Franzese's Struggle Followed His 1986 Indictment

Michael Franzese
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Michael Franzese is most widely known for the gasoline tax scam, one of the single-most profitable rackets ever operated by New York's Five Families. He also sported a clean-cut image and, as the son of "Sonny" Franzese, was described by the media as "Mafia royalty."
A 1986 indictment, however, said that Franzese "inherited his father's business tactics and violent ways. According to [one federal prosecutor], one of [Michael's] goons broke the head of a competitor with a ball peen hammer."

And one auditor who had the temerity to question Franzese's books was told: "You don't know who you're fucking with. We'll cut your heart out.''

You certainly don't have to signup to participate in the event, but there may be a limit to the number of participants, so I decided to offer priority "seating" to those who join.

See my previous story Want to Chat with Former Colombo Capo Michael Franzese? for additional information about the "virtual sitdown" with the former Colombo captain who has never spoken publicly about certain aspects of his former life in "the life."

Michael Franzese was pegged at number 18 by Fortune Magazine in its 1986 cover story on "The 50 Biggest Mafia Bosses."

Describing him as "the son of convicted bank robber and Colombo chieftain John ''Sonny'' Franzese," and "a fast-talking 35-year-old businessman and handsome father of five," the article noted how he'd established a "cartel" that produced feature movies (including the horror film Mausoleum and a youth-gang musical called Knights of the City). In Hollywood a "cartel" is called a studio. It further noted that Franzese "ran a discotheque, sold and repaired automobiles, operated construction firms, and achieved a near monopoly of independent gasoline sales on Long Island."

A 28-count, 99-page federal indictment issued around the time of the article noted that "[t]he government accuses Franzese of ripping off more than $5 million in tax fraud, insurance fraud, fraudulent loans, and the fraudulent operation of two auto dealerships.

"Investigations also reveal that he cheated New York, New Jersey, and Florida out of hundreds of millions in gasoline taxes. The gas tax scam was accomplished through what federal prosecutor Jerry D. Bernstein calls a ''daisy chain of phony companies.'' Some 20 Franzese oil and gas distributors would make paper sales of gasoline from one company to another until the whole tax bill was owed by one firm known as the ''burnout company.'' It consisted only of a mailing address, a telephone, and a corporate principal who was an illegal alien. The burnout company, in turn, sold the gas to retailers with an invoice marked ''all taxes paid.'' Then the burnout company would declare bankruptcy, and Franzese would create another daisy chain.

"In spite of his clean-cut image, Mike Franzese inherited his father's business tactics and violent ways. According to Bernstein, one of his goons broke the head of a competitor with a ball peen hammer. And an auditor who questioned Franzese's books was threatened by a Franzese associate: ''You don't know who you're fucking with. We'll cut your heart out.''

"In March, Franzese agreed to plead guilty to racketeering and conspiracy charges, accept a prison term of ten years, forfeit assets worth $4.8 million, and pay an additional $10 million to the states defrauded in the gasoline tax scam."

"He was able to persuade the Justice Department that he couldn't possibly come up with the $14.8 million if he was stuck behind bars -- not even after selling his various houses and signing over his movie rights. An extraordinary deal was struck. Before going to prison, Franzese was permitted limited freedom under the guard of deputy U.S. marshals. The surveillance costs were to be paid by Franzese, who was soon seen (and to the embarrassment of the government, filmed by an NBC-TV news crew) scurrying around Hollywood with his posse in tow. The farce ended when Franzese, reverting to form, gave a bad check to the U.S. Marshals Service to pay for his guards. A federal judge sent him off to prison.

"The investigation of Franzese's affairs revealed yet another crooked business -- the 700-member Allied International Union, a large labor union of private security guards. Its members worked in sensitive spots as diverse as nuclear power plants and gambling casinos. Allied International had been a joint venture of the Genoveses, Gambinos, and Colombos. But when the Genovese and Gambino partners died, it became exclusively a Colombo operation. Before Allied International came under Franzese's wing, Daniel Cunningham, a builder in Smithtown, Long Island, thought he had bought control of the union from one of the Genoveses for $90,000. Cunningham saw a way to get rich. He took $134,000 a year in salary and expenses and put his wife, ex-wife, and girlfriend on the union payroll. Cunningham admitted trying to call a guard strike against five nuclear power plants along the Eastern Seaboard, including Three Mile Island, and threatening to strike the Atlantic City casinos. He was indicted for embezzlement, racketeering, and bribery in 1981.

Comments

  1. Did he ever testify against anyone or was that just a ploy? So many mixed "facts" about it.

    ReplyDelete

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