RACE BETTING
The race-betting business was also run out of the sports office. Horses drew far less action than sports, but it was a good earner. The mob’s payouts were better than the competition’s, which was the New York Off-Track Betting parlors; to pay their costs, the OTBs took out too much. So players could get more on winning tickets from the illegal joints.
“We took a lot of business away from the OTBs,” says Andrew. “We offered food and had the same simulcast live feeds showing mostly every racetrack in the country. We extended small amounts of credit to good customers and offered a twenty-five-percent kickback on the weekly loss, because these guys were never gonna win. As the proverb goes, ‘All horse bettors die broke and live with broken shoes.’”
People like Andrew, who booked through Nick Corozzo’s horse rooms, worked on a percentage basis. They received 25% of the profits on winning weeks, while Corozzo paid all the losses and put the operators on a make-up until they got the losses back. But losing weeks were the exception and not the rule in the Gambino-controlled sports- and race-betting venues. Andrew never experienced one and his peers were in the black the vast majority of the time.
NUMBERS
The illegal numbers game—also known as a “policy racket”—is a very simple proposition. The bettor picks three single-digit numbers. If they match the “daily number” announced the following day, he’s a winner.
In the early days, numbers betting was run almost exclusively by black gangsters. Like any lottery, the low cost of entry made the game extremely popular in poor, mostly black, neighborhoods, which meant that almost everyone was a potential customer.
Eventually, white organized criminals in New York took an interest in the business. The Genovese crime family got involved first and the other families followed.
Under the Gambino rules, winners were paid 500-1. So a 50¢ bet returned $250. Since the true odds of hitting were closer to 1,000-1, the numbers gave the operators a healthy edge (they kept about half of whatever was bet).
The daily number was (and still is) derived from the total handle at a specified local racetrack. “If a person bet with a Gambino store,” Andrew says, “there were two daily numbers in play: the New York number and the Brooklyn number. The New York number came from the results of the third, fifth, and seventh races at the designated track. The Brooklyn number resulted from the last three digits of the total mutuel handle at whichever track was being used.”
There were other ways of doing it. Some unaffiliated numbers operators in Westchester County used the “1-in-the-middle” method when computing their payoffs. Under that system, if the winning set of numbers had a 1 in the middle, the winners were paid at a rate of only 300-1 rather than the normal 500.
As in any free market, the public eventually decides what they’ll “pay” for anything, and the Gambinos reasoned that they made plenty by paying out extra. As a result, their game thrived and by the time Andrew became active, the numbers racket was a big part of the family’s gambling income. Nick Corozzo operated several games in his territory.
The pay structure for the Gambino stores worked as follows. The store’s boss—called the “controller”—received 600-1 on winning bets. This assured that he’d make a profit even on customer wins. In addition, the crew boss paid the controller 35% of the business’ take. From that, the controller kept 10% and paid the runner—the guy who took the bets and collected and paid out the money—the balance, which equaled 25% of the total take. The boss kept all the rest, minus 3%-4% for the cost of paperwork.
“One well-known numbers store in New York City did around three hundred thousand in business every week. He passed all his action off to the two biggest numbers runners in the city for ten percent, then collected thirty grand or so a week while the runners did all the work,” Andrew recalls.
When New York City started its own lottery, it paid the merchants selling the tickets only 6%. That was 4% less than organized crime paid its store operators. And if the legal lottery was getting too much action on a particular number, it shut down that number. The illegal competition didn’t do that. Hence, the numbers rackets were able to continue operating even after the lottery was created.
As Andrew likes to point out, state and local governments frequently open businesses with which organized crime has had financial success. Horse betting produced a lot of money and New York opened Off-Track-Betting parlors. Numbers games took in tons of money and state lotteries came into being.
LAS VEGAS
It’s well-known that organized crime has a long history in Las Vegas. Over the years, many families made money on their Sin City ventures. For the Chicago Outfit and its partners in Kansas City, Milwaukee, and Cleveland, and for the New York families, Las Vegas served as a cash cow for decades.
The New York families had their hands deep in the Vegas pie. In the late 1960s and 1970s, the Genovese family, for example, had interests in Caesars Palace, the Sands, and the Tropicana. They sent their guys out to Vegas to work as dealers and cashiers and to serve as “connections” for visiting mobsters and their associates.
For as long as they had their people in place, the New Yorkers also participated in the “skim.” The purloined cash was transported across the country by a legendary female courier. For obvious reasons, her identity, the details of her visits to Vegas, and her modes of transportation were highly secretive, but the cash always arrived without incident. Back in New York, the money went straight to the Genovese family, which functioned as the banker for all five families.
The mob tolerated nothing that might upset the financial apple cart. One good example was that New York wise guys who left Las Vegas without settling up their gambling debts had to answer directly to Genovese boss Anthony “Fat Tony” Salerno himself. Because of that, the Vegas casinos rarely got stiffed on New York markers.
Of course, connected gamblers weren’t without certain perks. Andrew remembers the tale of a Lucchese associate who arranged credit for Mob-connected visitors.
“A visitor approached the Lucchese guy, identified himself, and asked for a credit line of, say twenty Gs. The Lucchese guy took the visitor to the cage, which verified he was who he said he was and was good for the money. If everything checked out okay, a marker was approved.
“If the player lost the twenty grand, he got together with the Lucchese guy to settle up. At that time, he was offered a special deal: fifty percent off his debt to settle up in cash before he left. It was an offer that couldn’t be refused. They went back to the cage, where the borrower paid the ten grand, which was split between the fixer and his cashier confederate. Then the marker was ripped up and it was as if it never existed. Everybody was happy—except for the casino, which didn’t see a dime.”
With the corporate takeover of the Las Vegas casinos, combined with technological advancements, the days of organized-crime skimming from the count rooms and cashier cages are gone. However, clever crooks can still take advantage of the casinos. It involves the new extension of the gambling industry: offshore betting.
The reliability of telephonic communications and computer technology has made it possible for gaming entrepreneurs to open businesses in places such as Costa Rica with minimal overhead expenses. Initially, these cyber-book-makers and their customers escaped the tax burdens and other laws associated with gambling on United States soil. However, the U.S. government is now aggressively pursuing them and attempting to close the loopholes—legal and otherwise—that make offshore betting so appealing.
In addition to tax breaks, other features of online wagering appeal to some gamblers. The offshores offer the convenience of doing business on the Internet or by an 800 phone number. Money doesn’t have to be tendered (though it may have already been “posted up” and be on account) when the bet is placed. And most of these businesses offer their customers various financial incentives, usually in the form of sign-up bonuses. For example, a customer who funds an account with $1,000 might get an extra $200,
for a total of $1,200.
If you walk into any major Las Vegas casino today, look around the sports book for a guy with a laptop computer (patrons are allowed to bring computers into the casino) and wearing a Bluetooth headset. He may very well be a cyber-bookie. He has customers meet him in the casino’s own betting parlor to take their action. He can service his customers while monitoring the latest line changes. He can even enjoy some free casino beverages if he’s so inclined.
Sports betting is legal in Vegas, so why wouldn’t the gambler just go to the window in the casino’s sports book to make his bet? Because he’d have to come up with the money to make the wager.
Like the Gambino-run books, the cyber-bookies’ betting cycle lasts a week. At the end of the cycle, the bettor can settle his account online through the use of a credit card or meet personally with his local “agent” to balance the books.
Running an offshore betting business was so lucrative that it appealed greatly to Nick Corozzo and he opened one himself. However, it was a decision that contributed to his eventual downfall.
9
1987
In the early part of 1987, Andrew was presented with the chance to move to a larger horse parlor located on Stillwell Avenue in Bensonhurst. It was an opportunity he welcomed, but it turned out to be fraught with danger as well.
This particular site consisted of two rooms on the ground floor of an eight-family apartment building that had previously been a Mob social club. The satellite, mounted on the roof, was invisible from street level. It could only be seen from passing subway trains running on the elevated tracks.
The betting parlor operated daily from about eight in the morning until 11 or so at night. The main room sat around 50 people comfortably and accommodated 100 or so for special events like the Kentucky Derby if some were willing to stand. Four large-screen televisions, three showing different racetracks and the fourth various other sporting events, ran continuously during business hours.
It was a customer-friendly environment with food and non-alcoholic drinks provided to the bettors for free. They were served by a waitress who worked for a salary plus tips. In addition, customers who wanted to partake in other games of chance could play poker or bet on the daily lottery number, with a percentage of the action going into the Mob’s coffers.
A second much smaller room was the manager’s office. This is where the bets were actually taken and all the digital equipment was kept. As Andrew explains, the financial side of the business was tilted somewhat in favor of the gangsters.
“Thanks to the stolen OTB computer chip, we ran our horse parlors pretty much as OTB ran theirs. The main difference was that we didn’t pay out quite the same as OTB. We didn’t pay track odds on bets like daily doubles and tri-fectas. If those bets hit at full odds, it could have hurt us bad, so we shaved them a little to our advantage. We did pay track odds on win, place, and show bets, as well as exactas.
“I ended up on Stillwell Avenue because Nicky asked me to give Joey, the guy running the place, a hand. Joey was like a godson to Nicky and was in his mid-forties then. But in reality there was more behind this than just helping Joey out. You see, organized crime is rife with nepotism. The bosses like to take care of their sons, brothers, nephews, cousins, and godsons by giving them positions within the organization with a chance to earn at least some authority. Of course, the people getting those jobs aren’t necessarily qualified to do them.
“In this case, Nicky was concerned about Joey. He knew Joey was drinking heavily, possibly skimming, and not running things with the family’s best interests in mind. So I wasn’t sent there just to help out. I was also there to observe and see what Joey was up to.
“When I first showed up, I wasn’t sure how Joey would take it. He was no dummy and had to suspect I was Nicky’s eyes and ears. But he treated me well and taught me the business side of the operation. We worked well together and before long developed a thriving business. Each week we were tens of thousands of dollars in the blue [on the plus side]. The overall volume of business tripled. We treated the customers like gold, feeding them well and sometimes making small loans to those in need. Things were going so well I even started to think of Joey as my friend.
“Nicky noticed the improvement in the profits. And he wasn’t the only one. John Gotti himself commented about it. His brother Gene was one of our best customers and saw first-hand how we ran the place and the business we were doing.”
But for Andrew and Joey, the honeymoon period came to an end within a few months, when Joey’s bad habits caught up with him. His alcohol problem got worse and affected his health. He became undependable, constantly taking days off or going home early. It all came to a head one day when Andrew was working and looking forward to his day off.
“That night I had to take Joey the money for the next day’s opening bank. I was on my way to meet him at a bar down the street from our social club on East Ninety-third and Avenue L. As I passed the club, I saw Nicky standing outside and pulled over to say hello. He asked me to give him a ride home. On the way, I stopped at the bar and took Joey’s money in, twelve thousand dollars, as I recall. Nicky waited in the car. Joey was feeling no pain and was mushing it up with some broad. I gave him the money and left.
“About seven the next morning, Joey called me and wanted to know when I’m gonna drop off the bank. I asked him what the hell he was talking about. I’d given him the money last night. Then he told me to stop fucking around and bring him the money or there was going to be trouble. I told him to go fuck himself and hung up. About five minutes later Nicky’s son-in-law Scotty called. He said to get over to the luncheonette right away because Nicky wanted to see me.
“When I walked into the diner, the whole crew was there staring at me. Joey started right off with, ‘Where’s the money, kid? You think you can rob us and get away with it?’
“I started laughing and told Joey to screw himself. Nicky had been with me and knew the truth. I was waiting for him to step forward. But he kept quiet and let Joey talk, digging himself a deeper hole. Finally, Nicky jumped up and grabbed Joey by the shirt. He said, ‘You motherfucker. I was with the kid last night when he dropped off the goddamn money.’
“Joey’s face turned white and I thought he was going to faint. And then he started to cry and told how the girl he was with at the bar had rolled him. She took the money, all of it. He had been too ashamed to admit it so he made up the story that I never brought the money to him. Nicky said, ‘You’re lucky you’re a relative or I’d let the kid kill you right here.’
“I would have killed the bastard, too. The Mob doesn’t take internal theft lightly. If I hadn’t given Nicky that ride home, my body would probably have ended up in a landfill or in the trunk of an abandoned car.
“But Joey and I both walked out of the luncheonette alive. His punishment was exclusion from all crew businesses. My reward was that I was made the sole manager of the Stillwell Avenue horse room.
“Business continued to boom. To some guys it became a home away from home. We had such crowds every day that sometimes the beat cops would knock on the door and ask that the people who were double- or triple-parked move their cars. The only reason I can think of that they didn’t try to shut us down is that they thought it was just a social club.
“Pretty soon I was fencing stolen property too. Guys started coming in to get rid of hot jewelry, mink coats, televisions, weapons, and audio equipment. You name it, they brought it. Some days I was able to pocket thousands of dollars without leaving my chair.”
With all that money rolling in, Andrew took certain precautions to protect it from the law and limit his liability in the event of a raid.
“I had two places close by that I used to stash money when I thought we had too much cash on hand. One was two doors down at a deli my friend owned. The other was an apartment I kept a couple of blocks away. By keeping a relatively small amount on the premises, we wouldn’t lose it all in the event of a pinch. And the charges if
I got arrested were more serious the higher the amount of money seized. So I kept a smaller bank, but the money was close enough that I could get it fast if somebody hit a big win.
“The success of the horse room earned me a nickname from Nicky. Every time I reported to him the profits were soaring, so he started calling me ‘Good News.’”
EVERYBODY WALKS
Andrew wasn’t the only one Nicky Corozzo heard good news from early in the year. On March 13, four days before his 47th birthday, he received an early present. A jury acquitted him of the federal racketeering charges for which he had been indicted in 1985. Nicky’s six remaining co-defendants, including John Gotti, also left the courtroom as free men. Everybody walked. The government’s case, which had once seemed so strong, had failed to produce a single guilty verdict.
Leading up to and during the trial, Gotti had predicted that very outcome. That confident forecast could have been made by an innocent man who trusted the criminal-justice system or perhaps one with great faith in the abilities of his lawyer. However, in this case, another option seems more likely. Gotti had reason to believe that at the worst, the trial would end in a hung jury.
As the jurors left the courtroom, Gotti, the other defendants, their lawyers, and supporters gave them a standing ovation. As Gotti was heading for the door, a reporter asked him how he and his associates were able to prevail. Gotti pointed to the now-empty jury box and said, “With these people here.” But it may have been more appropriate had he said, “Thanks to Mr. Pape.”
Surviving the Mob Page 7
