THE BLACK HAND FORUM

[quote=CabriniGreen post_id=217205 time=1641818567 user_id=5378]
I'm referring this post to anyone who down talks the gas tax racket....


Great post...
[/quote]

Thanks. That was certainly the goal. People either dismiss it or simplify if it to no end just because Michael Franzese stakes his fame on this scam. Yeah he is really shady and dishonest about his past in many ways, but that doesn't mean that this particular scheme should suffer "reputationally" as a result lol. Plus people create myths/make up things without citing sources particularly in regards to the Russian aspect of it in a further effort to dismiss the Mafia's (and Franzese's) role in this aspect of LCN history just because they don't like who he is. Hopefully this helps set the record straight.

Great post! Very informative

I'm referring this post to anyone who down talks the gas tax racket....


Great post...

Well done. Very thorough. The 2001 Lucchese case is the last one with direct LCN involvement I'm aware of.

Excellent post.Thank you for sharing.It’s always great to read informative posts.This is the website for Nizarsoccer.I recommend checking it out https://mafiabookreviews.com/about-me/

Top post

I just realized the photos don't show up. Sorry about that. https://mafiabookreviews.com/2022/01/08/mafiagastaxscheme/ for pictures of the above mentioned guys.

Great read, incredibly informative. Thanks for sharing.

[1] Peter Mass, “The Valachi Papers”. 1968. Pages 168-172.

[2] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 39.

[3] Ibid.

[4] Joseph Demma et. al, “Seeking Ways to Stop Sales-Tax Siphoning”. Newsday. September 2nd, 1981. Page 4.

[5] Muhammad Abd Al-Ghani Jamasi & Mohamed Abdel Ghani El-Gamasy, “The October War: Memoirs of Field Marsh El-Gamasy of Egypt”. 1993. Page 181.

[6] John T. McQuiston, “Low Profits Chafe Gasoline Retailers”. The New York Times. May 28th, 1979. Page 39 or D3.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13] Ibid.

[14] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 308.

[15] Ibid.

[16] Ibid.

[17] Ibid. Page 310.

[18] Joseph Demma et. al, “The Gasoline Bootleggers: How they Siphon Taxes”. Newsday. August 30th, 1981. Page 24.

[19] Joseph Demma et. al, “Seeking Ways to Stop Sales-Tax Siphoning”. Newsday. September 2nd, 1981. Page 4.

[20] Joseph Demma et. al, “The Gasoline Bootleggers: How they Siphon Taxes”. Newsday. August 30th, 1981. Page 26.

[21] Ibid.

[22] Joseph Demma et al., “Lessons in How to Pocket the Tax”. Newsday. August 30th, 1981. Page 25.

[23] Ibid.

[24] Joseph Demma et. al, “The Gasoline Bootleggers: How they Siphon Taxes”. Newsday. August 30th, 1981. Page 26.

[25] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 309.

[26] Ibid.

[27] Ibid. Page 310.

[28] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 157.

[29] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 311.

[30] Ibid.

[31] Ibid. Page 312.

[32] Joseph Demma et. al, “The Gasoline Bootleggers: How they Siphon Taxes”. Newsday. August 30th, 1981. Page 24.

[33] Ibid. Pages 5 and 24.

[34] Ibid.

[35] Ibid. Page 5.

[36] Ibid. Page 24.

[37] Ibid. Page 5.

[38] Ibid.

[39] Ibid.

[40] Ibid. Page 24.

[41] Ibid.

[42] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 121.

[43] Ibid.

[44] Joseph Demma et. al, “The Gasoline Bootleggers: How they Siphon Taxes”. Newsday. August 30th, 1981. Page 5.

[45] Joseph Demma et. al, “Adding Wastes to Gas Boosted the Profits”. Newsday. September 1st, 1981. Page 6.

[46] Joseph Demma et. al, “Adding Wastes to Gas Boosted the Profits”. Newsday. September 1st, 1981. Page 26.

[47] Ibid.

[48] Ibid.

[49] Gus Taylor, “A New Star On Horizon For Demos”. Oakland Tribune. November 26th, 1974. Page 12.

[50] Joseph Demma et al, “How a Gas Operation Kept $323,000 in Taxes”. Newsday. August 31st, 1981. Page 5.

[51] Ibid.

[52] Ibid.

[53] Ibid. Page 21.

[54] Ibid.

[55] Ibid.

[56] Ibid.

[57] Ibid. Page 20.

[58] Ibid. Page 5.

[59] Ibid. Page 20.

[60] Ibid. Page 5.

[61] Ibid.

[62] Ibid.

[63] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 313.

[64] Ibid.

[65] Joseph Demma et. al, “Adding Wastes to Gas Boosted the Profits”. Newsday. September 1st, 1981. Page 6.

[66] Ibid. Page 26.

[67] Ibid. Page 6.

[68] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 158.

[69] Joseph Demma et. al, “Adding Wastes to Gas Boosted the Profits”. Newsday. September 1st, 1981. Page 26.

[70] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 313.

[71] Ibid.

[72] Ibid.

[73] Joseph Demma et al, “How a Gas Operation Kept $323,000 in Taxes”. Newsday. August 31st, 1981. Page 21.

[74] Carole Angus & Brian Donovan, “Parkway Gas Gouging Alleged”. Newsday. February 15th, 1980. Page 3.

[75] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 314.

[76] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 119.

[77] Ibid.

[78] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 310.

[79] Carole Angus & Brian Donovan, “Parkway Gas Gouging Alleged”. Newsday. February 15th, 1980. Page 25.

[80] Tom Renner & Brian Donovan, “Iorizzo in Witness Program”. Newsday. October 19th, 1984. Page 27.

[81] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 158.

[82] Ibid. Page 159.

[83] Carole Angus & Brian Donovan, “Parkway Gas Gouging Alleged”. Newsday. February 15th, 1980. Page 25.

[84] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 159.

[85] Carole Angus & Brian Donovan, “Parkway Gas Gouging Alleged”. Newsday. February 15th, 1980. Page 25.

[86] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 120.

[87] Carole Angus & Brian Donovan, “Parkway Gas Gouging Alleged”. Newsday. February 15th, 1980. Page 3.

[88] Brian Donovan & Carole Angus, “Parkway-Gas Bidding Probed”. Newsday. February 24th, 1980. Page 3.

[89] Ibid.

[90] Ibid.

[91] Ibid.

[92] Carole Angus & Brian Donovan, “Parkway Gas Gouging Alleged”. Newsday. February 15th, 1980. Page 3.

[93] Ibid. Page 25.

[94] “Vantage Oil Cited As Overcharging”. Newsday. December 9th, 1982. Page 18.

[95] Carole Angus & Brian Donovan, “High Profit in ‘Hardship’ Gas”. Newsday. February 20th, 1980. Page 7.

[96] Ibid. Page 25.

[97] Ibid. Page 7.

[98] Rick Brand, “Move Against Terminal Grows”. Newsday. February 20th, 1980. Page 25.

[99] Ibid.

[100] Sydney H. Schanberg, “Gas Tax Cash & Re-Electing a Governor”. Newsday. December 4th, 1987. Page 99.

[101] Ibid.

[102] “Parkway Drivers Deserve a Better Deal on Gas”. Newsday. October 1st, 1982. Page 73.

[103] Stewart Ain, “State courts Carey’s Brother”. Daily News. October 23rd , 1981. Page 173 or NS 2.

[104] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 312.

[105] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 314.

[106] Paul Browne, “Prober: Didn’t smear gov but I’ll quit”. Daily News. December 3rd, 1987. Page 740 or C5.

[107] Ibid.

[108] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 314.

[109] Paul Browne, “Prober: Didn’t smear gov but I’ll quit”. Daily News. December 3rd, 1987. Page 740 or C5.

[110] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 314.

[111] Ibid.

[112] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 120.

[113] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 161.

[114] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 315.

[115] U.S. House of Representatives, Committee on Ways and Mean, Subcommittee on Oversight, Compliance with Federal Gasoline Excise Tax Provisions: Hearing (Washington, D.C.: Government Printing Office, 1987). Page 38.

[116] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 315.

[117] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 119.

[118] Robert E. Kesser, “Iorizzo Role Sparks Fla. Tax Probe”. Newsday. February 4th, 1985. Page 19.

[119] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 315.

[120] Ibid.

[121] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 119.

[122] Ibid.

[123] Ibid. Page 90.

[124] Michael Franzese, “A Day in The Life Inside the Mafia: The Michael Franzese Story”. YouTube. December 6th, 2021. Relevant Clip Starts at 13:02.

[125] Limited, “5 Families Crew Succession”. The Black Hand Forum, posted by Pogo The Clown. May 25th, 2015.

[126] Michael Franzese, “A Day in The Life Inside the Mafia: The Michael Franzese Story”. YouTube. December 6th, 2021. Relevant Clip Starts at 18:23.

[127] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 120.

[128] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 315.

[129] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 120.

[130] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 315.

[131] Ibid.

[132] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 121.

[133] Ibid.

[134] Ibid. Page 130.

[135] M. Anthony Lednovich, “Missing taxes traced to bank accounts”. Fort Lauderdale News. May 8th, 1985. Page 13 or 3B.

[136] Patrick Bet David et. al, “Multi Billion Dollar Gas Scam | Mafia States of America with Michael Franzese”. YouTube. December 7th, 2021. Relevant Clip Starts at 7:23.

[137] Selwyn Raab, “Five Families: The Rise, Decline, and Resurgence of America’s Most Powerful Mafia Empires”. 2014. Google eBook. Pages 353-354.

[138] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 324.

[139] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 121.

[140] Ibid.

[141] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 314.

[142] Ibid. Page 323.

[143] Ibid.

[144] Ibid. Page 324.

[145] Ibid.

[146] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 160.

[147] Ibid.

[148] Ibid.

[149] Ibid.

[150] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 121.

[151] Ibid. Page 124.

[152] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 315.

[153] Ibid.

[154] Ibid.

[155] Mark McIntyre, “State Plans to Evict Vantage Petroleum”. Newsday. September 29th, 1982. Page 18.

[156] Ibid.

[157] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 123.

[158] Mark McIntyre, “State Plans to Evict Vantage Petroleum”. Newsday. September 29th, 1982. Page 18.

[159] Don Smith, “Iorizzo Testifies in Fraud Case”. Newsday. March 6th, 1985. Page 27.

[160] Mark McIntyre, “State Plans to Evict Vantage Petroleum”. Newsday. September 29th, 1982. Page 18.

[161] Ibid.

[162] Kathleen Kerr, “Officials Close Vantage Parkway Stations”. Newsday. November 9th, 1982. Page 26.

[163] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 316.

[164] Ibid.

[165] Ibid.

[166] Ibid. Page 317.

[167] Don Smith, “Iorizzo Testifies in Fraud Case”. Newsday. March 6th, 1985. Page 27.

[168] Ibid.

[169] Robert E. Kessler, “Bank, 2 Men Charged In Money Laundering”. Newsday. July 3rd, 1987. Page 5.

[170] Ibid.

[171] Ibid.

[172] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 40.

[173] Joseph Demma et. al, “The Gasoline Bootleggers: How they Siphon Taxes”. Newsday. August 30th, 1981. Page 26.

[174] Mark McIntyre, “Gas Tax Collection Still Lags”. Newsday. January 26th, 1983. Page 7.

[175] Bruce Lambert Jr., “Carey Vetoes Bill Easing Retirement Rule for Judges”. Newsday. July 9th, 1982. Page 15.

[176] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 159.

[177] Robert E. Kesser, “Iorizzo Role Sparks Fla. Tax Probe”. Newsday. February 4th, 1985. Page 19.

[178] U.S. Department of the Treasury, Office of Tax Policy, “Report To The Congress On Evasion Of The Federal Gasoline Excise Tax”. December 1987. Page 4.

[179] Harrison Raine, “Gas-tax foes are deflated”. Daily News. December 20th, 1982. Page 2.

[180] Ibid.

[181] Steven P. Rosenfeld, “Wholesale increase shows up at pump”. Press and Sun-Bulletin. April 15th, 1983. Page 5-B.

[182] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 41.

[183] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 160.

[184] Ibid.

[185] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Page 151.

[186] Robert E. Kessler, “2 Charged in Gas-Tax Scheme”. Newsday. May 27th, 1988. Page 23.

[187] U.S. vs. Aracri, 968 F.2d 1512 (2nd Circ. 1992).

[188] Ibid.

[189] Ibid.

[190] Joseph Demma et al., “Lessons in How to Pocket the Tax”. Newsday. August 30th, 1981. Page 25.

[191] Ibid.

[192] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 320.

[193] Ibid.

[194] Ibid.

[195] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 38.

[196] U.S. vs. Aracri, 968 F.2d 1512 (2nd Circ. 1992).

[197] Ibid.

[198] Ibid.

[199] Ibid.

[200] Ibid.

[201] Ibid.

[202] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 160.

[203] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 125.

[204] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 320.

[205] Carolyn Colwell, “$10M Bond Set for Oil-Probe Suspect”. Newsday. February 22nd, 1986. Page 10.

[206] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 40.

[207] Paul Carlsen, “Local Amoco dealers resist conversion to Power Test”. The Journal News. February 14th, 1982. Page B1 or 37.

[208] Ibid. Page B7 or 43.

[209] Selwyn Raab, “State Finds Evasion of Sales Tax on Gas”. The New York Times. January 24th, 1983. Page B4 or 24.

[210] Ibid.

[211] Ibid.

[212] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 40.

[213] Liz Willen, “Grand Jury Indicts Ex-Gas Firm Exec”. Newsday. October 26th, 1989. Page 30.

[214] M. Anthony Lednovich, “10 suspects charged in gas tax rip-off”. South Florida Sun Sentinel. May 23rd, 1985. Page 10A.

[215] Joseph Demma et al., “Lessons in How to Pocket the Tax”. Newsday. August 30th, 1981. Page 25.

[216] M. Anthony Lednovich, “State eager to question ‘key man’ in gas-tax scam”. Fort Lauderdale News. December 16th, 1984. Page 16A.

[217] Letta Tayler, “Brothers Guilty in Gas Scam”. Newsday. October 12th, 1990. Page 3.

[218] Robert E. Kessler, “Franzese Took Tax Scam South, Florida Says”. Newsday. December 20th, 1985. Page 27.

[219] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Pages 324-325.

[220] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 161.

[221] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 275.

[222] Ibid.

[223] Ibid.

[224] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page XVI.

[225] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 272.

[226] Ibid.

[227] Ibid. Page 277.

[228] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Page 66.

[229] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 276.

[230] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Page 165.

[231] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 19.

[232] Ibid. Pages 19-20.

[233] Ibid. Page 23.

[234] Peter Blauner, “The Wild and Crazy Gangster: Michael Markowitz’s Twisted American Dream”. New York Magazine. Vol. 22, No. 40. Page 54.

[235] Ibid.

[236] Ibid.

[237] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 162.

[238] Ibid.

[239] Ibid.

[240] Ibid.

[241] William Bunch, “3 Charged as $1.5M Gas-Tax Cheats”. Newsday. August 9th, 1985. Page 25.

[242] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 162.

[243] Ibid.

[244] Ibid.

[245] Ibid.

[246] Ibid.

[247] Ibid.

[248] Ibid.

[249] James Rosen, “The Nerd of Crime”. Daily News. April 19th, 1992. Page 19.

[250] (1982, December). [Advertisement for Wholesale Gasoline]. Daily News.

[251] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 162.

[252] Ibid. Page 163.

[253] Ibid.

[254] Peter Blauner, “The Wild and Crazy Gangster: Michael Markowitz’s Twisted American Dream”. New York Magazine. Vol. 22, No. 40. Page 54.

[255] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 163.

[256] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Page 152.

[257] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 38.

[258] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 162.

[259] Ibid. Page 166.

[260] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Pages 152 and 157.

[261] Selwyn Raab, “Mob-Linked Businessman Killed in Brooklyn”. The New York Times. May 3rd, 1989. Page B3 or 31.

[262] Thomas Raftery & Jerry Capeci, “Turncoat is slain”. Daily News. May 3rd, 1989. Page 2.

[263] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[264] Associated Press, “Reputed mob figure charged with state gas-tax fraud”. The Tampa Tribune. December 21st, 1985. Page 7-B.

[265] Tom Burgis, “Kleptopia: How Dirty Money Is Conquering the World”. 2020. Chapter 11, Paragraph 8.

[266] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 163.

[267] Ibid.

[268] Ibid. Page 161.

[269] Ibid.

[270] Ibid.

[271] Robert E. Kessler, “Franzese Took Tax Scam South, Florida Says”. Newsday. December 20th, 1985. Page 26.

[272] Ibid.

[273] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[274] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 161.

[275] Ibid. Page 163.

[276] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[277] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Pages 128-129.

[278] Ibid.

[279] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[280] Rayner Pike, “Mob hit: Spotlight on Russian mafia in Brooklyn”. Muncie Evening Press. January 14th, 1992. Page 11.

[281] Ralph Blumenthal & Celestine Bohlen, “Soviet Émigré Mob Outgrows Brooklyn, and Fear Spreads”. The New York Times. June 4th, 1989. Page 38.

[282] Robert E. Kessler, “Franzese Took Tax Scam South, Florida Says”. Newsday. December 20th, 1985. Page 26.

[283] Ibid.

[284] Alan J. Wax, “BP Pulling Up Stakes”. Newsday. March 31st, 1983. Page 47.

[285] Alan J. Wax, “Northville Buying Gas Stations”. Newsday. June 18th, 1983. Page 13.

[286] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 164.

[287] Alan J. Wax, “Northville Completes Deal”. Newsday. November 16th, 1983. Page 40.

[288] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 163.

[289] Ibid.

[290] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 317.

[291] M. Anthony Lednovich, “State eager to question ‘key man’ in gas-tax scam”. Fort Lauderdale News. December 16th, 1984. Page 16A.

[292] Robert E. Kesser, “Iorizzo Role Sparks Fla. Tax Probe”. Newsday. February 4th, 1985. Page 6.

[293] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 316.

[294] M. Anthony Lednovich, “State eager to question ‘key man’ in gas-tax scam”. Fort Lauderdale News. December 16th, 1984. Page 16A.

[295] Ibid.

[296] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 163.

[297] M. Anthony Lednovich, “Gas tax thieves siphoning off millions”. Fort Lauderdale News. December 9th, 1984. Page 1.

[298] Ibid.

[299] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 20A.

[300] M. Anthony Lednovich, “Gas tax thieves siphoning off millions”. Fort Lauderdale News. December 9th, 1984. Page 1.

[301] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 20A.

[302] Ibid.

[303] Ibid.

[304] M. Anthony Lednovich, “Missing $3.6 million in gas taxes example of the classic ‘paper chase’”. Fort Lauderdale News. January 6th, 1985. Page 14A.

[305] M. Anthony Lednovich, “State ignores firm despite fraud”. Fort Lauderdale News. December 12th, 1984. Page 1A.

[306] Ibid. Page 10A.

[307] Ibid.

[308] Ibid.

[309] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 1A.

[310] Robert E. Kesser, “Iorizzo Role Sparks Fla. Tax Probe”. Newsday. February 4th, 1985. Page 6.

[311] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 1A.

[312] M. Anthony Lednovich, “State eager to question ‘key man’ in gas-tax scam”. Fort Lauderdale News. December 16th, 1984. Page 16A.

[313] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 20A.

[314] Ibid.

[315] Ibid.

[316] Ibid.

[317] M. Anthony Lednovich, “Soviet mobsters expanding activities in Florida”. The Tampa Tribune. December 26th, 1985. Page 7-B.

[318] Ibid.

[319] Scott M. Deitche, “Cigar City Mafia”. 2005. Chapter 47, Paragraphs 1 & 3 (Kobo eBook).

[320] Michael Franzese, “Q&A TODAY- Following “Emergency Podcast” with Patrick Bet David and Sammy “The Bull” Gravano”. YouTube. November 24th, 2021. Relevant Clip Starts at 12:33.

[321] M. Anthony Lednovich, “State ignores firm despite fraud”. Fort Lauderdale News. December 12th, 1984. Page 1A.

[322] Ibid.

[323] Ibid.

[324] Robert E. Kessler, “Franzese Took Tax Scam South, Florida Says”. Newsday. December 20th, 1985. Page 26.

[325] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 20A.

[326] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 127.

[327]Robert E. Kesser, “Iorizzo Role Sparks Fla. Tax Probe”. Newsday. February 4th, 1985. Page 19.

[328] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 20A.

[329] Ibid. Page 1A.

[330] M. Anthony Lednovich, “10 company officials arrested, suspects in gasoline-tax theft”. Fort Lauderdale News. May 23rd, 1985. Page 6B.

[331] M. Anthony Lednovich, “Missing $3.6 million in gas taxes example of the classic ‘paper chase’”. Fort Lauderdale News. January 6th, 1985. Page 14A.

[332] Ibid.

[333] Ibid.

[334] Ibid.

[335] Ibid.

[336] Ibid.

[337] Ibid.

[338] M. Anthony Lednovich, “State ignores firm despite fraud”. Fort Lauderdale News. December 12th, 1984. Page 10A.

[339] M. Anthony Lednovich, “Missing $3.6 million in gas taxes example of the classic ‘paper chase’”. Fort Lauderdale News. January 6th, 1985. Page 14A.

[340] Ibid.

[341] John MacCormack & Emilia Askari, “Lauderdale firm linked to gas tax scam”. The Miami Herald. December 16th, 1984. Page 20A.

[342] M. Anthony Lednovich, “State ignores firm despite fraud”. Fort Lauderdale News. December 12th, 1984. Page 1A.

[343] M. Anthony Lednovich, “Missing taxes traced to bank accounts”. South Florida Sun Sentinel. May 8th, 1985. Page 3B.

[344] Tom Renner, “LI Man Accused of Running Multimillion-Dollar Scams”. Newsday. December 20th, 1985. Page 27.

[345] M. Anthony Lednovich, “Suspect key to tax scam, officials say”. South Florida Sun Sentinel. May 24th, 1985. Page 5B.

[346] M. Anthony Lednovich, “State loses millions in gas tax fraud”. The Orlando Sentinel. December 9th, 1984. Page B-9.

[347] Ibid.

[348] M. Anthony Lednovich, “State eager to question ‘key man’ in gas-tax scam”. Fort Lauderdale News. December 16th, 1984. Page 1A.

[349] M. Anthony Lednovich, “Two New York state firms raided by Florida agents”. South Florida Sun Sentinel. April 19th, 1985. Page 3A.

[350] M. Anthony Lednovich, “10 company officials arrested, suspects in gasoline-tax theft”. Fort Lauderdale News. May 23rd, 1985. Page 6B.

[351] Ibid.

[352] M. Anthony Lednovich, “Hearings on gas-tax theft set”. Fort Lauderdale News. December 11th, 1984. Page 1.

[353] Laura Misch, “Producer surrenders in tax scam”. The Miami Herald. December 21st, 1985. Page BR.

[354] Ibid.

[355]Robert E. Kessler, “Franzese Took Tax Scam South, Florida Says”. Newsday. December 20th, 1985. Page 27.

[356] M. Anthony Lednovich, “Delray Beach man surrenders to face racketeering counts in gas-tax thefts”. Fort Lauderdale News. December 21st, 1985. Page 5B.

[357] Laura Misch, “Producer surrenders in tax scam”. The Miami Herald. December 21st, 1985. Page BR4.

[358] Letta Tayler, “Gas Tax Evasion In Limelight Again As Trials Proceed”. Newsday. November 23rd, 1990. Page 24.

[359] Selwyn Raab, “A.K.A Trial Is a Study In Evasion Of Gas Tax”. The New York Times. February 20th, 1989. Page B2.

[360] Ibid.

[361] Ibid.

[362] Ibid.

[363] Ibid.

[364] Ibid.

[365] Robert E. Kessler, “2 Charged in Gas-Tax Scheme”. Newsday. May 27th, 1988. Page 23.

[366] Ibid.

[367] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 335.

[368] Ibid.

[369] Ibid.

[370] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[371] Angela Mosconi, “Queens Club Stabbing Could Trigger Mob War”. The New York Post. August 10th, 2000.

[372] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[373] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 335.

[374] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 126.

[375] Ibid. Pages 126-127.

[376] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 335.

[377] Ibid.

[378] Ibid.

[379] U.S. vs. Aracri, 968 F.2d 1512 (2nd Circ. 1992).

[380] Ibid.

[381] Ibid.

[382] Ibid.

[383] Ibid.

[384] Ibid.

[385] U.S vs. Sheldon Levine, 1:86-cr-00304-ENH

[386] U.S. vs. Aracri, 968 F.2d 1512 (2nd Circ. 1992).

[387] Jerry Rosa, “Ten men are indicted in a 55M tax evasion”. Daily News. October 31st, 1986. Page NS 4.

[388] U.S. vs. Aracri, 968 F.2d 1512 (2nd Circ. 1992).

[389] Selwyn Raab, “A.K.A Trial Is a Study In Evasion Of Gas Tax”. The New York Times. February 20th, 1989. Page B2.

[390] U.S. vs. Aracri, 968 F.2d 1512 (2nd Circ. 1992).

[391] U.S vs. Sheldon Levine, 1:86-cr-00304-ENH

[392] Selwyn Raab, “A.K.A Trial Is a Study In Evasion Of Gas Tax”. The New York Times. February 20th, 1989. Page B2.

[393] U.S. vs. Aracri, 968 F.2d 1512 (2nd Circ. 1992).

[394] Ibid.

[395] Ibid.

[396] Ibid.

[397] Sarah Pollock, “Gas Wholesaler Convicted”. Newsday. January 22nd, 1984. Page 7.

[398] Ibid.

[399] “New Trial Ordered for Gasoline Dealer”. Newsday. October 7th, 1985. Page 27.

[400] Dennis Bell & Dennis Havesi, “2 Held in $11-Million Loan Fraud Scheme”. Newsday. December 13th, 1983. Page 19.

[401] Police/Court Digest, “The Courts: Fraud Sentence”. Newsday April 23rd, 1985. Page 27.

[402] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[403] Ibid.

[404] Ibid.

[405] Daniel Hays & Don Singleton, “Fuel dealer indicted in $2.5M case”. Daily News. November 16th, 1983. Page 16.

[406] Don Smith, “Innocent Plea In Oil Firm Tax Case”. Newsday. November 22nd, 1983. Page 26.

[407] Thomas J. Maier, “Ex-Vantage Chief Is Missing”. Newsday. June 23rd, 1984. Page 7.

[408] Ibid.

[409] Ibid.

[410] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 176.

[411] Carolyn Colwell, “Witness Testifies Of Franzese Plot”. Newsday. January 7th, 1986. Page 6.

[412] Thomas J. Maier, “Ex-Vantage Chief Is Missing”. Newsday. June 23rd, 1984. Page 7.

[413] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 176.

[414] Ibid.

[415] Ibid.

[416] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 324.

[417] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 165.

[418] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 324.

[419] Ibid.

[420] Ibid.

[421] Ibid.

[422] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 168.

[423] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 324.

[424] Ibid. Pages 324-325.

[425] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 176.

[426] Tom Renner & Brian Donovan, “Iorizzo in Witness Program”. Newsday. October 19th, 1984. Page 6.

[427] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 164.

[428] Don Smith, “Iorizzo Testifies in Fraud Case”. Newsday. March 6th, 1985. Page 27.

[429] Geraldine Baum, “Owner of Station Held in Gas Theft”. Newsday. May 13th, 1984. Page 18.

[430] Ibid.

[431] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 215.

[432] Tom Renner, “A New Crime Kinship Is Scrutinized”. Newsday. July 24th, 1986. Page 25.

[433] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 215.

[434] Tom Renner, “LI Man Accused of Running Multimillion-Dollar Scams”. Newsday. December 20th, 1985. Pages 3, 26, and 27.

[435] Ibid. Page 3.

[436] Ibid. Page 27.

[437] Ibid.

[438] Ibid.

[439] Daniel Hays, “8 Indicted in $5M Racket”. Daily News. December 20th, 1985. Page 3.

[440] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 225.

[441] Ibid. Page 234.

[442] Robert E. Kessler, “Franzese Admits Racketeering; Faces 10 Years, Must Pay $14M”. Newsday. March 22nd, 1986. Page 3.

[443] Ibid.

[444] Ibid.

[445] William Bunch, “3 Charged as $1.5M Gas-Tax Cheats”. Newsday. August 9th, 1985. Page 25.

[446] Ibid.

[447] Ibid.

[448] Carolyn Colwell, “$10M Bond Set for Oil-Probe Suspect”. Newsday. February 22nd, 1986. Page 10.

[449] Michael Franzese & Dary Matera, “Quitting the Mob”. 1992. Page 216.

[450] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Page 319.

[451] Carolyn Colwell, “$10M Bond Set for Oil-Probe Suspect”. Newsday. February 22nd, 1986. Page 10.

[452] Ibid.

[453]U.S. House of Representatives, Committee on Ways and Mean, Subcommittee on Oversight, Compliance with Federal Gasoline Excise Tax Provisions: Hearing (Washington, D.C.: Government Printing Office, 1987). Page 260.

[454] Robert E. Kessler, “Bootleg-Gas Ring Probed in NY”. Newsday. February 27th, 1986. Page 7.

[455] Ibid.

[456] Ibid.

[457] Carolyn Colwell, “Man Is Indicted In Gas-Tax Fraud”. Newsday. April 23rd, 1986. Page. 31.

[458] Tom Renner & Joshua Quittner, “7 Indicted in Scheme To Sell Untaxed Gas”. Newsday. July 24th, 1986. Page 2.

[459] U.S. House of Representatives, Committee on Ways and Mean, Subcommittee on Oversight, Compliance with Federal Gasoline Excise Tax Provisions: Hearing (Washington, D.C.: Government Printing Office, 1987). Pages 254 – 255.

[460] Ibid. Page 68.

[461] Ibid. Pages 257-258.

[462] Ibid. Pages 254 – 255.

[463] Ibid. Page 255.

[464] Ibid. Page 259.

[465] Ibid.

[466] Joshua Quittner, “Gas-Tax Indictment Expanded”. Newsday. October 30th, 1986. Page 23.

[467] Jerry Rosa, “Ten men are indicted in a 55M tax evasion”. Daily News. October 31st, 1986. Page NS 4.

[468] State of New Jersey Commission of Investigation, “Motor Fuel Tax Evasion”. February 1992. Page 17, Exhibit 30.

[469] Joshua Quittner, “Cops Nab Gas Scam Suspect”. Newsday. October 17th, 1987. Page 12.

[470] Joshua Quittner, “Cops Nab Gas Scam Suspect”. Newsday. October 17th, 1987. Page 12.

[471] Joshua Quittner, “Jail for Gas Scam’s Mastermind”. Newsday. October 24th, 1989. Page 9.

[472] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 36.

[473] Ibid.

[474] Ibid. Pages 36-37.

[475] Ibid. Page 37.

[476] Ibid. Page 38.

[477] Ibid.

[478] Ibid. Page 32.

[479] Ibid. Page 29.

[480] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Page 76.

[481] Ibid.

[482] Ibid. Page 78.

[483] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 166.

[484] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 38.

[485] Ibid. Pages 38-39.

[486] Ibid. Page 39.

[487] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 165.

[488] Ibid.

[489] Ibid. Page 166.

[490] Ibid.

[491] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 40.

[492] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 172.

[493] Ibid.

[494] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 40.

[495] U.S. v. Macchia, 845 F. Supp. 953 (E.D.N.Y. 1994).

[496] Ibid.

[497] John Cummings, “Court Is Asked to Let Oil Depot Reopen”. Newsday. December 5th, 1985. Page 25.

[498] John Cummings, “State Argues to Keep Oil Depot Closed”. Newsday. December 6th, 1985. Page 29.

[499] John Cummings, “Court Is Asked to Let Oil Depot Reopen”. Newsday. December 5th, 1985. Page 25.

[500] John Cummings, “State Argues to Keep Oil Depot Closed”. Newsday. December 6th, 1985. Page 29.

[501] John Cummings, “Court Is Asked to Let Oil Depot Reopen”. Newsday. December 5th, 1985. Page 25.

[502] Ibid.

[503] John Cummings, “State Argues to Keep Oil Depot Closed”. Newsday. December 6th, 1985. Page 29.

[504] Gwen Young, “Judge Won’t Order Oil Terminal Opened”. Newsday. December 28th, 1985. Page 37.

[505] Ibid.

[506] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 40.

[507] Ibid. Pages 40-41.

[508] Ibid. Page 41.

[509] Ibid.

[510] Bill Vlasic, “Gas firm faces tax charges”. The Daily Times. August 9th, 1985. Page B 11.

[511] Bill Vlasic, “Wholesale hike hits ATI chain”. The Daily Times. June 5th, 1985. Page B 11.

[512] Ibid. Page B 12.

[513] Ibid. Page B 11.

[514] Bill Vlasic, “Gas firm faces tax charges”. The Daily Times. August 9th, 1985. Page B 11.

[515] U.S. v. Macchia, 845 F. Supp. 953 (E.D.N.Y. 1994).

[516] Ibid.

[517] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Page 152.

[518] Phillip Carlo, “Gaspipe: Confessions of a Mafia Boss”. 2008. Pages 119-120.

[519] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Pages 44-45.

[520] Letta Tayler, “Gasoline Bootlegger Convicted”. Newsday. July 3rd, 1992. Page 23.

[521] Phillip Carlo, “Gaspipe: Confessions of a Mafia Boss”. 2008. Page 120.

[522] Jerry Capeci & Grene Mustain, “Mob Star”. 2002. Page 27.

[523] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 46.

[524] William Kleinknecht, “The New Ethnic MoRbs: The Changing Face of Organized Crime in America”. 1998. Page 280.

[525] U.S. v. Macchia, 35 F.3d. 622 (2d Cir. 1994).

[526] U.S. v. Macchia, 845 F. Supp. 953 (E.D.N.Y. 1994).

[527] Phillip Carlo, “Gaspipe: Confessions of a Mafia Boss”. 2008. Page 120.

[528] Ibid.

[529] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 47.

[530] Phillip Carlo, “Gaspipe: Confessions of a Mafia Boss”. 2008. Page 120.

[531] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 44.

[532] Robert E. Kessler, “2 Charged in Gas-Tax Scheme”. Newsday. May 27th, 1988. Page 23.

[533] Robert E. Kessler, “Gas Bootleg Probe”. Newsday. November 26th, 1992. Page 7.

[534] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 280.

[535] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 46.

[536] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 280.

[537] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 46.

[538] Ibid.

[539] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 280.

[540] Ibid.

[541] Ibid.

[542] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 166.

[543] Marianne Arneberg, “Officials Say Emigres Operate Crime Network”. Newsday. March 31st, 1986. Page 31.

[544] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 46.

[545] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Pages 44-45.

[546] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 46.

[547] Ibid. Page 53.

[548] Ibid. Pages 52-53.

[549] Ibid. Page 54.

[550] U.S. v. Macchia, 845 F. Supp. 953 (E.D.N.Y. 1994).

[551] U.S. v. Tarricone, 996 F.2d 1414 (2nd Cir. 1993).

[552] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 42.

[553] U.S. v. Tarricone, 35 F.3d 662 (2nd Cir. 1994).

[554] Letta Tayler, “4-Year Term For Gas Bootlegger”. Newsday. April 16th, 1991. Page 28.

[555] U.S. v. Tarricone, 35 F.3d 662 (2nd Cir. 1994).

[556] Ibid.

[557] Ibid.

[558] Ibid.

[559] Ibid.

[560] Ibid.

[561] U.S. v. Macchia, 845 F. Supp. 953 (E.D.N.Y. 1994).

[562] U.S. v. Tarricone, 35 F.3d 662 (2nd Cir. 1994).

[563] Josh Meyer, “Glasnost Gangsters in L.A.”. The Los Angeles Times. April 10th, 1992. Page A30.

[564] Jim Herron Zamora, “Gasoline Dealer Gets 10 Years in Scam”. The Los Angeles Times. November 9th, 1991. Page B5.

[565] U.S. v. Macchia, 845 F. Supp. 953 (E.D.N.Y. 1994).

[566] Ibid.

[567] Ibid.

[568] Robert E. Kessler, “Oil Executives Guilty”. Newsday. November 17th, 1990. Page 11.

[569] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 41.

[570] Christian Murray, “Lukoil’s High Test”. Newsday. January 7th, 2001. Page A37.

[571] U.S. v. Tarricone, 996 F.2d 1414 (2nd Cir. 1993).

[572] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 41.

[573] Ibid. Pages 54-55.

[574] Ibid.

[575] Robert E. Kessler, “5 Charged in Evasion of Gasoline Taxes”. Newsday. February 19th, 1992. Page 23.

[576] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 55.

[577] U.S. v. Macchia, 845 F. Supp. 953 (E.D.N.Y. 1994).

[578] Estelle Lander, “8 Cited in Gas Bootlegging”. Newsday. July 1st, 1993. Page 25.

[579] Robert E. Kessler, “Dad, Sons Admit Gas Scam Roles”. Newsday. October 28th, 1994. Page A31.

[580] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 57.

[581] U.S. Department of the Treasury, Office of Tax Policy, “Report To The Congress On Evasion Of The Federal Gasoline Excise Tax”. December 1987. Page 13.

[582] Ibid.

[583] Joshua Quittner, “War on Gas-Tax Cheats Continues”. Newsday. October 31st, 1986. Page 23.

[584] Letta Tayler, “Gas Tax Evasion In Limelight Again As Trials Proceed”. Newsday. November 23rd, 1990. Page 30.

[585] Selwyn Raab, “Mafia-Aided Scheme Evades Millions in Gas Taxes”. The New York Times. February 6th, 1989. Page B7.

[586] Selwyn Raab, “A.K.A Trial Is a Study In Evasion Of Gas Tax”. The New York Times. February 20th, 1989. Page B2.

[587] Selwyn Raab, “Mafia-Aided Scheme Evades Millions in Gas Taxes”. The New York Times. February 6th, 1989. Page B7.

[588] Ibid.

[589] Dirk Beveridge, “New taxes booked for travelers”. The Daily Times. November 30th, 1990. Page C1.

[590] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 273.

[591] Ibid.

[592] Kristin Casler, “Oil scam loss set at $14.8 million”. The Morning Call. March 31st, 1993. Page B5.

[593] Robert E. Kessler, “2 Charged in Gas-Tax Scheme”. Newsday. May 27th, 1988. Page 23.

[594] Rayner Pike, “Mob hit: Spotlight on Russian mafia in Brooklyn”. Muncie Evening Press. January 14th, 1992. Page 11.

[595] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Pages 46-47.

[596] Ibid. Pages 46-48.

[597] Ibid

[598] Selwyn Raab, “Five Families: The Rise, Decline, and Resurgence of America’s Most Powerful Mafia Empires”. 2014. Google eBook. Page 330.

[599] Phillip Carlo, “Gaspipe: Confessions of a Mafia Boss”. 2008. Page 120.

[600] Ibid.

[601] Ibid.

[602] Limited, “5 Family’s Making Ceremonies”. The Black Hand Forum, posted by Pogo The Clown. October 31st, 2014.

[603] Leonard Buder, “Two With Links To Crime Group Charged by U.S.”. The New York Times. September 11th, 1986. Page B3.

[604] Andy Petepiece, “The Colombo Family: A History of New York’s Colombo Mafia Family”. 2020. Chapter 22 (eBook).

[605] U.S. Senate, Permanent Subcommittee on Investigations, Organized Crime: 25 Years After Valachi: Hearing. (Washington, D.C.: Government Printing Office, 1988). Pages 767, 779 and 780.

[606] Limited, “5 Family’s Making Ceremonies”. The Black Hand Forum, posted by Pogo The Clown. October 31st, 2014.

[607] Ibid.

[608] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Page 152.

[609] Ibid.

[610] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 39.

[611] Ruben Rosario and Jerry Capeci, “Was rubout postponed?”. Daily News. October 11th, 1989. Page 24.

[612] Elaine Rivera, “Figure in Tax Scam Slain”. Newsday. May 3rd, 1989. Page 2.

[613] Peter Blauner, “The Wild and Crazy Gangster: Michael Markowitz’s Twisted American Dream”. New York Magazine. Vol. 22, No. 40. Page 60.

[614] Ibid.

[615] Ibid.

[616] Abraham Abramovsky, “Hit in Brooklyn, Trial in Tel Aviv”. Newsday. June 29th, 1994. Page A34.

[617] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 45.

[618] Jerry Capeci, “Trial no-show spurs rumor of mob death”. Daily News. May 24th, 1994. Page 12.

[619] Jerry Capeci, “Feds say hers was a love to die for”. Daily News. May 31st, 1995. Page 22.

[620] Ruben Rosario and Jerry Capeci, “Was rubout postponed?”. Daily News. October 11th, 1989. Page 24.

[621] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 45.

[622] Ibid.

[623] Jerry Capeci, “Mob siphoning gas tax”. Daily News. March 13th, 1988. Page 3.

[624] Phil Williams, “Russian Organized Crime: The New Threat?”. 1997. Page 165.

[625] Ibid.

[626] Robert E. Kessler, “2 Fugitives Arrested”. Newsday. November 30th, 1993. Page 31.

[627] Ampetrol, Inc v. United States, 37 Fed. Cl. 422 (1997)

[628] U.S. v. Joseph Reisch, 93-CR598 (E.D.N.Y 1993) (Document 380).

[629] Ibid.

[630] Ibid.

[631] Ibid.

[632] Helen Peterson, “18 nabbed in tax scam”. Daily News. May 28th, 1993. Page 2.

[633] Michael Kirkland, “The Justice Department said Wednesday that 15 people, including…”. United Press International (UPI). May 25th, 1994.

[634] Department of Justice, “Four Me With Ties To Well Known New York Organized Crime Families Were Sentenced In Excise Tax Fraud Case”. Press Release. December 23rd, 1994.

[635] Ibid.

[636] William Bastone, “The Mob is Dead! Long Live the Mob!”.Village Voice. Vol. 37. No. 38. Page 32.

[637] Selwyn Raab, “Lawyers Living High Life is Said to Have Ties to Mob”. The New York Times. July 21st, 1995. Page B3.

[638] Selwyn Raab, “Five Families: The Rise, Decline, and Resurgence of America’s Most Powerful Mafia Empires”. 2014. Google eBook. Pages 369-370.

[639] Ibid. Page 370.

[640] Department of Justice, “Four Men With Ties To Well Known New York Organized Crime Families Were Sentenced In Excise Tax Fraud Case”. Press Release. December 23rd, 1994.

[641] Warren Richey, “Two men charged in fraud”. South Florida Sun Sentinel. January 11th, 1994. Page 3B.

[642] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 47.

[643] Daniel Hays, “That’s cheatin’ with gas”. Daily News. August 24th, 1987. Page 18.

[644] Selwyn Raab, “Mafia-Aided Scheme Evades Millions in Gas Taxes”. The New York Times. February 6th, 1989. Page 1.

[645] Daniel Hays, “That’s cheatin’ with gas”. Daily News. August 24th, 1987. Page 18.

[646] Ibid.

[647] Joseph McNamara, “He’s slain as trial nears”. Daily News. December 8th, 1987. Page C6.

[648] Selwyn Raab, “Mafia-Aided Scheme Evades Millions in Gas Taxes”. The New York Times. February 6th, 1989. Page B7.

[649] Joseph McNamara, “He’s slain as trial nears”. Daily News. December 8th, 1987. Page C6.

[650] Selwyn Raab, “Mafia-Aided Scheme Evades Millions in Gas Taxes”. The New York Times. February 6th, 1989. Page B7.

[651] Jerry DeMarco, “2 reputed mobsters indicted in fuel-tax sting by U.S. agents”. The Record. September 12th, 1996. Page A-5.

[652] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Pages 84-85.

[653] Ibid. Page 84.

[654] Ibid. Pages 59-60.

[655] Jerry Capeci, “Feared Russian Hitman Saved by Genovese Guardian Angel”. Huffpost. August 7th, 2010.

[656] Steve Lieberman, “Ramapo man pleads guilty in bootleg gas scheme”. The Journal News. December 19th, 1998. Page 3B.

[657] Ted Serrill, “13 indicted in $60M fuel tax evasion”. The Central New Jersey Home News. May 6th, 1993. Pages A1-A2.

[658] Ibid. Page A1.

[659] Ibid.

[660] Ibid. A2.

[661] Jerry Capeci, “Feared Russian Hitman Saved by Genovese Guardian Angel”. Huffpost. August 7th, 2010.

[662] Ibid.

[663] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 84.

[664] Ibid. Pages 59-60.

[665] Jerry Capeci, “Feared Russian Hitman Saved by Genovese Guardian Angel”. Huffpost. August 7th, 2010.

[666] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 61.

[667] Ibid.

[668]Jerry Capeci, “Mob siphoning gas tax”. Daily News. March 13th, 1988. Page 39.

[669] Ibid.

[670] Jerry Capeci, “Gotti had way to keep prison years golden”. Daily News. May 11th, 1993. Page 12.

[671] Jerry Capeci & Grene Mustain, “Mob Star”. 2002. Page 27.

[672] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 47.

[673] Ibid.

[674] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 60.

[675] Phillip Carlo, “Gaspipe: Confessions of a Mafia Boss”. 2008. Page 120.

[676] Limited, “5 Family’s Making Ceremonies”. The Black Hand Forum, posted by Pogo The Clown. October 31st, 2014.

[677] Gene Mustain & Jerry Capeci, “The Golden Bull”. Daily News. March 8th, 1992. Page 28.

[678] “Nicky Corozzo 1996 Case Document”. GangsterBB, posted by Louiebynochi. April 5th, 2021.

[679] The New York Times, “3 Convicted In Mob Plot To Cheat U.S. Of Gas Tax”. The New York Times. May 27th, 1995. Page 25.

[680] Ted Serrill, “13 indicted in $60M fuel tax evasion”. The Central New Jersey Home News. May 6th, 1993. Pages A1-A2.

[681] Letta Tayler, “Lawyer Sentenced For Gas Schemes”. Newsday. April 19th, 1991. Page 27.

[682] Jerry Capeci, “Gotti had way to keep prison years golden”. Daily News. May 11th, 1996. Page 12.

[683] Patrice O’Shaughnessy, “Cops put skids on bootleg gas”. Daily News. May 6th, 1993. Page 7.

[684] The New York Times, “3 Convicted In Mob Plot To Cheat U.S. Of Gas Tax”. The New York Times. May 27th, 1995. Page 25.

[685] John Sullivan, “After Émigrés Began Fuel Scheme, Traditional Mob Families Moved In, Officials Say”. The New York Times. September 15th, 1996. Page 48.

[686] Helen Peterson, “18 nabbed in tax scam”. Daily News. May 28th, 1993. Page 2.

[687] David Gibson, “Mob bootlegging, Russian style”. The Record. May 6th, 1993. Page A-3.

[688] Kristin Casler, “Oil scam loss set at $14.8 million”. The Morning Call. March 31st, 1993. Page B5.

[689] Gary Cohn & Julia C. Martinez, “2 firms, 15 people accused of tax fraud”. The Philadelphia Inquirer. March 30th, 1993. Page B1.

[690] James O. Finckenauer & Elin J. Waring, “Russian Mafia in America: Immigration, Culture and Crime”. 1998. Pages 149-150.

[691] Kristin Casler, “Oil scam loss set at $14.8 million”. The Morning Call. March 31st, 1993. Page B5.

[692] Ibid.

[693] Ibid.

[694] Ibid.

[695] Kristin Casler, “U.S. alleges area oil tax scam”. The Morning Call. February 2nd, 1993. Page A2.

[696] Ibid.

[697] Kristin Casler, “Oil scam loss set at $14.8 million”. The Morning Call. March 31st, 1993. Page B5.

[698] Ibid.

[699] Kristin Casler, “U.S. alleges area oil tax scam”. The Morning Call. February 2nd, 1993. Page A2.

[700] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 89.

[701] Kristin Casler, “Oil scam loss set at $14.8 million”. The Morning Call. March 31st, 1993. Page B5.

[702] Jim Smith, “It was a slick idea”. Philadelphia Daily News. April 14th, 1994. Page 10.

[703] Ibid.

[704] Tom Avril, “Problem bar sinks deeper into trouble”. The Philadelphia Inquirer. January 25th, 1994. Page S2.

[705] Joseph F. Sullivan, “12 Held in Trucking of Untaxed and Contaminated Oil”. The New York Times. May 28th, 1993. Page B5.

[706] Ibid.

[707] Kirk Moore, “Racketeering arrests center on fuel scam”. Asbury Park Press. May 28th, 1993. Page A5.

[708] Joseph F. Sullivan, “12 Held in Trucking of Untaxed and Contaminated Oil”. The New York Times. May 28th, 1993. Page B5.

[709] Ibid.

[710] Ibid.

[711] Kirk Moore, “Racketeering arrests center on fuel scam”. Asbury Park Press. May 28th, 1993. Page A5.

[712] Joseph F. Sullivan, “12 Held in Trucking of Untaxed and Contaminated Oil”. The New York Times. May 28th, 1993. Page B5.

[713] Kirk Moore, “Racketeering arrests center on fuel scam”. Asbury Park Press. May 28th, 1993. Page A5.

[714] Joseph F. Sullivan, “12 Held in Trucking of Untaxed and Contaminated Oil”. The New York Times. May 28th, 1993. Page B5.

[715] Allan A. Block, “Space, Time, and Organized Crime”. 1994. Pages 321-322.

[716] Letta Tayler, “Gas Tax Evasion In Limelight Again As Trials Proceed”. Newsday. November 23rd, 1990. Page 24.

[717] U.S. Senate, Subcommittee on Appropriations, Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations: Hearing (Washington, D.C.: Government Printing Office, 1991). Pages 121-122.

[718] Letta Tayler, “5 Charged in Tax Scam”. Newsday. January 31st, 1991. Page 23.

[719] Terri Somers, “Manalapan man admits to fuel fraud”. Asbury Park Press. August 3rd, 1994. Page A3.

[720] Robert E. Kessler, “Feds Indict 18 in Gas Bootlegging”. Newsday. May 28th, 1993. Page 32.

[721] William Bastone, “The Mob is Dead! Long Live the Mob!”.Village Voice. Vol. 37. No. 38. Page 32.

[722] Robert E. Kessler, “Feds Indict 18 in Gas Bootlegging”. Newsday. May 28th, 1993. Page 32.

[723] Ibid.

[724] U.S. v. Joseph Reisch, 93-CR598 (E.D.N.Y 1993) (Document 380).

[725] Robert E. Kessler, “Feds Indict 18 in Gas Bootlegging”. Newsday. May 28th, 1993. Page 32.

[726] William Bastone, “The Mob is Dead! Long Live the Mob!”.Village Voice. Vol. 37. No. 38. Page 32.

[727] Ibid.

[728] Ibid.

[729] Ibid.

[730] Ibid.

[731] U.S. v. Joseph Reisch, 93-CR598 (E.D.N.Y 1993) (Document 380).

[732] Ibid.

[733] Ibid.

[734] Ibid.

[735] U.S. v. Daniel Enright, 95-CR388 (D.N.J. 1995).

[736] Joseph F. Sullivan, “12 Held in Trucking of Untaxed and Contaminated Oil”. The New York Times. May 28th, 1993. Page B5.

[737] Jerry DeMarco, “2 reputed mobsters indicted in fuel-tax sting by U.S. agents”. The Record. September 12th, 1996. Page A-5.

[738] David Gibson, “Mob bootlegging, Russian style”. The Record. May 6th, 1993. Page A-3.

[739] Ibid.

[740] Jerry DeMarco, “2 reputed mobsters indicted in fuel-tax sting by U.S. agents”. The Record. September 12th, 1996. Page A-5.

[741] Ibid.

[742] Kristin Casler, “Oil scam loss set at $14.8 million”. The Morning Call. March 31st, 1993. Page B5.

[743] John Sullivan, “After Émigrés Began Fuel Scheme, Traditional Mob Families Moved In, Officials Say”. The New York Times. September 15th, 1996. Page 48.

[744] Ibid.

[745] Ibid.

[746] Jerry DeMarco, “2 reputed mobsters indicted in fuel-tax sting by U.S. agents”. The Record. September 12th, 1996. Page A-5.

[747] John Sullivan, “After Émigrés Began Fuel Scheme, Traditional Mob Families Moved In, Officials Say”. The New York Times. September 15th, 1996. Page 48.

[748] Ibid.

[749] Ibid.

[750] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 61.

[751] Ibid. Page 60.

[752] Ibid.

[753] Ibid. Page 61.

[754] Ibid.

[755] Ibid.

[756] Ibid. Pages 61-62.

[757] Robert E. Kessler, “Bootleg Gas Scam Alleged”. Newsday. November 25th, 1992. Page 4.

[758] Ibid.

[759] Kristin Casler, “Oil scam loss set at $14.8 million”. The Morning Call. March 31st, 1993. Page B5.

[760] Ibid.

[761] Ibid.

[762] David Gibson, “Mob bootlegging, Russian style”. The Record. May 6th, 1993. Page A-3.

[763] Ibid.

[764] Charles Strum, “13 Indicted In Oil Scheme Laid to Mob”. The New York Times. May 6th, 1993. Page B6.

[765] Joseph F. Sullivan, “12 Held in Trucking of Untaxed and Contaminated Oil”. The New York Times. May 28th, 1993. Page B5.

[766] Helen Peterson, “18 nabbed in tax scam”. Daily News. May 28th, 1993. Page 2.

[767] Ibid.

[768] Jerry DeMarco, “2 reputed mobsters indicted in fuel-tax sting by U.S. agents”. The Record. September 12th, 1996. Page A-5.

[769] Department of Justice, “Four Men With Ties To Well Known New York Organized Crime Families Were Sentenced In Excise Tax Fraud Case”. Press Release. December 23rd, 1994.

[770] Robert I. Friedman, “Red Mafiya: How the Russian Mob has Invaded America”. 2002. Page 80.

[771] Fredrick Kunkle, “$140M fuel tax fraud alleged”. The Record. August 8th, 1995. Page A-5.

[772] U.S. v. Daniel Enright, 95-CR388 (D.N.J. 1995).

[773] Ibid.

[774] Fredrick Kunkle, “$140M fuel tax fraud alleged”. The Record. August 8th, 1995. Page A-5.

[775] U.S. v. Daniel Enright, 95-CR388 (D.N.J. 1995).

[776] Ibid.

[777] Clifford J. Levy, “Russian Emigres Are Among 25 Named in Tax Fraud in Newark”. The New York Times. August 8th, 1995. Page A1.

[778] Allison Garvey, “Jackson man not in fuel scam, his lawyer says”. Asbury Park Press. September 26th, 1997. Page A3.

[779] Ibid.

[780] U.S. v. Daniel Enright, 95-CR388 (D.N.J. 1995).

[781] Allison Garvey, “Jackson man not in fuel scam, his lawyer says”. Asbury Park Press. September 26th, 1997. Page A3.

[782] Fredrick Kunkle, “$140M fuel tax fraud alleged”. The Record. August 8th, 1995. Page A-5.

[783] Associated Press, “25 indicted in $140 million tax fraud”. Asbury Park Press. August 8th, 1995. Page A3.

[784] Fredrick Kunkle, “$140M fuel tax fraud alleged”. The Record. August 8th, 1995. Page A-5.

[785] Clifford J. Levy, “Russian Emigres Are Among 25 Named in Tax Fraud in Newark”. The New York Times. August 8th, 1995. Page B5.

[786] Staff Report, “Man pleads guilty in scheme”. The Central New Jersey Home News. January 28th, 1997. Page B6.

[787] Ibid.

[788] Department of Justice, “After Nearly 20 Years, International Fugitive in Multi-Million Dollar Fraud Scheme Apprehended in Greece and Extradited to United States to Serve Prison Sentence”. Press Release. July 21st, 2015.

[789] Ibid.

[790] Associated Press, “Jury convicts Russian émigré in fuel tax scam”. The Daily Journal. March 8th, 1996. Page A2.

[791] Sherry Figdore, “Father, son from Holmdel get prison, fine in tax fraud”. Asbury Park Press. September 26th, 1996. Page B2.

[792] Ibid.

[793] Steve Lieberman, “Ramapo man pleads guilty in bootleg gas scheme”. The Journal News. December 19th, 1998. Page 3B.

[794] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 274.

[795] Ibid.

[796] Ibid.

[797] Christian Murray, “A Criminal Comeback”. Newsday. February 4th, 2001. Page A4.

[798] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Pages 151-152.

[799] William Kleinknecht, “The New Ethnic Mobs: The Changing Face of Organized Crime in America”. 1998. Page 274.

[800] U.S. Senate, Permanent Subcommittee on Investigations, Russian Organized Crime in the United States: Hearing (Washington, D.C.: Government Printing Office, 1996). Page 152.

[801] Christian Murray, “A Criminal Comeback”. Newsday. February 4th, 2001. Page A4.

[802] Ibid. Page A48.

[803] Ibid.

[804] Ibid.

[805] Ibid.

[806] Christian Murray, “7 Indicted In Tax Evasion”. Newsday. May 20th, 2001. Page A 45.

[807] Christian Murray, “A Criminal Comeback”. Newsday. February 4th, 2001. Page A48.

[808] Ibid.

[809] Robert E. Kessler, “5 Charged in Florida Gas-Tax Plot”. Newsday. May 23rd, 1985. Page 27.

[810] Ibid. Page A4.

[811] Ibid. A48.

[812] Ibid.

[813] Mike Claffey, “Rackets indictment names 7 in gas scam”. Daily News. May 30th, 2001. Page 14.

[814] Ibid.

[815] Christian Murray, “A Criminal Comeback”. Newsday. February 4th, 2001. Page A48.

[816] Ibid.

[817] Mike Claffey, “Rackets indictment names 7 in gas scam”. Daily News. May 30th, 2001. Page 14.

[818] Christian Murray, “A Criminal Comeback”. Newsday. February 4th, 2001. Pages A4 and A48.

[819] Christian Murray, “7 Indicted In Tax Evasion”. Newsday. May 20th, 2001. Page A 45.

[820] Department of Justice, “New York Man Admits Conspiring to Defraud New Jersey of $19 Million in Motor Fuel Tax”. Press Release. August 10th, 2021.

[821] Ibid.

[822] Ibid.

[823] Ibid.

[824] Robert E. Kessler, “3 Cited in Plot to Block Tax-Cheat Probe”. Newsday. June 14th, 1989. Page 23.

[825] Ibid.

[826] Ibid.

[827] Ibid.

[828] Larry Celona & Patrice O’Shaughnessy, “Russian hood rubbed out”. Daily News. November 19th, 1987. Page 23.

The “Association” – La Cosa Nostra’s Second Fuel Cartel

After 1985, it became harder and harder to steal gasoline taxes. To largely eliminate tax skimming, Florida implemented a new law in January 1985 which required taxes to be paid after the first sale in the state.[581] New York followed in June of 1985 requiring that taxes be collected when gasoline was first imported into the state.[582] John Ryan, a state assistant attorney general and member of the Long Island Oil Industry Organized Crime Task Force, commented on the law change saying, “we have taken a $200-million-a-year hemorrhage and reduced it to $30 or $35 million a year – or less”.[583] In fact, after New York tightened its laws in 1985, state tax evasion became far less common, and the bootleggers mostly concentrated on the skim of federal gasoline taxes according to prosecutor Ray Jermyn.[584] In April of 1988, in an effort to combat gasoline bootlegging, the federal government made it so that taxes would have to be paid when a distributor or a wholesaler drew gasoline from a storage terminal.[585] This law change, however, backfired as bootleggers now created daisy-chains of faked sales inside the terminals.[586] As a result, Mr. McDonald, of the Justice Department, commented on how federal investigators observed, “mob activities pick up at the terminals”.[587] A further weakness in the new federal law was that companies with a federal “637 fuel licenses” were able to remove gasoline from a terminal without paying taxes at the time of purchase.[588] It is also important to note that the federal gasoline tax rose from 9 cents to 14.1 cents per gallon on December 1st, 1990, further boosting a bootlegger’s margins.[589] Finally, the fuel racketeers diversified much more heavily into skimming diesel taxes. No. 2 oil can be used as either diesel fuel or home-heating oil.[590] As such, mobsters would pose as home-heating oil companies, since no tax was levied on its purchase, and sell the product as diesel fuel, where they could pocket the tax from retailers.[591] This variation of the scam would be especially prevalent in New Jersey and Pennsylvania. The federal diesel tax at the time was 20.1 cents per gallon, with New Jersey charging a further 17.5 cents and Pennsylvania adding 10.35 cents as an “oil company franchise tax”.[592]

After Michael Franzese went to prison, the illegal dealers all reached out to a variety of mobsters for protection.[593] The racket, which started as a Mafia enterprise, was sort of “franchised off” to the Russians who handled the day to day aspect of the business in return for paying a mob tax.[594] After Marat Balagula went to the Lucchese’s for protection, the Colombo’s reached out to Anthony Casso to put together a panel to make sure that there would be no more problems between the various participants within the scheme.[595] The idea was to put together a new cartel so that no one would undercut one another or supplying fuel to an already claimed retail station.[596] By creating a panel to oversee the business, the three initial Families involved: Colombo’s, Lucchese’s, and Genovese’s were all going to earn an equal share of the proceeds which totaled $500,000 per month.[597] That number seems quite low and Selwyn Raab reported the Russians and Italians stole $80-100 million in taxes per year.[598] Casso’s book gives further detail on the composition of the new gasoline tax panel that oversaw this renewed cartel. Victor Orena from the Colombo’s appointed his son Victor Orena Jr. and Franky Sciortino.[599] Vincent Gigante appointed Daniel Pagano (given Joe Glitz was facing a lot of legal trouble).[600] Finally, the Lucchese’s appointed captain Frank Lastorino.[601] Both in Casso’s testimony and book, the panel described above seemed to have come together quite quickly in 1986 if not in mere days after Balagula went over to the Lucchese’s. I am rather skeptical of this, and I think the panel likely came together in 1987 at the earliest. From the Colombo side, Vic Orena Jr. wasn’t made until the middle of 1987 at the earliest.[602] In fact, how would Victor Orena be deciding who to put into what position given Jimmy Angelino was the Acting Boss of the Family from summer of 1986[603] until April 3rd, 1988.[604] Moreover, Frankie “the Bug” Sciortino was made sometime after 1988[605] and before May of 1991.[606] Similarly Frank Lastorino was not made until 1987 either.[607] As such it seems implausible that it came together as quickly as Casso implied in his testimony or book. What is known is that this panel oversaw several simultaneous schemes in the Tri-State area, and that each Family had their own group operating the fuel tax fraud on their behalf. Joseph Reisch and David Shuster[608] alongside Michael Markowitz ran the scheme for the Colombo’s. In New Jersey, Vladimir Zilber, Monya Elson, and Arkady Siefer[609] operated the scheme on behalf of the Genovese’s and later Gambino’s. Finally, Marat Balagula and his associates ran a scheme centered in New York City, Brooklyn, and Queens for the Lucchese’s. Then you have individuals like Jacob Dobrer or Michael Varzar who appeared to be part of multiple simultaneous operations that involved different Families, and so it is important to keep in mind that there wasn’t a set rigid structure; it was all rather fluid. Given that all these conspiracies happened simultaneously, it is hard to talk about them in chronological order and so instead I’ll focus on each one individually. Since the Balagula section more or less covered the Lucchese’s involvement, I will mostly talk about the Colombo operation on Long Island and the combined Genovese/Gambino operation in New Jersey.

[img]https://imgur.com/gallery/HB8jEHz[/img]
(L:R): Frankie “the Bug” Sciortino, Daniel Pagano, and Frank “Big Frank” Lastorino

Contrary to Michael Franzese’s 1996 testimony where he speculated that his main Russian partners stopped working with the Colombo Family[610], it appears that at least Michael Markowitz maintained his relationship with them.[611] In 1986, Markowitz was convicted and became a government witness.[612] Despite this “minor” legal set-back, he continued to run gasoline scams, while cooperating and thought that because he was a terrible witness when put on the stand and because he wasn’t telling the FBI much about the Mafia that nothing was going to happen to him.[613] He was highly mistaken. On the evening of May 1st, 1989, Markowitz was busy playing poker with Joseph Reisch, an Israeli business partner of his in Brooklyn.[614] After leaving Reisch’s house that night on his silver Rolls-Royce, Markowitz was gunned down, seemingly by someone he knew.[615] Joseph Reisch and gunman Israel Mizrahi would later be charged for his murder.[616] Also accused of plotting the murder, by Anthony Casso[617] and Carmine Sessa[618], was Frank Sciortino, although the case against him seemingly fell apart down the line.[619] In fact, apparently Sciortino took part in five practice runs to kill Markowitz, but decided he, “needed him alive for a little while longer, for money”. [620] “The Bug” Sciortino had extensive tutelage in the gasoline business as he was part of Franzese’s crew.[621] According to prosecutor Ray Jermyn, Sciortino and a “Gotti” soldier would go around, “shaking down a bunch of Russian bootleggers. They would just go into places in Brooklyn and make them pay $25,000 a clip for protection, or else they’d use a ball peen hammer on them. The Russians are scared to death of the Italians. They scored over half a million dollars by shaking these guys down”.[622] With Lev Persists paralyzed after an attempted shooting on November 18th, 1987[623], Joseph Reisch became the main Colombo partner in the gasoline scam.

Joe Reisch got his start in the gasoline business by being one of Michael Markowitz’s accountants.[624] Not only was he stealing from his “mentor”, but he was also romancing Markowitz’s wife.[625] Like his predecessor, he too owned an oil terminal on Long Island called the Inwood Oil Terminal.[626] The entire Colombo scheme centered on a company called Ampetrol owned by, Martin “Marty” Nociforo[627] which operated out of an office at the Inwood Terminal.[628] In an interesting change from previous iterations of the scheme employed by Lawrence Iorizzo or Sheldon Levine, who cycled through legitimate wholesalers to perpetuate their gasoline operation, Joseph Reisch used Ampetrol as the primary recipient of the illegal proceeds with all other shell corporations used to shield it from law enforcement detection and tax liability.[629] Moreover, Ampetrol was the only legitimately registered and licensed company in the scheme, all other shell corporations used to falsify invoices and siphon taxes employed fraudulent tax-exempt registrations (Form 637).[630] Again this differs from earlier schemes were even the shell corporations were legitimately licensed. As such, the “daisy-chain” employed was pretty straightforward. Ampetrol would make it look like it sold gasoline in tax-free transactions to other licensed wholesalers, when in fact it was selling the gasoline directly to retailers and pocketing a substantial portion of the 14.1 cent federal gasoline tax per gallon.[631] The Colombo operation handled about 40-50 million gallons of gasoline per month.[632] From that conspiracy, the four Families collected at least 1.5 cents per gallon as a tribute.[633]

[img]https://imgur.com/gallery/1WeSSI2[/img]
(L:R): Dennis J. Pappas, Frank “Frankie Camp” Campione, and Joseph “Chubby” Audino

Some of the organized crime bagmen in connection to the Reisch operation were Frank Sciortino and Joseph Audino, both Colombo soldiers, Frank Campione, Colombo associate, and Frederick Adrion, Lucchese associate.[634] One of the primary recipients of the protection payments was Victor M. Orena or Vic Orena Jr., a captain in the Colombo Family, and the Colombo’s representative on the gas tax Mafia panel.[635] The money generated by the scheme was considerable and the FBI estimated that Victor Orena, the Acting Boss of the Colombo Crime Family, personally made $4.5 million from the Reisch operation in four years.[636] Once the money went up the Colombo administration, Dennis J. Pappas, Orena’s “financial consigliere” handled the money laundering process.[637] At least $5 million from loan-sharking, gambling, and gasoline bootlegging was laundered by Pappas using 11 companies and 165 bank accounts created in the 1980s.[638] One accountant working for Pappas received a dead fish wrapped in a newspaper when they started voicing their concern about the questionable practices Pappas undertook with the various ledgers.[639] While Joseph Reisch was the primary caretaker of this particular bootlegging operation, the scheme did involve other “Russian Émigré” co-conspirators like Vyacheslav Dobrer, Michael Varzar, and Paul Sharp.[640] As mentioned previously, Varzar operated some of the unlicensed gasoline distributors used by Marat Balagula in the “Macchia Conspiracy”. Paul Sharp was also part of a racketeering enterprise headed by Michael Vax, the gangster who got into a fire fight at Platenum Energy in 1986, which skimmed gasoline and diesel taxes in Georgia and Florida.[641] At this time, I’m not sure if the Michael Vax operation paid a “mob tax” to the Families although given he was a known commodity in Brooklyn it also wouldn’t figure that he flew under the radar. This operation went along smoothly until January of 1992.

Now we will turn our attention to the Genovese and Gambino operations, which were one in the same after 1988. When “Gaspipe” Casso described the creation of the gasoline panel, he mentioned that the Genovese had a, “branch in the gasoline business also, with their own group of Russians”.[642] Now even if the gasoline panel did come together in 1986, the main Genovese associates in the business were all facing prolonged legal headaches (although that didn’t deter one particular individual). As such it is interesting to speculate on who those people could be. One small-fry gasoline associate at the time was the aforementioned office bum Phillip Moskowitz. It seems that after Franzese’s untimely exit from the industry, Moskowitz hooked up with the Genovese’s and boasted about his “strong ties” to figures from that Family.[643] On July 31st, 1987, he was recorded by an undercover law enforcement agent talking about the state of the industry commenting how, “They got it all locked up. You can’t do any squawking. You can’t do any hollering. That’s their dope, and they split it between three families”.[644] Moskowitz’s gasoline firm was called Stingray Ventures and during the summer of 1987, he “bribed” an undercover IRS agent posing as a “tax man on the take” with a $37,500 payoff for a federal license to use in his daisy-chain scheme.[645] He and his employee, Shae Presaizen, were charged for attempted bribery and prosecutors also found evidence that he avoided paying at least $2.7 million in federal taxes on 30 million gallons of gasoline.[646] In early December of that year[647], he was found strangled to death[648] with his skull fractured[649] and investigators speculated he was murdered to prevent him from cooperating with the government.[650] Despite Igor Roizman’s legal troubles as a result of the Green Star Conspiracy, he continued to work with the Genovese into the mid 1990s.[651] Moskowitz or Roizman were probably not on Casso’s mind when he made that statement and it is now that the next set of Brighton Beach’s leaders are introduced: the Zilber bothers and Monya Elson.

Marat Balagula’s departure from New York at the end of 1986 created a vacuum in the hierarchy of the Russian Brighton Beach mob. This decentralized the leadership structure further and several different major figures emerged which controlled fragmented gangs.[652] Monya Elson, one such leader of a Soviet gang that bore his name, systematically murdered numerous Russian rivals in the gasoline bootlegging business, propelling himself and the Zilbers’ brothers to the top of Brighton Beach’s criminal pyramid (at least temporarily).[653] Victor and Alex Zilber came to New York in 1979 and within 13 years became dons in the Russian mob due to, in part, getting the Genovese’s to stake their fuel bootlegging operation in exchange for paying up a penny per gallon of gasoline as tribute.[654] Their Italian supervisors were Daniel Pagano, a captain in the Genovese Crime Family, and Anthony Palumbo, Pagano’s Acting Captain.[655] Pagano and the Genovese were involved with the Zilber brothers since at least 1987, and so are likely the “guys” Casso referred too in his testimony.[656] Although Friedman in his books says that the Zilbers’ made tremendous amounts of money from skimming gasoline taxes, it seems that by the early 1990s their focus turned towards skimming diesel taxes in New Jersey.[657] Some of the companies employed in their scheme were U.S. Universal Trading, Universal Petroleum, Nova Trading, and Amco International.[658] Zilber was also a controlling member of the ‘Association’, which set prices and pooled resources for an added competitive advantage in the bootleg fuel market.[659] This new fuel cartel will be elaborated more on shortly. Apparently the money generated in the motor fuel tax fraud was so great, that co-conspirators frequently fought amongst themselves for a greater share of illegal proceeds.[660] This can be best seen when Victor Zilber asked Anthony Palumbo to murder Monya Elson on his behalf.[661] Elson was a “key employee” at Zilber’s Rasputin who earned anywhere between $3,000[662] and $15,000 a week from the brothers and a percentage of the cabaret’s revenues.[663] Rasputin, a restaurant and cabaret, allegedly cost $4 millions to renovate and became an epi-center of the Russian mob in Brooklyn.[664] Palumbo agreed to murder Elson and even organized a dry-run to practice the hit on an unsuspecting Monya, but Daniel Pagano quickly put an end to the plot once he found out.[665] Victor Zilber, however, would soon find himself on the receiving end of a shotgun when he angered his Mafia partners.[666] After the shooting, it was not a Genovese captain, but a Gambino captain that materialized next to his hospital bed[667] and so it is time to discuss how the final Family got involved in the scheme.

At the same time as Michael Franzese pled guilty to his involvement in the gas scheme, John Gotti was tipped to the fuel tax evasion scam by Joseph “Joe Glitz” Galizia.[668] The Genovese soldier told the Dapper Don how easy it was to steal the 28 cents tax per gallon of gasoline with Gotti replying that even stealing 2 cents per gallon was plenty.[669] He ended the conversation by saying, “I gotta do it right now. Right now I gotta do it. I gotta call this guy…”.[670] At the time of the events, Jerry Capeci identified the man who told Gotti about the gasoline scam as Joseph Galizia, however later on when he wrote Mob Star Capeci referred to that person as “Joey”.[671] It took Gotti some time to get into the gasoline business and the Gambino’s finally joined the Mafia Association cartel in 1988.[672] Anthony Casso identified that prior to joining, they had their own Russian fuel group[673], although I have never been able to find their identities and in any case the Gambino operation more or less merged with that of Victor Zilber’s. As a result, Zilber was now also paying a penny per gallon to the Gambino Crime Family.[674] Anthony “Fat Tony” Morelli and Anthony “Tony Pep” Trentacosta represented Gotti’s interests on the Mafia gas tax panel.[675] It is interesting that these two got so much responsibility this early on since “Tony Pep” was inducted in 1986 and “Fat Tony” in 1988.[676] While acting as the fuel liaison, Morelli was a soldier in Frank D’Apolito’s crew and Trentacosta was a soldier in Peter Gotti’s crew.[677] As we will soon see it seems that Anthony Morelli was the more active guy in the business, or at least had the most face time as Trentacosta was never indicted for anything related to the fuel business. The only mob reference I have been able to find about his involvement in the gas business was that according to Louis Maino, Nicky Corrozo commented how Trentacosta made a “ton” of money in the oil business with Anthony Morelli.[678] One of the crucial participants in the now combined Genovese-Gambino operation was Gregory Federico, owner of Capital Fuel Services which supplied diesel fuel to the black-market oil companies used in the scheme.[679] Another returning fuel bootlegger who participated in the “G” Families conspiracy was Anthony Zummo, who hooked up with the Zilber operation[680] despite being convicted for gasoline tax evasion alongside Aracri in 1991.[681] The scheme was extremely profitable for all the participants with John Gotti alone receiving $1 million per year from bootleg fuel proceeds.[682] Between October 1991 and November 1992, this daisy-chain alone skimmed at least $60 million in fuel taxes from New Jersey and the federal governments.[683] That alleged amount stolen would rise to a $100 million by 1995[684] and to a total of $140 million stolen between 1988 and 1993.[685]

[img]https://imgur.com/gallery/2LBzXWb[/img]
(L:R): Victor Zilber, Antony “Fat Tony” Morelli, and Monya Elson

Jacob Dobrer is one of those figures that is hard to place. He, along with Joseph Reisch, was one of the masterminds behind the Colombo gasoline operation out of Long Island.[686] He was also part of the Zilber operation in New Jersey, working alongside Gambino and Genovese members bootlegging different types of fuel.[687] He was also the architect of another scheme based in Pennsylvania which centered around the substitution of home heating oil for diesel fuel that stole at least another $14.8 million[688] between October 1991 and December of 1992.[689] Some authors wrote how this substitution scheme is rather simple, but as we will soon see it was actually complex and involved a lot of moving parts.[690] The Dober conspiracy involved some 20 different companies used in a variety of intertwining daisy chains to pass home heating oil as diesel fuel.[691] The scheme also utilized two types of “burn” companies. The first type of “burn” companies were classic paper companies which existed to absorb the tax liability.[692] In a novel fashion, “burn” companies were also set-up in the names of legitimate oil businesses, like Incco Fuels, without the real companies knowing about it.[693] Schemers would use forged signature stamps and stationary forms from the legitimate companies to make it seem like they were the ones incurring the tax liability.[694] Bell Fuel Co., which was one the most prominent companies in the scheme, was bought by Atlantic in 1988.[695] Bell, then in March of 1992, formed a related business called ASCO Inc. which was later renamed to NOVA in October of that year.[696] In some chains ASCO would be the last corporation in the chain, with Dynamo frequently serving as the middle company between it and the “burn” companies.[697] In other cases, Bell would supply the home heating oil to the start of a daisy-chain and later buy it back once it had “become” diesel fuel.[698] At other times, Myles Martin, owner of Self Oil Heat, would buy fuel as home heating oil and sell it to Bell as diesel.[699] An example of some of the daisy-chains used in this particular scheme are shown below.[700] Although mostly a financial white-collar crime, participants were not above resorting to violence, as David Shuster and Gerald DiTursi threatened to harm a witness who testified before a federal grand jury.[701] Jacob Dobrer, whose office served as the headquarters for the conspiracy, helped launder some of the money by using the unremitted tax dollars to purchase merchandise such as cars, clothes, and shoes to export to Europe and Russia for re-sale.[702] This scheme also paid a tribute to a New York Mafia family on a per-gallon basis.[703] Given the geographic location of this scheme, it was probably either the Gambino’s or Genovese’s, but everything was supposed to be split between the four families so it didn’t really matter who got it (at least theoretically).

[img]https://imgur.com/gallery/vbXPsHu[/img]

At the same time, an environmentally unfriendly businessman and a former mayor concocted a two-part scheme that blended the two things the mob loved most: tax fraud and garbage. Christopher Grungo, owner of Noble Oil, and his father Frank, former Mayor of Tabernacle, New Jersey avoided paying fuel tax by selling home heating oil to retail stations and sold virgin oil that was actually mixture of waste oil and clean oil.[704] New Jersey was unique in that it treated waste oil as hazardous waste and as such, it required treatment from re-refiners before it could be sold to the public again.[705] Due to his oil connections, Grungo would collect waste oil from tank cleaning companies in seven states and Canada for “treatment”[706] using a company formed by his niece, Brenda, named Jamesport Corp.[707] Instead of cleaning it, he would store the waste oil at terminals in New Jersey before shipping it off to Cibro Terminal in the Bronx, a sketchy facility with alleged ties to the Gambino Crime Family.[708] At Cibro, the oil was mixed with clean oil and sold to various public agencies and commercial customers.[709] One auspicious customer, RJW Company, bought 8 million gallons of dirty fuel and determined after testing it that it contained high levels of heavy-metal contaminants.[710] As for the fuel substitution scheme, Grungo was able to evade between $500,000 and $1 million in fuel taxes during a six month period by selling to several area stations including National Energy Petroleum (NEP).[711] Besides a vague connection to the Mafia via Cibro Terminal, Mr. Grungo also met several times with a “high-ranking” member of the Gambino Crime Family, only identified as “Danny”, at the Grotto D’Oro Restaurant in Brooklyn.[712] Grungo wanted to pay a penny-per-gallon “fee” to make sure his operation was sanctioned by organized crime.[713] Apparently the Gambino’s, Genovese’s, and Lucchese’s all got proceeds from this tribute.[714] I guess the Colombo’s were out of luck? Sort of throws a wrench into Casso’s statement about how proceeds from fuel tax evasion were supposed to be split equally between all the participants. Maybe the aforementioned Pennsylvania Dobrer operation was treated the same? By this point the federal government estimated that it was losing about $1 billion and New Jersey about $40 million (likely underestimated) annually in fuel taxes to these types of scams.[715] It was time for Uncle Sam to do something daring.

Donnie Brasco Meets John D. Rockefeller

The government was extremely successful at brining fuel racketeers to justice. Since prosecutions began in 1983, more than 90 bootleggers were found or pled guilty in federal and state courts for Long Island-linked gasoline tax scams by 1990.[716] Frank Sciortino, for instance, was convicted in January 1990 for extorting money from participants in the gasoline scheme.[717] Five more bootleggers, including Joe Glitz and Igor Roizman, were indicted in January 1991 for evading $14 million in federal gasoline taxes over a 27-month period in the early 1980s.[718] Yet despite all that effort by law enforcement, tax evasion was still a billion-dollar problem. As such, the federal government launched Operation Red Daisy in 1991 to investigate the bootleg motor fuel industry and its control by both traditional organized crime groups and Russian crime rings.[719] The operation centered around two sets of undercover companies: one set was used to target the Colombo operation on Long Island and the other monitored the Gambino/Genovese diesel operation in New Jersey. As such each will be discussed separately.

In January 1991, the FBI and IRS set up three phony companies headquartered on Grand Avenue in Baldwin, Long Island.[720] The FBI used a cooperating wholesaler[721] to set up two firms named Rossi Associates and Independent Petroleum Brokers that would compete directly with the bootlegging operation controlled by Joseph Reisch.[722] A third company, posing as a video production store, was used to record the going-on in the offices of the undercover oil firms.[723] From approximately January 1992 through June 1992, the FBI ran companies set-off a gasoline price war with Reisch’s group.[724] The FBI was so successful that at its peak it was handling 10 million gallons of gasoline per month, 20%-25% of the amount normally protected by the mob.[725] Obviously that put a pretty big dent into the Colombo operation and after six months two men arrived at Rossi’s office carrying flowers and a telegram.[726] They shouted, “If you don’t get out of the [expletive] gas business, you’re [expletive] dead”.[727] Two days later, another man showed up at the office with a large funeral wrath and an accompanying card which read, “In Loving Memory, Rest in Peace. From all your good friends in N.Y. City”.[728] Two weeks later, FBI surveillance spotted a suspected Colombo hitman in the vicinity of the cooperating wholesaler’s home who had enough and reached out to the daughter of a Colombo captain to broker a peace agreement.[729] That Colombo captain reached out to Joseph Audino who suggested that the wholesaler meet with Joseph Reisch to straighten everything out.[730] On June 24th and 25th, 1992, the undercover agents met with Reisch who told them that the only way they could continue to operate was if their business became a “shell” company used to conceal Ampetrol’s tax liability.[731] For their cooperation in the daisy-chain, Reisch initially guaranteed a payment of 3 pennies per gallon of gasoline and a monthly volume of three million gallons.[732] A couple days later after the initial meetings, Reisch upped his offer to 4.5 cents per gallon and 4.5 million gallons of gasoline, for a monthly payment of $180,000 to the cooperating wholesaler and FBI agent.[733] Starting July 1st, Rossi Associates began to work with the Colombo bootleggers and in that month the undercover FBI agent received a payment of $140,000.[734]

In New Jersey and Pennsylvania, the FBI used different companies including Packer Petroleum, RLJ Management, RUZ Fuel, Fuel Services of America, General Petroleum Products[735], and RJW Company.[736] Federal agents began operating their bogus companies in May of 1991 where they set up shop in Ewing Township and two locations in Bucks County, Pennsylvania.[737] Initially the undercover agents made it seem like they were unwilling to cooperate with the bootleggers and so on February 10th, 1992, their Ewing office burned down under “suspicious” circumstances.[738] In April 1992 George Doddy, one of the Gambino fuel associates, met with the undercover agents on at least three occasions saying he could introduce them to his boss, Jacob Dobrer, who was one of the leaders in the ‘Association’.[739] This time, the agents cooperated and were told that they would have to pay the mob on a per-gallon basis to stay in business or risk physical harm.[740] Over the next three months, the government’s “company” paid the mob $127,175 in tribute.[741] It wasn’t all bad for the cooperating wholesalers as one received a $40,000 18-karat gold Rolex watch for his participation in one of the daisy-chain schemes.[742] The agents also joined the ‘Association’ and discovered how the mob ran the illicit fuel industry.[743]

The Mafia was not just extracting simple ‘protection money’ from the bootleggers, as they acted more like a public utility regulatory body.[744] La Cosa Nostra played an active role in the fuel market by setting prices and carving up territories amongst the bootleggers to maximize profits for everyone involved.[745] The Families would even dispatch auditors to fuel companies to make sure they weren’t cheated out of their rightful cut.[746] The ‘Association’ would host meetings at a conference room in the Marriot Hotel at La Guardia Airport.[747] Overtime, it seems the undercover agents gained prominence within the organization as in subsequent meetings Mafia representatives offered an undercover wholesaler a job acting as an auditor to check on the fuel sales figures reported by other bootleggers.[748] This, of course, gave the government an unparalleled inside look at how the Mafia managed this racket and prosecutors were surprised at the level of cooperation between the four Families.[749] Yet all “good” things must come to an end and soon word came down to the Italian Mafia that massive federal indictments were being prepared.[750]

[img]https://imgur.com/gallery/lOrJpBG[/img]
(L:R): Anthony “Tony D” Palumbo, Edward Dougherty, and John A. Brogna

On November 20th, 1992, Victor Zilber was summoned to a meeting with members of the Genovese Crime Family over the Russian’s supposed erratic behavior.[751] After being accused of jeopardizing the fuel operation, the Victor apparently responded that if he went down, the Italians would go down with him.[752] This is something the Genovese did not take lightly and two days later, as he was driving for another sit-down in his 1989 Ford Taurus, some Russian with a shotgun blasted him from a neighboring vehicle.[753] While Zilber wasn’t killed, he was crippled and partially blinded.[754] At his hospital bed, Anthony Morelli showed up and whispered something to the Russian after which he refused too cooperate with police.[755] An attempted murder of one of the key suspects in ‘Operation Red Daisy’ prompted the government into action and over the course of November 22nd and 23rd, over two hundred search warrants were executed across New York, New Jersey, Pennsylvania, and Florida.[756] Among the firms raided were Rad Oil Terminal, Inwood Oil Terminal, Ampetrol, Rossi Associates, Bantrel Enterprises, New York Gasoline Distributors, Keystone, and others.[757] The feds seized tens of millions of dollars in property and bank accounts from bootleg gasoline distributors alongside an 800,000 gallon barge.[758] Authorities also seized vehicles as they were unloaded in Europe and over $400,000 in connection to the Dobrer operation in Pennsylvania involving Bell Fuel.[759] The party for the mobsters was over and it was just a matter of time before they were all arrested.

First on the chopping block was Jacob Dobrer, Gerald DiTursi, David Shuster, and the whole home heating oil/diesel operation in Pennsylvania. An 89-count 169-page indictment was unsealed on March 29th, 1993, charging 17 defendants with bilking the federal government out of $10.2 million and Pennsylvania and New Jersey each with $2.3 million between October 1991 through December 1992.[760] Some of the Soviet emigres fled the country.[761] Next, a 101-count indictment was unsealed against thirteen Italian and Russian organized members with evading more than $60 million over a 15-month period.[762] Among those charged where Gambino captain Anthony Morelli alongside Gambino associates Edward Dougherty, John A. Brogna, Anthony Zummo, Gregory Federico among others, and on the Russian side, Victor Zilber, Arkady Seifer, George Doddy, Jacob Dobrer and his son Vyacheslav Dobrer (who both fled).[763] The government alleged that some $6.7 million in tribute went to the mob who collected up to 2.25 cents for each gallon of fuel sold.[764] On the same day, Christopher Grungo and 11 others were arrested for trucking untaxed and contaminated oil.[765] Later that month, on May 27th, eighteen people were indicted for skimming more than $34 million in federal gasoline taxes.[766] Among those arrested were Victor M. Orena, Joseph Reisch, Ted Cohen, and Jacob Dobrer.[767] After a few years of respite, in September 1996, a 17-count indictment was unsealed charging Genovese captain Daniel Pagano, Anthony Palumbo, and Gennaro Dellamonica (a Gambino associate) with defrauding the government out of $77 million in fuel taxes.[768] Prison sentences ranged from as little as 32 months[769] to a 20 year racketeering sentence imposed on Anthony Morelli.[770]

Operation Red Daisy also yielded another large conspiracy, one that stole $140 million in fuel taxes by selling tax-free home heating oil as “tax-paid” diesel.[771] The conspiracy began in February of 1989 when Daniel Enright, owner of legitimate wholesaler PetroPlus Petroleum met with Igor Erlikh to discuss the purchase and sale of fuel.[772] In November of that year, Erlikh filed an application with the IRS for a Form 637 to license Kings Motor Oils.[773] Essentially these two companies formed the backbone of the scheme with Kings Motors Oils always making tax-free sales and PetroPlus appearing to always buy tax-paid fuel.[774] In between the two firms were a series of some 28 sham companies used to absorb PetroPlus’s tax liability and conceal the conspiracy.[775] Fourteen existing fuel companies became “insulating companies” and a further dozen corporations were created or converted to fuel companies to serve as “burn companies”.[776] Using these companies, 25 individuals, including 15 “Russian Emigres” evaded federal and state taxes on more than $500 million in fuel sales.[777] One of the companies used to conceal the scheme was called American Minority Petroleum (AMP) owned by an African-American lady named Mary Ingram.[778] The other co-conspirators thought that adding Ingram to the scheme would be beneficial because she would enter into legitimate contracts with cities and municipalities, add respectability to the books, and her minority status would discourage authorities from looking in too closely into her operations.[779] Another character in the scheme was Michael Lipkin, the former executive at Marat Balagula’s Energy Makers of America, who was brought in to assist AMP[780] and bring in companies to confuse authorities.[781] This oil ring also did business with the undercover FBI/IRS company known to them as RUZ Fuel.[782] On August 7th, 1989, a federal grand jury unsealed a 39-count indictment charging that 25 individuals in the above described conspiracy evaded $133 million in federal taxes and $11 million in New Jersey state taxes between 1989 through 1994.[783] At the time of the indictment the government declined to link this conspiracy with the earlier Red Daisy scheme involving Zilber and Morelli.[784] So what does this have to do with La Cosa Nostra? Maybe nothing at all monetarily, but this group did brush up against Italian organized crime.

[img]https://imgur.com/gallery/CXiFK2l[/img]
(L:R): Vadim Bruselovsky, Gregory Khutorksy, and Arnold Zeidenfeld

While the government didn’t initially tie the Enright group with the Zilber group, it did content that there, “may have been some coordination between those groups [Zilber] and the Russians [Enright]”.[785] Besides vague statements like these, we do know the two groups knew of each other and physically interacted. For instance, to put pressure on the then uncooperative undercover FBI fuel company, Gambino associate Gennaro “Jimmy Sweats” Dellamonica travelled to Kings Motor Oils in 1992, assaulted employee Arnold Zeidenfeld, and destroyed office equipment.[786] This took place in attempt to get Kings Motor to change their fuel supplier and put pressure on the undercover fuel company that refused to make tribute payments.[787] Given the kind of business Kings Motor Oils was already doing with PetroPlus, I find it bizarre that the mob didn’t demand tribute for that group directly. Or maybe they did? Gideon Misulovin evaded at least $6.5 million in fuel taxes from 1988 through January 31st, 1993.[788] In that scheme, one of his co-conspirators was the very same Arnold Zeidenfeld.[789] During his trial, evidence showed that a “mob tax” was being paid on fuel that Misulovin purchased, and he knew it was being paid.[790] Gideon, who owned, National Energy Petroleum also supplied untaxed fuel to Gurmit Singh who owned and operated five truck stops in New Jersey.[791] IRS spokesman Kevin McKeon said Singh was part of the 25 individuals indicted in August of 1995 for the $140 million tax fraud (they were not) and so maybe he meant that they were connected?[792] That’s about all the connections I could find between the two groups. While there is circumstantial evidence they might have worked together through Gideon Misulovin and others, I could not find direct evidence that the Enright group paid a mob tax to the organized crime families of New York. Operation Red Daisy was a monumental success on the government’s part and by 1996, more than 200 people were either indicted or convicted across the nation as a result of this investigation.[793] New government legislation further impeded the activities of racketeers and their ability to evade fuel taxes. For instance, a new law change enacted on January 1st, 1994, required that fuel taxes be paid when wholesalers drew fuel from a terminal.[794] The new law also made the home heating oil -> diesel daisy-chain scheme obsolete by requiring that No. 2 oil be dyed red if were to be used as heating oil.[795] These law changes increased compliance and the Federal Highway Trust Fund projected a $1.3 billion increase in tax receipts for the year of 1995.[796] All these law changes effectively crippled La Cosa Nostra’s ability to exercise any meaningful control over the fuel market. But as the Mafia has demonstrated time and time again, it is very resilient and resourceful. The mob was down for the count, but not out.

One Last Hurrah!

The joint federal and state agencies task force that held the fuel bootleggers at bay in the mid-90s no longer existed by the dawn of the new millennium, giving racketeers a last window of opportunity.[797] Despite all the new laws, regulations, and constrictions, the Russians and their Italian benefactors found a new loophole to exploit. The new scam involved legally buying tax-paid fuel in a low tax state like New Jersey and shipping it to a high tax state like New York, to yield a 12 cent per gallon profit margin in 1996.[798] Tax arbitrage was now the name of the game, and the New York State Department of Taxation estimated in June 1995 that this scheme yielded criminals up to a million a week.[799] A May 1996 Senate Committee investigating Russian organized crime cited a different figure and assessed that the state of New York lost $20 million in the last 18 months to this type of tax evasion.[800] Once again lax government attitude and a bit of criminal ingenuity made this scheme possible. First, the wiseguys smartened up and stopped skimming federal gasoline taxes.[801] This meant that federal agents and the IRS with its massive enforcement arm would no longer investigate fuel fraudsters giving them plenty of leeway to operate.[802] As such, the bootleggers now only had to contend with the ~65 investigators employed by New York’s Tax Enforcement division who spent 80% of their time pursuing cigarette tax evaders.[803] The state collected $1.5 billion in gasoline taxes in the year 2000, compared with $643 million on cigarettes and yet cancer stick taxes were the main concern with only 20 or 30 summons or arrests issued by the state government for breaches of gasoline taxes.[804] They sure had their priorities right…

Well, by 2000 the bootleggers were reaping a 20 cent per gallon profit by sending tank trucks to draw fuel from New Jersey terminals, paying the state tax of 10 cents per gallon, and then trucking the gasoline into New York to pocket its 30 cents tax.[805] By netting 20 cents per gallon, Alex Lukov, under the protection of the Lucchese Crime Family, netted $8 million dollars per year using this scam since 1990.[806] While the gasoline tax evasion problem was not on the scale that it was in the mid-80s, bootleggers like Lukov still created competitive problems for legitimate wholesalers.[807] Take for instance, Richard Spiegel of M. Spiegel & Sons Oil Corp. who complained that retailers would not take his gas even when he quoted prices below cost (which included taxes).[808] This is of course hilarious and ironic given that Richard Spiegel was indicted in Florida alongside his brother George in that whole Colombo cartel tax skim out of Florida…[809] Anyhow, Lukov’s scheme utilized the good ole daisy-chain method to steal the taxes.[810] Essentially Lukov employed licensed dummy corporations like Panther Oil and Express I and Dye-Wreck Petroleum which bought the gasoline at the terminal and became responsible for paying that tax.[811] Those front companies then “sold” the gasoline on paper to a legitimate company and disappeared once investigators get a whiff of the scam.[812] The mobsters created false paperwork indicating that the gas would be sold in New Jersey to avoid New York’s high taxes.[813] Lukov then rinsed and repeated that for several years, defrauding the state of New York out of millions in excises. Lukov and Lucchese associate John Romeo bought their gasoline from John Cassese, owner of Whirled-Wide Petroleum[814] and John Musacchia, owner of O.K. Petroleum, and a returning guest star from the 1980s.[815] Musacchia’s attorney, Marvin Kramer, would claim that the company wasn’t a knowing conspirator.[816] To further augment their thievery, Panther Oil was also used to defraud Citgo Petroleum out of $2 million by tricking Citgo into advancing credit to Panther.[817] Alex Lukov was actually convicted in 1996 for cheating New York out of gasoline taxes, but only got a $1,000 fine and continued to operate his criminal enterprise until 2000.[818] A series of indictments brought forth in November 2000 and May 2001 crippled this scheme when Alex Lukov, Lucchese Soldier Marco Minuto, and five others were charged with racketeering, among a litany of other crimes.[819] This seemed to have been the final nail in the coffin for La Cosa Nostra’s involvement in fuel tax evasion. Or was it?

Enter Roman Sobolevsky and his illustrious and tenured career in fuel racketeering.[820] Between June 2019 and July 2020, Roman Sobolevsky was the president of a Brooklyn motor fuel distribution company that defrauded New Jersey out of $19 million in fuel taxes.[821] He achieved this by falsely representing to a fuel supplier that he was shipping the fuel to Delaware, when in fact he was selling it to local gas stations in the Garden State.[822] When fuel is shipped out of state from New Jersey, taxes are not applied and so this nifty scheme yielded millions.[823] What does this have to do with the modern mob? Well in June of 1989, Roman Sobolevsky and two others were indicted for plotting to obstruct a federal probe into the gasoline bootlegging racket plaguing New York.[824] Sobolevsky at the time headed Fill-Up Corp. and sought to hide his secret interest in MNG Petroleum when a federal grand jury investigated whether Fill-Up was used to hide federal-taxes.[825] His intrigues obviously backfired and he was indicted alongside Anatoly Faerman and his wife Janna.[826] Besides his peripheral connection to the golden days of the gasoline bootlegging scheme, he was also caught in 1987 for impersonating gangster Boris Rubinov.[827] Rubinov was a reputed member of the “Russian Mafia” and interestingly enough was murdered on the same day Leo (Lev) Persits was shot and paralyzed.[828] So it seems like Roman Sobolevsky has been connected to the criminal element for ages and involved in the fuel industry for over three decades. If a relic of the old days is still defrauding the government out of fuel taxes, I guess that means there is a non-zero chance La Cosa Nostra is still involved in the oil & gas industry?

Thank you for reading and I hope you enjoyed this. This has certainly been the most ambitious ‘project’ I have ever done in my life, and I hope you got something out of it. If you can have feedback, comments, objections, or ways to improve this I’ll be happy to hear. I’ll also periodically update this article as I get additional information from the FOIA requests I have made.

In late spring of 1983, the Russian operation grinded to a halt, as tax collectors began to investigate SMI and look for its “President” Szczepkowski.[266] The Pole was sent packing home and to solve their tax problem, the group paid $100,000 to Markowitz’s accountant who sent them to attorney Marvin Kramer to straighten everything out.[267] During Markowitz’s meeting with Kramer, a petty crook named Phillip Moskowitz, who basically lived in the lawyer’s office and ran errands for him, suggested that they meet with Michael Franzese believing he could help them with their problems.[268] Importantly, Phillip Moskowitz at the time was courting (and later married) a sister-in-law of one of Michael’s brothers.[269] I wonder why the Yuppie Don never speaks about that part of his family tree… Anyways, a meeting was set between the Russian group and Franzese. The first meeting at Kramer’s office was attended by Franzese, George Kryssing, and several of Franzese’s goons including Vinnie Corroza whose mother worked as a bookkeeper for Markowitz.[270] The second meeting held in June of 1983 at David Bogatin’s Lesez Petroleum[271] office included Franzese, Lawrence Iorizzo, George Kryssing[272], Sheldon Levine[273], and Michael Markowitz.[274] The deal they struck was as follows: proceeds from tax evasion would be split 75% in favor of Franzese’s group and 25% for the Russian group[275] with the Soviets keeping their Brooklyn and Queens gas stations and the Franzese group keeping control of gas retailers in Long Island.[276] If you are keeping score of the economics, on a hypothetical theft of 20 cents per gallon, the Franzese group kept 15 cents – this is important for later. In his book, Michael Franzese, as usual, glossed over the details and combined the two meetings into one.[277] The main catalyst for the initial outreach by the Russians, according to Franzese, was to help collect a $7,500 debt from one of Markowitz’s gas station operators.[278] Another reason for the meeting, according to Suffolk and Nassau police, was heightening tensions and increased threats of violence between elements of the Russian mob in Brighton Beach and the Colombo Family over control of “no brand” gas.[279] I also found a reference stating that Evsei Agron also helped facilitate the 1983 gasoline bootlegging deal with a Colombo Crime Family captain (almost certainly referring to Michael Franzese).[280] After all, Evsei Agron was listed as a Vice President of a Brooklyn fitness club that had ties to Colombo heavyweight John “Sonny” Franzese.[281] The last significant event that stemmed from the meeting was that associates would be sent to Florida to establish a chain of wholesalers and export the daisy-chain scheme to the Sunshine State.[282] Franzese would receive 40% of the profits, with the rest split between the various cartel participants.[283] Once again, that amounts to an 8 cents per gallon kick-back to the Colombo Crime Family. In March 1983, BP Oil, Standard Oil of Ohio, was pulling out of New York state amid an unfriendly regulatory environment and wanted to divest its retail arm and sell its oil terminal.[284] Eventually it sold its gas stations to Northville[285] and its Oceanside Oil Terminal to Bogatin, Skolnick, and their secret partner Franzese[286] who used E.W.E Corporation as the front company to buy it.[287] With the added Russian participants, the entire enterprise grossed a billion dollars over the following year with the Colombo’s cut being $200-$300 million.[288] The cartel at this point centered on Iorizzo, who handed the real books and records, and David Bogatin, who handled the Russian contribution.[289]

Mobsters Seek out the Sun

The idea to expand into Florida brewed in Lawrence Iorizzo’s head for quite a while, before the fuel cartel formed or the Russians were brough onboard. Already flush with cash in the summer of 1982, Lawrence Iorizzo moved to the Sunshine State with style, purchasing a $600,000 Boca Raton waterfront mansion that came with a yacht.[290] The first Florida Iorizzo corporation popped up in July of 1982 named Blue Bell Trading.[291] William Rothfuss, Larry’s wife’s uncle[292], was named as its President and Charles Yingst was its Registering Agent. It seems, however, that the government was mistaken, and William Rothfuss was actually a Panamanian national who washed windows in Houston Holding’s office.[293] The corporation was registered to Iorizzo’s Boca Raton home and folded up without doing any business after a New York bankruptcy court involving Vantage placed a lien against the house.[294] That was just a minor set-back as Larry would soon be back. In late 1982 Iorizzo’s relatives and business associates started to appear in Broward and Palm Beach counties.[295] After putting together the New York fuel cartel in late 1982, the racketeers started to expand into Florida in earnest during the winter of 1982-1983.[296]

The Florida taxation system was different than that of New York but was just as exploitable. Licensed wholesalers were responsible for collecting from retail service stations 9 cents in federal taxes, 9.7 cents in state taxes and potentially any additional local county taxes.[297] For example, Broward county levied an additional 4 cents per gallon while Palm Beach county only charged an additional 2 cents.[298] In total, wholesalers were responsible to collect, on average, 21 cents in taxes per gallon.[299] Florida’s tax collection system itself was based on “a gentleman’s agreement” whereby the state relied primarily on reports filed by wholesalers to keep track of what was owned (hoping they were honest).[300] Their monthly reports were only checked for mathematical errors.[301] Wholesalers themselves were audited on a three-year cycle.[302] It was a very weak system that was vulnerable to sophisticated racketeers like Iorizzo. The fuel cartel stole taxes using primary two methods. Houston Holdings would sell their fuel below cost but would only make a sale to another wholesaler with all taxes included.[303] These “tax-paid” transactions were unusual, since wholesalers sold to each other tax-free, but most operators just looked the other away and took advantage of the low prices. The other method involved Iorizzo shuffling fuel transactions between several phony wholesalers making tax-free transactions, when in reality they were being secretly sold to retailers instead.[304] To augment this scheme, Houston would hold large inventories of gasoline on the books (which were not subject to taxes)[305] and report few sales to the government.[306] To further muddy up the trail, Houston failed to file the required monthly reports for a good chunk of its existence.[307] Finally, Houston Holdings would keep two sets of books with one listing the firm’s taxable sales to service stations and another listing its fictitious gasoline inventories.[308] This endeavor would prove to be extremely profitable for the group.

[img]https://imgur.com/gallery/JfbMFR8[/img]
(L:R): Charles Yingst, Joseph Yorizzo, and Jerome “Jerry” Zimmerman

Houston Holdings, which already operated in Long Island and had wholesale licenses in both New Jersey and Connecticut[309], began business in Florida in March of 1983.[310] On its application to acquire a wholesaler’s license in Florida it indicated that it planned to sell 30,000 gallons a month and posted a $7,200 bond.[311] Around the same time, Charles Yingst, Iorrizo’s chauffer and bodyguard[312], was back in Florida to start recruiting clients for Houston.[313] They marketed their gasoline below cost in an effort to establish a customers base and a brand name.[314] When asked how Houston could possibly sell at such low prices, Yingst offered some gibberish about how they could “manipulate” spot markets in the Gulf Coast, Pacific, and New York to bring cheap fuel to Florida.[315] Some operators did not believe that, but most ignored the warning signs and did business with Houston and its many sister companies anyways.[316] Of course this was all happening before the fateful meeting in Bogatin’s office, so it is a bit bizarre to me seeing references to Franzese and Markowitz investing $50,000 to “kick-start” the Florida operation.[317] Some sources also say the Florida split was not 40% as previously stated, but followed the original split agreed between Markowitz and Franzese of 75/25 in favor the Colombo group.[318] This confusion probably came as a result of either authorities or newspapers combining or confusing the details discussed in Bogatin’s office. In any case, Markowitz and Franzese probably invested money not to start (since it was already happening) but perhaps to expand the scope and pace at which the scam was developing in Florida by acquiring licenses or setting up even more dummy corporations. At any rate, after June of 1983, the Russians clearly became involved and helped take the operation to the next level.

Although Miami and South Florida were considered “Open Territory” since time immemorial, mobsters seeking to do business in the Sunshine State usually still paid their respects to Tampa’s Don, Santo Trafficante Jr.[319] Yet despite the enormity of Franzese’s illegal operation there, Michael never dealt with the Silent Don.[320] We only imagine Santo’s reaction when he read in the newspapers like everyone else how much money was stolen right under his nose. Houston Holdings was ramping up over the summer and fall of 1983 until it almost hit a snag. A routine audit in November of 1983 found that the 1.5 million gallons of gasoline Houston Holdings “held” in its inventory did not exist.[321] Instead it secretly sold that to retailers and pocketed $208,000 in taxes it was supposed to pay.[322] Houston paid the money back and continued to operate as usual with auditors failing to question or audit their subsequent monthly reports despite its previous falsification.[323] Jim Barger, chief of Florida’s Department of Revenue’s Audit Selection Bureau later said, “It was the conclusion of the field inspectors, the auditors, and the department that since Houston Holdings had corrected its tax liability, there was no need for future inspections or audits”. This proved to be a big mistake as we will soon see. To further the scheme, Peter Raneri using the alias ‘Peter York’[324] bought an inactive licensed gasoline wholesaler named Kendall Petroleum in May of 1984.[325] According to Franzese, within months of moving to Fort Lauderdale, Houston Holdings was moving 40 million gallons per month, and they were taking down an additional half-a-million a week in stolen taxes.[326] What ever the real figure was, legitimate competitors soon faced the pains of having to compete with the bootleggers. William Lank, head of the Florida Petroleum Marketers Association said that legitimate wholesalers experienced such a massive drop in sales during 1984 that several major oil companies hired private detectives to see what was happening.[327] It got so bad that genuine wholesalers tipped off the government about Houston’s ability to undercut them[328] which led to Operation Tiger Tail.[329] The investigation uncovered numerous phony corporations used to create paper mazes and trick officials. Among the firms used to further the scheme were: Houston Holdings, Houston Trading, Southern Belle Petroleum, Southern Belle Petroleum Marketing, Kendall Petroleum, Conlo Services, and SOS Petroleum.[330] An example of a daisy-chain transaction used during this scheme happened as follows. In June of 1984 19 million gallons of gasoline was sold by SOS Petroleum to Conlo Services.[331] Since it was a tax-free transaction between two licensed wholesalers, it didn’t trigger the $3.6 million tax liability.[332] The following month, those same 19 million gallons were sold to Houston Holdings, a licensed wholesaler.[333] In the month of August, Houston then sold those 19 million gallons to Kendall Petroleum, another licensed wholesaler.[334] When examined, these transactions were bizarre given that Houston’s and SOS’s offices stood just one mile apart in Fort Lauderdale.[335] All those transactions, however, where bogus paper transfers as the gasoline stayed in storage tanks at Port Everglades before being secretly sold to retailers who paid up the taxes due.[336] This one transaction netted the bootleggers $3.6 million in taxes, as all four wholesale companies went out of business before the state could collect.[337] Mind you, this was the quantity reported by the companies, which constantly falsified their records and it stands to reason the actual quantities sold were much higher. For instance, Kendall Petroleum never even filed reports for the months of June to August 1984 during which Houston “sold” it 36 million gallons of fuel.[338] SOS Petroleum’s filings were also highly suspect given that between the months of June and August 1984, it “sold” an identical amount of gasoline and diesel, 6 million gallons each.[339] This, of course, is not very likely given gasoline sales outweigh diesel sales by 15 to 1.[340] Houston Holdings would shut down in August of 1984.[341] Florida would file tax liens of $9.8 million against Houston and $4.4 million against Kendall, but these were pointless given that the state knew these companies had no assets.[342] Those daisy chain firms were also used to obscure the money laundering trail. For instance, Houston Holdings would regularly wire checks ranging from $50,000 to $220,00 to Houston Trading which then wired the money to Miami Gold, Michael Franzese’s movie production company.[343] Miami Gold would help launder at least $1.8 million in stolen gas taxes.[344] Jerry Zimmerman, Miami Gold’s partner, originally arrived in Florida in late 1983 to work as a “salesman” with a $500 per week salary for Houston Holdings.[345]

After legitimate wholesalers tipped off the government, Operation Tiger Tail began in June of 1984 investigating irregularities within the fuel industry, beginning with Sun Coast Petroleum.[346] Although not connected to the Colombo cartel operating in Florida it showed the state government just how big the problem was.[347] Florida’s investigation got a big boost, when a principal architect of the entire scheme, Iorizzo, started to cooperate with the government.[348] In April of 1985, Conlo Services in Farmingdale, New York and SOS Petroleum in Tuxedo Park, New York were raided by agents of the Florida Department of Law Enforcement (FDLE), seizing volumes of transactional records.[349] On May 22nd, 1985, 10 company officials were arrested in connection to stealing $1.6 million in sales taxes.[350] Among them were Charles Yingst of Houston Holdings, Robert Meyer of Southern Belle Petroleum, Ronald Weiner co-owner of Conlo Services, Peter Raneri of Kendall Petroleum, George Speigel of SOS Petroleum, and others.[351] This, unfortunately for the racketeers, was just a prelude of what was to come. Florida collected about $452 million per year in motor fuel taxes and the government initially estimated that tax evasion cost the state up to $200 million over an 18-month period.[352] The racketeers moved in too quickly and too aggressively. They simply got greedy and helped create such a dent that the government couldn’t help but notice and react. On December 20th, 1985, Franzese and 25 others were indicted for stealing $40 million just in local and state taxes between 1983-1984.[353] The 177-count indictment alleged that Franzese and his cartel set-up nine dummy corporations to skim fuel excises.[354] All those charged in May were indicted in this broader indictment as well and included additional operators like Martin Meyer of Dart Oil, George Kryssing of Keri-Lynn Petroleum, David Bogatin, Michael Markowitz and Lev Persits of Oceanside Oil Terminal[355] and Paz Gas.[356] Samuel Alexander of the Florida State Department of Revenue believed that the Franzese-led group skimmed $55 million in state taxes since 1983.[357] State and local taxes were ~12.7 cents per gallon and so by doing a little bit of math, that works out to ~315 million of gallons of gasoline sold by taking the low-end figure of $40 million. Given that the federal tax was 9 cents, that’s an additional $28.3 million in federal excises the group very likely stole that went unpunished. Truly mind-boggling figures.

[img]https://imgur.com/gallery/1vc0DsG[/img]
(L:R): David Bogatin, Thomas Casale, William Ferrante, and Michael Franzese

Franzese Out – More Gangsters In

Now before it went south in Florida, things weren’t going as smoothly as they ought to have been in New York from a Colombo perspective either. True, the fuel cartel was expanding, and everyone was making more money. By the mid 1980s, nearly 100% of Long Island’s small, independently owned gasoline stations were involved in gasoline tax scams to some degree.[358] Yet the scheme began to garner interest from the other Families too. Newspaper articles and even indictments don’t always do a good job of illustrating the broad nature of the first fuel cartel that took place in the early 1980s or even into later years. Indictments usually focused on specific people and actions and would annoyingly state, “X person together with others known and unknown to the Grand Jury undertook illegal action Y”. Articles didn’t always connect the dots either and so the best way I found of keeping track of who was in or worked with the Colombo fuel syndicate was to follow the various “burn” companies used in the conspiracies mentioned in legal documents or newspapers. Take for instance A.K.A Petroleum which was formed in July of 1983.[359] The company was secretly controlled by John Mussacchia who was also the owner of O.K. Petroleum Products.[360] For a 1-2 cent kick-back per gallon, Herman DeJonge, one-time owner of Rappaport Fuel, was compelled to create false invoices from 1983 to April of 1984, showing that his company sold gasoline tax-free to either Northbrook Associates, Cabot Petroleum, or Houston Holdings.[361] Those three companies would then sell the gasoline as “tax-paid” to A.K.A which would then sell it to O.K.[362] Of course, these were all phony paper transactions because in reality O.K. Petroleum would take direct ownership of the gasoline from a fuel terminal[363] and this particular daisy-chain was used to evade paying taxes on at least 8.6 million gallons of gasoline.[364] All three dummy corporations were owned by the Colombo Crime Family, which means that Mussacchia had to be part of the Franzese-led syndicate. Interestingly enough, John Mussacchia’s cousin and secret co-owner of A.K.A Petroleum was a fellah named John A. Gambino.[365] Contrary to the association his last name creates, he has been repeatedly identified as a Lucchese Crime Family associate.[366] Although he played a rather minor role in the grand scheme of things, it shows other Families started to slowly creep into the racket.

As I mentioned, the various syndicate members didn’t always get along with each other and things would occasionally get violent. The biggest offender, without a doubt, had to be Sheldon Levine who would always seek to undercut his fellow “friends”. As some point (probably early 1983), Lawrence Iorizzo found out that Shelly was under-selling the fixed price that was set by the fuel cartel.[367] When Michael Franzese found out he was prepared to dispatch two thugs to shoot up his office.[368] Levine agreed to stop, but soon the temptation to under-sell crept in again.[369] Levine went to Anthony Federici, who was mistakenly identified as a Lucchese soldier for help.[370] Federici, who was actually a Genovese member[371], helped assign Joseph Galizia as Levine’s new guardian angel.[372] With his new mobster pal, a sit-down took place in Florida to work out a cease-fire and smooth everything over.[373] As usual, Franzese skips over the details and simply summarized that Levine’s operation would be swept under Galion Holdings.[374] That’s not very helpful given we already know Levine was part of the cartel, but okay… Given this meeting coincided with the expansion of Houston Holdings into Florida, the meeting probably took place in late-spring/early-summer of 1983.[375] As such by the middle of 1983, the Genovese Crime Family was involved in the gasoline tax-evasion racket. Sheldon being Sheldon would break the agreement a final time and not even Galizia could save him. Around Christmas of 1983, Levine and George Kryssing were severely beaten.[376] I think Michael Franzese misinterpreted what it meant by being in the “giving spirit” during the holidays. Sheldon Levine, in his affidavits, provided a different reason for the violence. He said the “price-wars” had nothing to do with his assault and that instead Levine was slapped by John Mussacchia and John Gambino for allegedly not paying an $850,000 debt.[377] Levine believed it happened because Mussacchia, a confederate in the gas venture, was actually stealing from his partner and used Levine as a scapegoat to conceal his own thefts.[378] As such by the end 1983, the scheme was still dominated by the Colombo Crime Family, but now the Genovese’s and to a lesser extent the Lucchese’s were involved.

[img]https://imgur.com/gallery/xRHwjO2[/img]
(L:R): John A. Gambino, John Mussacchia, and Joseph “Joe Glitz” Galizia

Northbrook Associates’s license was also cancelled by New York in December of 1983.[379] George Kryssing, was in part, responsible for this cancellation because he “burned” too many gallons of gasoline through it without notifying Lawrence Iorizzo.[380] This might have been another reason as to why Kryssing was assaulted during the Christmas Holidays in 1983. Curiously enough, despite Iorizzo possessing other licensed companies like Houston Holdings and Conlo, Larry, Kryssing, Sheldon Levine, Bernard Short, and Joseph Aracri chose to find another licensed company to “burn” gasoline through.[381] On Kryssing’s request, Anthony Zummo found a new licensed company for sale called Cabot Petroleum Products, which they purchased for $175,000.[382] This was a particularly desirable license because it had very little historical activity on it and all its filings were up to date.[383] The group installed Yassim Akkurt as the stooge President and created Vestal Petroleum as an off-shoot of Cabot to further the scheme.[384] Cabot was used as a dummy company in several simultaneous daisy-chains. It was used in the A.K.A/O.K. Petroleum daisy-chain described above, by Sheldon Levine for his companies No Brand Petroleum and Snug Harbor[385] and by Joseph Aracri and George Kryssing.[386] In February of 1984, Sheldon Levine also set-up another dummy Connecticut licensed corporation called Green Star Petroleum and began using it “burn” gasoline alongside Cabot.[387] Cabot’s license was cancelled in March of 1984 as this time it was Lawrence Iorizzo who “burned” too much gasoline through it.[388] In April of 1984, associates of the Colombo Crime Family muscled in on Rappaport Fuel, the licensed wholesaler mentioned previously.[389] Instead of simply being affiliated with their cartel and paying Herman DeJonge for his services, I guess the group decided to just straight up take it over. With the Cabot license cancelled, Joseph Aracri and Zummo were left with no “burn” company and contacted Iorizzo to further their operation by “burning” gasoline through Rappaport Fuel which Larry now fully controlled.[390] Why this happened is a bit puzzling to me, because after Cabot’s cancellation, Sheldon Levine’s corporations started “burning” their gasoline through Houston Holdings right away.[391] John Mussacchia and O.K Petroleum were also using Houston.[392] Perhaps Larry Iorizzo learned from his previous mistake and wanted to make sure different participants were “burning” gasoline through different corporations to minimize the risk of future license cancellations. Iorizzo, being the ever-helpful gentleman, got in touch with Ronald Weiner who’s firm Conlo was already being used in daisy chains with Power Test, New York Fuel Terminal, and in Florida to now arrange for Aracri and Kryssing to use it as well.[393] In May 1984, one the new daisy-chains employed by the cartel was as follows. General Oil would sell gasoline to Pilot to Conlo in a tax-free transaction.[394] Then, Conlo would sell to Rappaport Fuel or Houston Trading to Petroleum Haulers, tax-paid, and then re-sold back to Pilot or Pride Oil.[395] Gasoline was now “burning” through Conlo Service, Rappaport Fuel, and Houston Trading.[396] The progression of the various daisy-chains after this are harder to track given one of principles of the scheme was about to go to prison.

Throughout the course of my research for this ‘article’, I found it quite amusing just how dysfunctional this cartel was at times. In addition to the occasional violence between the various participants, the cartel was plagued by law enforcement pressure throughout most of its existence. In a way, it is pretty amazing that they lasted as long as they did and would have lasted a lot longer if Lawrence Iorizzo didn’t flip. The first on the chopping block was Bernard Short, one of the originators of the cartel. In January of 1984, he was convicted of grand larceny and bribery for stealing 3,200 gallons of gasoline from a Pilot gas station.[397] In a petty dispute between two businessmen with egos, Bernard dug a deeper hole for himself when he offered or “bribed” the gas station owner into signing an affidavit claiming it was a civil disagreement without criminal intent in exchange for dropping a $112,000 debt.[398] Bernard Short would successfully appeal the conviction in 1985, but this was just the start of the group’s legal troubles.[399] Another troublemaker for the cartel was accountant Sheldon Fishman. In December of 1983, Fishman was charged in connection with an $11.5 million loan fraud scheme where he and his partner personally netted a million dollars.[400] In April of 1985, Sheldon pleaded guilty to attempted grand larceny[401] and subsequently became an informant.[402] Turns out he was also connected to the gasoline business and Russian mobsters wanted him dead.[403] Michael Franzese talked out the Russian mob from killing the accountant and as a show of gratitude Fishman refused to testify against Franzese or Sheldon Levine after being bailed out of prison by those same gangsters that wanted him dead.[404] The biggest blow, however, came when the law finally caught up to Lawrence Iorizzo.

On November 16th, 1983, the 45-year-old Long Island distributor was indicted for defrauding the states of New York and New Jersey out of $2 million in taxes from 1978 through 1981[405] and for stealing 50 loads of gas from Ashland Petroleum.[406] In April 1984, Iorizzo was found guilty on eight counts of tax and mail fraud in attempting to defraud the government out of $1.1 million in unpaid taxes.[407] In June of that year, he was also convicted of wire fraud and interstate transportation of stolen property stemming from a scheme to defraud Ashland.[408] For those two felony convictions, he was facing upto 55 years in prison alongside a heavy fine.[409] Clouded by money and fear of prison, he told Michael Franzese that he would lam it in Panama despite the mobster’s supposed objections.[410] Iorizzo would later testify that Franzese threated his son if he didn’t leave for the Central American nation.[411] On June 22nd, 1984, just prior to his sentencing, an arrest warrant for Iorizzo was issued[412] as the oil man made refuge for Panama.[413] Iorizzo owned a large estate there and supposedly paid millions to General Noriega in return for banking connections, personal security, and other amenities.[414] He designated “Wife II” to be his fugitive wife and traveled under the name Salvatore Carlino.[415] Iorizzo did not stay idle in Panama and continued to run the fuel cartel and the various daisy-chain schemes employed in New York and Florida.[416] David Bogatin, for instance, traveled to Panama to meet with Iorizzo to discuss business.[417] He also used the jet owned by Houston Holdings to make monthly trips to Vienna, Austria for money laundering purposes and to expand the gas tax skim to Europe.[418] Iorizzo had extensive interests in Austria dating back to the early 1980s as he opened a safety deposit box at the Creditenstalt Bank Verein in Vienna sometime in late 1982 or early 1983.[419] Shortly thereafter, he began to wire substantial amounts of money into various accounts and the dozens of deposit boxes in his or his co-conspirator’s names like Peter Raneri.[420] One such account that was later recovered by the feds contained $13 million dollars.[421] David Bogatin would later tell authorities in Vienna precisely where Iorizzo kept hidden approximately half a billion dollars in various currencies.[422] Iorizzo also introduced Austria to other bootleggers like George Kryssing who deposited a million dollars there during the summer of 1983.[423] In fact, Austria wasn’t the only European nation used for money launders and other cartel members Martin Meyer and Ronald Weiner deposited millions in Liechtenstein.[424] After months of pressure, the U.S. negotiated some sort of agreement with Panama and Iorizzo was captured and sent packing north.[425] On September 29th, 1984, Iorizzo was arrested by FBI agents in Miami as he stepped off the plane and on October 4th, he agreed to become an informant.[426] In his first interrogation, he likely told the agents about the Franzese inspired rip-off the two petroleum firms, O.K. and O.B. that was mentioned before.[427] On March 5th, 1985, he testified against Louis Fenza, President of Down to Earth Management, about the $50,000 fraudulent check he wrote to pay for gasoline deliveries.[428] Another early victim of Lawrence Iorizzo was Frank “Frankie G” Castagnaro, one of Franzese’s main henchmen. In May of 1984, he was charged for stealing $68,000 worth of gas from the Mobil Oil Corp by using bad checks.[429] The investigation into him grew out of the Bernard Short and Lawrence Iorizzo cases.[430]

[img]https://imgur.com/gallery/9Lcncls[/img]
(L:R): Michael Franzese, David Bogatin, and George Kryssing

Pressure on Michael Franzese was mounting, and he could sense the heat from Ed McDonald and the Eastern District wherever he travelled.[431] Following Iorizzo’s turning, Sheldon Levine become one of the leading figures in the scheme.[432] Franzese continued to exercise control of the operation and attended meetings held by the major figures at either Peter Raneri’s restaurant or Sheldon Levine’s office alongside Markowitz, Bogatin, Joe Glitz, and “several others” in the gas business.[433] Throughout the course of writing this I have grown more and more frustrated with the how cryptic and frankly unforthcoming Michael was and is in his materials. Anyways, on December 19th, 1985 Franzese was hit with a double whammy, as he was simultaneously indicted by the feds in the Eastern District of New York on federal racketeering charges and in Florida for state racketeering charges.[434] In the federal 28-count indictment the “Franzese Group” allegedly skimmed millions of dollars from blue chip corporations, unions and the government.[435] The indictment mainly focused on the various financial frauds Franzese’s cronies were undertaking on his behalf and the only relevant portions of the charges pertaining to the gasoline business were a mixture of tax evasion and a financial crime.[436] Through Houston Holdings, Franzese stole over $3 million in gasoline taxes from New Jersey and essentially “tricked” the Union Indemnity Insurance Co. of New York in putting up a $500,000 fuel tax bond on his behalf.[437] When Houston failed to pay the taxes, folded up, and defaulted on the bond, Union Indemnity was forced to make up the $500,000 loss[438] and went into receivership.[439] The Florida indictment focused solely on gasoline tax evasion and was previously discussed in more detail. While Franzese claimed he was not as worried about the charges he immediately faced,[440] he was anxious about Brooklyn’s organized strike force chief, Laura Brevetti’s investigation into the actual gasoline scheme and a future indictment it could produce.[441] Her investigation was examining the alleged bootleg ring that was stealing up to a quarter of a billion dollars in state and federal gasoline taxes.[442] On March 21st, 1986, Michael Franzese threw in the towel and took a 10-year prison sentence alongside agreeing to give the government at least $14.75 million in fines and restitution.[443] As part of his plea, Franzese was shielded from testifying at criminal trials or in grand juries against any of his associates, but he would have to cooperate in any civil proceedings to recover additional money from any scheme he was involved in.[444]

Marat Balagula – The King of New York

After Michael Franzese was indicted, Sheldon Levine could see the writing on the wall. It was now only a matter of time before the government got him too. Not only were some of his business associates caught in Florida alongside Franzese, the Russians in New York were also facing trouble. In early August of 1985, David Bogatin was forced to close down Oceanside Terminal by the state of New York in the wake of charges that 500,000 gallons of gasoline were being stored illegally there.[445] About a week after, David Bogatin, Michael Markowitz, and Joseph Skolnick were indicted on a $1.5 million gas tax fraud in connection to Shoppers Marketing.[446] Iorizzo helped law enforcement make that case.[447] As mentioned before Bogatin and Markowitz were then re-indicted in connection to the $40 million tax skim in Florida. Seeing all this going down, Sheldon Levine was caught on a bug saying to the associates that were still left on the street, “I got my wife burning records in the fireplace” and “I destroyed five boxes…other boxes will be gone”.[448] Alongside his habitual desire to cheat his “friends”, Sheldon Levine also had a bad habit of incriminating himself while the government was listening[449] and in one conversation he said the infamous words, “… what we’re doing here is not legal”.[450] On February 15th, 1986, the frizzy-haired Jew was arrested for obstruction of justice, and that was just the start of his troubles.[451] He posted a $10 million bail secured by various properties, equity in companies, and 24 Mercedes-Benz automobiles.[452] Just two days prior to his arrest, the government executed search warrants on several homes and businesses including a certain Energy Makers of America (EMA).[453] Later in February, a grand jury in the Federal Eastern District of New York in Brooklyn and another joint state-county grand jury in Suffolk county targeted 60 individuals in connection to the bootleg-gas ring in New York.[454] Sheldon Levine was one of the individuals investigated, alongside Joseph Galizia, Igor Roizman, Igor Porotsky, and Marat Balagula of Energy Makers of America.[455] John Jacobs, Franzese’s attorney, used these grand jury investigations as an opportunity to try and muddy up previous allegations by authorities that Michael Franzese was the head of the oil scheme.[456]

Levine got a taste of the upcoming storm on April 23rd, 1986, when he was indicted by the Eastern District of New York for failing to pay ~$1 million in gas taxes during the first half of 1984.[457] Then on July 23rd, 1986, Sheldon Levine alongside six other defendants were indicted by the state of New York for evading $11 million in gasoline taxes.[458] In what was dubbed by prosecutors as the “Green Star Conspiracy”, the group alongside un-named conspirators used Green Star Petroleum, a licensed Connecticut wholesaler, to import 70 million gallons of gasoline between July and December, 1984 and sell it to distributors owned by the group without paying federal or state taxes.[459] Charged alongside Levine were Morton Gerald Friedberg, Director of Marketing for Lewis Petrochemical and Trading Corp., Igor Roizman and Igor Porotsky both of Semar Petroleum and Green Star Petroleum[460], Nicky Dozortev, Gerald Teich, the accountant, and Joseph Galizia, a soldier in the Genovese Crime Family.[461] Apparently the scheme was decided upon during a July 1984 meeting by Levine, Roizman, Porotsky and “other conspirators” (although as we will soon see it happened much earlier).[462] Green Star Petroleum was incorporated in February of 1984 and “headed” by a Polish immigrant named Stanislowa Korsakowska who was paid $10,000 to go back to Poland in November 1984.[463] The daisy-chain worked like this: Lewis Petrochemical & Trading, a licensed wholesaler, would sell gasoline tax-free to Green Start Petroleum.[464] The group would then “burn” gasoline through Green Star by selling “tax-paid” fuel to No Brand Petroleum, Semar Petroleum, Snug Harbor, and others.[465]

[img]https://imgur.com/gallery/pSf0LTf[/img]
(L:R): Gerald Freidberg, Igor Roizman, and Igor Porotsky

A couple months later, a superseding monster 1,004 count indictment was unsealed charging those seven defendants, plus three more, of additionally skimming $29 million in state gasoline taxes.[466] Thus by October 30th, 1986, Sheldon Levine and nine other men were alleged to have stolen $55 million in federal, state, and local taxes between February 1984 and early 1986.[467] New licensed dummy corporations were listed and included Carger Petroleum[468] and California Petroleum which sold 23 million gallons of gasoline in February 1985.[469] Most of the participants pled guilty in March of 1987 and got sentences ranging from probation to two years and were forced to pay a total of $16 million in restitution.[470] After being originally sentenced to 2-6 years, Levine was re-sentenced for up to 66 years in prison after he failed to pay any restitution in 1989.[471] With Lawrence Iorizzo, Michael Franzese, and now Sheldon Levine gone, Marat Balagula became the most important gasoline bootlegger in the Tri-State area.

Marat Balagula was born in 1943 in a small Russian town to a hard-working middle-class family.[472] Determined to reach higher heights, Marat became a well-educated individual receiving a diploma as a teacher of mathematics and then a business degree in economics and mathematics.[473] Far from adhering to the USSR’s ideology of communism, Balagula dabbled in the Russian black market peddling various types of goods where he learned about the riches that could be acquired under the West’s capitalistic system.[474] Thus, while never practicing Judaism, Balagula used his heritage to move to the U.S. on January 16th, 1977.[475] Apparently the straight life didn’t appeal to Marat and after six months of working for a textile manufacturer, he re-located his family to Brighton Beach, Brooklyn.[476] There, he rose up the echelons of the Russian mob extremely quickly by acting as a sort of “consigliere” for the don, Evsei Agron.[477] Yet his ambitions would not allow him to be number two, and Agron soon found his end on May 4th, 1985.[478] Who exactly did it is a matter of debate. Agron at the time was feuding with David Shuster and Boris Goldberg.[479] Elsewhere, I found that Agron was supposedly murdered because he sought a piece of the lucrative bootleg gasoline business.[480] As a result, the need for his elimination was agreed upon by the Colombo Crime Family alongside their Russian partners[481] with Marat Balagula allegedly giving the order to kill Agron[482] and involving the Nayfeld brothers in the conspiracy.[483] That is one murder not commonly attributed or associated with Michael Franzese. Unlike Agron, Balagula sought to organize the “Organizatsiya” and lead it into the realm of big money-making white-collar crimes.[484]

[img]https://imgur.com/gallery/YS2Gi4C[/img]
(L:R): Evsei Agron, Boris Nayfeld, and Marat Balagula

Within a year of Marat’s move to America, he gained control over fourteen gas stations.[485] It wasn’t, however, until 1983 that he formed his two fuel distributorships.[486] This proves that he was not the inventor of the daisy-chain gasoline tax scheme, since both the Franzese/Iorizzo and Markowitz/Bogatin group were already doing it back in late 1982 and early 1983, respectively. One of his wholesaling companies was called Mallard Enterprises, which was formed in November of 1983 along with Lev Naum, Efram Nezhinski, and Carlos Orsini.[487] The other fuel wholesaler he used was named Energy Makers of America.[488] He started off by buying tax-free fuel from a corporation owned by the Nayfeld brothers called R&R Cab Corporation.[489] Originally formed as a taxi company, the Nayfeld brothers then converted it to a sham oil corporation.[490] Marat’s business greatly benefited the involvement of three key corporations: Power Test, A. Tarricone, Inc. (ATI), and the New York Fuel Terminal Corporation. As mentioned previously, Louis Cohen, a VP at Power Test, worked with Conlo and Larry Iorizzo to steal gasoline taxes. Well, Power Test also worked closely with Mara Balagula through John Bryne, a district sales manager, and Robert Eisenberg who was Power Test’s in-house council[491] and later a “financial consigliere” for the new Russian don.[492] It is relevant to point out that the very same Robert Eisenberg once worked as an associate for attorney Marvin Kramer.[493] The two helped Marat Balagula set-up phony companies to sell “cheap” (bootleg) gas exclusively to Power Test.[494]

Hamilton Oil Brokers was one of many unlicensed shell corporations was used in various daisy-chains to sell bootleg gasoline to Energy Makers of America.[495] On paper, Hamilton Oil Brokers was owned by John Bryne, but in reality, it was controlled by Marat Balagula.[496] Hamilton was also used to try and circumvent the problems Michael Markowitz and David Bogatin were having. Oceanside Oil Terminal was closed in the summer of 1985 after the state charged that bootleg gasoline was stored in it.[497] To try and get around that Leo (Lev) Persists, who was a shareholder in a corporation that owned the land underneath the terminal, loaned Alexander Shkolnik $500,000 to “purchase” the terminal from Markowitz and Bogatin.[498] Alex Shkolnik then formed Crossboro Energy Inc. that summer to purchase the terminal and then subsequently subleased it to John Byrne’s[499] Hamilton Oil Brokers.[500] Hamilton then hired Shkolnik to work as a gasoline salesman for a $2,000 salary per week.[501] With this “new ownership” in place, in early December 1985, a court judge was asked to re-open the oil terminal so that the group could get back to business.[502] Of course the government saw through that trick, called Hamilton a bogus oil company, and maintained that Bogatin and Markowitz still secretly controlled the terminal.[503] Of course it didn’t help their case when Bogatin and Markowitz were indicted in Florida, although judge Wexler maintained that he made up his mind before he read about it in the newspaper.[504] As such Wexler denied Alex and Hamilton’s motion and kept Oceanside Oil Terminal closed.[505]

Power Test benefited greatly from their association with the bootleggers. From the brink of ruin in early 1983, CEO Leo Liebowitz began negotiating with Texaco in the winter of 1983 to buy Getty Oil.[506] Due to anti-trust problems, Texaco was forced to sell Getty and by 1985 Power Test concluded the deal and Leo sat atop a $1.3 billion company.[507] Power Test took on the Getty name and Forbes lauded Leo as one of the most brilliant businessmen in America.[508] Amidst all this success, Newsday quoted Liebowitz as saying, “The sky’s the limit. We are the largest independent in the United States and we are just getting started!”[509] We will revisit Getty Oil and their legal troubles quite soon.

Marat Balagula and Energy Makers of America got another big boost to their operations when they got the sub-contract to supply gasoline to 150 ATI stations[510] which happened sometime right before June of 1985.[511] ATI’s station owners didn’t benefit much from this arrangement as they saw a 16-cent hike in their prices in early June which coincided with a new state law designed to combat fuel tax evasion.[512] Michael Lipkin, an executive with the company offered up lame excuses to deflect rumors that EMA previously didn’t pay taxes.[513] In August of 1985, the state of New York hit EMA and its president Marat Balagula with charges alleging that it imported more than a million gallons of fuel without paying taxes.[514] These legal troubles were rather inconsequential in the long-run as the relationship between Balagula and ATI proved to be extremely profitable.

The final boost to Marat’s operation was his relationship with Joseph A. Macchia, owner of the New York Fuel Terminal Corporation (NYFT).[515] NYFT owned and operated M&Q terminal in Brooklyn, the very same one used by Michael Markowitz and Joseph Skolnick for their original fuel importation business.[516] It is Macchia’s relationship with Marat Balagula that made me re-evaluate a common narrative I have seen in books and videos about the relationship between Michael Franzese and Marat Balagula. In books I have read, Marat Balagula was described as running a different fuel syndicate than that of the Franzese/Iorrizo/Bogatin/Levine group.[517] The most conflicting narrative put forth, to me, is that of Robert Friedman’s in Red Mafiya: How the Russian Mob has Invaded America. Contrary to Anthony Casso’s account of how Marat Balagula went to Christopher Furnari, only after the Colombo’s “tried” to move in on Balagula,[518] Friedman said Marat essentially forged a pre-emptive alliance with the Lucchese and Genovese Crime Families against the Colombo’s.[519] To me, this narrative now makes no sense anymore. First, why would the Genovese go against the Colombo’s when they were already partners in the gasoline business since the summer of 1983, before Balagula even formed his fuel wholesaling businesses? Moreover, Joseph “Joe Glitz” Galizia was picked up on a bug discussing Balagula’s lavish spending habits in 1985.[520] It is obvious, then, Galizia knew Marat in 1985 (while Mikey was out on the streets) and as discussed previously Galizia was Franzese’s partner in the gasoline racket. It is counter intuitive to think that Galizia cooperated with Franzese on handling Sheldon Levine and some Russians like Markowitz and Bogatin, but Balagula was somehow off limits? Second, Michael’s supposed extortion happened sometime in late 1985 or more probably early 1986, since according to Casso, Gotti just became boss.[521] This timeline is more or less echoed by Friedman since he also makes references to Gotti’s early 1986 gasoline remark[522] and added that the “Italians” already came to Balagula’s aid during the Platenum Energy incident[523] which happened in February of 1986.[524] Why would Franzese wait until he was vulnerable due to the impending legal troubles that haunted him in the latter half of 1985 or worse until he was powerless and off the streets to make a move against Balagula? Thankfully, I have also found positive proof to back up my belief. Instead of thinking that Marat Balagula ran an independent fuel syndicate concurrently with the Colombo-led cartel, I propose that he was a semi-autonomous operator under the overall Colombo umbrella, who grew more independent over time until he got enough juice to break away and negotiate a better deal with the Lucchese’s. This is supported by the facts in the Macchia indictment which listed that Balagula, and his co-conspirators skimmed over $85 million in federal gasoline taxes, on nearly one billion gallons of gasoline, between early 1983 through the middle of 1988.[525] To carry out this scheme, they used 18 licensed wholesalers as “burn” companies and which are listed below.[526]


As I previously mentioned, going by mutual corporations listed in the various indictments is the best way, I found, to keep track of who was and who wasn’t in the various conspiracies. As it can be seen, three corporations: Houston Holdings, Rappaport Fuel, and Conlo were all at one point in time controlled or affiliated with Lawrence Iorizzo and Michael Franzese. Seeing those corporations used in the Macchia indictment shows that the groups collaborated with each other to further the bootlegging scheme. An additional three corporations: Carger Petroleum, California Petroleum, and Lewis Petrochemical Trading were all controlled by Sheldon Levine or his associates. As discussed previously, Sheldon Levine was part of the Colombo fuel cartel dating back to 1982. Lesez Petroleum was one of the unlicensed wholesalers used in the Macchia conspiracy and was controlled by David Bogatin who was a Franzese associate. As such this document more or less summarizes the progression of the gasoline bootleg scheme until 1988 in that it was first facilitated by Iorizzo, then Sheldon Levine, and finally Balagula outgrew them and started using other burn companies to further the enterprise. It is because of this, and the many previous connections peppered throughout the ‘article’ (like the Balagula-Persits relationship or Hamilton Oil Brokers and Markowitz) that I whole heartedly believe that Balagula was in fact part of the Colombo fuel assembly. What I believe happened was that Michael Franzese’s greediness got to Balagula and as soon as he found an opportune moment to escape his clutches, he did. This was not the first time Michael’s aggression drove his associates to the clutches of other crime families (like Sheldon Levine and the Genovese). Recall, also, the economics of the gasoline racket up until 1986. Michael Franzese and the Colombo’s received a kick-back that ranged anywhere between 8-15 cents per gallon of gasoline. When Marat Balagula negotiated with Christopher Furnari, he was told that he would have to kick-up 2 cents per gallon.[527] That was obviously way better economically for Balagula and explained why he considered the Colombo’s greedy and gruff.[528] I know Phil Carlo’s book is less than reputable, but the specific chapters concerning Casso’s involvement in the gasoline scheme more or less follow and expand upon his 1996 testimony to a Senate committee investigating Russian organized crime.[529] The economics are different though as in his testimony Casso initially explained that the new “mob tax” was only one-penny per gallon while in Casso’s book[530] and Red Mafiya, the tax was two pennies per gallon.[531] The mob did reportedly increase its tax to one-and-a-half cents per gallon in 1988[532] and finally to two cents by the early 1990s.[533] Regardless of the exact economics, Marat’s deal with the Lucchese Crime Family was infinitely better than the deals Michael Franzese dished out and so this move made perfect sense. This leaves a final question? Why hasn’t Michael Franzese ever elaborated on his relationship with Marat? Well, it didn’t dawn on me until I was writing this ‘article’ that when Michael’s first book came out, Balagula wasn’t yet indicted for any gasoline related crimes. Of course this isn’t the case nowadays and I wish he did talk about him. Maybe he doesn’t want to talk about Balagula because it contradicts the “brilliant businessman” image he likes to project these days. After all, despite recently chiding Andrew Russo and the Colombo’s for their extortion of IUJAT Local 621, Michael squeezed Marat so hard that the Russian had no choice but to seek help from outsiders which resulted in the Lucchese’s getting a huge piece of the bootlegging market for “free”.

By early 1986, Marat Balagula was squarely in the Lucchese camp, and his protection payments would soon bear fruit. As seen before, participants would often sell licensed wholesalers to one another and Balagula was no expectation. The Nayfeld brothers, who by now also owned Platenum Energy, became embroiled in a dispute with Michael Vax[534] and Vladimir Reznikov.[535] The duo was under the impression that the company the Nayfeld’s sold them, MVB Energy[536], was a legitimately licensed wholesaler.[537] Not only was the license invalid[538], but the company already owned federal gasoline taxes which Vax and Reznikov were now responsible for paying.[539] On February 3rd, 1986, Michael Vax went to Platenum’s office to confront the Nayfeld brothers which resulted in a shoot out.[540] Vax and Boris Nayfeld were wounded, while Alex Zeltser, a partner in Platenum, was killed.[541] Elsewhere I have seen that the person that died was identified as Ilia Zeltzer[542] or Ilya Zeltser.[543] Vladimir Reznikov would soon be back, promising to kill Balagula unless he turned over $600,000 and a piece of the gasoline action.[544] This time Balagula went to his Lucchese protectors for aid and Anthony Casso promised to help.[545] On June 13th, 1986, Reznikov was lured to the Odessa in Brooklyn and killed by Joey Testa on orders from Casso.[546] These incidents marked the beginning of increased lethal violence in a post-Franzese world. Besides gasoline bootlegging, Balagula was also involved in other white-caller schemes that included credit-card counterfeiting.[547] Credit card fraud proved to be his initial downfall and after being convicted for raking in more than $750,000, Balagula fled the U.S. three days before his November 1986 sentencing.[548] While on the lam for the next three years, Balagula continued to receive $50,000 a month from his New York underlings and his gasoline scam was stewarded by his subordinates.[549] Chief among them were John Barberio, Michael Varzar, John Pabone, and Viktor Batuner.[550]

By the middle of 1980s, Marat Balagula controlled all bootleg gasoline sales in New York City.[551] Marat’s operation was vertically integrated as he controlled ocean going tankers, seven terminals, a fleet of gasoline trucks, truck stops, and over a hundred gasoline stations.[552] John Qouck and John Pabone acquired Conlo to “burn” gasoline through, on December 11th, 1985, “from individuals who had been using Conlo for the same purpose”.[553] I’m not really sure how “Ronnie” Weiner was able to sell Conlo with its license intact given he was already under indictment in Florida, but never the less it happened. John Pabone was said to be connected to the Gambino Crime Family, although I have never seen him, or his company featured on indictments with any Gambino members or associates.[554] The two then approached Balagula seeking access to customers and for a supply of tax-free gasoline to transfer through Conlo.[555] Marat Balagula obliged and Conlo became part of a daisy-chain used to steal at least $400,000 in federal taxes between November 1985 to April 1986.[556] ATI became the source of the bootleg gasoline for Conlo through a tax-free transaction between two legitimate wholesalers.[557] Conlo would then “sell” to Beck Equities, an unlicensed wholesaler, in a “tax-paid” transaction.[558] Beck would “sell” to Westchester Hudson Petroleum, controlled by John Barberio, and Hamilton Oil Brokers.[559] Hamilton would then sell to Energy Makers of America and Shore Line Oil which employed Barberio.[560] The dynamic between ATI and Conlo is interesting in the context of the wider Macchia conspiracy. Both ATI and Conlo were used as “burn” companies to shield NYFT’s tax liability, with Conlo used in that capacity until March of 1984[561] and ATI until December of 1985.[562]

[img]https://imgur.com/gallery/B8uwVAn[/img]
(L:R): Leo Liebowitz, Marat Balagula, and Anthony Tarricone

Joseph A. Macchia, owner of NYFT, as mentioned before also worked closely with Marat Balagula to skim gasoline taxes. While fuel racketeering was popularized in New York, by the late 1980s Soviet emigres from Brooklyn brought the scheme to California.[563] The dynamic in Los Angeles was extremely interesting, but it’s mostly irrelevant for the scope of this article given La Cosa Nostra was not involved in their activities. However, one company and person did factor in to what Balagula was doing in New York and showed the national scale of the various simultaneous gasoline tax evasion conspiracies. Oleg Yasko, who controlled both Janice Ventures and Jolana Enterprises, was convicted in 1991 for stealing $1.3 million between May and August of 1987 in federal taxes in California.[564] Janice Ventures was also one of the 18 licensed companies used by Macchia and Balagula to obscure NYFT’s tax liability.[565] John Barberio, who was featured in the ATI-Conlo daisy-chain, was also employed at NYFT as the manager of wholesale gasoline sales until the mid-1980s and played a key role in facilitating the scheme.[566] As part of the NYFT scheme, taxes on nearly a billion gallons of gasoline were evaded and sold to companies controlled by Marat Balagula, Michael Varzar and Viktor Batuner which included: Mallard Distributing, Malon Enterprises, EMA, J & J Petroleum, Pioneer Petroleum, and Galias Enterprises.[567] The aforementioned John Pabone, owner of J&J, and John Quock, owner of Tun Yung Oil Co. were also involved in a scheme with Getty Oil’s subsidiary, Getty Terminals Corp., to skim $1,014,000 in taxes between June 30th and September 5th, 1985.[568] Getty Oil was the first major oil corporation in recent history to be convicted of gasoline bootlegging from their involvement with both Lawrence Iorizzo and Marat Balagula.[569] Although Leo Liebowitz denied the allegations, the Long Island Motor Fuel Task Force alleged that Power Test (Getty) collaborated with the bootleggers with some schemes totaling into the $100-million-plus range.[570] J&J and Tun Yung were both also used in the NYFT bootlegging scheme showing how all these players interconnected with each out throughout the various simultaneous conspiracies. John Quock would later turn informant[571] alongside other Balagula partners like John Byrne and Robert Eisenberg.[572]

Due to the credit card fraud convictions mentioned above, Marat Balagula globe trotted as his gasoline bootlegging operation continued to truck along in New York. On February 27th, 1989, Marat Balagula was apprehended in Germany and by December of that year he was on a C-5A military transport bound for New York.[573] He was given an eight-year sentence for his role in the credit car scheme.[574] In late February of 1992, Marat, alongside four others, were indicted in the “Tarricone Conspiracy” for stealing $400,000 in taxes.[575] He was convicted in November 1992 to an additional ten years in prison.[576] Then on June 30th, 1993, Marat alongside seven others were indicted in the “Macchia Conspiracy”, which superseded the earlier Tarricone indictment[577], and charged the group with stealing $85 million in federal gasoline taxes.[578] Marat Balagula pled guilty[579] and became eligible for parole in March 2003.[580] Marat’s demise marked the end of a gasoline “kingpin”. No longer would one person exercise overall control of the gasoline bootlegging market and after his legal troubles began, different Russian groups operated simultaneous bootlegging operators under the overall supervision of the Mafia.

[img]https://imgur.com/a/MKAqwVw[/img]

Gasoline bootlegging has existed in one form or another ever since humans invented a way to use it. For example, during World War II, rations imposed by the U.S. government to combat resource shortages prompted the creation of a gasoline black market where mobsters like Joseph Valachi traded in illegally obtained gas stamps.[1] During the 1960s, gasoline bootlegging in New York was done at the retail level mostly by Turkish or Greek immigrants.[2] Their modus operandi was simple: instead of turning over the gasoline taxes collected at the pump to the government, they pocketed it and disappeared before the IRS could catch them. These criminal activities were disjointed, small in scale and short lasting with maybe $600,000 worth of total taxes stolen at a time.[3] It is interesting to note that at the time, New York had the second-highest gasoline tax in the country and was one of only nine states that levied excises on gasoline.[4] In all, the oil & gas industry was not that affected by this petty tax theft as much a different issue was plaguing the sector during the 1970s and it all had to do with something that happened in 1973.

On October 6th, 1973, the Yom Kippur War started when a coalition of Arab nations attacked Israel on one of their holiest days.[5] Due to America’s support of Israel, Saudi Arabia placed an oil embargo on it, creating a shortfall of petroleum supplies.[6] As a response to this, the Department of Energy adopted a formula where a retailer’s profit per gallon was held at the same level their stations made in mid-May of 1973.[7] This meant that if a station operator made a 10 cents per gallon profit in 1973, they were mandated by law to keep the same profit margin in 1979 as well, regardless of inflation or rising in-put costs. Another element to this law was “banking” that dictated retailers’ allocated gasoline volume. When supplies of gas were plentiful, retailers could reduce their profit margin or “bank it” to increase the volume of gasoline sold to remain competitive.[8] Conversely, when market conditions permitted, such as a shortfall in petroleum products, operators could re-apply their profit margins. Since gasoline allocations were based on volume sold in previous years, practically this meant gasoline operators who survived the competitive environment of the mid-1970s, continued to receive large allocations of gasoline and were using “banked” profits to swell the price at the pump and remain profitable.[9] Joseph Aracri, was an example of a new breed of fuels station owners in New York. As president of Pilot Petroleum Associates, he owned and operated 21 non-branded gasoline service stations on Long Island saying, “I’m a little ahead of the game this year [1979]”.[10] In the late 1970s, only a handful of non-branded, high-volume gas stations were showing a profit as inflation wiped out nearly half their profit margin, despite an increase in gasoline prices.[11] Branded gasoline owners, which made up 70% of the New York market, were in an even grimmer financial predicament.[12] Risque Harper, an executive director of the National Association of Petroleum Retailers commented on how the typical dealer was placed under a terrific financial squeeze.[13] Difficult economic conditions are fertile grounds for criminal activity. The failure of governmental policies in the wake of the 1973 Oil Embargo shows why more than ever before, gasoline station operators had the motivation to engage in frauds of all kinds.

[img]https://imgur.com/gallery/EKGRXQm[/img]

Equally important is to understand the “how” part of the equation. How were criminals able to defraud the government so easily and seemingly with impunity? Once again, governmental failures and an archaic tax code aided the criminal element. To alleviate pressures from the 1973 Oil Embargo, U.S. government policies were enacted to stimulate private entrepreneurs in the O&G industry to promote private investments and boost production. Unfortunately for the public, criminal elements quickly took advantage of these policies, and a fair amount of crime took form through tax cheating.[14] To compound the problem, the Intelligence Division of the Internal Revenue Service (IRS) was crippled in the 1970s.[15] Lack of coordination and a disarray of communications among the various state jurisdictions and departments also aided the crooks.[16] Years later when officials asked how Lawrence Iorizzo, a major gasoline bootlegger, was so successful in his criminal conduct he replied, “no Federal agencies checking your operations as to whether you did or didn’t pay”.[17] In 1980, only 10 of 12,389 gas stations were prosecuted for sales-tax theft in the state of New York, with tax audits being exceedingly rare.[18] In fact, overseeing the collection of sales and excise taxes from 450,000 businesses within the state were a measly group of 600 auditors.[19] To check just one retail station, selling 3.6 million gallons of gasoline per year, would take three state auditors a month.[20] On average only 4% of stations would be audited every year by government auditors who knew little about what they were doing and took financial statements prepared by the retailer at face value, failing to verify the numbers independently with the retailer’s supplier.[21] Ronnie Wiener, president of Conlo Petroleum, talked to undercover journalists from Newsday posing as petroleum businessmen about the nature of tax evasion in New York who discovered just how weak the audits were. He commented on how when audits were done on gasoline distributors, “… They’re [the auditors] are checking us, not you [retail gas stations]”.[22] Fraudulent retailers had nothing to worry when their suppliers were being inspected, and in the rare case where a retailer would find themselves being audited, they would only have to show one legitimate quarter in a three year period.[23] The government did not have the resources to investigate criminals or the means to check compliance. Yet, the biggest embarrassment is that the state government of New York couldn’t even determine how much of the total sales tax it collected came from the sale of gasoline and had no systems in place to check for discrepancies between distributor figures and what retailers reported.[24] The final piece of the puzzle lay in the tax code and what the government deemed as a “producer”. According to the law, a producer was characterized as, “an actual producer, as well as a refiner, compounder, blender, wholesale distributor, and a dealer selling gasoline exclusively to producers of gasoline”.[25] At this point in time, retailer stations or other non-producers were responsible for paying motor fuel taxes and due to the broad nature of the “producer” category, the gasoline could be sold tax-free within that chain as long as the buyer and seller were registered with the IRS.[26] IRS Form 637 entitled “Registration for Tax-Free Transactions” gave producers a particular certificate registry number and allowed them to buy and sell gasoline tax-free from other registered producers as long as they recorded the transactions with the appropriate IRS District Director.[27] However, an oversight structure based on the “honor system” is a structure that’s ripe for fraud. This would become important in 1982.

Now that we understand the motivation as to why gasoline operators were willing to commit crimes and how the lack of oversight and enforcement allowed them to get away with it, we can finally begin to discuss the nature of crime in the Oil & Gas industry during the 1970s. The fuel sector was ripe with all kinds of fraud during this time including but not limited to engaging in bid-rigging, price-fixing by gas stations, delivering unbranded fuel to branded gas stations, stealing federal, state, and local motor fuel excise, and selling gas, diesel, and heating oil laced with toxic waste.[28] It is important to note that operators in the space did not view “gasoline bootlegging” as the theft of fuel taxes. For instance, the previously mentioned Lawrence Iorizzo explained how in his mind bootlegging meant selling fuel spiked with toxic waste.[29] The entire value chain of the industry was complicit, with Iorizzo believing that major oil refiners knew of crimes being committed and commented how, “one major [refiner] in order to ‘cover their tracks’ complained to the authorities, and, in the meantime, they continued to supply his organization with fuel”.[30] It wasn’t just the retail gasoline operators or small-time distributors participating in all manners of fraud relating to the fuel industry, the major oil companies and refiners at least knew of if not were outright involved in some of the major crime being committed.[31] We can now begin to understand just how pervasive criminality was in the fuel industry of New York and it is now that we can finally turn our attention to what we normally consider gasoline bootlegging which is the theft of motor fuel tax.

[img]https://imgur.com/gallery/hbMXel3[/img]

On Long Island, bootleg gas was sold as early as 1973, which coincided with the First Oil Shock.[32] To add fuel to the fire (no pun intended), during the early 1980s a new dynamic in the industry emerged to aggravate gasoline operators further. In January of 1981, President Ronald Regan lifted allocation controls on gasoline following the 1979 Energy Crisis, which effectively severed the bond between a station retailer and their suppliers.[33] This created a dynamic where a score of new gasoline marketers entered the industry to sell-off the excess petroleum supplies.[34] The resulting oil glut increased competition within the sector, forcing gasoline retailers to drop gas prices to remain competitive. The profit margin narrowed to such a degree that gas station operators were forced to start stealing gas taxes to stay in business.[35] By the early 1980s, gasoline bootlegging was an endemic problem, and this happened due to three reasons. One, as outlined before profit margins were incredibly thin and most stations could not make money legally. Two, oversight and enforcement of laws were incredibly poor. If no one noticed it, can you even call it theft? Finally, stealing taxes was becoming more lucrative as time went on. Jack Porte, chairman of the Long Island Gasoline Retailers Association (LIGRA), said in 1981 how, “Five years ago the average sales tax collected on a gallon of gas was 2.5 cents to 3 cents. Today the average is closer to 8.5 to 9 cents per gallon. Obviously it is worth much more to steal all or part of the sales tax collected”.[36] The government of New York didn’t help either, as by 1981, the total annual loss to state and local governments was more than $100 million in tax revenue.[37] Shooting itself in the foot, the government then simply hiked gasoline taxes to generate an additional $100 million and make up for the short-fall in collections.[38] Instead of remedying the issues of collection by actually monitoring and enforcing existing taxes, the government inadvertently encouraged more bootlegging by making tax evasion even more profitable! It was one vicious loop. All this resulted in the sales tax on an estimated one in five gallons being diverted across the state of New York.[39] On Long Island the problem was even worse. Given its population, geography, and lack of public transportation, Nassau and Suffolk counties had the highest per capita gasoline consumption in the state (52% higher than the state average).[40] LIGRA estimated that one in every three gallons sold locally in Long Island was off the books by 1981.[41] The issue of gasoline tax theft was staggering.

As mentioned before, prior to September of 1982, retail gasoline operators oversaw the collection and payment of gasoline taxes owned to the state government. So how was it done? Well, there were multiple ways and dishonest gasoline operators often used a combination of the following methods. Lawrence Iorizzo explained to Michael Franzese that due to the slack enforcement on the government’s part, Iorizzo’s ~300 gas stations could delay their payment of gasoline sales tax for as long as a year.[42] During that time, each station would close, the owners would vanish, and then within a month, the station would re-open under “new” management and start operating again, repeating the cycle.[43] As such by delaying the payments, Iorizzo would pocket the taxes during each cycle and the government could do nothing about it. This basic principle was supplemented by rolling back meters on gasoline pumps, keeping two sets of books for tax purposes, keeping deliveries of and sales of bootleg gasoline off the books, and taking deliveries of fuel at night.[44] Now that the set-up is out of the way, we can finally begin to talk about the first set of players in this racket.

Martin Carey & Lawrence Iorizzo

Martin Carey was a very peculiar individual. According to associates he was a very family oriented and religious man, giving up whisky during lent.[45] Yet at the same time, he had no qualms about defrauding the state of New York out of taxes or contaminating the gasoline he sold with toxic waste, causing mass engine breakdown.[46] Martin Carey is partially responsible for the involvement of organized crime and La Cosa Nostra in the fuel industry and so it is important to discuss his operations and eventual entanglement with Lawrence Iorizzo.

[img]https://imgur.com/gallery/yJRkI01[/img]

Martin was born into the fuel industry as he worked alongside his three brothers in their father’s business called Peerless Petrochemicals.[47] After the brothers went their separate ways, Martin took over the business’s shipping arm called Marine Transportation of Chemicals.[48] One of his brothers, Hugh Carey, went on to become New York’s governor in 1975 after a landslide victory.[49] This would add an interesting twist in this saga. In June of 1975, Martin Carey decided to expand his interest in the oil industry and founded Petroleum Combustion International (PCI) alongside Bruce Biersack as a 50/50 partner, with Carey becoming the sole owner after some time.[50] The operation started by taking over eight closed British Petroleum (BP) stations, turning them around and subleasing them to other people under the “Gas Value” brand.[51] Ostensibly, PCI wanted to sub-lease as many of its stations as possible so that it could avoid the hassle of running the actual retail locations and focus on just procuring and supplying gasoline to achieve corporate excellency.[52] In reality, this was done to confuse the tax authorities and muddy up any audit trails when it came to determining tax liability stemming from PCI’s operations. The most egregious example of that was the Grodlap Operation that ran up to 21 Gas Value stations in a nine-month period during 1976 and helped PCI dodge at least $149,000 worth of sales tax.[53] PCI claimed that Grodlap leased out its stations (even though a lease was never signed) meaning that Grodlap would be responsible for the taxes, while Grodlap would claim that it merely operated those stations on behalf of PCI and that the tax responsibility lay with it as the true owner of those stations.[54] The Grodlap stations themselves were operated under 10 or 15 different corporations, which further obscured the tax liability.[55] However, given there was no record that Grodlap ever had a sales-tax registration number, PCI and Martin Carey were responsible for the tax liability.[56] A similar tactic used by PCI to reduce or hide its tax burden was to induce its employees like Sebastian “Buddy” Lombardo to set-up corporations and “lease” out high-volume stations from PCI.[57] Marin Carey assisted by his Vice President Richard W. MacKay used three sets of books to avoid paying a large percentage of sales tax at their retail locations.[58] For instance, MacKay who prepared the firm’s sales tax put PCI’s total gas sales for 1977 at 11.6 million gallons, lower than the 14.1 million gallons shown by another set of records.[59] Gas Value, in fact, never paid any sales tax for the first six months of its operations, claiming to follow “industry standards”.[60] Finally, most employees were paid in cash without any social security, disability payments etc. being taken out or reported.[61] In all it used these tactics to evade at least $323,000 and possibly as much as $502,000 in sales taxes over the course of its operation.[62] In a lot of ways Martin Carey and PCI were the quintessential example of the type of criminality plaguing the fuel industry of New York in the late 1970s. Unfortunately, he wasn’t just cheating the government out of taxes, but his customers out of quality gasoline too.

As mentioned before, Carey’s initial foray into the oil industry was through inheriting Marine Transportation of Chemicals which processed toxic liquid waste in Queens.[63] Another company of Martin’s was called Carey Resources and it owned a petroleum tank farm in Mattituck, Long Island.[64] You see, Martin Carey wasn’t just satisfied in juicing corporate profits through tax theft, as he also made a bundle by blending his fuel with petroleum by-products and waste. Adulterating Gas Value’s gasoline with toxic chemicals brought almost six times the profits the firm earned on straight gasoline, earning PCI at least $274,000 in additional profits.[65] The economics were simple, while Carey purchased fuel from suppliers at 51 cents per gallon, he procured heptane at 20 cents a gallon and petroleum waste from Mattituck for 10 cents a gallon.[66] Between 1977 and 1978, PCI’s operation bought at least 2 million gallon of waste, and MacKay commented on the harm this was doing to customers’ car engines by saying, “I could tell how much [expletive] they were running by how many cars were stranded on the expressway”.[67] Far from being the only corporation to dabble in this, the waste oil industry would continue to be an enormous liability for the state of New York in the coming years to the point that by 1984, at least ten percent of marketed oil in New York was contaminated with toxic waste (that’s 300 million gallons per year!).[68] Garbage and oil? You know La Cosa Nostra had a hand in that.

Carey and his corporations were always under great financial stress. Despite going on a purchase spree of mansions, Carey was barely able to keep up with his mortgage debts.[69] Likewise his corporations were ran poorly, and this caught up with PCI by 1977 when its regular supplier stopped delivering gasoline due to a lack of pay.[70] A certain Lawrence Iorizzo, owner of Vantage Petroleum, however, swooped in and agreed to supply Carey’s operation with gasoline on credit.[71] Their interests were further intertwined when in the spring of 1978 Vantage leased Mattituck terminal from Carey Resources, with Carey filing a false affidavit to counteract a 1977 EPA order of closure.[72] In late December of 1978, Vantage Petroleum essentially took over PCI’s operations for non payment of gasoline and Carey was hired as a consultant.[73] At the beginning of their association, Iorizzo reckoned a relationship with the Governor’s brother would be beneficial.[74] Yet, that takeover, as Lawrence Iorizzo would come to believe in time, was the start of Vantage Petroleum’s headaches that would make him turn towards organized crime.[75]

[img]https://imgur.com/gallery/A7Ii4ll[/img]

Lawrence “Larry” Iorizzo was a colossal figure, standing at six foot, four inches.[76] He was twice the size of a normal man, and so naturally had to have two wives to make up for it.[77] Larry had vast experience in the fuel industry, peddling aviation, diesel, and gasoline at various times since at least 1966.[78] Originally starting out as a gas station operator and running an air taxi service at Republic Airport[79], Iorizzo ran into his first trouble with the law in 1976 when he was convicted of attempted grand larceny and possession of a forged document in a bad-check case where he received five years’ probation.[80] While things may have looked grim for his career after an attempt to defraud a bank, Larry would get his first big break the following year. Northville Industries, operating one of Long Island’s largest fuel terminals, had to divest its retail gas operation, called Vantage Petroleum, for legal reasons.[81] Lawrence Iorizzo and his “legal” wife Cheryl bought this operation on credit[82] for $550,000 and began to rapidly expand the business.[83] As part of the agreement, Iorizzo agreed to “kick-back” one half cent per gallon to Northville’s credit manager Farrell.[84] By the start of 1980, Vantage had become Long Island’s largest independent gasoline retailer owning 250 stations with 60 of them flying the Vantage logo.[85] Moreover he branched his operations further through supplying other gasoline wholesalers (like Carey’s PCI) and retailers so that by 1981 he controlled or supplied over 300 stations.[86] In 1978, Vantage Petroleum got a big boost to their operations when they won a state contract to operate eight Long Island parkway gas stations.[87] As with anything involving Iorizzo, however, the auction process was marred with controversy. When the tender went up in 1977, only two firms, Vantage Petroleum and 338 Automotive, submitted bids to operate the seven stations at that time.[88] In a move that should not surprise anyone, Gas Value was the reported supplier of 338 Automotive, the same Gas Value owned by Martin Carey’s PCI who got their gas from Vantage.[89] By offering a mere $45,000 more than the other “phantom” bidder, Vantage won the initial contract to operate the seven stations.[90] Iorizzo would later get another station for free because the state deemed that he was performing a “public service”.[91] Eight stations don’t seem that consequential given the near 300 stations he owned or supplied, but in the summer of 1979 it along with Iorizzo’s other tactics proved to be extremely lucrative.

As part of Vantage’s contract to operate the eight Long Island parkway gas stations, the prices charged were supposed to be, “the standard retail prices as the adjoining sections of Nassau and Suffolk counties”.[92] However, Vantage’s stations were charging 5 to 15 cents above other nearby stations, taking down the maximum federally permitted profit margin of 16.1 cents per gallon.[93] The Energy Department later accused that between April 1st to August 31st, 1979, Vantage overcharged motorists and dealers by almost $1.3 million.[94] In fact, the 1979 Energy Crisis proved to be a boon for Vantage Petroleum as it diverted hundreds of thousands of gallons allocated by the federal and state hardship program meant to combat petroleum shortages.[95] Instead of fulfilling existing agreements with other fuel firms like Award Petroleum[96], Vantage closed 20 stations and sold its excess ‘hardship’ gasoline to speculators on the spot-market at a profit of upwards of 55 cents per gallon (3.4x the legally allowed maximum profit margin) where fuel was often shipped out of state![97] At the height of the energy crisis, Vantage illegally stored 800,000 gallons worth of gas in its Mattituck terminal.[98] The political underhandedness is about to get worse as you will recall this tank farm was owned by Martin Carey at the time. The state knew that the terminal did not have the required permits to operate, yet it allowed the terminal to go about its business for 15 months until it leaked gasoline and forced the closure of a nearby beach.[99] It seemed the state avoided enforcing its rules for as long as it could until the public denounced and pressured it to close its Mattituck terminal.

Larry Iorizzo’s scheming and profiteering would come back to haunt him. In 1980, Iorizzo was indicted on bid-rigging charges by Suffolk county in relation to the state-owned Long Island parkway stations.[100] In a surprise twist, Patrick Henry, Suffolk’s DA, called Martin Carey to testify in the case under grant of immunity.[101] The indictment was dismissed without merit, but it did foreshadow Larry’s future legal troubles. When allegations of Iorizzo’s price gouging on the state-owned stations finally reached law enforcement’s ears, Vantage pled guilty to charges of criminal contempt and agreed to temporarily lower prices at its retail outlets.[102] By this point, the relationship between Vantage/Iorizzo and Martin Carey were at an all-time low, as Vantage sued Carey over the latter’s false affidavit that the Mattituck terminal had all its permits.[103] At the same time as Vantage was getting subpoenaed and indicted on a variety of charges, Lawrence Iorizzo was quietly informing to law enforcement and state officials on the pervasiveness of criminality within the fuel sector. In 1979, for instance, he reported extensive tax fraud in the gasoline industry to the government.[104] Around that time he also snitched on his first business partner to the IRS and FBI alleging that Martin Carey stole gasoline taxes to help finance his brother’s re-election campaign.[105] In fact, Jeremiah McKenna, counsel to the Senate Crime and Correction Committee, disclosed in 1987 that they were probing Martin Carey for skimming $2 million in gas taxes for use in his brother’s re-election campaign.[106] Unsurprisingly, he stepped down “to limit political damage” to his boss…[107] The snitching backfired for Larry and about a month after telling the tax state agency about this allegation and supplying certain documents, Iorizzo’s legal troubles intensified.[108] Carey, by the way, would be indicted in 1982 for evading $122,000 in gasoline state sales taxes but an appeals court ruled that he could not be tried for the crime because of the immunity granted to him by Patrick Henry.[109] Very convenient indeed… But for Lawrence Iorizzo, things were about to go from bad to worse.

The Colombo’s Enter the Fray with Michael “the Yuppie Don” Franzese

While Lawrence Iorizzo wasn’t above engaging in criminal behavior, at that point in time it seems he wasn’t yet stealing gasoline taxes. To the contrary, Vantage Petroleum was under great financial pressure as Vantage station owners and managers, wishing to not pay any gasoline excises themselves, bought their fuel from bootleggers instead of the parent company.[110] Iorizzo was a victim of fuel racketeers! To add to his ever-growing list of woes, another set of criminals sought to muscle in on Vantage itself.[111] Michael Franzese in his book claimed these individuals were small fry associates of another Family.[112] However, another source claimed that the takeover was engineered by an Oklahoma oil fraudster, and one of his employees, Andy Gazzara, who came to Long Island and threatened Iorizzo.[113] Once again, Larry contacted law enforcement for help without avail after supposedly supplying incriminating tapes to both the Southern and Eastern Districts of New York.[114] Years later when a Senate committee investigated fuel tax fraud, some funny exchanges happened from officials rightfully chewing out the FBI for sitting on their thumbs and doing nothing when businessmen in the industry came to them for help.[115] Running out of options, Lawrence Iorizzo decided to contact Colombo captain John “Sonny” Franzese to help out with his duel problem.[116]

[img]https://imgur.com/gallery/6xFtQIB[/img]
(L-R): John “Sonny” Franzese, Sebastian “Buddy” Lombardo, and Peter Raneri

The Franzese family and Iorizzo had a long history. While in his book Michael makes it seem like he met Iorizzo in 1981[117], they had known each other for quite a bit longer. In the mid 1970s, Michael Franzese bought cars from Iorizzo when both were in the automobile dealership industry.[118] Later, when Iorizzo got into the fuel business he supplied Sonny’s auto dealerships with gas.[119] Apparently, the elder Franzese had also done some unidentified favor for Larry and in return, Sonny asked that the “fat man” kept his his son, Michael, in mind for any future business deal.[120] In 1981, it was time for Iorizzo to play his trump card and he sent one of his employees, Sebastian “Buddy” Lombardo, to Sonny Franzese to see if the gangster could help him out.[121] “Buddy” was referred to his son, Michael, to square away the problem.[122] Michael’s rank within the Family at the time is a bit of a puzzle. While Andrew Russo was his original caporegime[123], Michael recently did say he was under Joseph “Joe T” Tomasiello for a while[124], whose crew wasn’t formed until August of 1980.[125] However, in the same video Michael says he was promoted to caporegime in 1980[126]. It’s more likely he was still a soldier under Joe T’s crew or at best an acting captain for his father during his fateful meeting with Iorizzo. Regardless, in 1981 the life of Michael would forever be different. Franzese said it wasn’t until 7 months after Buddy’s initial approach that he finally met with Iorizzo, as he was concerned about the oil man’s ties with law enforcement following the Carey debacle.[127] On October of 1981, they finally met at Peter Raneri’s Long Island restaurant with Iorizzo explaining to Franzese how the gasoline business worked and the large quantities of cash it could generate for the young racketeer if only he could solve his problems.[128] To that end, Franzese sent a squad led by Vincent Aspromonte to scare away the Oklahoma oil fraudster.[129] As for Iorizzo’s bootlegging issue, the two men agreed to use one of Iorizzo’s Panamanian shelf companies, called Galion Holding Corp., to supply the cheap tax-free fuel Vantage dealers craved.[130] The partnership was officially in business starting in December of 1981.[131] To insulate themselves from law enforcement scrutiny and mask their involvement, John Garbarino, a retired union official became Galion’s President and Aspromonte was appointed its Vice President.[132] The economics of the partnership were also extremely interesting to show how the scheme evolved over time. In his book, Michael, outlined the economics of the deal as follows: 20% of the profits off the top would go to the Colombo Crime Family, with the rest being split 50/50 between the two.[133] At the height of their operation, they were stealing at least 20 cents worth of tax per gallon, which meant in effect Michael and the Colombo Family took a 12 cents per gallon kick-back.[134] Years later, a grand jury in New York was told that Franzese and the Colombo’s were receiving 15 cents per gallon and that Iorizzo only took down a penny for running the whole scheme.[135] Whatever the exact payout ratio was, it is clear the Italians were receiving the greater percentage of the money being stolen. This will become important later. When Franzese realized what he had with this operation, he went to his Boss, Carmine Persico, and promised, “to show more money than you [Persico] ever saw” provided he helped him win all the sit-downs to prevent other Families from getting in on the scheme.[136] At the time, Carmine probably didn’t realize just how dependent the Colombo Family was going to be on this gas tax tribute.[137]

[img]https://imgur.com/gallery/pZeNP3x[/img]
(L-R): Lawrence “Larry” Iorizzo and Michael “the Yuppie Don” Franzese

Galion was one of about a hundred dormant Panamanian “bearer share” companies Iorizzo was able to activate throughout the course of the scheme.[138] Bearer share companies were useful because whoever held the physical stock certificate “owned” the corporation.[139] This allowed Franzese and Iorizzo to hide their control of those businesses and whenever the government did make the trip to Panama to talk to these supposed owners, all they would find were sugar plantation workers[140] and office window washers.[141] The story of how Lawrence Iorizzo was first introduced to Panama is somewhat conflicting. In the early 1980s, Larry associated with V. Leslie Winkler and Mario Renda, expert financial criminals with organized crime connections.[142] Renda, in particular, assisted Paul Castellano, Gambino Crime Family Boss, with laundering money in part through U.S. Savings & Loan institutions.[143] Renda also introduced Iorizzo to the idea of using Panamanian companies as collateral for credit and then to take them into bankruptcy.[144] In return for this kindness and others, Renda possibly received a 49% stake in Vantage Petroleum.[145] Another source, however, described that Iorizzo was introduced to Panama (and later Austria) by an elaborate conman named Eric D’Antin, who pretended to be the Duke of Alba and who managed to snag for himself a real Hapsburg princess.[146] D’Antin introduced Larry to a former president of Panama who received a large payoff for this venture to go down.[147] In Panama, Steve Samos had plenty of experience incorporating phony companies for criminals (mostly drug traffickers) and helped Iorizzo set up his corporations through Inter Credit Trust.[148] Regardless of which story is truer (it was likely a combination of both), Iorizzo now had plenty of anonymous companies he could use to either secure his own registration numbers or use to buy licenses from other companies that had them.[149]

The creation for Galion Holdings was necessary to start providing bootleg gasoline to Vantage Petroleum and to distance Iorizzo and Franzese from the now famously scandalous company.[150] While dealing with organized crime helped Iorizzo solve some of his problems, the association brought with it issues of their own. Michael Franzese contended that his relationship with Larry was fairly smooth[151], whereas Iorizzo complained that it got off to a rough start. When Galion was first created, Vantage extended it credit to kick-start the operation.[152] Franzese and his cronies, however, used that arrangement to loot the Vantage treasury out of $3 million dollars with Iorizzo never receiving a dime.[153] When Iorizzo confronted the Colombo soldier, Mike sent his goon Frank “Frankie G” Castagnaro to threaten the fat man into submission.[154] This petty thievery would continue by various members of Michael’s entourage which is quite puzzling to me given the amount of money they were earning.

[img]https://imgur.com/gallery/23scgJb[/img]

Starting from November of 1981, Vantage stopped paying the state of New York rent on those eight Long Island parkway stations mentioned previously.[155] By September of 1982, it owned $232,000 in back rent.[156] Conveniently at some point before August of 1982 it also subleased the stations to a new Franzese/Iorizzo shell company[157] called Down to Earth Management.[158] The pair appointed Louis Fenza as it’s president and the corporation ran those stations until the fall of 1983.[159] The company did a lousy job at maintaining the stations as consumers constantly complained about the filthy wash rooms and the piles of trash.[160] One thing Down to Earth was good at, however, was price gouging customers, and the parkway stations’ gas prices were 9-10 cents higher than the Suffolk county average.[161] By summer of 1982 Vantage was once again in great financial trouble. Its treasury was looted, its stations were supplied by a “competitor” and now Vantage did not have the funds to pay their creditors because Down to Earth Management refused to pay a $133,000 debt.[162] On August 2nd, 1982, Vantage Petroleum officially filed for bankruptcy with the bankruptcy court appointing trustee, George W. Hudwalker Jr.[163] Incidentally, on July 9th, 1982, just before filing for bankruptcy, Vantage Petroleum assigned its distribution rights to Krell Petroleum whose royalty payments were assigned to Houston Holdings.[164] As a side note: Houston Holdings will be most important Iorizzo company as it underpinned a lot of the simultaneous conspiracies in the gasoline bootlegging racket. Besides Houston Holdings, Vantage issued sweetheart leases to Galion Holdings on some of its station leases[165]. Moreover, Vantage dealers paid in cash sums ranging from $60,000 – $100,000 to secure their leases which never went to the parent company, not to mention the other litany of frauds and crooked tactics used to strip Vantage of almost every asset.[166] In the end, all the creditors got was an empty husk of a company. While Vantage Petroleum ceased to exist as an entity, its memories would haunt Lawrence Iorizzo in the years to come.

While Iorizzo was busy plundering Vantage for its every nickel and dime, Michael Franzese’s cronies continued with their petty theft. Louis Fenza attended a meeting hosted by Michael and Iorizzo in a Huntington restaurant where he told the duo, “We banged O.K. and we banged O.B”.[167] What Fenza meant was that his company, Down to Earth Management, issued fraudulent checks in October of 1982, one for $40,064 to O.K. Petroleum and one for $10,213 to O.B. Petroleum to purchase gasoline for his stations.[168] As we will see this move is quite perplexing given the amount of money they were already generating. It is also funny because O.K. Petroleum would soon be working quite closely with Iorizzo and Franzese to further their collective scheme. By this time the group was already making enormous quantities of money, and they needed financial institutions to help launder all their ill-gotten proceeds. Luckily for Franzese, his crew member Vincent Aspromonte had a connection with Extenbank, one of Spain’s largest banks.[169] Aspromonte’s cousin, George Ruggiero was a vice president with the bank and in charge of its Hauppauge branch on Long Island.[170] Between April and November of 1982, at least $11.5 million was laundered through the bank branch.[171] I always see people doubting Franzese’s claims about the money they were making, but this shows the money was real and it was only going to get realer. 1982 was a special year for the mobsters because the government enacted two additional policies that allowed the criminals to take their scam to the next level and nation wide.

The First Fuel Cartel is Formed

By the middle of 1982, the state of New York realized that the problem of gasoline bootlegging was indeed serious. By 1980 perhaps as much as half of all unbranded gasoline sold on Long Island was bootlegged which took a major toll on legitimate distributors.[172] They were becoming such a problem that even major oil companies like Power Test started to complain. A Newsday article investigating this problem quoted Power Test’s President, Leo Liebowitz, as saying, “The bootlegger has no allegiance to anyone”.[173] This statement would become quite ironic in hindsight given his actions. As such, on September 1st, 1982, a new tax law went into effect in the state of New York whereby the responsibility for tax collection went from the 10,000+ gas retailers to the 445 wholesale distributors.[174] Incidentally, Governor Hugh Carey initially vetoed the bill that proposed the change, but the Legislature overrode it.[175] Former prosecutor Ray Jermyn summarized the results of this law change best by saying, “New York went from 6,000 little thieves to 600 big ones”.[176] Raymond Dearie, U.S. Attorney for the Eastern District was more colorful in his characterization of the new law by stating, “The legislature opened a window of vulnerability big enough to drive Jones Beach through”.[177] Now wholesalers collected the taxes after selling their fuel to a non-producer like gas station retailers or to wholesalers who did not possess the coveted IRS Form 637. Within the “producer” chain, firms could sell to each other tax-free. The IRS would monitor a fuel firm’s transactions and collect the taxes via IRS Form 720 filed quarterly.[178] This would create severe liabilities within the system that would be exploited shorty. If that law change wasn’t enough, Christmas came early during 1982 when news started trickling in about some of Ronald Reagan’s proposals. In December of 1982, Reagan sought funding to help repair the U.S.’s crumbling bridges, roads, and mass transit systems.[179] To pay for this massive program, the President sought to raise $5.5 billion worth of proceeds from more than doubling the federal gasoline excises.[180] On April 1st, 1983, the federal tax on a gallon of gasoline went from 4 cents to 9 cents.[181] The feds unintentionally made it twice as profitable to steal the federal gasoline tax and the fuel racketeers would take full advantage of it.

This change in the law was beneficial for two reasons. First, fuel racketeers were no longer volume dependent. Before, the bootlegger could only steal taxes at the retail level and so they were limited by the volume of gas sold at the stations they controlled. Now theft at the wholesale level enabled fuel racketeers to sell to other wholesalers, steal the tax and not worry about finding enough stations to sell-off their fuel inventories. It also made stealing taxes less cumbersome as it eliminated the downtime necessary when skimming at the retail level. As mentioned before, retail stations would have to close for a month or so after stealing taxes to allow for “new management” to take-over and start the bootlegging process again. Now that didn’t happen anymore which meant more excises were stolen. Stealing on the wholesale level without getting caught, however, necessitated the creation of daisy-chains schemes whereby gasoline is “burned” through a licensed dummy corporation that absorbed the tax liability. Who came up with this method? Well, it is a contentious matter. Some credit Lawrence Iorizzo with the invention of the daisy-chain.[182] However, it was probably as an associate and co-conspirator of Iorizzo by the name of George Kryssing who came up with the idea.[183] He proposed to steal federal, state, and local gasoline taxes by using a series of fictitious transfers among licensed wholesale firms in which the last one was supposed to be untraceable.[184] A real life example of this chain is shown below.[185] In this case, gasoline is “burned” through either Cabot Petroleum or Houston Holdings leaving them with the tax liability. When the IRS came to collect, they found that those firms disappeared off the face of the earth.

[img]https://imgur.com/gallery/LRx6O7n[/img]

Seeing their opportunity to take advantage of the new legal weaknesses, the first Mafia-led fuel cartel was formed. According to authorities, Franzese brought, “all the illegal dealers… together to prevent violence”.[186] The original masterminds behind this first co-operative were Lawrence Iorizzo, George Kryssing and Bernard Short and in late 1982 they started to recruit additional individuals to join their new co-op.[187] Larry Iorizzo of course owned dozens of Panamanian shelf companies, while Kryssing and Short owned an unlicensed firm called Petroleum Haulers, Inc.[188] One of the first individuals they reached out to were Joseph Aracri and John Papandon, co-owners of Pilot Petroleum Associates which was a licensed gasoline wholesaler.[189] Iorizzo and Kryssing seem to have had a relationship with these businessmen before the New York law change went into effect. For instance, at least as far back as 1981, George Kryssing, who also owned Keri-Lynn Petroleum, got his gasoline from Pilot, and seemed to have already been engaged in gasoline bootlegging at the retail level or at least helped facilitate it.[190] Galion Holdings and Down to Earth Management switched from Nobek Distributors to Pilot sometime before September 21st, 1982, due to Pilot’s cheaper gasoline prices.[191] The gasoline cartel worked as follows. A fixed price for gasoline was established that would be distributed by the bootlegging cartel which would buy and store their fuel at the General Oil Terminal in Inwood, New York.[192] Moreover, a fee was to be, “assessed on a per gallon basis on each member/bootlegger company to launder the stolen tax monies through the use of false and/or fraudulent invoices”.[193] Finally, Michael Franzese and the Colombo Crime Family would provide the necessary force to make this all work.[194] Another benefit Franzese claimed to have provided were crucial political connections in Albany, New York. Apparently, the Colombo’s had “a guy” at the commissioner of revenue’s office at the State House in Albany who could get the necessary licenses.[195] With this structure set-up, the racketeers went to work.

One of the first daisy-chain used by this cartel centered around Northbrook Associates. As mentioned above Iorizzo and Kryssing approached Aracri and Papandon to discuss burning “gasoline” through another firm they owned called Pilot International.[196] As part of their agreement to sell Pilot International’s license, it was required that Iorizzo re-name the company so that the license’s true owner Don Kuss would remain ignorant of the group’s machinations and to conceal Aracri and Papandon’s involvement in the scheme.[197] Kryssing paid Aracri and Papandon $41,000 for Pilot International’s license which became Northbrook Associates and the business was acquired by one of Iorizzo’s Panamanian shelf companies.[198] One of the first daisy-chain schemes worked like this. Pilot Associates acquired gasoline tax-free from General Oil and made false invoices representing the transfer of that fuel to Northbrook as a legitimate tax-free transaction.[199] Northbrook would then “sell” the gasoline as “tax-paid” to Future Positions, another Iorizzo company, which then transferred it to Petroleum Haulers.[200] Now that taxes were supposedly paid, Petroleum Haulers would sell some of the gasoline back to Pilot, Anthony Zummo’s Pride Oil Corp., and other companies.[201] From late 1982 through 1984, Northbrook sold about $150 million worth of fuel per month, taking down $30-$40 million in federal and state taxes each month.[202] This was just one of the several simultaneous daisy-chains schemes performed by this group and it was about to get bigger and better.

Another big addition to the growing Colombo fuel syndicate was Sheldon Levine. In his book Franzese described him as a frizzy-haired Jewish man with a big gasoline operation and no protection.[203] Unfortunately, Franzese’s book also doesn’t provide a satisfying account of the actual business relationship between the two men as Franzese condensed a lot of the events into a couple of pages. Lawrence Iorizzo already had several meetings with Sheldon Levine in 1982 (probably late 1982 when the law change went into effect) to work out new methods to launder stolen gas monies and ultimately join the growing cartel.[204] This was a big win for Franzese and the growing syndicate because by 1986 Sheldon Levine would be described as the largest marketer of non-branded gasoline on Long Island whose companies exceed $100 million in transactions.[205] Their relationship, however, would not always be very smooth. Entering 1983, members of the Colombo fuel cartel must have felt over the moon and soon their syndicate would get a big boost from some major players.

[img]https://imgur.com/gallery/rRRZSZy[/img]
(L-R): George Kryssing, Ronald Weiner, and Sheldon Levine

Power Test CEO Leo Liebowitz aspired to become a major player in the oil business and by the late 1970s, he was well on his way to achieving his dreams. [206] In March 1978 Power Test purchased 158 retail service stations in the New York City area from M. Spiegel and Sons (whose sister company was SOS Fuel Oil).[207] The aftermath of the deal proved to be quite chaotic as Power Test sued George Spiegel in 1981 for continuing to supply those stations with gas and fostering dealer resistance against converting to the new Power Test brand from the existing the Amoco logo.[208] These actions are funny given they eventually unwittingly worked together through intermediaries. In the meantime, the illicit Colombo fuel syndicate was taking a toll on legitimate competitors. By January of 1983, 55 new gasoline distributors were licensed and approved to sell gasoline tax-free within the state of New York.[209] Coincidentally, the very same Power Test experienced a 60% decline in gasoline sales to their stations since September of 1982.[210] Other major legitimate oil firms experienced the same pain, attributing the slide to suppliers who were evading tax payments.[211] Once again this shows just how meaningful this syndicate had become in such a short time, although of course other bootleggers contributed as well. Not wishing to see his ambitions fail, Leo Liebowitz threw in the towel and ordered his subordinates to buy bootleg gasoline.[212] Although more famous for working with another fuel racketeer, Power Test did collaborate with Iorizzo and the Colombo fuel assembly. Starting in 1983, Louis Cohen, Vice-President at Power Test in charge of the supply and distribution of gasoline, created false invoices reflecting payment of taxes between Power Test, Conlo Service Inc. and several Iorizzo controlled companies.[213] Conlo Service[214] and Conlo Petroleum were both controlled by Ronald “Ronnie” Weiner.[215] While he was most likely one of the original members recruited by Iorizzo in late 1982, Ronnie was certainly part of the cartel by 1983, with more members on the way. The aforementioned George Spiegel of SOS Petroleum also joined the cartel by 1984 at the latest, although it is likely he joined in 1983 given his firm’s close transactional association with Houston Holdings.[216] Additional joiners by 1983 included identical twin brothers Robert and Richard Kennon who used their three fuel firms – Jenny Oil, Oil City Enterprises, and Mount Vernon Energy Terminals – as part of Iorizzo’s schemes.[217] Martin Meyer, owner of Dart Oil[218] and Apache, firms used for tax scamming purposes, was certainly part of the scheme by 1984, but given Meyer’s closeness to Ron Weiner, he was already likely part of the syndicate by 1983.[219] Marvin Kramer, George Kryssing’s lawyer, was about to take this Mafia enterprise to the next level.[220]

The Russians of Brighton Beach

Being Jewish in the Soviet Union was for the most part a liability. Despite being well-educated, Jews were effectively barred from the highest echelons of the Communist Party, holding a major rank within the military, and the circles of “high society” at large.[221] Soviet Jews would, however, catch a big break when Gerald Ford signed into law the ‘Jackson-Vanik Amendment’ with the USSR, requiring the communist regime to grant exit visa to Soviet Jews in exchange for receiving trade benefits.[222] Some 90,000 Soviet Jews would take advantage of this law change between 1975-1980 as they made their way for the ‘Land of Opportunity’.[223] Among the tens of thousands of immigrants were thousands of hard-core nominally Jewish criminals recently released from Gulags by the KGB.[224] Criminal life in the Soviet Union equipped many of these “Russian” gangsters with an extensive toolkit and skill set perfectly suited to commit white-collar crime once they came to America.[225] They perfected forgery, counterfeiting and knew how to navigate around complex bureaucracy.[226] A Philadelphian police officer summarized the attitude of this novel criminal group by saying the new wave of Russian émigrés viewed the U.S. as a big candy store with no one minding the front counter.[227] The most popular destination for the new arrivals in New York was Brighton Beach, Brooklyn.[228] By 1998, more than 30,000 Russians called Brighton Beach home, with 40,000 to 50,000 more living in the surrounding New York area.[229] A key differentiator between this new wave of criminals and their entrenched Italian counterparts stemmed from the way they organized themselves. Soviet criminals did not seem to form complex organizational hierarchies, and instead individuals joined together on an ad-hoc basis for a specific criminal venture.[230] This will become particularly relevant as it related to the gas tax scheme in a post Franzese-world. The first Russian gangster of any importance to the gasoline scheme was Evsei Agron, Brighton Beach’s first ‘don’.[231] Coming to America in 1975, Agron was a vor (an “elite” criminal group formed in the Soviet prison system) who quickly took over the criminal scene in Little Odessa by running a vicious extortion ring.[232] By 1980, he sat atop the most powerful crime group in Brighton Beach, with outposts in at least half a dozen other American cities.[233] We will re-visit him shortly.

At the same time as Agron was busy menacing his community, another Jewish immigrant was busy marketing his electronic receipt-producing meter to the Taxi and Limousine Commission.[234] In the end, that taxi meter was at the center of a major city scandal involving commissioner Jay Turoff.[235] Michael Markowitz, the inventor, was a Romanian by birth and immigrated to the U.S. from Israel in the spring of 1979 after completing a master’s degree in science, math, and engineering.[236] With his taxi venture failing, he became involved in the gasoline business in a very small way in 1981 after answering a newspaper advertisement placed by Joseph Skolnick.[237] Markowitz learned the ropes quickly and the two soon became partners, buying fuel from M&Q (Manhattan and Queens) Terminal.[238] In the summer of 1982, they decided to become fuel importers by bringing barges to M&Q and General Terminal from abroad.[239] To do so, the duo needed a New York State distributor’s license and they turned to Markowitz’s accountant for help.[240] Together they founded Shoppers Marketing Incorporated (SMI) in June of 1982,[241] and installed one of Skolnick’s gas station attendants and a Polish immigrant named Szpila Toduesz, as the President and sole shareholder.[242] Their names started to appear on corporate records in November of 1982, after becoming confident in their operations.[243] In January of 1983, Markowtiz wanted to dump SMI and form a new corporation, with Skolnick dissuading the Romanian and offering him stock in his company, Gas Stop, instead.[244] Attorney Marvin Kramer got Gas Stop licensed too.[245] Around the same time as Gas Stop got licensed, Markowitz started expanding his criminal connections and got in contact with Leo (Lev) Persits, one of Brighton Beach’s more important gangsters.[246] Persists immigrated to America from Tashkent, Uzbekistan in 1975 and for a time owned a Mobil station in Manhattan.[247] Markowitz wanted to sell SMI and Persits helped connect him with another individual in the fuel business named David Bogatin.[248] After shooting down American war planes in Northern Vietnam, Bogatin decided to move to New York in 1977.[249] By December of 1982 at the latest, he got into the fuel business through forming Lesez Petroleum, a gasoline wholesaler.[250] Bogatin became a partner in SMI with a $100,000 buy-in that was equally split between Markowitz and Skolnick after Persits took a $20,000 finder’s fee.[251] The new partnership booted Toduesz and installed Mieczyslaw Szczepkowski as the new front man.[252] The four individuals set-up their own daisy chain with Szczepkowski and SMI bearing the tax liability and leaving Lesez with all the money.[253] This group of Russians (through Gas Stop) also bought and controlled 200 retail stations in Brooklyn and Queens.[254] For the next couple of months both Michael Markowitz and David Bogatin made considerable sums of money, with Lev Persits and Joseph Skolnick making not as much.[255]

[img]https://imgur.com/gallery/sBfNtrK[/img]
(L:R): Michael Markowitz, David Bogatin, Joseph Skolnick, and Phillip Moskowitz

As such the earliest Soviet emigree group to become involved in fuel daisy chain schemes were the group led by Michael Markowtiz and David Bogatin.[256] This is of course contrary to some of the comments floating on the internet and on Wikipedia claiming that Evsei Agron or Marat Balagula “invented” the scheme. It should now be clear that the Russians didn’t invent this particular scam and certainly didn’t bring it to the Italians. The Iorizzo group under the direction of the Colombo Crime Family did it first. Relating to that, I have also wondered where the Markowitz group fit in the broader Brighton Beach Russian mob or “Organizatsiya” as it was called.[257] Lev Persits is the easiest one to place as he associated with several Russian heavyweights, most notably Brighton Beach’s second “Godfather” Marat Balagula.[258] Another prominent Russian criminal Persits was involved with was Efrim Laskin, a major heroin smuggler and associate of Boris Nayfeld.[259] Boris Nayfeld, himself, was one of Brighton Beach’s most powerful criminals, involved in gasoline bootlegging and narcotics trafficking.[260] Michael Markowitz’s position or influence within the Russian mob is harder to establish. Markowitz self-admitted to being a member of an organized crime group of Eastern European immigrants in Brooklyn.[261] Elsewhere, newspapers identified him as being “in” the Russian mob.[262] Federal and Suffolk investigators also described Markowitz regularly meeting other Russian crime figures at a popular nightclub in Brighton Beach.[263] In 1985, authorities said he was the leader of a “Soviet mob”.[264] I have also seen Evsei Agron being described as Michael Markowitz’s boss.[265] Bogatin seemed to be the most “straight” person in the group, although as mentioned before he did associate with Leo Persits.