Informants key to case against two Mafia members

Friday, May 21, 1999 | 11:38 a.m.

The government's case against two Mafia members charged in the scheme to murder Herbie Blitzstein is expected to hinge on the credibility of two key witnesses who bolted from the mob and joined the prosecution efforts.

The 12-member jury continued its deliberations today after reviewing the evidence for about six hours on Thursday.

But before the case was sent to the jury Thursday, Assistant U.S. Attorney Eric Johnson, of the Organized Crime Strike Force, defended the use of John Branco, who steered the FBI to those involved in the murder plot, and Joe DeLuca, who pleaded guilty to his role in the killing.

"You cannot infiltrate a criminal organization with priests, Boy Scouts and the common person off the street," Johnson said, as he wrapped up the government's closing argument. "When you open a sewer and you look inside, you do not see swans swimming."

Johnson acknowledged that DeLuca's testimony, in particular, would be crucial in helping the 12-member jury evaluate the evidence the government presented during the month-long trial in the courtroom of U.S. District Judge Philip Pro.

DeLuca was called upon to fill in the blanks on secret FBI recordings that captured the two defendants, Robert Panaro and Stephen Cino, discussing plans to muscle in on Blitzstein's loan-sharking and insurance fraud operations in Las Vegas on behalf of the Los Angeles and Buffalo crime families.

Panaro, a reputed soldier in the Buffalo mob, wanted Blitzstein out of the way after noticing that his loan-sharking business had become very lucrative, Johnson told the jury.

Blitzstein, once a top lieutenant of slain Chicago Mafia kingpin Anthony Spilotro, had as much as $200,000 in loans on the street before his Jan. 6, 1997 murder, the prosecutor said.

Johnson, meanwhile, also made it clear the government needed Branco, a career criminal who wore a recording device throughout much of the FBI's two-year undercover investigation, to provide insight into the role of the two defendants in the murder plot.

The government contends that Branco -- though he participated under the watchful eye of the FBI in the plan to force Blitzstein out of business -- was kept in the dark about the murder.

Two days before Blitzstein's slaying, John said, Branco was assured by Panaro at a recorded meeting that Blitzstein would not be killed. But unknown to Branco at the meeting, Panaro already had approved the murder.

Prosecutors have alleged that Panaro, with the backing of his bosses in Buffalo, authorized the hit on Blitzstein and "pulled the strings" behind the scenes. Cino, the government lawyers charged, used his ties to the Los Angeles mob to help "grease the wheels."

Attorneys for the two defendants, however, argued that the evidence during the trial, including the tapes, showed both did not want Blitzstein killed.

"It's all on tape," said Cino's lawyers, Louis Palazzo, "Thank God it's all on tape."

Both Palazzo and John Fadgen, who represents Panaro, tried to discredit Branco and DeLuca in their closing arguments, saying the two government witnesses had the most to gain with Blitzstein out of the way.

Branco, who received $150,000 for his government informant work, they argued, would be able to earn even more money by dragging additional defendants into the investigation, and DeLuca no longer would have to answer to Blitzstein when pulling off insurance scams.

Palazzo made an impassioned plea to the jury Thursday, alleging Branco and the FBI "created the crimes" and manufactured the entire case against Panaro and Cino.

"Over-reaching? Abuses? Misconduct by the government? I'd say so," Palazzo charged.

He urged to jury to serve as a "buffer" between the government's actions and the defendants.

Johnson, however, told the jury how difficult it is to pursue criminal cases against organized crime figures .