60 Minutes Glimpses Part of Scores Story
Michael Blutrich grew up in Brooklyn, New York. After graduating from Georgetown in 1974, he opened his own firm on Park Avenue, Blutrich, Falcone & Miller. The current Governor of New York, Andrew M. Cuomo, was a partner in the firm (1985-1988).
Gotti, then the 37-year old son of infamous underworld boss John Gotti Sr., pleaded guilty to racketeering and other charges. In exchange, the Scores' extortion charges were dropped. He served six years.
In federal court in Atlanta, Steve Kaplan, owner of the Gold Club topless club, Michael DiLeonardo, and others were on trial in connection with the shakedowns at Scores. Mikie Scars was acquitted.
Leach was one of many prosecutors, federal agents and defense attorneys from New York, Georgia, and Florida who made impassioned speeches seeking to reduce Blutrich's and Pfeffer's sentences.
He was told ''certain accommodations would have to be made; otherwise they were ready to go with a bomb.''
Asked why he did not abandon Scores at that point, Mr. Blutrich said: ''I wanted to open and run a sophisticated, upscale club. If I did not accede to their demands, there would not have been a Scores.''
Scores, which featured topless dancers and big-screen television sets tuned to sports, opened on Oct. 31, 1991, at 333 East 60th Street. About this time, Mr. Blutrich and Mr. Pfeffer met and their business worlds began to merge.
Pfeffer opened a string of carwashes while in college. Later, he advanced into pooling investments for real estate deals and supervising mortgage portfolios for investment companies.
In 1992, through Blutrich's introductions, National Heritage gave hefty commissions to Pfeffer for managing the company's real estate investments and for finding buyers for its holdings.
For the first year, Blutrich said, Scores was hemorrhaging red ink, and by late 1992 Mr. Davies of National Heritage wanted out. Blutrich's solution was to bring in Pfeffer as the chief investor and to manage the club's finances.
Pfeffer relished the idea of overseeing a popular nightclub that attracted show business and sports figures. He took over as executive manager, with Mr. Blutrich remaining as his main partner and the club's lawyer.
According to the Scores case indictment, from 1991 to 1997, Gambino family members extorted more than $1 million from the owners and employees. (Note all those "Mafia goons" shown on stark surveillance videotape were caught in the operation's final year.)
''Some of them were scary,'' Pfeffer said of the Gambino family members who frequently went to the club. ''They talked about blowing away people with shotguns and told us, with smiles on their faces, how easy it would be for them to kill us.''
The mobsters rarely paid for meals and drinks. They would also pick up cash left on tables by customers and tell waiters, '' 'It's on the house; they're friends of ours,' '' Pfeffer recalled. When he objected to the mobsters' actions he was threatened. After one such incident, he walked into his apartment and found a bullet on his coffee table.
The first sign of legal trouble for Mr. Blutrich and Mr. Pfeffer came in 1994, when insurance regulators closed National Heritage after uncovering a maze of embezzlements, worthless investments, assets inflated to conceal losses and suspected kickbacks to company officials for authorizing secret loans.
In 1996 and 1997, a Federal grand jury in Florida indicted Mr. Blutrich, Mr. Pfeffer, Mr. Davies and 13 others on fraud and conspiracy charges that led to a loss of about $400 million for the company, which went out of business in 1996.
Mr. Davies was never been implicated in the Scores case.
In November 1996, four months after Mr. Blutrich and Mr. Pfeffer were indicted in Florida, Federal and state investigators raided Scores as part of a separate investigation of Gambino family rackets in the New York area. They also raided the Scores offices that Mr. Blutrich and Mr. Pfeffer had shared at 3 Park Avenue.
Both men soon agreed to work undercover for the authorities. They did so after learning that they had been ensnared in a broad investigation of the Gambino family. Moreover, substantial evidence had been obtained against both men through court-authorized video cameras and microphones that the FBI had planted in their offices.
But there were tense moments. At meetings concerning Scores payoffs and the investigation, Mr. Blutrich and Mr. Pfeffer said, the mobsters often put guns on the table or ostentatiously displayed their weapons.
''They told us not to worry about the guns,'' Mr. Pfeffer recalled. ''They said, 'It's only for rats.' ''
As part of the cooperation agreement, the FBI installed concealed video cameras and microphones in Mr. Pfeffer's Park Avenue office. Outside the office, both men had recording devices under their clothes, in their cars and in cellular telephones.
Some mobsters, Mr. Blutrich and Mr. Pfeffer said, would playfully pat them or unbutton their shirts before beginning conversations.
''It was a year of unbearable tension,'' said Mr. Blutrich. ''They came pretty close a couple of times to finding the wires on me.''
Mr. Blutrich, who is divorced, and Mr. Pfeffer, who is married and has daughter from a previous marriage, said they expected to receive lighter sentences in return for cooperating, but were given no assurances by prosecutors.
In prison, like other witnesses in Mafia cases, they were confined in segregated cellblocks out of concern for their safety.
''We didn't start out as criminals, but we were fast-track guys who were out to make lots of money,'' Mr. Pfeffer said. ''By working undercover we tried to make up for the wrong things we had done, but as a consequence, we'll be looking over our shoulders for the rest of our lives.
''I don't think,'' he added, ''there will be happy endings for us.''
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| Michael Blutrich was featured on 60 Minutes The news show will revisit the Scores case. |
In the 1990s, using stolen money, Blutrich started investing in restaurants and nightclubs including the strip club Scores. At some point, he started working in cahoots with Steve Sergio, described by 60 Minutes as a Gambino associate. (See script of the episode, An Unlikely Informant here.)
Sergio revealed the extent of the scams he generated, which included taking payment from employees within the club, as well as club suppliers. Sergio even appointed a busboy as Score's accountant. "He was incompetent," Sergio told Anderson Cooper.
After being indicted for embezzlement, Blutrich agreed to work undercover for the FBI who really, really wanted to nail some Gambinos, John "Junior" Gotti specifically.
Blutrich recorded about 1,000 hours of conversations with mobsters.
Anderson Cooper recently sat down with Blutrich for a 60 Minutes segment that aired on Sunday, May 10, at 8 pm on CBS.
Blutrich and Lyle K. Pfeffer were indicted for both Heritage Foundation scam and Scores before becoming informants in the Scores case. In the end they helped put away 60 people, according to reports.
Sergio revealed the extent of the scams he generated, which included taking payment from employees within the club, as well as club suppliers. Sergio even appointed a busboy as Score's accountant. "He was incompetent," Sergio told Anderson Cooper.
After being indicted for embezzlement, Blutrich agreed to work undercover for the FBI who really, really wanted to nail some Gambinos, John "Junior" Gotti specifically.
Blutrich recorded about 1,000 hours of conversations with mobsters.
Anderson Cooper recently sat down with Blutrich for a 60 Minutes segment that aired on Sunday, May 10, at 8 pm on CBS.
Blutrich and Lyle K. Pfeffer were indicted for both Heritage Foundation scam and Scores before becoming informants in the Scores case. In the end they helped put away 60 people, according to reports.
Federal agents credited the two with risking their lives to infiltrate the Gambino crime family, which supposedly put a $1 million bounty on each head. We wonder if the FBI asks their snitches to say this stuff about bounties on heads.
"From the standpoint of law enforcement, we simply could not have prosecuted these insidious criminal cases without the help of these defendants," said Assistant U.S. Attorney Art Leach. "These men cooperated against the most powerful crime boss -- that is John A. Gotti Jr. -- and he [was] in jail.''
Michael Blutrich and Lyle Pfeffer hoped their actions in New York would lead to a reduction in their sentences.
But a federal judge in Orlando was unmoved. She refused a request by the government and defense to cut the men's sentences dramatically as a reward for their efforts against organized crime.
"Their cooperation was extraordinary, but the crimes, in this case, were extraordinary," said U.S. District Judge Anne Conway. "The two have to be considered together."
The men originally were sentenced to 25 years for their crimes against the National Heritage Life Insurance Co. They had hoped for new sentences of six years. But what they received equaled a typical reduction for defendants who cooperate with the government: Each got 16 years and eight months. They served about 13, got out two years ago, and apparently are in danger of Mafia retaliation though we believe the current Sicilian-led Gambino family couldn't care less about murdering Blutrich and throwing unnecessary heat on a well-hidden operation.
"From the standpoint of law enforcement, we simply could not have prosecuted these insidious criminal cases without the help of these defendants," said Assistant U.S. Attorney Art Leach. "These men cooperated against the most powerful crime boss -- that is John A. Gotti Jr. -- and he [was] in jail.''
Michael Blutrich and Lyle Pfeffer hoped their actions in New York would lead to a reduction in their sentences.
But a federal judge in Orlando was unmoved. She refused a request by the government and defense to cut the men's sentences dramatically as a reward for their efforts against organized crime.
"Their cooperation was extraordinary, but the crimes, in this case, were extraordinary," said U.S. District Judge Anne Conway. "The two have to be considered together."
The men originally were sentenced to 25 years for their crimes against the National Heritage Life Insurance Co. They had hoped for new sentences of six years. But what they received equaled a typical reduction for defendants who cooperate with the government: Each got 16 years and eight months. They served about 13, got out two years ago, and apparently are in danger of Mafia retaliation though we believe the current Sicilian-led Gambino family couldn't care less about murdering Blutrich and throwing unnecessary heat on a well-hidden operation.
At the sentencing in Flordida, the Orlando Sentinel reported:
After a moment of shocked silence, the top-floor courtroom erupted when Conway announced her decision.
Defense attorneys cried out in disbelief.
Debbie Pfeffer, Lyle's wife, left the room wailing, cursing and pounding on the walls.
"This judge has taken my family from me," she cried. "And John Gotti Jr. will come for me when he's released from prison and put a bullet in my head."
Blutrich and Pfeffer served more time than John "Junior" Gotti Jr., whom the two men helped send to prison.
Blutrich, 51, a New York attorney, and Pfeffer, 41, a Manhattan businessman, pleaded guilty to racketeering, fraud and money-laundering charges in the National Heritage Life case. Nearly half of the 25,000 policyholder victims live in Florida.
Blutrich and Pfeffer were responsible for $237 million of a $400 million theft, the largest insurance loss in U.S. history. Only about half of the $400 million has been recovered.
They lived the high life for years with stolen insurance money. After their arrests, they agreed to cooperate.
In addition, the men used $300,000 of money from the Orlando insurance company to buy Scores, a Manhattan strip club that became a hangout for movie stars and athletes.
Court records show that "Junior" Gotti became interested and tried to take the business from Blutrich and Pfeffer. The men agreed to pay Gotti $100,000 to keep the club.
Gotti, then the 37-year old son of infamous underworld boss John Gotti Sr., pleaded guilty to racketeering and other charges. In exchange, the Scores' extortion charges were dropped. He served six years.
In federal court in Atlanta, Steve Kaplan, owner of the Gold Club topless club, Michael DiLeonardo, and others were on trial in connection with the shakedowns at Scores. Mikie Scars was acquitted.
Leach was one of many prosecutors, federal agents and defense attorneys from New York, Georgia, and Florida who made impassioned speeches seeking to reduce Blutrich's and Pfeffer's sentences.
Assistant U.S. Attorney Judy Hunt, the lead prosecutor in the insurance case, agreed with the large reduction.
Both men were in protective custody in prison and were not sent into the Witness Protection Program upon release, according to 60 Minutes.
Both men were in protective custody in prison and were not sent into the Witness Protection Program upon release, according to 60 Minutes.
"We've done everything we can do as human beings and everything we have been asked to make up for it,'' Blutrich said. "It has been staggering.''
The NY Times reported that Michael Blutrich became entangled in the insurance fraud in 1990 when he was hired by three Florida businessmen seeking control of the National Heritage Insurance Company in Orlando, whose main business was selling annuities. Blutrich would later admit that he helped the businessmen take over National Heritage by setting up a phony bank account and providing them with a fake check for $4 million when their assets barely totaled $1 million.
Prosecutors said the three Florida men gained control of the company's assets as soon as they turned over the check, then dipped into the company's own funds to cover the check before it bounced.
Blutrich soon began reaping dividends from National Heritage. His clients, now the company's top officials, lent him $300,000 as seed money to open Scores. One of them, David L. Davies, became chief executive of National Heritage and invested $700,000 of his own money as the secret principal partner of Scores, Blutrich said.
He was told that John J. Gotti was demanding payoffs from anyone opening a nightclub at the site Blutrich had picked.
Prosecutors said the three Florida men gained control of the company's assets as soon as they turned over the check, then dipped into the company's own funds to cover the check before it bounced.
Blutrich soon began reaping dividends from National Heritage. His clients, now the company's top officials, lent him $300,000 as seed money to open Scores. One of them, David L. Davies, became chief executive of National Heritage and invested $700,000 of his own money as the secret principal partner of Scores, Blutrich said.
He was told that John J. Gotti was demanding payoffs from anyone opening a nightclub at the site Blutrich had picked.
He was told ''certain accommodations would have to be made; otherwise they were ready to go with a bomb.''
Asked why he did not abandon Scores at that point, Mr. Blutrich said: ''I wanted to open and run a sophisticated, upscale club. If I did not accede to their demands, there would not have been a Scores.''
Scores, which featured topless dancers and big-screen television sets tuned to sports, opened on Oct. 31, 1991, at 333 East 60th Street. About this time, Mr. Blutrich and Mr. Pfeffer met and their business worlds began to merge.
Pfeffer opened a string of carwashes while in college. Later, he advanced into pooling investments for real estate deals and supervising mortgage portfolios for investment companies.
In 1992, through Blutrich's introductions, National Heritage gave hefty commissions to Pfeffer for managing the company's real estate investments and for finding buyers for its holdings.
For the first year, Blutrich said, Scores was hemorrhaging red ink, and by late 1992 Mr. Davies of National Heritage wanted out. Blutrich's solution was to bring in Pfeffer as the chief investor and to manage the club's finances.
Pfeffer relished the idea of overseeing a popular nightclub that attracted show business and sports figures. He took over as executive manager, with Mr. Blutrich remaining as his main partner and the club's lawyer.
According to the Scores case indictment, from 1991 to 1997, Gambino family members extorted more than $1 million from the owners and employees. (Note all those "Mafia goons" shown on stark surveillance videotape were caught in the operation's final year.)
''Some of them were scary,'' Pfeffer said of the Gambino family members who frequently went to the club. ''They talked about blowing away people with shotguns and told us, with smiles on their faces, how easy it would be for them to kill us.''
The mobsters rarely paid for meals and drinks. They would also pick up cash left on tables by customers and tell waiters, '' 'It's on the house; they're friends of ours,' '' Pfeffer recalled. When he objected to the mobsters' actions he was threatened. After one such incident, he walked into his apartment and found a bullet on his coffee table.
The first sign of legal trouble for Mr. Blutrich and Mr. Pfeffer came in 1994, when insurance regulators closed National Heritage after uncovering a maze of embezzlements, worthless investments, assets inflated to conceal losses and suspected kickbacks to company officials for authorizing secret loans.
In 1996 and 1997, a Federal grand jury in Florida indicted Mr. Blutrich, Mr. Pfeffer, Mr. Davies and 13 others on fraud and conspiracy charges that led to a loss of about $400 million for the company, which went out of business in 1996.
Mr. Davies was never been implicated in the Scores case.
In November 1996, four months after Mr. Blutrich and Mr. Pfeffer were indicted in Florida, Federal and state investigators raided Scores as part of a separate investigation of Gambino family rackets in the New York area. They also raided the Scores offices that Mr. Blutrich and Mr. Pfeffer had shared at 3 Park Avenue.
Both men soon agreed to work undercover for the authorities. They did so after learning that they had been ensnared in a broad investigation of the Gambino family. Moreover, substantial evidence had been obtained against both men through court-authorized video cameras and microphones that the FBI had planted in their offices.
A Year of Pretense And Ominous Threats
Oddly, the Florida indictments helped the two men in their undercover roles. ''It gave us more credibility,'' Mr. Pfeffer explained. ''The mob guys thought that nobody who gets indicted is cooperating, and they offered to help us raise bail and find lawyers.''But there were tense moments. At meetings concerning Scores payoffs and the investigation, Mr. Blutrich and Mr. Pfeffer said, the mobsters often put guns on the table or ostentatiously displayed their weapons.
''They told us not to worry about the guns,'' Mr. Pfeffer recalled. ''They said, 'It's only for rats.' ''
As part of the cooperation agreement, the FBI installed concealed video cameras and microphones in Mr. Pfeffer's Park Avenue office. Outside the office, both men had recording devices under their clothes, in their cars and in cellular telephones.
Some mobsters, Mr. Blutrich and Mr. Pfeffer said, would playfully pat them or unbutton their shirts before beginning conversations.
''It was a year of unbearable tension,'' said Mr. Blutrich. ''They came pretty close a couple of times to finding the wires on me.''
Mr. Blutrich, who is divorced, and Mr. Pfeffer, who is married and has daughter from a previous marriage, said they expected to receive lighter sentences in return for cooperating, but were given no assurances by prosecutors.
In prison, like other witnesses in Mafia cases, they were confined in segregated cellblocks out of concern for their safety.
''We didn't start out as criminals, but we were fast-track guys who were out to make lots of money,'' Mr. Pfeffer said. ''By working undercover we tried to make up for the wrong things we had done, but as a consequence, we'll be looking over our shoulders for the rest of our lives.
''I don't think,'' he added, ''there will be happy endings for us.''