FBI deals crippling blow to L.A. mob

Tuesday, Feb. 3, 1998 | 10:45 a.m.

A sweeping federal racketeering indictment unsealed Monday describes how the FBI's latest assault on Las Vegas street rackets struck deep into the heart of the Los Angeles mob.

Among the 16 defendants named in the 80-page indictment are Carmen Milano, the reputed underboss of the Los Angeles mob and suspected "capos" Vincent "Jimmy" Caci, 73, and Louis Caruso, 40, and "made members" Stephen Cino, 60, Charles Caci, 62, and Rocco Zangari, 65.

The 67-year-old Milano, who owns a condominium in Las Vegas, surrendered to the FBI here this morning. He is the brother of reputed Los Angeles crime kingpin Peter Milano, who was not charged in the two-year probe, which authorities said is continuing.

"We have dealt a serious blow to the Los Angeles mob," Bobby Siller, agent in charge of the Las Vegas FBI office, said Monday in announcing the 50-count indictment.

"I don't believe we can raise the flag and say we've won. But I think when you see that we've taken down the underboss, two capos, and number of associates all in one family, it just kind of shows we're not letting up."

The investigation, part of the FBI's nationwide "Operation Button-down" initiative against the mob, made use of court-approved electronic surveillance, informants and several undercover FBI agents who penetrated the hierarchy of the Los Angeles mob.

The undercover names of three of the FBI agents -- Charles Marone, Sonny Blake and Vincent Torrio -- were disclosed in the indictment.

One of the agents (Blake) had to be relocated temporarily during the probe, because of threats to his life.

The FBI offensive smashed a bid by the Los Angeles crime family to muscle in on the street rackets once controlled by the Chicago mob.

No mob family has moved so heavily into Las Vegas since the 1986 murder of the late Chicago Mafioso Anthony Spilotro.

Throughout the 1970s and early 1980s, street rackets here were dominated by Spilotro and the Chicago mob, even though Las Vegas remained an "open city" to the nation's 26 Mafia families.

After Spilotro's gangland execution outside Chicago in June 1986, no crime family has been able to assert itself with any success.

At a news conference Monday, FBI mob fighters said 17 of the 26 crime families still maintain a presence here.

But Siller was quick to point out that the mob does not have a foothold on the casino industry as it once did in the 1970s.

The Chicago mob's diminished role in Las Vegas was demonstrated last January, when Spilotro's right-hand man, Herbie Blitzstein, lost his life in the Los Angeles mob's failed takeover bid.

Among law enforcement officials, the bungled takeover has enhanced the Los Angeles mob's reputation for ineptness on the streets. For months, the FBI secretly was watching nearly every move Los Angeles mobsters made.

Despite the intense surveillance, agents said Monday they were caught by surprise when the plot to murder Blitzstein was carried out.

The plan to move Blitzstein out of the way, according to the FBI, was hatched in October during a meeting in Las Vegas with Milano, Cino and John Branco, a longtime hoodlum who had become a government informant. Ranking Los Angeles mobsters wanted Branco to become a made member of the family while he secretly was working for the FBI.

Charges in Monday's indictment, which supersedes a smaller April 17 indictment, included racketeering, extortion, money laundering, mail and wire fraud, and murder-for-hire in the scheme to kill Blitzstein.

Six of the defendants -- Cino, Peter Vincent Caruso, 58, Robert Panaro, 55, Alfred Mauriello, 69, Antone Davi, 32, and Richard Friedman, 56 -- were charged in the Jan. 6, 1997 Blitzstein killing.

The six, who reside in Las Vegas, were behind bars Monday, and the government announced it would seek the death penalty for all of them.

In a hearing Monday, Assistant U.S. Attorney Eric Johnson identified Panaro, a reputed member of the Buffalo mob, as the man who gave the ultimate permission to kill Blitzstein.

The FBI has alleged that Los Angeles and Buffalo mobsters murdered Blitzstein to take control of his lucrative loan-sharking and auto insurance fraud operations.

U.S. Magistrate Robert Johnston ordered Panaro jailed without bail above the objections of his lawyer, Steve Stein, who attacked the credibility of Panaro's chief accuser, former associate Joe DeLuca.

DeLuca, once a close friend of Blitzstein's, pleaded guilty last year to a charge in the April racketeering indictment and became a protected government witness. Panaro was charged in that case, but not for Blitzstein's murder.

Milano was not charged in Blitzstein's slaying Monday. But he was accused in the indictment of trying to share in the profits of his illicit activities after Blitzstein's demise.

The indictment reveals that two undercover FBI agents had personal contact with Milano during the investigation.

Milano and Peter Caruso were charged with extortion and threatening to harm Blake, who had borrowed money from the mob figures in his undercover capacity. The threat allegedly was made om Sept. 7, 1996.

Milano also was charged with laundering money from purported drug sales that Torrio had given him. Milano met several times with the undercover agent from July 1996 to March of last year.

Three other suspected Los Angeles mob associates, Vincent Arcuri, 66, Vern Stephens, 50, and Abe Silfani, 45, and two former Blitzstein associates, Dominic Spinale, 62, and Anthony DeLulio, 45, also were among the 16 charged in in the superseding indictment.

Spinale, released on his own recognizance Monday, was among other things, allegedly involved in a diamond fraud scheme with Milano. Spinale was represented Monday by Spilotro's former attorney, Oscar Goodman.

Another nine men were charged in four separate indictments related to the racketeering probe.

Of the 25 defendants charged, only two were at large today. Several had been in jail as a result of the previous charges.