought was approximately four acres Giuseppe “Joe” Gambino, Dominick of land in Galloway Township, N.J., Adamita and Lenny Soccolich. John which they purchased in the name of Gambino was another person who Scarf, Inc. Although they paid was involved with this group, but DiNatale $40,000 for the property, it Leonetti believed that he continued was documented as though they had to live in New York. John, Joe and paid only $30,000. Leonetti gave Sal Gambino are brothers and dis- DiNatale $10,000 in cash. tant relatives of former Gambino Family boss Carlo Gambino. Joe and Sal Gambino lived in the Cherry Hill area after moving down from New York.25 GAMBINO FAMILY BARS Leonetti learned from Scarfo that John Gambino was a La Cosa Nostra One of the most compelling areas revealed by member in the Gambino Family. Leonetti was the interplay between the Scarfo Family Gambino and Leonetti were later in- and the Gambino Family, which has operated primarily troduced to each other as “amico in the New York area. In the early 1970s, a number of nostra” by Nicholas “Nick” Russo at

25In 1984, Sal Gambino was convicted on federal drug trafficking charges. In 1992, Matty Gambino was convicted on similar charges. In 1993, John and Joe Gambino pled guilty to similar charges. All cases involved trafficking in heroin. a sit-down at an Atlantic City restau- November 1976 until October 1982, when it was de- rant in approximately 1983. Russo stroyed by arson. Valentino’s, Inc., held the liquor li- was a member of the Gambino Fam- cense from July 1976 until June 1986, when it was sold. ily who lived in the Trenton, N.J., The corporation was formed in April 1976 by its sole area. The words “amico nostra” stockholder, Guiseppe “Joe” Gambino. Casanova Disco mean “friend of ours.” If a La Cosa operated during 1977 and 1978 at 2415 Pacific Av- Nostra member introduces two people enue in Atlantic City. Dominick Adamita held the li- as “amico nostra,” it lets each know cense in the name of 2415 Pacific Corporation, trading that the other is a La Cosa Nostra as Casanova’s, and owned the business and property member. The words are only used under the name of Casanova, Inc., which was formed in when introducing La Cosa Nostra March 1977. Leonetti reported: members to each other. Sal Gambino was a member of the Sicilian Mafia. Scarfo told Leonetti that sometime in When the Gambino brothers and their the 1970s, he was introduced to Sal associates began operating in the Gambino as “amico nostra” by southern New Jersey and Philadel- Angelo Bruno. Because of the way phia area, some of them also ran bars that Bruno introduced Sal Gambino and pizza parlors. One of the bars to Scarfo, Scarfo and Leonetti al- was Valentino’s in Cherry Hill. ways thought that he was a member Leonetti was not certain who held the of La Cosa Nostra. It wasn’t until liquor license or if there was any hid- January or February of 1986, when den ownership involved. However, it Scarfo and Leonetti first met John was his understanding from conver- Gotti after he became the boss of the sations with Scarfo and other mem- Gambino Family, that they found out bers and associates of the Family that that Sal Gambino wasn’t a member Joe and Sal Gambino owned of La Cosa Nostra. Gotti informed Valentino’s. It was common knowl- Scarfo and Leonetti that Gambino edge among the people that Leonetti was a member of the Sicilian Mafia, dealt with. not La Cosa Nostra. Valentino’s was open during the late Angelo Bruno was the boss of the 1970s and early 1980s. Scarfo told Family when the Gambino brothers Leonetti that Joe and Sal Gambino and their associates started moving were giving some of their profits from into the area of southern New Jersey Valentino’s to Angelo Bruno. They and Philadelphia. They moved to the gave Bruno “a piece” of Valentino’s area with Bruno’s blessing, but it out of respect. worked against him. Many members and associates in the Family felt that In the late 1970s and early 1980s, Bruno was showing the Gambinos there was a bar and restaurant, known more respect than his own people. as Casanova, on Pacific Avenue in Because of that, and the way that Atlantic City. It was Leonetti’s un- Bruno handled other problems, a split derstanding from conversations with occurred in the Family. The split Scarfo and other members and asso- played a part in Bruno’s murder in ciates of the Family that Joe and Sal 1980. Gambino and Dominick Adamita owned Casanova. Their ownership was common knowledge among the Leonetti identified Valentino’s Supper Club and people that Leonetti associated with. Casanova Disco as the two liquor-licensed establish- Leonetti was not sure who held the ments owned and operated by the Gambino Family in liquor license or if there was any hid- southern New Jersey. Valentino’s was open at 512-16 den ownership involved. Haddonfield Road in Cherry Hill (Camden County) from not. I don’t know exactly. I haven’t In August 1977, the Commission’s four-day been to Atlantic City in about a year, public hearing on organized crime in Atlantic City fea- approximately a year. Now, you tured one full day of testimony on the Gambino Family’s know, I might assume that they have hidden ownership of Casanova Disco. In its report26 on something to do with it, but I never the hearing, the Commission cited the restaurant and bar saw them there. I never went there as an example of “the unorthodox and mysterious jug- and I, I don’t know what they’re re- gling of finances that are commonplace in the purchase ally - you know, what they’ve got to or sale of many mob-targeted businesses such as bars, do with it. restaurants and pizza parlors.” Also noted was the ab- sence of any background investigation when the liquor Q. Did Giuseppe Gambino ever license was issued. The report included excerpts from mention to you that they were going the public hearing on the examination of boss Angelo to open a bar in Atlantic city? Bruno concerning his placement of cigarette vending A. I can’t recall. I can’t recall any machines in both Casanova and Valentino’s and his meet- conversation like that. ing with Gambino Family boss Paul Castellano at Valentino’s. After acknowledging that he knew the Q. Do you have a vending ma- Gambino brothers, Bruno was asked: chine in their location, in a location in Atlantic City? Q. Do you know them to be the A. Yes. owners of Valentino’s Restaurant in Cherry Hill? Q. What is the location that A. I don’t know them to be the we’re speaking of? owners. I know they’re there. A. Well, I think we’re talking Whether they own it, whether they about Casanova. Aren’t you? rent it, what their - I know they’re there. They seem to have some au- Q. Casanova. thority there. But I don’t know whether they own it because I never . . . saw any documents. I don’t know. Q. Did Carlo Gambino introduce you to Paul Castellano? Q. Did you discuss with them A. Yes. putting in one, a vending machine in their location, Valentino’s? Q. Do you recall when he intro- A. Probably did, yes. duced you to Paul Castellano? A. No. Q. Do you have that location, Valentino’s Restaurant in Cherry Hill? Q. Is it more than ten years ago? A. Yes. Did you hear the question, Mr. Bruno? Q. Do you have a location of A. Yes. I don’t remember if it was their’s [sic] in Atlantic City, also? before I went to Yardville or after A. Yes. Yardville. I don’t remember. Q. Do you have a vending ma- Q. Have you met Mr. Castellano chine in another location of their’s in the past six months? [sic] in Atlantic City? A. In the past six months. Well, A. Right. You see, the same an- I think in that vicinity I did meet him. swer there. Oh, I’m sorry. Same an- swer there. I don’t know what they Q. Would it be approximately own. I don’t know if they own it or April or May of 1977?

26Ninth Annual Report of the Commission. A. It could be, yes. you were going to go in? Q. Where did you meet him? A. I don’t recall it, but I don’t A. I met him at Valentino’s Res- know what his intentions are. I have taurant. a pretty good feeling about what my intentions are with Atlantic City. Q. In Cherry Hill? Would you want me to tell you that? A. Yes. Q. What are your intentions with Q. That is the Gambinos’ restau- Atlantic City, Mr. Bruno? rant that we were referring to before? A. Stay away from it. That’s my A. That’s the restaurant. intentions. Q. Did you have dinner with him Q. Were the Gambino brothers there? present when you talked to Mr. A. Yes. Castellano, at the same table? A. Well, it’s only natural they Q. In Valentino’s? would come, they would go away. A. Yes. Not - I had no appoint- They take care of other customers. ment to have dinner with him. You know, I don’t remember exactly what. Q. But you did have dinner with him? Q. They may have sat down and A. I had dinner with him, yes. chatted with you? A. It’s possible. Q. What did you discuss at that time? A. General conversation. I don’t * * * * remember. Q. Did you discuss Atlantic In 1983, an incident occurred at Sy Hoeflich’s City? Deptford Tavern that became a topic at a meeting and A. I don’t remember. He may two separate sit-downs between the Scarfo Family and have asked me what I thought of At- the Gambino Family. It involved the assault, at gun- lantic City. General conversation. point, of Hoeflich’s bouncers by Sal Gambino and his I have nothing to do with cohorts. The episode was but one of many problems Paul Castellano in anything in Atlan- caused by brothers Sal and Joe Gambino and their as- tic City or any business anywhere. sociates. Leonetti recounted: This way you got the whole answer. Q. Your answer is you do not During the years that Scarfo was the conduct any business - boss of the Family, he had problems A. No. with the Gambino brothers and their associates on a few occasions and Q. - with Mr. Castellano? Scarfo was forced to complain about A. No business of any kind. them a couple of times to the boss of the Gambino Family in New York. Q. Did you discuss in Valentino’s Also, Scarfo did not like the involve- doing business separately in Atlan- ment of the Gambino brothers in drug tic City? trafficking because it was against the A. I don’t know what you mean rules of La Cosa Nostra. When by “separately.” Scarfo and Leonetti heard that they were involved in drugs, they con- Q. Well, did he tell you what firmed it by talking to Joseph “Joe” business he was going to go in, per- Farinella and Nicholas “Nick” Russo, haps, and you tell him what business who were two Gambino Family mem- bers from the Trenton, N.J., area. Scarfo Family had a sit-down with the Gambino Family at a house in A few months before Scarfo was re- Staten Island. Scarfo had instructed leased from federal prison in Janu- Leonetti to make the arrangements ary of 1984, Tyrone DeNittis told for a sit-down, which Leonetti did Leonetti about a disturbance that through Joseph “Joe” Farinella. The occurred at the Deptford Tavern in- main purpose of the meeting was to volving Rosario “Sal” Gambino. settle a “beef” involving money be- DeNittis informed Leonetti about the tween a member of the Gambino incident a month or so after it hap- Family from north Jersey, named pened. Right after learning about it, Mike Mandaglio, and a member of Leonetti went to see Sy Hoeflich at the Scarfo Family from Hazleton, the Deptford Tavern to discuss the Pennsylvania, named Jack Parisi. La matter. Hoeflich explained that Sal Cosa Nostra members from the Gambino and a few of his associates Scarfo Family who attended the sit- entered the Deptford Tavern just af- down were Scarfo, Leonetti, ter it closed for business one night, Leonetti’s great uncle, Nicholas beat up a couple of Hoeflich’s bounc- “Nicky Buck” Piccolo, Lawrence ers and caused some damage. “Yogi” Merlino, Ralph “Blackie” Hoeflich said that Sal Gambino Napoli, Santo “Big Santo” Idone and jumped up on the bar or a table with Joseph “Joe” Scalleat. La Cosa a handgun in each hand and ordered Nostra members from the Gambino Hoeflich’s bouncers to line up as his Family who attended were Paul people beat them. Gambino said that Castellano, Aniello “Neil” the beatings were in retaliation for Dellacroce, Frank DeCicco, the beating given by some of Salvatore “Sammy the Bull” Hoeflich’s bouncers to one of Gravano, Thomas “Tommy” Bilotti, Gambino’s relatives or friends at the Mike Mandaglio, Nicholas “Nick” Deptford Tavern. Hoeflich was Russo and Joe Farinella. At the time scared by the incident and didn’t want of the meeting, Castellano was the to tell Leonetti about it right away boss of the Gambino Family and because he thought it would lead to Dellacroce was the underboss. more trouble at the Deptford Tavern or his other bar in Bellmawr, the After the situation over the money Coral Reef. Because Scarfo was be- dispute was taken care of, Scarfo ing released soon from prison, took Castellano aside to discuss the Leonetti didn’t do anything about the problem involving Sal Gambino’s matter right away and waited until actions at the Deptford Tavern.... Scarfo got home to discuss it with Although Leonetti was not part of the him. Leonetti knew that a sit-down conversation, Scarfo told him about between the Scarfo Family and the it later. Scarfo stated that Castellano Gambino Family would be required apologized for his people’s behavior to straighten the matter out. When and said that he would straighten Scarfo got out of prison, Leonetti told them out. him about the problem and Scarfo was very upset that Hoeflich, who was under Scarfo’s protection, was treated In early 1986, Scarfo and Leonetti paid their in that manner. respects to John Gotti as the new boss of the Gambino Family. In their initial meeting, Scarfo apprised Gotti of the problems caused by the Gambino brothers in The incident so infuriated Scarfo that he raised his area and specifically cited the beatings at the Deptford it at a sit-down that was held shortly thereafter: Tavern: In approximately December of 1985, In the spring or summer of 1984, the John Gotti, a member of the Gambino Family, had Paul meeting with Gotti, another problem Castellano killed and then took over occurred with the Gambino group as boss. A short time later, Gambino from the southern New Jersey and member Salvatore “Sammy the Bull” Philadelphia area. It involved Gravano travelled to Atlantic City to Emanuel “Matty” Gambino, who meet with Scarfo and Leonetti. They was friendly with John, Joe and Sal met Gravano at a bar, known as Gambino. Matty Gambino, who Angelo’s Fairmount Tavern, on lived in the southern New Jersey area, Fairmount and Mississippi Avenues. was somehow related to the Gambino Gravano told Scarfo and Leonetti brothers. He and Philip Narducci had that Gotti, as the new boss of the an argument over a woman at a Gambino Family, would like to meet Cherry Hill bar, known as Franchin’s. them. Scarfo told Gravano that he Gambino made threatening remarks would also like to meet Gotti and that and pulled a gun on Narducci. he would make contact with Joe Narducci was a La Cosa Nostra Farinella to schedule a meeting. member in the Scarfo Family and Scarfo and Leonetti then contacted Gambino was an associate in the Farinella in Trenton shortly after- Gambino Family. After the incident ward and made arrangements to meet took place, Narducci went to see with Gotti. Leonetti in Atlantic City at the office of Scarf, Inc., to tell him what had A month or so after Gotti became happened. They took a walk outside boss, Scarfo and Leonetti met him for while Narducci, who was accountable the first time. The meeting took place to Leonetti at the time, explained the in approximately January or Febru- situation. When Leonetti told Scarfo ary of 1986 at a town house in Staten about the incident, Scarfo was furi- Island that was owned by a brother- ous. in-law of Gravano’s. Other members of the Gambino Family who were at Around March of 1986, Scarfo and the meeting were Gravano, Frank Leonetti again met Gotti at the Staten DeCicco, Joseph “Joe” Gallo, Island town house of Salvatore Angelo Ruggiero, Joe Farinella and “Sammy The Bull” Gravano’s Joseph “Joe Butch” Corrao. Scarfo brother-in-law. Gotti had Joe and Leonetti were the only members Farinella contact Scarfo and Leonetti of the Scarfo Family who went to the to arrange a second meeting because meeting. One of the areas discussed Gotti wanted to further discuss the were the problems that the Scarfo problems with the Gambino brothers Family was having with the and their associates. Scarfo and Gambino brothers and their associ- Leonetti were the only members from ates, including the incident with Sal the Scarfo Family who attended the Gambino at the Deptford Tavern. sit-down. The Gambino Family mem- Gotti said that he was sorry that the bers that attended the first meeting incidents occurred. with Gotti were the same members who were present for the second meet- ing. Shortly after Scarfo’s and Gotti’s first meet- ing, a sit-down was convened when a Gambino Family associate brandished a gun and threatened a Scarfo The meeting resolved the issue to Scarfo’s Family member in a fight over a woman at a Cherry satisfaction: Hill bar. Leonetti narrated the facts that prompted the sit-down over the persistent problems with the Gambinos: Scarfo and Leonetti explained to Gotti what Matty Gambino had done to Narducci. Scarfo then told Gotti Within a month or two of the first that he was so angry that he wanted Matty Gambino killed. The incidents Scannichio’s soon after it opened. regarding Sal Gambino’s actions at the Deptford Tavern...[was] also Sausto gave Scarfo the required tribute, although brought up again. Scarfo told Gotti he was excused from making weekly monetary pay- that he was tired of all the problems ments, and received the related benefits: caused by the Gambino brothers and their associates. Gotti apologized for From the time that Scannichio’s the problems and asked Scarfo to give opened in approximately 1979 until him a little more time to take care of around 1982, Scarfo and Leonetti the situation. Gotti indicated that usually ate and drank there a couple since he had only been boss of the of times a week. Scarfo and Leonetti, Gambino Family for a few months, as well as others who happened to be he needed time to get things in order. with them, never had to pay for the Gotti said that if he couldn’t food and drinks. Scarfo and Leonetti straighten out the situation, then he were never even given a check. It was would have Matty Gambino killed. obvious to Leonetti that Sausto told After the meeting with Gotti, the Portock and a manager, named John Scarfo Family never had any more Varalli, not to charge them. Varalli problems with the Gambino group was in charge of running Scannichio’s from the southern New Jersey and on most of the nights that Scarfo and Philadelphia area. Leonetti were there, but there were many other times when Sausto or Portock were there. In the weeks before the trial in Atlan- SCANNICHIO’S tic County for the Vincent Falcone murder, Scarfo, Leonetti, Lawrence Scannichio’s opened in Atlantic City in June Merlino and members of their de- 1978. The liquor license was held by Boardwalk-Cali- fense team ate and drank for free at fornia Corp., which was wholly owned by James Scannichio’s on several nights. Dur- Portock. Leonetti disclosed that Portock had a hidden ing the actual trial in September and partner in the business — an associate of the Scarfo October of 1980, all of them went Family: there almost every night and ate and drank for free. The defense team in- Scannichio’s was a restaurant and bar cluded three attorneys and an inves- owned by Vince Sausto, an associate tigator. of the Family who was “with” Scarfo, and Jimmy Portock. It was located The free food and drinks at on South California Avenue, near the Scannichio’s was tribute that Sausto Boardwalk, in Atlantic City. gave to Scarfo because of their Scannichio’s opened in approximately friendship and the respect that Sausto 1979 and was still open for business had for Scarfo’s position. Scarfo and when Leonetti was arrested and held Leonetti had been friendly with on several state and federal charges Sausto for many years. In return for in early 1987. the tribute, Sausto was under Scarfo’s protection and could use Scarfo’s Although Leonetti did not remember power and reputation. He received whose name was on the liquor license, certain benefits from Scarfo, includ- he recalled Sausto telling him and ing protection from Local 54 of the Scarfo that Sausto and Portock were Bartenders and Hotel Workers Union. partners in the business. Sausto also Through Frank Gerace, Scarfo ar- told them the percentage of the busi- ranged for the union to go easy on ness that each owned, but Leonetti Scannichio’s. It either received a did not now recall the percentages. sweetheart deal with Local 54 or may The conversation took place at not have been unionized at all. Also, working as a manager for Philip Scarfo, Leonetti and some of their Testa at Testa’s Philadelphia bar and relatives gave their insurance busi- restaurant, which was first known as ness to Sausto, who owned an insur- the Bank Street Restaurant and later ance business in the Chelsea section as Virgilio’s. Scarfo and Leonetti of Atlantic City. Scarfo and Leonetti knew Varalli from going to Testa’s res- also steered a lot of insurance busi- taurant to meet with Testa and other ness from their friends and associates members and associates of the Fam- to Sausto. ily. One day in approximately 1979, when Scarfo and Leonetti were at Sausto knew Philip Testa and was Virgilio’s, Testa asked Scarfo if he friendly with his son, Salvatore Testa. could get Varalli a job in an Atlantic Scarfo sent Salvatore Testa to Sausto City restaurant because he wanted to when he needed insurance. Philip move to the shore. Varalli had asked and Salvatore Testa got to know Testa to make the request. Scarfo Sausto through Scarfo and Leonetti. told Testa that he would arrange for a job at Sausto’s restaurant. After In approximately 1981 or 1982, speaking with Testa, Scarfo called Scarfo talked to Sausto about receiv- Varalli over to discuss the matter and ing a regular tribute payment or a told him that he would get him a job “piece” of the profits from at a restaurant that a friend of his Scannichio’s. Scarfo had mentioned owned in Atlantic City.... it to Leonetti on a few occasions be- fore discussing it with Sausto. Shortly after talking to Varalli, Scarfo Leonetti did not know exactly what and Leonetti went to see Sausto about Sausto told Scarfo about the tribute giving Varalli a job at Scannichio’s. payments, but thought that Sausto Scarfo told Sausto that Varalli was a said he just didn’t have the money to good manager and that he was work- make such payments. Scarfo ing at Virgilio’s for Philip Testa, who wouldn’t have let Sausto get away Sausto knew. Scarfo said that Varalli with any other excuse. Scarfo never would be an asset to Sausto’s busi- got any tribute payments out of ness. Sausto agreed to hire Varalli as Sausto. a manager and made room for him by firing the manager who was al- ready working there. Scannichio’s provided Scarfo with another li- censed establishment for the dispensing of jobs. When Varalli moved to Atlantic City, Scarfo arranged for Sausto to employ an associate of he lived on South Florida Avenue in the Family and to hire a manager who had been work- an apartment located in a house ing at the Philadelphia bar owned by boss Philip Testa: owned by John “Johnny” Palumbo. Palumbo was an associate of the Family and a business partner of In 1981 or 1982, Scarfo spoke to Scarfo’s and Leonetti’s. Sausto and got Joseph “Joe” Ligambi a job as a bartender at Scannichio’s. He was an associate of In April 1991, the business and liquor license were the Family at the time, but was later sold to Varalli, who applied for transfer of the license inducted by Scarfo into La Cosa from Boardwalk-California Corp. to John Varalli & Nostra after taking part in the mur- Sons, Inc., in which he was sole officer and stockholder. der of Frank D’Alfonso in 1985. In September 1991, Varalli withdraw the application Ligambi was close with Lawrence when it became apparent that ABC concluded that Varalli Merlino.... had operated the business as an undisclosed owner for a number of years and used the business’ profits to ac- Scarfo also got a job for John Varalli quire the license and business. Thereafter, one of Varalli’s at Scannichio’s. Varalli had been sons replaced him as the sole corporate officer and stockholder. His application for transfer of the license When Scarfo, Leonetti and Lawrence was withdrawn because the license had statutorily lapsed. Merlino were arrested in December In January 1993, an application was filed with ABC for of 1979 for the murder of Vincent the transfer of another liquor license. In September Falcone and held in the Atlantic 1993, ABC denied the application on the ground that County Jail, they were able to make Varalli continued to be the true owner. That denial is bail about two weeks after their ar- presently being contested. The restaurant still operates, rests with the help of a few people. but without a liquor license. One of the individuals who helped them was Materio, who put up his Ventnor house as security for their bail. Toro Construction, which was owned by Robert “Toro” Locicero, LACOSTA PACKAGE GOODS AND put up $45,000 towards their bail. COCKTAIL LOUNGE Frank Gerace also contributed a large amount of money, but did it Leonetti identified Frank Materio, an associate through his mother, Lillian Gerace, of the Scarfo Family, as the undisclosed owner of to put some distance between him- LaCosta Package Goods and Cocktail Lounge in Sea self and Scarfo, Leonetti and Merlino. Isle City (Cape May County) for a period of time: In 1979, at Scarfo’s direction, Materio became On a couple of occasions between an Executive Board member and business agent for Lo- approximately 1978 and 1982, Scarfo cal 54: and Leonetti met with Frank Materio at a bar and liquor store known as LaCosta in Sea Isle City. Materio was In about 1978 or 1979, Scarfo di- an associate of the Family who was rected Frank Gerace, the president “with” Scarfo. Materio told Scarfo of Local 54 of the Bartenders and and Leonetti that he had an owner- Hotel Workers Union, to make ship interest in the bar and liquor store Materio an officer of that union so business. Materio never indicated if that Scarfo would have more control he had any partners, whether he was over it. In approximately 1984, the on the liquor license or who owned New Jersey Casino Control Commis- the building that the bar and liquor sion forced Gerace and Materio out store were in. of Local 54 because of their relation- ship with Scarfo. The Casino Con- Materio had a bookmaking operation trol Commission didn’t want associ- in the Atlantic City area that turned ates of Scarfo’s and the Family’s in- its gambling action into a gambling volved with a union that represented business that Scarfo controlled. casino workers. Scarfo operated his gambling busi- ness from approximately the mid- 1960s until approximately 1970. Despite his forced resignation from Local 54 in 1984 on the ground that he was closely allied with Scarfo and other organized crime figures, Materio was permitted to In 1979, Materio obtained a Disqualification Removal acquire an ownership interest in Estelle Manor, a res- for a 1967 bookmaking conviction. taurant and bar that was located on Route 50 in Estelle Manor City (Atlantic County). He and five others were equal partners in the business and held the liquor license Leonetti named Materio as one of the individu- in the name of Magi, Inc., from February 1985 to May als who assisted in posting bail for him, Scarfo and 1986. Merlino following their arrests for Vincent Falcone’s murder: In declarations filed in the 1990 federal civil RICO suit against Local 54 and its officials, Leonetti and Lawrence D. Merlino, a Scarfo Family member who also cooperated with the federal government, disclosed didn’t deal with Kelly that much, other aspects of Materio’s relationship with Scarfo. Kelly was involved with members and Leonetti reported: associates of the Family who were friendly with Scarfo and Leonetti. Scarfo received money . . . from...sweetheart deals that were made through the union. Frank At about the time that Kelly was at Materio was involved in a mainte- T.K.’s, or shortly after he left, Phillip nance contract at Caesar’s Casino. “Moe” McFillin considered purchas- Materio received kickbacks from the ing T.K.’s, but never did. If he had, contract that Scarfo split with Scarfo and Leonetti would have got- Gerace. ten a “piece” of it because McFillin was an associate of the Family who was “with” Scarfo. During at least Merlino stated: one conversation with Leonetti, which took place at T.K.’s, McFillin expressed an interest in purchasing Frank Materio... periodically came to the bar. Scarf, Inc. to talk to Scarfo about union business or shaking down bars. In August 1985, at a dinner at the In March 1995, McFillin pled guilty to a federal rack- Lobster Loft, Materio approached eteering conspiracy charge stemming from his in- Scarfo to find out if Al Zurzolo of the volvement with Scarfo in a series of fraudulent real es- Coliseum Restaurant was “with” me. tate scams in south Jersey, including a $2.68 million con- I told Scarfo he was not and Scarfo struction loan for a North Wildwood condominium told Materio to do whatever he project. wanted to do with Zurzolo. I under- stood that Materio was shaking T.K’S was another bar that provided employ- Zurzolo down. ment for the Scarfo Family:

As part of the 1991 settlement agreement in the federal When Kelly ran T.K.’s, Lawrence civil RICO suit, Materio consented to a permanent bar Merlino got Kelly to hire Joseph from any direct or indirect involvement in Local 54. From Ligambi as a bartender. Merlino was January 1991 to March 1994, Materio worked as a a captain in the Family at the time bartender on a part-time basis at the Days Inn on Morris and Ligambi was a good friend of Avenue and the Boardwalk in Atlantic City. Materio Merlino’s and a Family associate. died in March 1995. Ligambi was later inducted as a La Cosa Nostra member into the Fam- ily. Because of Kelly’s contacts with the Scarfo Fam- T.K.’S PUB ily, he was able to affect Local 54’s involvement with his bar: From April 1977 to July 1984, the bar at 3426 Atlantic Avenue in Atlantic City was known as T.K.’s In approximately 1983, Frank Pub. Toward the end of that period, Frank Kelly was Lentino told Leonetti that Kelly had the manager. Leonetti knew both the bar and Kelly: asked him to keep Local 54 of the Bartenders and Hotel Workers Union from unionizing T.K.’s, or at least to In approximately 1983 and 1984, keep union benefit contributions low. Frank Kelly ran T.K.’s, which was a Lentino, who was an associate of the bar on Atlantic Avenue in Atlantic Family, was then an official of Local City. Although Scarfo and Leonetti 54. Scarfo had approved the hiring of Lentino. time, Martin Casella was in the same At the time that Lentino contacted prison. Between January and ap- Leonetti about Kelly, Leonetti was proximately March of 1989, Leonetti helping to run the Family because was housed in the same unit at Scarfo was in prison. Leonetti gave Ottisville as Bobby Manna, Marty Lentino his approval either to keep Casella and Bocci DeSciscio. Manna Local 54 out of T.K.’s or to limit its was the consigliere of the Genovese involvement. Leonetti learned later Family and Casella and DeSciscio from Lentino that he had helped were associates of the Genovese Kelly with his union problem. Family who were very close with Leonetti didn’t know whether Lentino Manna. Joe Massino, who was the kept Local 54 out of T.K.’s all to- boss of the Bonanno Family of La gether or if he arranged to keep the Cosa Nostra, was also in the same benefit payments low. unit. Manna, Casella and DeSciscio left Ottisville in approximately March of 1989 to go on trial for a RICO case Following Kelly’s departure as manager, ABC that the federal government had Form E-141-A listed Gary Tavella as the manager of against the Genovese Family. While the bar, which was renamed Club Atlantic, from July Casella and Leonetti were in prison, 1984 to August 1985. Tavella is an associate and gam- they conversed regularly and Casella bling operative of the Family. During an ABC inspec- told Leonetti that he owned a restau- tion of the bar in July 1985, two handguns were discov- rant in northern New Jersey. Casella ered in the office safe and Tavella was charged with their said that the FBI had bugged the res- possession. In December 1985, Tavella pled guilty to taurant and that some of the record- one count of unlawful possession of a handgun. In 1994, ings that were made from the bug he was included in the federal RICO indictment of the were going to be used as evidence in Stanfa Family. the RICO case.

CASELLA’S RESTAURANT27 MEDFORD VILLAGE RESORT AND COUNTRY CLUB28 One of the organized crime bars highlighted in the Commission’s 1992 public hearing and report was In 1992, the Commission identified the Medford Casella’s Restaurant in Hoboken (Hudson County). Village Resort and Country Club in Medford Township Martin “Motts” Casella held a 90% interest in the liquor (Burlington County) as a location utilized by the Scarfo license from August 1962 to October 1990. Despite Family to further its illegal gambling activities. Leonetti Casella’s close association with Genovese Family had the following to say about Scarfo Family member consigliere Louis “Bobby” Manna, who used the estab- Salvatore “Shotsie” Sparacio and associate Blase lishment as his headquarters, Casella’s 1988 indictment Salvatore, who were linked by the Commission to the on federal RICO charges, his subsequent 1989 convic- gambling activities at the country club: tion, and his incarceration on an 80-year sentence, the municipality continued to renew the liquor license every year. Leonetti became acquainted with Casella while Blase Salvatore was an associate of they were both incarcerated in federal prison: the Family who lived and operated a pizza parlor in the Cherry Hill area. Salvatore and a member of the Fam- Leonetti was in federal prison at ily, Salvatore “Shotsie” Sparacio, Ottisville, N.Y., from November of were cousins. When Leonetti became 1988 until May of 1989. During that a captain in May or June of 1981,

27Casella’s Restau- 28Medford rant ap- Village pears at Resort and pages 4 Country through 8 Club ap- of the pears at Sparacio was one of the soldiers in Scarfo and Leonetti were incarcer- the Family that was put under ated. Leonetti knew that Piccolo Leonetti. Sparacio continued to re- oversaw the day-to-day activities of port to Leonetti when Leonetti was the Family from the time that Leonetti elevated to underboss in January of was incarcerated in April of 1987 until 1986. From Leonetti’s dealings with Leonetti began cooperating in June Sparacio over the years, he knew that of 1989. When anything major came Blase Salvatore worked as a book- up, Piccolo always sent messages to maker in a sports betting business Scarfo in prison to ask what he operated by Sparacio in the southern wanted done. Scarfo selected Piccolo New Jersey and Philadelphia area. to run the Family because he was a When Leonetti became Sparacio’s blood relative. Scarfo felt that Pic- captain, he gave Leonetti certain tele- colo would be loyal to him and that phone numbers to reach him and one he would be able to keep control of of the numbers was for Blase the Family through Piccolo. Salvatore’s pizza parlor. Piccolo ran the Family until John Stanfa became the boss The Commission also revealed at its 1992 pub- in early 1991. In 1994, Piccolo was named as a defen- lic hearing that Anthony “Tony Buck” Piccolo held an dant in the federal RICO indictment of the Stanfa Fam- ownership interest in the club from January 7, 1974, to ily. Later that year, he was convicted in state court of December 4, 1985. At the hearing, Piccolo invoked his conspiracy to commit racketeering and being a leader Fifth Amendment privilege against self-incrimination in of organized crime and, in January 1995, was sentenced response to questioning about his ownership interest. It to 10 years. was Anthony Piccolo to whom Scarfo turned in 1987 to run the Family when he and Leonetti were facing sub- The Commission notes that in August 1994, the stantial prison time: Director of the Division of Alcoholic Beverage Control upheld the decision of the administrative law judge to revoke the club license of Medford Village Resort and When two members of the Family, Country Club. Although the ruling did not impose a Thomas “Tommy Del” DelGiorno two-year restriction against the premises from having and Nicholas “Nicky Crow” another liquor license, the individuals who held the re- Caramandi, decided to become gov- voked license were so barred. The opinion and findings ernment witnesses in approximately of the Director were bottomed extensively on testimony November of 1986, Anthony “Tony taken before the Commission during its investigation. Buck” Piccolo began to play an im- portant role in the Family. Scarfo and Leonetti realized that with every- thing that DelGiorno and Caramandi PHILADELPHIA BARS knew about their illegal activities, they would soon be going to jail and Leonetti discussed a series of bars in Philadel- Scarfo would need someone to run the phia that were owned by Bruno/Scarfo Family mem- Family. At the time, Scarfo was the bers or associates. The bars provided convenient and boss and Leonetti was the underboss. safe locations for celebrations, making ceremonies, the The next highest-ranking member plotting of murders and the luring of unsuspecting tar- was their consigliere, Nicholas Pic- gets to their deaths. The Buckeye Club, 9M Bar, colo, but he was old and sickly. Virgilio’s, Old Timers Tavern and Friendly Tavern were Shortly after DelGiorno and Philadelphia bars previously discussed in this report. Caramandi began cooperating, Scarfo made Anthony Piccolo the act- ing consigliere. Scarfo then informed the captains of the Family that Pic- colo was the acting consigliere and would be running the Family after LaCucina trol. For example, Joseph “Joey” Merlino, who was the son of underboss Salvatore Merlino, caused Family associate Salvatore “Sam The Barber” disturbances at LaCucina on a couple LaRussa operated La Dolce Vita, a liquor-licensed so- of occasions. After learning that, cial club at 117-123 South Street, from at least 1980 Scarfo made sure that Merlino was until February 1984, when he remodeled the premises, reprimanded and brought under con- obtained a retail liquor license and reopened the restau- trol. rant and bar as LaCucina Ristorante Extrordinaire. On July 30, 1987, following a series of federal and state In April of 1981, about a month af- arrests and indictments of Family members and associ- ter Scarfo became boss, he held his ates, including Scarfo, LaRussa transferred the liquor first La Cosa Nostra induction cer- license to his son. The restaurant and bar presently op- emony in the basement of LaCucina. erate under the name of the Back Porch, with an appli- At the time, LaRussa’s bar was cation pending to transfer the license to another of known as La Dolce Vita. At the cer- LaRussa’s sons. emony, Scarfo “made” Salvatore “Shotsie” Sparacio and Raymond LaCucina exemplified the role played by bars in “Long John” Martorano. Scarfo organized crime’s way of life. In exchange for a myriad also announced that Salvatore of benefits, LaRussa bestowed upon Scarfo various Merlino was the underboss, that forms of tribute. In addition, the restaurant and bar pro- Frank Monte was the consigliere and vided one of the locations for Scarfo’s meetings, cel- that Joseph “Chickie” Ciancaglini ebration parties and making ceremonies. Leonetti dis- and Ralph “Blackie” Napoli were el- closed: evated to captains. LaRussa’s house in Whitemarsh, LaCucina was a restaurant and bar Pennsylvania, was also used to hold located on South Street, near Second a making ceremony in November of Street, in Philadelphia. It was owned 1984. At the ceremony, Scarfo in- by an associate of the Family named ducted Nicholas “Nicky Crow” Salvatore “Sam The Barber” Caramandi, Charles “Charlie White” LaRussa, who was “with” Scarfo. Iannece and Joseph “Joey” Grande Prior to being known as LaCucina, into La Cosa Nostra. Also, Scarfo LaRussa called the restaurant La announced that Thomas “Tommy Dolce Vita. The Family used Del” DelGiorno and Francis “Faffy” LaCucina for several functions dur- Iannarella were acting captains and ing the years that Scarfo was the boss. that Pasquale “Patty Specs” Martirano replaced Ralph “Blackie” LaRussa paid for approximately Napoli as the captain in charge of the $50,000 in renovations for Scarfo’s Family’s northern New Jersey regime. Ft. Lauderdale, Florida, home. Also, A celebration party was held after the when the Family held gatherings at ceremony and LaRussa provided all LaCucina, LaRussa never charged the drinks and food for free. for the food and drinks that he served. That was LaRussa’s way of paying In March of 1986, Scarfo used tribute to Scarfo. LaRussa did so out LaRussa’s bar for a celebration party of friendship and respect for Scarfo. after holding a making ceremony on LaRussa was under Scarfo’s protec- the second floor of a pizza parlor, tion, which allowed him to use which was located about two blocks Scarfo’s name, reputation and power. away from LaCucina. The pizza par- LaRussa could also go to Scarfo for lor, which was owned by an associ- help with any problems that he had. ate of the Family, Phillip “Moe” Scarfo also helped LaRussa by keep- McFillin, was located on South Street ing Family members and associates, near Fourth Street. At the ceremony, who drank at LaCucina, under con- Scarfo “made” Nicholas “The Whip” Milano and Philip Narducci been held by Dominic’s son, Rocco Rugnetta. Leonetti and announced some changes in the was aware of the South Philly Grill when Dominic owned Family’s leadership positions. i t: Salvatore Merlino was “taken down” as the underboss and Lawrence The South Philly Grill, which was lo- Merlino was “taken down” as a cap- cated at 12th Street near Snyder Av- tain. Scarfo also announced that enue in South Philadelphia, was Leonetti was the new underboss and owned by Family member Dominic that Thomas DelGiorno and Francis Rugnetta. Leonetti first became Iannarella were full captains. aware of the South Philly Grill and of Rugnetta’s ownership of it in ap- In the late summer of 1986, Scarfo proximately the mid-1970s. Rugnetta held a meeting in the office of still owned it at the time that Leonetti LaCucina with Leonetti, Nicholas was arrested and held on various Piccolo, Francis Iannarella, Santo state and federal charges in April of Idone, Alfred Iezzi and several oth- 1987. ers. Scarfo announced that he had “taken down” DelGiorno from the Dominic Rugnetta was the nephew of position of captain and that anyone Joseph “Joe the Boss” Rugnetta, who used to report to DelGiorno who was the consigliere of the Fam- should now report to Iannarella. ily until his death in the 1970s. Dominic Rugnetta was in a crew In December of 1984 and in Decem- headed by Family Captain Santo ber of 1985, Scarfo held Christmas Idone. Other members of that crew parties for the Family at LaCucina. were Joseph Scalleat, Santo Romeo The parties were attended by almost and Nino Sciglitano.... In December all of the members of the Family and of 1984 and December 1985, Scarfo many associates of the Family. A few held Family Christmas parties at people from other families also at- LaCucina in Philadelphia. The par- tended. Michael Taccetta and ties were attended by many members Michael Perna of the Lucchese Fam- and associates of the Family. ily were at the 1984 Christmas party. Dominic Rugnetta was present at both parties. LaRussa attended the New Year’s party that Scarfo threw at his Ft. Lau- derdale, Florida, home a few days af- ter New Year’s Day in 1986. The Cous’ Little Italy party was attended by many members and associates of the Family. One restaurant and bar in south Philadelphia, at 901-903 South 11th Street, was in the hands of orga- nized crime for approximately 40 years. The bar un- South Philly Grill derwent three name changes. From the 1950s until 1977, it was known as Piccolo’s 500. The bar operated as Cous’ Little Italy from approximately 1977 until 1982, The South Philly Grill, which has operated since when it became Torano’s. Since September 23, 1993, 1935 at 2026-28 South 12th Street in south Philadel- the liquor license has been “in safe keeping,” phia, was passed from one Family member to a related Pennsylvania’s equivalent of a pocket license. Family member. Family consigliere Joseph “Joe the Boss” Rugnetta owned the liquor license and property The Bruno/Scarfo members and associates who from June 1935 to July 1969. At that time, the license have been involved in the bar’s ownership include Tho- and property were transferred to his nephew, Family mas “Tommy Del” DelGiorno, Frank “Frankie Flow- member Dominic Rugnetta. Since 1988, the license has ers” D’Alfonso, Frank Sindone, Joseph “Chickie” Ciancaglini, Frank Monte, Raymond “Long John” Martorano, Nicholas “Nicky Buck” Piccolo, Joseph “Joe Buck” Piccolo and Michael “Mike Buck” Piccolo. Typi- Leonetti revealed how Cous’ Little Italy was used to set cally, the license was placed in the names of wives, rela- up an associate to be killed. In 1981, Scarfo ordered tives or other fronts. At the Commission’s 1992 public the “hit” on John Calabrese, hearing, former Scarfo Family captain Thomas DelGiorno testified about his ownership of Cous’ Little Italy from approximately 1975 to 1982 and identified an associate of the Family at the his partners, all fellow mobsters. He explained how he time. Calabrese was also an associ- had financed the purchase of the bar and how Scarfo ate of the Family who was “with” had received a portion of the proceeds when he sold Anthony “Tony Bananas” Caponigro the business: until Caponigro was murdered in the spring of 1980. Caponigro was from northern Jersey and was the Q. What money did you use to consigliere of the Family when he was purchase Cous’ Little Italy? killed. A. It was money I had saved from my gambling business and Not long after Scarfo became the boss loanshark business. of the Family in March of 1981, he ordered a “hit” on Calabrese. One . . . reason was that he felt that Calabrese had tried to set him up to be mur- dered in the late 1970s when Scarfo, Q. Did he buy all three partners Testa and some others in the Family [DelGiorno, Joseph Ciancaglini and were not getting along with Angelo Frank Monte] out? Bruno. Calabrese approached Scarfo A. Yes, he did. at Scarf, Inc., out of the blue one day and gave him some line about open- Q. How much was paid? ing a building cleaning business in A. He paid 600,000. 300 he -- Atlantic City and wanting to bring 3,000 he gave me under the table and him in on it. Scarfo thought that was I took $300,000 mortgage back. very strange because he and Calabrese were never all that friendly. Q. Did Scarfo get a portion of Scarfo felt that Calabrese was just that? trying to get close to him for an op- A. Of the first 300,000 I took 150 portunity to kill him. Another reason and the other 150 was split up be- why Scarfo ordered Calabrese’s death tween Scarfo, Chuckie Merlino, Joe was because right after Philip Testa Ciancaglini and Monte. was murdered, Calabrese went to see Testa’s son, Salvatore Testa, and tried to shake him down. Calabrese told Leonetti knew the bar as Cous’ and outlined his Salvatore Testa that he found out that recollection of the bar’s history of mob ownership: Testa’s father had been killed by a motorcycle gang and that the gang wanted $250,000 or they would also DelGiorno purchased Cous’ from kill Salvatore Testa and others in the Leonetti’s great uncles, Nick, Joe and Family. Scarfo knew that was not true Mike Piccolo, in the late 1970s. When and figured that it was just an attempt they owned the bar, it was known as by Calabrese to shake down the Fam- Piccolo’s 500. They started operat- ily. ing the bar in the 1950s. Sometime in the early 1980s, DelGiorno sold Scarfo assigned Joseph “Chickie” Cous’ to Raymond “Long John” Ciancaglini to supervise the “hit” on Martorano, who changed the name Calabrese and approved the use of to Torano’s. Scarfo inducted DelGiorno, Francis “Faffy” Martorano into La Cosa Nostra in Iannarella and Pasquale “Pat the April of 1981. Cat” Spirito to be on the “hit” team. Ciancaglini was a member of the Elsmore Club Family who Scarfo had recently el- evated to the position of captain. DelGiorno, Iannarella and Spirito The Elsmore Club was a social club on the sec- were associates of the Family at the ond floor of 1801 East Passyunk Avenue. It was ac- time. They tried for several months quired by Scarfo Family members Thomas DelGiorno, to kill Calabrese, but didn’t have any Salvatore Testa and Joseph Pungitore in approximately luck. Then they came up with a plan 1982 or 1983. At the Commission’s 1992 public hear- to have Ciancaglini lure Calabrese to ing, DelGiorno admitted to his ownership and identified a meeting at Cous’. After the meet- his partners. According to DelGiorno, they sold the ing, Ciancaglini walked Calabrese business shortly after Testa’s murder in September 1984. past a little alleyway near Cous’, The liquor license became inactive in October 1992. where DelGiorno and Iannarella were laying for him. DelGiorno and Leonetti was familiar with the Elsmore Club. He Iannarella shot Calabrese as he revealed that when Scarfo went to war in 1982 against walked by with Ciancaglini and then a small, rebellious faction of the Family, the Elsmore Club they ran to a get-away car driven by provided a safe location to orchestrate one of the kill- Spirito. Calabrese was murdered in ings: the fall of 1981. A few months later in January of 1982, Scarfo inducted DelGiorno, Iannarella and Spirito The Elsmore Club was a private club into La Cosa Nostra. and bar at Passyunk and Moore Streets in south Philadelphia. It was owned by Salvatore Testa, Thomas Pushcart Saloon DelGiorno and Joseph Pungitore, who were members of the Family at the time. They owned the club for a In addition to owning Torano’s (formerly Cous’ couple of years in the early part of Little Italy), Scarfo Family member Raymond “Long the 1980s. In 1983, Leonetti and John” Martorano owned a second bar at 1156 South other members of the Family used the 9th Street, the Pushcart Saloon, from March 1981 to Elsmore Club on two occasions to July 1989. Martorano acquired the bar from another discuss plans to kill someone. Family member, Domenick “Mickey Diamond” DeVito, who used his girlfriend and sister as fronts on the license. In the spring of 1982, Scarfo gave an DeVito was killed on Scarfo’s order in February 1982. order to kill Harry Riccobene, who The Pushcart Saloon provided one of Scarfo’s meeting had been a member of the Family for places: many years, because Scarfo felt that Riccobene was not showing him enough respect as boss. Another rea- In the early 1980s, Raymond “Long son why Scarfo wanted Riccobene John” Martorano owned a bar killed was because he refused to share known as the Pushcart, which was the profits from his illegal activities located in the Italian Market on with Scarfo. Plus, Scarfo heard that Ninth Street in south Philadelphia. Riccobene was drug trafficking, During that time, Scarfo and Leonetti which was against La Cosa Nostra met with Martorano and others there. rules. Martorano was inducted into La Cosa Nostra by Scarfo in April of Because of the “hit” that Scarfo put 1981. out on Riccobene, a war developed between the Family and a small fac- tion led by Riccobene. Scarfo was in In March 1981, surveillances by various law enforce- jail for most of the war, which lasted ment agencies, including the Commission, placed Scarfo, about two years. Salvatore Testa Martorano, Frank D’Alfonso, Mario “Sonny” oversaw the efforts of the Family to Riccobene, Roy Stocker and Michael Forte in the bar. murder approximately ten people that made up the Riccobene group. Testa Hazleton area. Salvatore Merlino, had several young, aggressive Fam- Thomas DelGiorno, Lawrence ily members and associates that were Merlino and Eugene Milano were suited for that type of work. also present at the Elsmore Club, but Riccobene’s people killed Frank did not take part in the discussions. Monte, who was the Family’s Lawrence Merlino and Milano were consigliere. The Family then mur- also members of the Family. dered Riccobene’s brother, Robert “Bobby” Riccobene, and an associ- About a week after the first meeting, ate of theirs named Salvatore Testa and Leonetti again met with “Sammy” Tamburrino. There were Idone at the Elsmore Club. Idone told also several attempted murders on Testa and Leonetti that Scalleat found both sides. out that “Tommy Spats” had been liv- ing in Hazleton, but left. Idone said One of the Riccobene people that the that Scalleat would watch for Family was trying to kill was a guy “Tommy Spats” and if he was lo- known as “Tommy Spats.” Around cated, Idone and Scalleat would kill the fall of 1983, Robert “Bobby” him. Rego agreed to have a couple of his people attempt to kill “Tommy Shortly after the Robert Riccobene Spats.” Rego, who was an associate “hit” in December of 1983, Salvatore of the Family, was originally aligned Merlino instructed Leonetti and Testa with the Riccobene group but decided not to kill anyone else in the Riccobene to assist Testa and the Family in their faction. Most of the people of that efforts against the Riccobene faction. group were already killed, in jail or Rego’s people were having trouble were in hiding. Merlino’s order came killing “Tommy Spats” because he about a month before Scarfo was re- never left his south Philadelphia leased from federal prison in Janu- apartment. They got so frustrated ary of 1984 after serving a sentence that they shot his car in the hope that for the illegal possession of a hand- it would make him come out to see gun. what happened, but that didn’t work either. After his car was shot, “Tommy Spats” got scared and fled Mars Restaurant the area. Salvatore Testa found out that The Mars Restaurant, which was located at 712- “Tommy Spats” was hiding in 714 South Street, was another location where Scarfo Hazleton, Pennsylvania, with his girl- Family members and associates gathered for business friend or ex-wife. Leonetti and Testa and social purposes. It also served as a meeting place then asked Salvatore “Chuckie” for Leonetti and then Atlantic City Mayor Michael J. Merlino, the Family underboss at the Matthews. The Mars Restaurant was owned by Family time, to contact Family captain Santo associate Arthur Pelullo from April 1982 until 1986. The Idone, who had a soldier in his crew, liquor license was held in the name of Caraway, Inc., named Joseph Scalleat, living in which was owned by Carousel Group, Inc., in which Hazleton, and have him ask Scalleat Michael Vosbikian held 100% of the stock. Pelullo and to find out if “Tommy Spats” was ac- Vosbikian were officers of Caraway and Vosbikian was tually living there. Merlino contacted the sole officer of Carousel. Following denial by Penn- Idone and a meeting was held at the sylvania authorities of the application of Arthur Pelullo’s Elsmore Club. At the meeting, Testa brother, Leonard, to become sole officer of Caraway, and Leonetti spoke to Idone about Leonard’s wife became its sole officer in 1986. The trying to find the whereabouts of license was sold in December 1988. Leonetti related “Tommy Spats.” Idone agreed to the following about the Mars Restaurant and the Pelullo have Scalleat try to find out if brothers: “Tommy Spats” was living in the The Mars Restaurant was owned by In 1983, during the period that the Arthur “Artie” Pelullo, who was an Family was involved with Mayor associate of the Family and a New Matthews, Leonetti met Matthews Jersey resident. Between approxi- once at the Mars Restaurant. Scarfo mately 1983 and early 1987, the Family members Lawrence “Yogi” Mars Restaurant, which was located Merlino and Salvatore “Salvie” on South Street near Eighth Street in Testa were als present. Philadelphia, was a place where members and associates of the Fam- ily used to meet to discuss Family The Pelullo brothers were guests at Scarfo’s business and to socialize. Leonetti Christmas parties and at his Fort Lauderdale house: was at the restaurant on numerous occasions during that period and al- ways ate and drank for free. Leonetti In December of 1984 and December knew from his conversations with of 1985, Scarfo held Christmas par- Pelullo at the restaurant that he ties for members and associates of the owned the Mars Restaurant. He did Family at a restaurant known as not know if any of Pelullo’s relatives LaCucina, which was located on or anyone else had an ownership in- South Street near Second Street in terest in the business or whose name Philadelphia. The restaurant was was on the liquor license. owned by an associate of the Family . . . named Salvatore “Sam the Barber” LaRussa. Only those approved by Arthur Pelullo had two brothers, Pe- Scarfo or invited by him were allowed ter and Leonard, who were also as- to attend. Arthur Pelullo attended sociates of the Family. Their uncle, both Christmas parties. Frank Frank Nicoletti, was a La Cosa Nicoletti attended the 1985 party and Nostra member in the Family. The Peter Pelullo attended at least one Pelullo brothers were “with” of the parties. Salvatore Testa until the time that Scarfo had Testa killed in September . . . of 1984. After Testa’s death, the Pelullo brothers were “with” In the summer of 1985, Scarfo Leonetti. bought a Fort Lauderdale, Florida, vacation home, which he, Leonetti Arthur Pelullo and the Mars Restaurant played and other Family members and as- roles in the Scarfo Family’s dealings with former Atlan- sociates visited periodically from the tic City Mayor Matthews: time that it was purchased until Janu- ary of 1987, when Scarfo was ar- rested and held on extortion charges. During 1982 and 1983, Scarfo, During that period, Arthur, Leonard Leonetti and others from the Family and Peter Pelullo all visited. were involved in illegal activities with then Atlantic City Mayor Michael Matthews. During that priod, In 1985, the Mars Restaurant was offered in Leonetti once had Arthur Pelullo satisfaction of Leonard Pelullo’s loanshark debt: meet with him and Matthews in Margate, N.J., to have Pelullo apolo- gize to Matthews for threatening In December of 1985, Scarfo, tokill him. Pelullo was angry because Leonetti and Family associate and at- he didn’t feel that Matthews was help- torney Bobby Simone got involved in ing him enough to acquire an Atlan- collecting a loanshark debt where the tic City license for a limousine com- Mars Restaurant wasoffered as pay- pany Pelullo owned. ment for the debt. Leonard Pelullo owed $200,000 to a Family associ- ate and loanshark named Anthony bar at 1500 Wolf Street, in approximately 1985. In the “Tony” DiSalvo, who was having early 1990s, the liquor license became inactive and was trouble getting Pelullo to repay the eventually terminated. Leonetti elaborated: money. Scarfo and Leonetti met with Pelullo at Scarfo’s Florida house In the mid-1980s, Joseph “Joey shortly after Christmas of 1985. Pung” Pungitore owned a south Pelullo and Scarfo reached an agree- Philadelphia bar known as Joe ment, which alled for Pelullo to pay Dickie’s. Pungitore was involved in $120,000 of the $200,000 debt. How- murder, gambling, loansharking and ever, time passed without Pelullo pay- extortion. He was inducted into La ing off the debt. In approximately Cosa Nostra in January of 1982 by February of 1986, Leonetti met with Scarfo.... Pungitore used a friend to Arthur Pelullo at the Mars Restau- front for him in the ownership of Joe rant and informed him that his Dickie’s. Leonetti knew the friend’s brother, Leonard, had not yet repaid first name as Joe, but could not re- the loan. Artur Pelullo told Leonetti call his last name. Leonetti met Joe that he would talk to his brother and on a couple of occasions and kne his attempt to get the money. He also wife, Helene, who was a niece of offered the Mars Restaurant to Nicholas “Nick the Blade” Virgilio’s Leonetti in settlemet of the debt, but wife. Vrgilio was inducted into La Leonetti turned down the offer be- Cosa Nostra by Scarfo in June of cause considerable money was owed 1982. Leonetti did not know if on it. Leonetti then wet to see Peter Pungitore had any partners or who Pelullo, who helped in collcting the owned the building where the bar was debt. located. Leonetti never had occasio to go to Joe Dickie’s. In an affidavit submitted to the Commission, Peter Pelulo denied that he was an associate of the Scarfo Family. Leonetti provided the following background on He also stated that he “paid approximately $6,000 for Pungitore: the season” to rent Scarfo’s Fort Lauderdale house “one time in or about 1985,” but was unable to provide any corroboration of a rental. In fact, Pelullo signed a In September of 194, Pungitore lured $12,000 check dated March 13, 1986, and made pay- Salvatore “Salvie” Testa to a store i able to Scarfo’s sham company, Casablanca South Leas- south Philadelphia so that Testa ing Company. The Commission also notes the follow- could be killed. Testa and Pungitore ing: Leonetti testified at the 1992 federal prosecution of had been very close friends since their Robert F. Simone, Esq., and Anthony DiSalvo about youth, which assisted Pungitore in the loanshark debt owed by Leonard Pelullo and the setting up Testa. At the time, Testa involvement of Peter in its repayment; Peter Pelullo’s was a captain in the Family. Testa telephone number was found among the personal ef- was shot to death by Salvatore fects of Salvatore Testa when he was shot numerous “Wayne” Grande, who was a mem- times on July 31, 1982, in an internal Family power ber of the Family. Other members of struggle; Peter Pelullo attended Testa’s wake in Sep- the Family who were involved in the tember 1984, and the 1990 Annual Report of the Penn- murder were Scarfo, Leonetti, sylvania Crime Commission profiled the organized crime Salvatore “Chuckie” Merlino, Tho- involvement of Peter Pelullo. mas “Tommy Del” DelGiorno and Francis “Faffy” Iannarella. Associ- ates of the Family who tok part in Joe Dickie’s Pub Testa’s murder were Nicholas “Nicky Crow” Caramandi, Charles “Charlie Scarfo Family member Joseph Pungitore, who White” Iannece and Joseph “Joey” was a partner in the Elsmore Club, became the undis- Grande. Approximately two months closed owner of Joe Dickie’s Pub, a south Philadelphia after Testa’s murder, Caramandi, Iannece and Grande were inducted and several other Family members into La Cosa Nostra by Scarfo. were indicted as conspirators. Scarfo decided to have Testa killed Riccobene was killed because of a war because he saw him as a threat the between Scarfo an his people, and a Scarfo’s position and existence. Also, small faction led by Robert Scarfo generally did not like Testa’s Riccobene’s older brother, Harry attitude. Scarfo was concerned that Riccobene.... Testa had several young and aggres- sive members and associates under Joseph Pungitore’s father, Anthony him and feared that Testa might use “Blonde Babe” Pungitore, was in- them to challenge him one day. ducted into La Cosa Nostra by Philip Testa in June of 1980. Leonetti was In January of 1982, Pungitore, Testa inducted into La Cosa Nostra at the and Eugene “Gino” Milano took part same ceremony. One of Joseph in the murder of Frank “Chickie” Pungitore’s brothers, Anthony Narducci. Narducci was a member “Tony” Pungitore, was inducted into of the Family. Pungitore and Testa La Cosa Nostra by Scarfo in June of shot Narducci to death near his home 1986. Another brother, Ralph in south Philadelphia.... “Ralphie” Pungitore, was an associ- ate of the Family. He was being con- Pungitore also took part in the mur- sidered for membership in the Fam- der of Robert Riccobene in 1983, ily at the time that Scarfo and along with Francis “Faffy” Leonetti were incarcerated in early Iannarella and Charles “Charlie 1987 on various state and federal White” Iannece. Riccobene was shot charges. The Pungitores lived in south to death by Iannarella at the south Philadelphia and also had a house in Philadelphia residence of Riccobene’s Margate. mother. Pungitore and Iannece drove the getaway cars. Scarfo, Leonetti RECOMMENDATIONS

1. STATE’S ABILITY TO INVESTIGATE licensure applicants and for the granting of licenses, with SUSPECTED FRONTS MUST BE ENHANCED: the municipalities retaining authority over purely local issues, such as zoning.

Leonetti’s statements, as well as the recent ex- The Commission recognizes the fiscal constraints amples of infiltration uncovered by the Commission, under which the State is operating and the scrutiny of demonstrate again the pernicious reach of organized public expenditures that is thereby necessitated. There- crime into liquor-licensed premises. The use of fronts fore, in order to provide adequate funding for the aug- by organized crime is all too easily accomplished. Ac- mented role of the ABC Enforcement Bureau under this cordingly, the Commission urges implementation of the recommendation, the Commission also reiterates its 1992 following: recommendation that the State assess to the liquor in- A. In order to enhance the ability of the State dustry the cost of the Bureau through increased fees and Division of Alcoholic Beverage Control to ferret out penalties and to the individual licensees the cost of con- attempts to utilize fronts, the Commission recom- tested administrative proceedings. In this way, the State mends the reinstitution of a specialized unit within will be able to meet not only its enforcement responsi- the ABC Enforcement Bureau to conduct investigations bilities to detect and eradicate incursions of organized of suspected front situations. Such a unit existed until crime into the liquor industry, but also its fiscal responsi- 1991. bilities to the public. B. It is further recommended that ABC Enforce- ment Bureau personnel be provided with an essential In the interim, municipalities must effectively tool — electronic computer access to ABC’s auto- meet their responsibility to conduct thorough back- mated licensing files — to obtain promptly all current ground investigations. Investigation into the sources and past information on a particular licensee or license. of funds used to purchase the license and licensed business, together with any additional financing at- tendant to the purchase, as required under N.J.A.C. 13:2-2.9(b)3 and N.J.A.C. 13:2-7.7(b)3, is critical in 2. STATE MUST ASSUME RESPONSIBIL- detecting an undisclosed interest by organized crime ITY OF BACKGROUND INVESTIGATIONS in the license or business. Where a municipality sus- OF PROSPECTIVE LICENSEES: pects organized crime involvement, but lacks the expertise to conduct a proper inquiry, it should refer the case to the ABC Enforcement Bureau. In addition, As emphasized by the Commission in 1992, the as the Commission found in its 1992 survey of munici- municipalities, which are vested with the responsibility palities, there is a lack of uniformity in the investigative to conduct background investigations when licenses are steps utilized by municipalities. The Commission urges acquired and to evaluate the licensees at annual renew- the Director of ABC to promulgate regulations requir- als, often lack the resources and expertise to conduct ing that investigations of all applicants include, at a mini- the type of investigation necessary to identify organized mum, fingerprinting, photographing and a criminal record crime figures, disclose hidden interests or uncover the check. use of proceeds from illicit activities in the purchase of the license or business. The Commission’s conclusions in this regard are equally apposite today. Accordingly, the Commission again recommends that the State as- sume responsibility for the background investigations of 3. CERTAIN MUNICIPALITIES MUST IN- C. The information concerning the active Penn- VESTIGATE THE CURRENT LICENSES IDEN- sylvania liquor licenses will be referred to the Pennsyl- TIFIED BY THE COMMISSION AS HAVING vania Liquor Control Board. ORGANIZED CRIME INVOLVEMENT:

Even when municipalities are presented with 5. ABC SHOULD PROHIBIT EMPLOY- evidence of organized crime involvement, some fail MENT ON LIQUOR-LICENSED PREMISES to act upon it. In addition to examples cited by the Com- OF PERSONS WITH DOCUMENTED IN- mission in its prior report, such inaction was again dem- VOLVEMENT IN ORGANIZED CRIME OR onstrated in July 1992 when certain municipalities re- CRIMINAL ACTIVITY: newed liquor licenses after receiving information from the Commission on the licensees’ organized crime in- volvement. In fact, the Medford Township Council re- A glaring omission in ABC’s regulations is the newed the license of Medford Village Resort and Coun- absence of any prohibition against a licensee’s em- try Club even after a recommendation to deny renewal ployment of individuals with documented associations was made by the Township’s own police department, with organized crime or involvement in criminal ac- which conducted an investigation based upon the tivity. Although ties to organized crime triggered Commission’s findings. Frank Materio’s removal from the casino industry by the Casino Control Commission and from Local 54 by In this report, the Commission reveals additional the federal government, ABC regulations did not bar information on two licensees previously linked to orga- him from working on liquor-licensed premises. Simi- nized crime — Memories in Margate City and the Coral larly, Felix Bocchicchio has been employed at the Coral Reef in Bellmawr, identifies organized crime involvement Reef even though his involvement in organized crime in an additional two, active licenses — Maynard’s in prompted his ouster from Local 54. The ABC regula- Margate City and Hooty Moo’s Beef & Ale in Waterford tions are anomalous in that they prohibit such persons Township, and discloses the prior organized crime in- from patronizing licensed premises under N.J.A.C. 13:2- volvement of a current licensee — Frog Rock Country 23.5(a), but not from being employed there. Accord- Club in Hammonton. The Commission urges the mu- ingly, the Commission urges the ABC either to promul- nicipalities where these licenses are located to examine gate regulations prohibiting the employment, at any level, the qualifications of the licensees and take appropriate of such individuals or to extend N.J.A.C. 13:2-23.5(a), action. The Commission will also forward the informa- which prohibits “the habitual presence” of patrons of ill- tion to the ABC for its review and action. In light of repute, to employees of the licensee. At the same time, current proceedings before an administrative law judge the Commission recommends the vigorous enforcement contesting ABC’s denial of a liquor license transfer to of N.J.A.C. 13:2-23.5(a). Scannichio’s in Atlantic City, the Commission will fur- nish to ABC the relevant information on the restaurant and its owner. 6. INCORPORATION OF 1992 RECOM- MENDATIONS: 4. ADDITIONAL REFERRALS: The Commission continues the following recom- mendations from its 1992 report, which remain viable: A. The material on Harold Garber will be for- warded to the Office of Attorney Ethics of the New A. [T]he Division of ABC should provide for Jersey Supreme Court for review of his license to prac- presumptive minimum penalties such as license suspen- tice law. sions for those regulatory offenses most likely to hide organized crime involvement in the industry. Deviations B. The data on Alvin Lippman will be provided from the presumptive penalties, such as fines in lieu of to the New Jersey Real Estate Commission for review suspensions, should be permitted only with an explana- of his salesperson/broker’s license. tory statement from the Director. B. Two areas the Commission staff has identi- licensure. fied as being used continuously to hide organized crime F. The Attorney General should require that involvement in licensed premises are those involving hid- county prosecutors notify the Division of all cases in- den interests in businesses and failure to maintain true volving gambling and narcotics activity in licensed pre- books and records. Inadequate or phony books are mises so that appropriate administrative penalties may often used to hide undisclosed interests. The Commis- be imposed on the licensees. sion reviewed the records submitted by licensees under investigation and found many serious deficiencies. To G. The Division must establish a follow-up in- the extent that the Division relies on such records to cal- spection procedure to make sure that licensees take culate fines, it is being deceived and shortchanged. appropriate corrective action after there has been a find- ing of administrative violations. C. [T]he Division similarly should impose a mini- mum period of suspension for persons with criminal The infiltration by organized crime into New records or associations who desire to be employed in Jersey’s liquor industry, first reported by the Commis- licensed beverage establishments. And it should de- sion three years ago, continues to pose a threat to the velop criteria for lifting disqualifications. integrity of the State’s licensing system and contribute to the underground economy that undermines the State’s D. Regulations should be amended so that lic- economic growth and stability. In order to detect and ensees such as Jerry Blavat, whose conduct has caused thwart the spread of organized crime in the State’s mil- other licensees to be cited for violations, are subject to lion-dollar industry, both the State and the municipalities disciplinary action themselves. must vigorously enforce the laws and regulations that are available, as well as undertake implementation of E. Licensees should be subject to discipline, those measures necessary to strengthen the system of perhaps even to the extent of license revocation, when they invoke their Fifth Amendment privilege in response to questions about matters affecting their suitability for

This investigation was conducted by Counsel Ileana N. Saros and Special Agent Michael R. Hoey. Assistance was also provided by Special Agent Grant F. Cuzzupe, now retired.