Gangland - 4/13/17

[Chucky]

This Week in Gang Land By Jerry Capeci

Feds Push For Plea Deals; Sealed Government Letter Lists Seven Areas Of Possible Wrongdoing By FBI Agents

Gang Land Exclusive!

Amid an embarrassing internal investigation of FBI foul-ups, federal prosecutors have agreed to drop the top charges lodged against most defendants in last year's blockbuster indictment of 46 mobsters and associates from five crime families, Gang Land has learned.

Among the wiseguys poised to benefit are the two biggest Mafia fish who were snared in the case, Philadelphia mob boss Joseph (Skinny Joey) Merlino and Genovese capo Pasquale (Patsy) Parrello. Sources say that under a tentative deal, the veteran Mafiosi, and many others, will slide on racketeering conspiracy charges that carry longer sentences. Instead, they will be allowed to cop pleas to the substantive crimes they are charged with, like gambling, extortion, and health care fraud.

The government's push for plea deals in the massive eight-month old case comes one month after prosecutors told defense lawyers about an ongoing FBI inquiry into potential wrongdoing by three veteran New York agents who allegedly hid investigative reports and tape recordings made by a secret informant to keep the information from other FBI field offices.

A March 8 government "discovery" letter to defense lawyers, which was ordered sealed by judge Richard Sullivan, spells out seven "general areas" of possible wrongdoing by the agents, according to a copy of the letter that was obtained by Gang Land.

The three-page letter — penned by the five assistant U.S. attorneys in the case — reveals that an "administrative inquiry" was launched by the FBI's Inspection Division on February 23 "into the conduct of two case agents and an FBI Supervisory Special Agent."

The Inspection Division is acting as a preliminary fact-finding body for the FBI's Office of Professional Responsibility. OPR makes the final decision on wrongdoing, as well as the type and severity of the punishment, which could mean a suspension, or even dismissal.

The letter does not name the agents, but as Gang Land reported last month, the case agents are William Inzerillo and Joy Adam, longtime members of the old "Genovese squad" that now investigates the Bonanno and Colombo families as well. The supervisor is William Vredenburgh.

One of the "subject matter areas" that the Inspection Division declined to pursue, Gang Land is pleased to report, was whether "FBI personnel" leaked "confidential details" about the investigation "that have appeared in Gang Land News," wrote prosecutors Amanda Kramer, Abigail Kurland, Jessica Lonergan, Jonathan Rebold and Lauren Abinanti.

"The subject of the Administrative Inquiry is an allegation that (the three agents) violated an operational guideline or policy that governs the handling of informants, assets or cooperating witnesses," wrote the prosecutors, who cited "two general subject matter areas" that were being probed.

The more serious allegation was "that numerous FBI investigative reports" and "recordings made by [cooperating witness John (J.R.) Rubio] were "intentionally withheld" from the FBI's internal computer systems while others "were restricted without approval … in order to keep other FBI field offices from accessing data relevant to the New York investigation."

This scenario, as Gang Land has previously reported, prevented mob-busting agents in Miami and Philadelphia from piggybacking off the New York probe and making cases against Merlino cohorts whom Skinny Joey met numerous times in those cities as well as in New York during the five-year-long investigation.

Ironically, New York FBI boss Willian Sweeney, who had the final say on the matters that were referred to the Inspection Division, headed the Philadelphia FBI during the final stages of the probe.

The other subject matter of the internal probe questions the lengthy periods of time it took agents to prepare written reports about meetings and conversations that Rubeo had with the wiseguys and mob associates. FBI guidelines call for the reports — so-called 302s and 1023s — to be written within five days. But that rule is often broken, and usually overlooked in mob cases since there are fewer agents assigned to organized crime squads these days.

The FBI, U.S. Attorney's office, and defense lawyers declined to comment about the matter. But in Gang Land's view, it's hard to see how those two aspects of the probe would hinder the ability of prosecutors to try the case.

That cannot be stated, however, about two of the other allegations that the Inspection Division declined to pursue, as well as other revelations about Rubeo that are contained in the letter.

The Inspection Division declined to investigate whether Inzerillo told Rubeo "certain details regarding the investigation prior to the takedown" last August as well as the "factory reset of a cellular telephone that was used by (Rubeo)" during the investigation," the prosecutors wrote. The reset caused the "deletion of certain communications between (Rubeo) and defendants," prosecutors wrote.

The Inspection Division also declined to investigate "whether these deletions were authorized or otherwise sanctioned by Agent (Inzerillo,)" the prosecutors wrote.

Prosecutors wrote that they first learned in November that Rubeo "had conducted a factory reset of the Cellphone in or about August of 2016" and that the last time the phone had "been imaged by the FBI" was on July 31, 2015. Between that date, and last August, the prosecutors wrote, many of the lost "calls and text messages were captured by the FBI on a computer system that records calls and messages" but "some communications between (Rubeo) and certain defendants may not have been preserved."

At trial, defense lawyers use facts like deleted phone and text messages and missing tape recorded conversations to challenge the honesty of the cooperating witness, and the integrity of the entire prosecution. This can be especially effective when the sole substantive charge is a non-violent crime — like gambling, or selling untaxed cigarettes — and the crimes of the mob turncoat, and his actions in the investigation, can be made out to be worse than the defendant on trial.

Even several extortion charges in the case, which revolve around discussions with Rubeo regarding the non-payment of gambling losses, or admonitions by defendants against beating up other gangsters or gamblers, could be compromised by the lost recordings and/or calls or text messages.

Also stressing out the feds, sources say, are allegations in state court filings, which are also cited in tape recorded conversations, that Rubeo, who began cooperating with the feds in 2011, stole $500,000 from the offshore gambling operation of two elderly mob bookmakers in the case, John (Tugboat) Tognino, 74, and Pasquale (Patsy) Capolongo, 68, in September of 2013. Discussions laying the theft on Rubeo, as Gang Land reported last month, were picked up on a court-authorized wiretap obtained by the Rockland County District Attorney's office.

Before they disclosed the internal FBI probe, prosecutors had been playing hardball, insisting that all plea deals would require a guilty plea to racketeering charges. But they later switched gears, agreeing to permit defendants to plead guilty only to the substantive crimes in the case, pending approval from Justice Department officials in Washington.

It sounds complicated but it's not. While all 46 defendants are charged with being part of a racketeering conspiracy called the East Coast LCN Enterprise — an entity that does not exist in the real world — 13 defendants are specifically charged only with illegal gambling, and three only with selling untaxed cigarettes.

If one of those defendants were to plead guilty to racketeering, his sentencing guidelines, all other things being equal, would call for 21-to-27 months in prison. But if he pleaded guilty to the substantive charge, his guidelines would be 6-to-12 months.

The numbers would be different for those charged with health care fraud, or extortion, or with more than one specific crime, as many of the others are, but in most cases, not pleading guilty to racketeering conspiracy charges would lower the sentencing guidelines significantly.

Sources say the government expects to have a final answer from Justice Department bosses in two weeks.

Tough Guy Ends Drug Case With Plea Deal; But Labor Racketeering Charges May Be Coming

For four years and 10 months, Brian Vaughan thought he had gotten a pass on his 2011 drug dealing, as others, including Gambino soldier Joseph (Joe Boy) Sclafani, went to prison. But he was living on borrowed time: the feds came for him last June, two months before the deadline to file charges. And last month, Vaughan, 50, copped a plea deal calling for about seven years, hoping for the best on sentencing day in July.

But the law isn't done with him just yet. Sources say Vaughan is a longtime Luchese associate who was bounced from a concrete workers union five years ago for his mob ties and is a target of a White Plains federal grand jury that is also investigating labor racketeering by family leaders who live in Westchester and who conduct the borghata's business from the suburbs as well.

As Gang Land disclosed last month, the family's top two leaders, Steven (Stevie Wonder) Crea and Matthew (Matty) Madonna, are targets of a White Plains grand jury. In February, the grand jury hit two reputed Luchese gangsters with federal murder charges for the 2013 gangland-style slaying of former Purple Gang leader Michael Meldish, and its investigation is still continuing.

Vaughan, a genuine tough guy from Hell's Kitchen according to those who know him, is a former member of Local 20 of the Cement and Concrete Workers Union of the Laborers International Union of North America, one of seven LIUNA locals that have long been linked to the Luchese crime family. Sources say he is a "godson" of an aging but still active soldier, Joseph (JoJo) Truncale, 86, and has been linked to several shakedowns in recent years.

Sources say Vaughan has been using his muscle and ties to Truncale and Madonna to shake down union workers looking for better jobs or union positions. He's also allegedly pulled off a classic jobsite shakedown known as the "coffee boy" scam.

In his version of the maneuver, Vaughan allegedly orders all workers to buy their food and drink at lunch time and during coffee breaks from food truck vendors that visit construction sites; in turn, Vaughan charges the vendors $150 a week to park their trucks on the job site.

For his drug conviction, for dealing multi-kilogram loads of cocaine in New York and Boston, Vaughan's sentencing guidelines call for 78-to-97 months when he faces the music in Brooklyn Federal Court.

His guidelines are much lower than what Sclafani got, but attorneys Joseph Gentile and James DiPietro say they will push for a "significantly reduced" sentence based on their client's "severe health problems," and because "the crime is six years old and he's moved away from that life."

Told about the labor racketeering allegations under investigation by the Manhattan U.S. Attorney's office, DiPietro said: "That's news to me. I haven't heard a thing about that in the Eastern District, where they've been investigating my client for seven years. Brian's a man's man. If they bring charges in the Southern District, we'll deal with them in court."

Defendant In Major Mob Takedown Has Major League Lawsuit Against Owner Of LA Dodgers

Anthony Cirillo, one of 13 defendants charged with illegal gambling in last August's major Mafia takedown, has friends in low places and former friends in very high places. A long-time trader who sold his seat on the New York Stock Exchange five years ago, Cirillo and his family run Princeton Securities, a floor broker on the Exchange. The firm executed trades for hedge funds and investor groups until Cirillo's arrest. The company has since suspended trading but is still in good standing, according to attorney Joseph DiBenedetto.

But the arrest hasn't prevented Cirillo from standing up for his stock-trading rights. And Cirillo will soon give voice to those rights in an upcoming meeting with lawyers for Mark Walter, the billionaire owner of the Los Angeles Dodgers. The meeting has nothing to with sports betting. Cirillo will re-iterate his claim that Walter and a couple of other very rich guys cheated him and his family members out of untold millions of dollars in a stock deal.

Cirillo got permission from Manhattan Federal Judge Richard Sullivan last week to travel to Delaware for oral arguments in a civil lawsuit he filed against Walter and others in 2014 that his lawyers want to amend to "include insider trading and misappropriation of company assets" charges against Walter and other defendants.

Walter is the Chairman and controlling owner of the Dodgers, and also the CEO of Guggenheim Partners, LLC with assets of $240 billion, according to court filings in the civil lawsuit. Walter contests the suit. His attorney did not respond to requests for comment.

In the complaint, filed by the Cirillo Family Trust in the Court of Chancery in Delaware, Cirillo alleged that Walter, and several other directors of Dava Pharmaceuticals, of New Jersey, withheld crucial information about the company's assets to stockholders like him who voted against a merger that led to Dava becoming part of a healthcare company in Dublin, Ireland.

DiBenedetto told Gang Land his client's "reputation within the securities industry is pristine" and that "he is prepared to fight to the end in order to ensure that The Cirillo Family Trust is not taken advantage of by corporate giants."

According to the complaint, Walter and other company directors breached their "fiduciary duty" to Cirillo and other stockholders who opposed the merger by "failing to provide any information that would enable any stockholder to make a determination" whether to sell their stock or go along with the merger.

As a result, Cirillo claims that Dava ended up selling his family trust's 1626 shares of company stock for far below the $706 per share value of the stock at the time of the merger in 2014.

Cirillo lost his motion to have the lawsuit classified as a class action suit on behalf of 40 other stockholders of approximately 600,000 shares of Dava common stock who "were left almost entirely in the dark" about Dava's financial status because it was a "privately held" company.

But the court has allowed the lawsuit to proceed, and Cirillo's lawyers were able to depose Walter about his actions before and during the merger. The matter is slated for oral arguments in June, when Cirillo is seeking to amend the complaint to add insider trading and other charges.

[willychichi]

Well these guys caught a big break thanks to the feds incompetence. Thanks for posting this week's Gangland Chucky

[Pogo The Clown]

Sources say he is a "godson" of an aging but still active soldier, Joseph (JoJo) Truncale, 86, and has been linked to several shakedowns in recent years.

Good update on Truncale. He is a longtime member. Most likely in the crew of Little Joe DiBenedetto.


It will also be a real shame of these guy's get off easy on this case.


Pogo

[Hailbritain]

Sources say he is a "godson" of an aging but still active soldier, Joseph (JoJo) Truncale, 86, and has been linked to several shakedowns in recent years.

Good update on Truncale. He is a longtime member. Most likely in the crew of Little Joe DiBenedetto.


It will also be a real shame of these guy's get off easy on this case.


Pogo

Most probably , he was under Frank lastorino in the early 90s

[Pogo The Clown]

And under Joey Tangorra in the early 2000s (along with DiBenedetto). So yeah.


Pogo

[Fughedaboutit]

Sources say he is a "godson" of an aging but still active soldier, Joseph (JoJo) Truncale, 86, and has been linked to several shakedowns in recent years.

Good update on Truncale. He is a longtime member. Most likely in the crew of Little Joe DiBenedetto.


It will also be a real shame of these guy's get off easy on this case.


Pogo

No it wont. Feds play dirty enough. Least they can do is follow their own protocol when it comes to their snitches.

Incompetent, sloppy work.

[Pogo The Clown]

Yeah it will be great having career criminals who pray on society back on the streets.


Pogo

[Garbageman]

Another stellar performance by the greedy Southern District of NY and the equally greedy, and now stupid, FBI agents of the former Genovese squad *applause*
Well done boys & girls... well done

Sent from my SM-N910V using Tapatalk

[Bruno187]

Sources say he is a "godson" of an aging but still active soldier, Joseph (JoJo) Truncale, 86, and has been linked to several shakedowns in recent years.

Good update on Truncale. He is a longtime member. Most likely in the crew of Little Joe DiBenedetto.


It will also be a real shame of these guy's get off easy on this case.


Pogo

No it wont. Feds play dirty enough. Least they can do is follow their own protocol when it comes to their snitches.

Incompetent, sloppy work.

I'm thinking about the restaurant. The food was worse than terrible before, now that they're gonna have to make all those lawyers fees back, Fuhgeddaboutit.

[TommyNoto]

Just a waste of time and millions of dollars for a bullshit case . When I originally saw the complaint and East coast enterprise BS you knew they were really reaching IMO. Trumped up gambling case that will make no difference .

Gerry has had pretty good stuff lately but that last story about the securities claim is worthless . Cirillo brought a "merger objection " claim , which have almost no value with judges starting to question the entire claim class as all it results in is defense costs and a few more worthless disclosures surrounding the acquisition . Don't spend a second reading it as it has no relevance to anything but attorneys looking for cash flow .

[Rocco]

Looks like Half Pint caught a break. Maybe he will learn not to get his hands dirty in rackets as boss. But I doubt it. I think we will see another indictment within in the next few yrs. You have to assume that he is not making enough money off the boys in Philly so he has to get directly involved in rackets on his own. I think that it will be his downfall again.

[Pogo The Clown]

Merlino has been getting directly involved in rackets his whole life. Even while Boss in the late 90s. This is nothing new for him. I don't see him changing.


Pogo

[Rocco]

Merlino has been getting directly involved in rackets his whole life. Even while Boss in the late 90s. This is nothing new for him. I don't see him changing.


Pogo

Me either. That's why I see him getting a 20yr sentence within the next 8yrs. You cant fix stupid....

[UTC]

If the government has admitted to that degree of fucking up in the pretend enterprise case, you can imagine what else is there.

[SonnyBlackstein]

Merlino is defined by one trait, greed.

Insulation for higher levels/Admin members is there for a reason. Merlino should've had, at a minimum, a soldier intermediary.

A boss getting caught directly in a racket is unforgivable and Merlino should know better.
Greed put his blinders on.