The core business of the Philly Mafia
Reputed South Jersey mob leader Anthony Staino, arrested on racketeering charges last month, once told an associate that he was a member of the "board of directors" and the "chief financial officer" for the crime family headed by Joseph "Uncle Joe" Ligambi, according to federal prosecutors.
Unfortunately for Staino, the "associate" was an FBI agent posing as a man named "Dino" who had borrowed money from the mob.
In a conversation in 2004, Staino was trying to explain how important it was that the debt be repaid, according to an indictment unsealed May 23. So he let Dino know who he was and at another point told him: "Please, on my life, I like you. I don't want to have to [expletive] hurt you."
The self-description offered by Staino, 53, underscores the nature of the case pending against him, Ligambi, and 11 associates.
The 50-count indictment, filed in U.S. District Court in Philadelphia, is devoid of the murder and mayhem - the beatings, the shootings, the ambushes - that have marked mob cases.
But the charges, built around gambling, loan-sharking, and extortion, offer an inside look at mob economics and hint at the staggering amounts of cash - little of it subject to taxation - that a well-oiled mob organization can generate.
While they don't seem like much, illegal video-poker machines have always been a big part of that economy and were, according to the indictment, an enterprise that Ligambi and Staino used to line their pockets.
The numbers tell the story.
According to sources in the business, a machine placed in a good location - a popular bar, restaurant, or coffee shop - can generate $500 to $1,000 a week in profits.
In a typical 50/50 split with the proprietor of the location, a machine making $1,000 a week would generate $26,000 annually for the mob.
Prosecutors allege that Ligambi and his associates had dozens, if not hundreds, of machines throughout Philadelphia and the Pennsylvania suburbs.
Just 20 machines operating at the high end of the profit- margin scale could produce more that $500,000 in profits in a year.
The indictment alleges that Staino, under house arrest outside Swedesboro, collected the mob's take each week. Ligambi and several other key defendants in the case are being held without bail. All have pleaded not guilty.
The indicted charges that Staino and Ligambi also shared earnings from sports betting and loan-sharking.
"There's nothing better than shark money," mobster-turned-informant Nicholas "Nicky Crow" Caramandi once said of the mob's particular brand of money lending.
In an interview shortly after he began cooperating in 1988, Caramandi explained an interest-generating system that would be the envy of any credit-card company. A degenerate gambler himself, he knew how it worked.
Take a guy who owes $10,000 in gambling debts to a mob bookmaker, he said. If he can't pay the debt, he is sent to a loan shark with mob connections and borrows the $10,000, which he then gives to the bookmaker.
Now the loan-shark debt has to be paid.
Usually the money is lent at three points for 10 weeks. That means that the debtor has to pay interest of $300 a week. At the end of 10 weeks he will have paid the loan shark $3,000 in interest - known as the "vig" - and, if he hasn't paid down the principal, he will still be $10,000 in debt.
At that point, the loan has to be paid - or extended for another 10 weeks. At the end of a year, under that scenario, the debtor would have paid $15,600 in interest and still owe the loan shark the $10,000 principal.
The loan shark and his mob associates would, in turn, have put some of that $15,600 "back on the street" at three points for 10 weeks.
"A guy's got to pay, 'cause we're the mob," Caramandi explained.
Three decades later, authorities allege that Ligambi, at 71 a Caramandi contemporary, is still cashing in on that fact.
Prosecutors charged that he and his associates used the reputation of the organization - its history of murders and assaults - to intimidate gamblers and assert control in the underworld.
In one case, authorities allege, Ligambi, Staino, and reputed underboss Joseph Massimino forced their way into a video-poker operation in South Philadelphia, taking over about 34 machines at 20 stops.
The indictment says they paid $70,000 for the business, a mere pittance for what it was worth.
"They made them an offer they couldn't refuse," prosecutors said of what amounted to the extortion of the company owners.
In the late 1980s, mobster-turned-informant Thomas "Tommy Del" DelGiorno testified before the New Jersey State Commission of Investigation that gambling was "the wheel" around which all other organized-crime activities spun.
That hasn't changed.
"It's the lifeblood of the organization," added Ron Previte, a mobster who turned informant in 1999.
Authorities say Ligambi, who became boss around 2001, took the organization back to its roots, eschewing the violence and the headline-seeking celebrity that were the marks of several mob leaders, including Joseph "Skinny Joey" Merlino and Ralph Natale, who came immediately before him.
His approach: Make money, not headlines.
And while there are no annual board of directors reports detailing how much money he made, he and Staino lived in well-appointed homes, drove late-model cars, and never appeared to be lacking for cash.
"It's the same game, just different players," said Fred Martens, a former executive director of the defunct Pennsylvania Crime Commission.
"The bread and butter of the mob has always been gambling, loan-sharking, and extortion. Those are the staples."
Narcotics generate more cash, Martens said, but that business is fraught with problems - informants, violent rival drug dealers, and intense law enforcement scrutiny.
"It's like the difference between blue-chip stocks and junk bonds," Martens said. "Drugs are the junk bonds. You can make a lot of money, but the risks are high.
"The blue-chip stocks are gambling, loan-sharking, extortion. With them, you're always going to make money.
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