Original subtitles

People once called New York "Fun City."

Now the police and firemen's unions in New York are calling it "Fear City."

There was a dispute over here, and he gets shot in the head.

Take that cocksucker out.

This is a story about New York.

There's been a lot of muggings,

killings.

Seven people have been murdered, their throats cut with a foot-long knife.

It's a story about horrible acts of violence.

It seems organized crime may have turned an abandoned railroad tunnel

into a graveyard for as many as 60 people.

Twenty-seven people have been eliminated.

And then it's a story about greed for money and power and dominance.

Federal officials say the Mob's income

could total 60 to 100 billion dollars a year.

Ninety-seven-04.

New York was held in the grip of the Mafia.

As I've tried to tell the president, the vice president, to Congress,

what's going on here, they're not listening. This is a war.

The director of the FBI said, "What are we going to do about this?"

This was billed as the biggest organized crime investigation ever.

We were gonna bug the Mafia.

- Is Jimmy there? - He left about five minutes ago.

We were gonna hear them on the tapes, with our very own ears.

In the '70s, the city of New York was owned by the Mob.

I had seen what Italian organized crime

had done in the neighborhood I grew up in in Brooklyn.

A few summers, I worked for my uncle, Jimmy Schiavone, in a butcher shop.

My uncle, he owed money to the Mob.

The poor guy worked six days a week to pay it back.

Meantime, I'd see these wiseguys come in from the Bonanno crime family...

bulls.

And my... my uncle was in the back.

And he would be schvitzing.

He would be sweating, because they'd be threatening him.

They'd threaten his son, Joey, Jr.

They'd threaten my aunt, Aunt Lucy.

And actually they'd look at me and say, "Who's the kid, right?"

And he'd say, "No, no he's just the delivery boy."

But, man, that was frightening days.

You knew when you borrowed money from them.

They... If you didn't pay on time,

they'd bend your leg and stuff it in your pocket.

My boxing trainer, my baseball coach,

my barber were all involved with the Mob.

And I started getting an education,

really understanding the street by the time I'm 14, 15.

By the time I'm the time I'm 17, 18,

I'm already collecting money.

And I'm told when to talk, when not to talk,

or when to just hurt somebody.

You wanna motivate 'em.

"Better have that money this fucking week."

If you don't have that money, I'm gonna come see you in a different way.

Have that fucking money." Now, when a guy comes to see me

and he insults me with $1,000, yeah, I hurt him.

After I hurt him, I tell him to go get me the rest of my fucking money.

Now there's no patience.

He doesn't have the money a week before then, I baseball bat him.

I liked lending money out to people. It was good business.

If somebody couldn't pay,

then the idea is we become their partner.

I acquired a Chevrolet agency that way.

Then I started making a lot of money

and started to use that life to benefit me.

The gasoline scheme was the biggest thing

that certainly I ever had.

There was a guy that had a small gas operation out in Long Island.

He comes to me, and he says, "Mike, I have a germ of an idea,

where we might be able to defraud the government

out of tax on a gallon of gasoline."

So he got my attention. I didn't like the government.

Puts the box on the table. Opens it up.

He said, "This is the first week's take in the gas business: $320,000."

From that point on,

I grew that operation to between eight and ten million dollars a week.

We were selling gas to branded, unbranded stations, everybody,

'cause we were undercutting everybody. We weren't paying the tax.

The FBI couldn't figure it out.

I'll never forget one day:

I was at my office at my automobile dealership.

Two FBI agents come in.

They said, "Look, we know you got something going on with this gas.

Just tell us how you're doing it.

You tell us how you're doing it. We'll give you a pass."

I said, "I dunno what you're talking about.

You wanna buy a car? I'll give you a break.

I like you guys. Don't worry about it."

But that's how frustrated they were with us.

They knew we were doing it, but they could never figure it out.

It was the golden era of the Mob.

The FBI couldn't keep up with us. There was no way.

Our relationship with the Mafia... it was a cat and mouse game.

A very serious game, to be sure.

I can't tell you how many times a wiseguy would say to me,

"You do what you gotta do. I do what I gotta do."

I used to tell them, "Hey, you do your job. We'll do ours.

You catch us the right way, no complaints."

Their job is to lock you up. Our job is to get away with it.

You see them in a van,

you smile and you wave, because you're being cocky with them.

They'd either walk away or tell me fuck off.

If you didn't get told that in Brooklyn, you'd done something wrong.

There was organized crime investigations being conducted

in three separate FBI offices,

but each of them had their own idea about how to approach the problem.

So, there was organized crime, but very unorganized investigations.

We had no strategy. We had no plan.

When we would come across somebody we didn't know,

the only thing we could do was take a photograph of them.

Then we could go out to our informants and say, "Do you know this guy?"

They'd say, "Yeah, I know that guy." "What's he do?

What's his criminal activity? Who's he connected with?"

And then we'd put them on a board.

We had a very, very good idea of who was who

and how the Mafia was structured in New York.

The five Italian organized crime families were.

Gambino, Genovese, Lucchese, Colombo, and Bonanno.

The families were very structured.

It started at the top with the boss,

then you had the underboss, who was really the second in command,

and then you had your caporegimes, captains,

and then you had the soldiers under them.

The way the families were structured gave us a very powerful position.

The biggest problem was that you could never get to an underboss

or the boss himself.

They were too well-insulated from whatever criminal activity was done.

They had no connection with it whatsoever.

The lower-level guys were out there committing the criminal acts

and kicking the money up to the higher-ups.

The average wiseguy, we knew what he was doing.

We put him in jail for a year,

but it didn't solve the problem.

Whatever their money making scheme was went right on,

virtually without interruption,

'cause there's a lot of guys waiting in the wings to take his place.

You know how I would spot the wiseguys?

- Well, particularly in the disco era... - Mm-hmm.

They had the polyester waffle-weave bell bottoms.

They had the open neck, you know? They had to have the hair.

Then they'd have their toilette water on, you know, like that Old Spice, Hai Karate.

- Lilac water. - Ah.

Man, you light a match, you'd all be blown to kingdom come.

In the '70s, when we started moving heroin and cocaine, it was huge.

We were making a million a month.

We partied constantly.

All the gangsters used.

They'll tell you they never did, but they did.

Say nobody cheated on their wives, but everybody cheated on their wives.

Nobody drank champagne. We drank champagne day and night.

The wiseguys were collecting the moola-shmoola.

In the mean time, the city of New York was total anarchy.

The Bronx was burning like every night.

Buildings were being either torched by the landlord for the insurance

or torched by gangs.

There is a war in progress on the streets of New York

to see who's gonna control portions of the illegal drug market.

New York was lawless.

One hundred eighty-seven banks were robbed in this town this month,

and there's still another day left.

Bank robberies, hijackings, drugs, murder, extortion,

loan sharking, gambling, you name it.

Organized crime controlled virtually everything you can think of.

No matter how much manpower we put out there,

the Mafia ran virtually unfettered in New York.

The Guardian Angels

is a group of youths who have taken it upon themselves to fight subway crime.

We had to take the law into our own hands.

As Guardian Angels, trying to maintain law and order...

The cops didn't like it, but we said, "Tough noogies, too bad,

because you guys turned the city over to organized crime."

Look, I had a jet plane. I had a Lear 25.

I had a helicopter at that time.

I had a house in Florida, a house in New York.

I built a 7,000-square-foot house with a racquetball court.

We were untouchable.

Who's gonna stop us?

You felt like you had the power to do anything you want.

I didn't have any power to do anything.

We were lucky if we put one or two guys in jail every year.

I didn't feel New York was mine for the taking.

I thought we already took it.

New York was held in the grip of the Mafia.

The government was not controlling much of anything.

That was the worst part about it. People didn't believe that law enforcement

could do anything about the Mafia.

It was gonna be here forever.

We had a meeting in Washington, D.C.,

the Department of Justice.

The director of the FBI said, "What are we going to do about this?"

At the time, the FBI was totally unsuccessful.

But we already had the perfect tools to bring down the Mafia.

The Racketeer Influenced and Corrupt Organizations Act...

commonly referred to as RICO,

was a law that I wrote in 1970 to dismantle the Mafia, bosses and all.

The FBI had this law for ten years and didn't know how to use it.

So I figured maybe what we could do is have a training course

at Cornell, right here.

March of '79, the boss wanted us to go

to a seminar at Cornell University Law School

having to do with organized crime problems.

It was a week of spending time away from the family.

I wasn't really seeing what benefit it was to me or to us.

I went kicking and screaming,

but as it turned out, it would change everything.

Question is, why RICO?

You need to know what we had before RICO.

Before RICO, we could arrest the foot soldiers in the Mafia family

for things like extortion, murder, drug-dealing,

but we had no way of tying...

the foot soldiers to the bosses.

I was telling them, "What you've gotta do is take out the organization.

And you're not gonna take out the organization

unless you focus on the organization."

By defining these people as bosses and members of this organization,

they're now all joined together.

Using RICO, a person can now be convicted

because they ordered somebody to commit a crime.

So you could now prosecute a group of people

who had committed those crimes together.

That way you can go after the whole organization at one time.

You need to be able to show that this crime was related

to an organization that does crime the whole time.

- The definition of power... - Bob Blakey said,

"You should prosecute these Mob guys not as individual people,

but as a group of people committing crimes as a business."

It was like an epiphany for me... a rush.

Now I could see how I could redirect the agents

and make them understand what we had to do.

Now I knew how we could bring down the entire New York Mafia.

The plan was to develop a RICO case

against each of the Five Families.

Organized crime requires organized investigation.

We would have five Family squads,

and all the information about that particular Family

would only go that one squad.

Kossler brought us into the conference room one day

and said, "We're not leaving the room until we have a written document

of how we work... organized crime cases under the RICO statute."

We didn't know anything about the RICO law, frankly,

because we never used it.

All of a sudden, people said, "Wait a minute. I have all these cases

involving all those people down here."

"Close them, because we're only gonna go after these people up here."

You're talking about a major operation:

One squad per family, going after the bosses of all Five Families.

When he first broached that to me, I...

I had my doubts. How're we gonna do that?

The problem was that no matter how hard you tried,

it was very, very difficult to get a cooperating witness.

They were too afraid to talk on the record.

We had a strict code.

It was the main reason why the Mob survived and prospered

for well over a hundred years in this country.

I took the blood oath on Halloween Night, 1975.

The boss was seated at the head of, like, a horseshoe configuration,

and all the captains were alongside of that.

I held out my hand. He took a knife, cut my finger.

He took a picture of a saint, put it on my hands, lit a flame...

and he said, "Tonight, Michael Franzese, you are born again into a new life."

He said, "Betray your brothers and you will die and burn in hell

like this saint is burning in your hands."

He said, "Do you accept?"

"Yes, I do."

Guys like myself...

everybody on the street, they knew, you become the witness,

you're probably gonna pay for it with your life.

You feared the boss.

You feared breaking the code.

The Yankess are one game away from ending the 1980 baseball season...

Someone who becomes a member of the Mafia won't testify.

It was a secret society.

But we had a good solution to a big problem.

Without cooperating witnesses, the plan was to start bugging the Mob.

Put bugs in the places where they operated.

It might be a restaurant he frequents.

It might be a car that he uses. It might be his house.

The ultimate goal was to record evidence

that's coming directly from the boss's mouth

as to what criminal activity he was involved in

and who was in it involved with him.

You can use that to bring the whole organization down.

That was gonna take a lot of manpower.

I asked headquarters to send us 50 agents.

The director said, "Give New York whatever it needs."

We started off on day one.

I had the Gambino family. It was one of the most powerful families.

There were close to 21 captains, over three hundred soldiers...

thousands of associates.

And the largest target was Paul Castellano, the boss of the family.

Castellano ran the family like a Fortune 500 business.

They called him the white-collar don because he read The Wall Street Journal.

He was very successful financially.

But the most important thing he understood was,

in order to rule a crime family,

you have to instill fear in your soldiers and captains.

And he had a bunch of real tough guys around him

who were like hit men for the Mob.

Paul Castellano was a boss. We knew he was very wealthy.

We knew we was very strong.

He had 20-something guys killed.

So when people say he was a soft, white-collar criminal,

that's the furthest thing from the truth. I actually looked up to the guy.

This is a guy who's smart enough to kill the way had people killed,

but yet not be called a killer.

Because he is a killer. It's just not by his own hand.

He lived in a big house on Staten Island.

Our goal was to put a microphone there.

Then when you play the tapes at trial, your best witnesses are

the criminals themselves, the mobsters.

The problem was you cannot bug anyone without a court order.

I have got to come up with enough information,

either from surveillance or from informants,

that links Paul Castellano to criminal activity.

So the plan was to work our way up from the bottom.

We want the gossip in the family. We want the blabbermouth,

the guy who talks a lot.

When I started as an organized crime investigator,

I was assigned to the Gambino squad.

We were focused on this small group in Queens.

Bergin Hunt and Fish Club was a Mafia social club

where they hung out and talked about their crimes.

John Gotti was the captain of this little den of thieves.

This crew were kind of thuggish, and they handled a lot of street rackets:

Loan sharking primarily, and gambling, and bookie joints.

And they were hijackers.

That was the more violent crimes.

Bergin Hunt and Fish Club was our Wall Street.

When guys go to work on Wall Street, they show up to the office,

and we show up to the Bergin Hunt and Fish Club.

And we wait for our boss, our CEO...

John Gotti.

I'm there 24 hours a day, seven days a week,

on call for when that man wanted me.

We're running numbers. We're running drugs. We're running girls.

Anything that's illegal.

I tasked all the agents:

"Let's find out what these guys are doing, who's making all the money,

and try to look for a weak link."

The FBI had an office very close to the Bergin Hunt and Fish Club.

We were taught, especially by Gotti:

"If they're around, they're around. We know they're around,

so, 'Hello, how are you?' Be cordial." That's about it.

We developed several high-level informants in Gotti's crew

through a variety of means. Some were arrested, some we paid a lot.

These guys provided a lot of information

about who the weak links were in that crew.

John's personal pit bull bodyguard was a tough guy known to be very violent.

He would do anything, from making him tons of money

to killing for him, to protecting him.

His name was Angelo Ruggiero.

Informants told us that he was a big gossip.

They called him "Quack Quack." Not to his face.

He ate a great deal. And he talked a great deal.

So... his mouth was always in motion.

Angelo was our blabbermouth.

This was great.

We went to the Attorney General of the United States and got approval

to put a bug in Angelo Ruggiero's house.

We were off and running.

A "black bag man" was an agent who had a skill set

for planting a concealed microphone

or getting through a locked door.

And that's basically what was in the black bag of tricks.

Many people don't operate in a covert world effectively.

They don't blend.

The most successful agents fit sort of my profile.

Maybe I was a bad kid growing up.

Maybe I learned how to hide and learned how to blend and so on and so forth.

My blending technique would depend on the neighborhood.

And generally speaking, I'm just a local guy doing his job.

In the Ruggiero case, the house was always occupied.

The neighborhood was too close and there was never an opportunity

that we could guarantee the security of the entry team.

So we came up with alternative options.

Ruggiero's residence had problematic wiring.

His telephone service would be out from time to time.

We were just going to see

if we could stretch that into an opportunity to get in the house.

The complaint goes in because he has absolute legitimate trouble on his phone.

We would ask the phone company to not dispatch... and I would show up.

Ruggiero's a little hostile.

We were always concerned

that they didn't trust my undercover identity.

But failure...

honestly was not an option.

I'm winging it. I'm making this up as I'm going along,

trying to read the pulse of who I'm dealing with.

Now I had an opportunity.

We ran the wire to the back,

and we're out of there.

I was assigned to listen in on Angelo Ruggiero's home.

When you were assigned a shift, you listened live.

And you would listen to see who his colleagues are

and who he's in charge of and who he reports to.

He tried to be a little cryptic.

So you were kind of trying to capture the gist of what was being talked about.

It was a total immersion into the life of a Mafia household.

So, I never heard so many creative uses of the f-word in my life.

If there were some hot, pertinent conversations,

then those things were immediately turned over to the steno pool...

who did their best to transcribe them.

It was like some kind of soap opera.

I got this impression that Angelo was this kind of cranky, over-verbal guy

who loved his kids.

The kids were, um... shall we say, a handful.

He ran around and did a lot of meat-handed management

of all these crew members in his Mafia crew and his family.

It was harder to understand certain sections.

So all the agents tended to get assigned to reviewing these conversations

in order to make the transcripts sensible.

And so you listened again and again and again.

You were kind of trying to put the puzzle together.

I mean, it was a real slow-going art.

People on the squad had different input, and they'd say, "Wait, I hear this,"

and then you'd say, "Yeah, that's the key.

That's what's going on in here."

He would make reference to it.

Did he get it? You know, did he get it?

We're sitting there like, "Well, what is he talking about, you know?"

You know, but then you had to put it with who he's speaking to.

Who was that at the other end of that telephone?

And of course, the FBI had technical abilities

to track the phone, and over time, you'd figure out who it is.

And then when you put it together, you'd say, he said, "Did you get it?"

And he's talking to a guy who is a big drug dealer.

Here we are in the middle of the day.

Angelo is talking about two- or three-kilo heroin deals,

while his wife and daughter are a few feet away washing the dishes.

We had gathered evidence

that Angelo was a big-time, multimillion-dollar heroin dealer.

It was a big deal.

But we still didn't have enough evidence that links Ruggiero's criminal activity

to Paul Castellano, the boss of the Gambino family.

For almost 6 months, we followed him around

so we knew where he went for different meetings.

We came to find out that he'd go up to the boss of the family,

Paul Castellano's house on a regular basis.

And then when the meeting was over, Ruggiero would come back to his house.

And other Mob guys would come over,

and Ruggiero would tell them all about what happened at the meeting.

It's a big deal to meet with the boss of the family.

It's a dream come true.

It's proof that Castellano was meeting members of his crew at his house

and talking criminal matters.

This was the proof we wanted for approval for electronic surveillance

of Castellano's house.

It was an unbelievable moment,

because now we could finally bug the boss's house.

But it was gonna be a very tricky operation.

It was a big house. It was referred to as the White House.

The surveillance squad, after many, many hours of surveillance,

had come to the determination

it's impossible to get in there surreptitiously

because the house was never empty.

Castellano had lots of new things in the house.

He had the latest telephone equipment,

and he had cable TV,

specifically a CNN channel, which was new at the time.

Get in touch with the world. Touch it. Get in touch with the news.

Touch it.

Get in touch when you want, 24 hours a day. CNN headline news.

We learned all of his meetings and conversations

took place in his kitchen, dinning room area.

That was where the TV was and that looked like a real opportunity.

So we started doing a little homework on cable TV.

It's daybreak in the east.

It's the 17th of May, good morning.

I learned it's very easy

to introduce interference in cable systems.

Good morning...

So, we introduced a problem into the house...

annoying and aggravating enough

that if somebody showed up to troubleshoot a problem,

they'd be happy to see them.

I'm the cableman now.

I ring the doorbell.

Lots of chimes, as I recall.

The gentleman that answers the door happens to be Tommy Bilotti,

Paul's right-hand guy.

The guy was a killer.

If something goes wrong, I need to get out of here immediately.

Residents of New York...

chemicals, as an earlier...

I'm calling into the office, and they're going to test the line.

I'm actually calling Art, who is my other agent out there.

And when I go, "Art, I'm tapping on this."

As I'm tapping, he's making interference.

TV's blinking.

- Son, Jesus Christ... - Get ready, Manhattan...

Preplanned, all orchestrated, bench tested before I went.

Including my level of uncooperativeness.

I'm acting like we have to come back.

You have to make an appointment.

They don't like appointments.

So, no appointment.

We're gonna do this. We're gonna do this right now.

I took a risk.

I said, "If you give me a hand for just a minute,

I promise I'll be out of here."

"What do you need?"

I go, "Would you just come over here and hold the flashlight for me?"

So Tommy Bilotti helped me while I installed the device

that had the microphone in it.

Microphone was active.

They were glad to not have me be there too long, and I was glad to leave.

You know what it takes to stop a crime? Your help and your neighbors'.

Take a bite out of crime.

Everybody was just thrilled with the successful installation

of the wire in Paul Castellano's house. I mean, that was just... Wow.

Your expectations are great. You expect to hear about murder.

Kill this guy and kill that guy. It was a big day for the FBI.

Paul Castellano, the boss of the Gambino family, was on tape.

This was really significant,

in that he was the boss of one of the largest families in the Mafia.

People wouldn't even dream about this ten years before.

The sound of a Mafia kitchen, you know what it is?

It's eggs being beaten in a bowl.

I don't recall listening to any meetings with others.

I just remember Castellano and Gloria talking.

Gloria was the maid in this giant mansion that they had.

She cleaned and cooked, and she'd been there for quite a while.

I got this impression.

She had a certain amount of personality and they clicked.

You'd listen to this and you'd go, "What is that?

Alright, stop it here and back it up." And the reels would go around.

"Let's play it again."

"Oh, God no! Oh, my God!"

Everybody's suddenly realized

he was having a torrid affair with his maid.

Poor Joe O'Brien had to be all tuned in to that little soap opera.

My job was to make a prosecutable case

against Paul Castellano.

I had people talking to me that didn't even know they were informants,

including Paul Castellano's maid and lover, Gloria Olarte.

She would we take pictures,

family pictures and pictures of Castellano meeting his associates.

She gave me those photographs.

But she was an unwitting source.

She didn't know about the bug in Castellano's house.

You listen to 600 hours' worth of tapes, you get to know the guy.

So... I did something a little unusual.

I started sending him greeting cards.

Birthday cards.

Get well cards. I heard he was sick.

I sent him a card: "To a special godfather."

I was messing with him. This was psychological warfare.

I wanted to see what they were made of.

My partner Andy and I were listening and had the headsets on.

He talked about the greeting cards.

A lot of profanity and everything. Kind of funny when you listen to the guy

and he's opening a card and talking about you.

That's when Gloria revealed that she'd been meeting with me privately.

And I figured, "Uh-oh."

He scolded her like a little schoolgirl.

"You don't meet with Mr. Joe anymore.

You stay away from O'Brien. You understand, Gloria."

Castellano's bodyguard started goading him.

"We can get rid of this guy, O'Brien."

They were goading Castellano to put a contract out of my life.

Scary people, you know. They're murders. They're psychopaths.

It was said that Castellano could order somebody killed

by just lifting an eyebrow. Didn't have to say a word.

If he had gone silent, it would have been all over for me.

But Castellano said, "No."

Bring too much heat on the family.

"Just be careful, you know. He's just doing his job."

He defended me, so I gotta give credit for that.

But it didn't change the fact that the whole object of my case

was to put Castellano in a federal prison for life.

I started getting evidence to implicate him.

Castellano talked about all kinds of things.

He talked with Tommy Gambino about dividing up the Garment District.

He spoke with Joe N. Gallo about all the various rackets they were involved in.

He spoke with Joe Armone about the restaurant union.

We were hearing more and more

about their involvement with the labor unions.

That was important information because it showed the real problem

of organized crime...

that the organized crime groups controlled the major labor unions in this country.

We were hearing how the Mafia controlled the Teamsters trucking union,

the Laborers' Union,

the longshoremen union,

the hotel employees' union.

There's so many ways they used the unions to make money.

They could extort companies to give their friends jobs.

They could give him health benefits.

The Mob had a lot of power,

because we controlled the unions.

We call in a strike with the Teamsters,

two and a half million people stop working.

That's a lot of power.

Not to mention the pension funds that you had at your disposal.

You got hundreds of millions of dollars sitting in the bank

that you can move anywhere you want. You control bankers that way.

You control insurance companies that way. And we used that.

And he gave me $5,000.

You control the unions.

You control the Teamsters. You control the docks.

You control the country.