Vario pulled Burke aside and said that Edwards had to go, and, according to Hill, that command was passed on to DeSimone and Sepe, as well as himself. Within a day of Vario putting out the hit, DeSimone killed Edwards, and Sepe waited outside the apartment, according to Hill. Ironically, DeSimone had actually given Edwards a few hundred dollars at the Christmas party after he had asked for some cash. Burke helped pay for some of the cost of Edwards’s funeral, according to Hill.
* * *
DeSimone’s days were also numbered but for reasons unrelated to Lufthansa. In his short, bloody life, DeSimone had been a volatile man whose uncontrolled rage led him to murder William “Bill Bats” Benventa, a made member of the Gambino crime family. In the Mafia world, that was a serious transgression. DeSimone also didn’t improve his stature when he killed James “Foxy” Jerothe, a friend of John Gotti, whose children knew him as “Uncle Foxy.”
In early January 1979, Steve Carbone got a call late one night from a fellow agent who had spotted DeSimone’s car parked near a grassy area by Burke’s home in Howard Beach. Acting quickly, Carbone and his fellow agents placed a radio tracking device under the vehicle and waited to see where the car was driven in the hopes it might turn up a lead. Two days later, the device mysteriously stopped working and the car was nowhere to be found. DeSimone had also dropped out of sight.
As it turned out, investigators learned that DeSimone had turned up at Robert’s Lounge one night after the heist and bragged to everyone, “I’m going to get straightened out tonight. They’re going to make me a captain.” In plain English what DeSimone was saying was that he was going to be inducted into the Mafia and given the rank of captain. Those within earshot of DeSimone when he made that boast were both Valenti and Asaro, who happened to be drinking at the club bar. To Valenti, what DeSimone said sounded odd because people don’t get inducted into La Cosa Nostra and then promoted to captain that very same day. The rank of captain, or caporegime, is one of the plumb jobs in the Mafia hierarchy and is only doled out when a person has proved his worth to the crime family and is able to lead men. Valenti turned to Asaro and said what DeSimone said sounded strange. “Be quiet,” said Asaro. DeSimone then left the club.
On January 14, 1979, just over a month after the heist, DeSimone was reported missing to police by his wife. DeSimone had already been tentatively identified from mugshots by Lufthansa workers as one of the robbers—thanks to the fact that he took off his ski mask. This made him more of a target to become a witness since he was at risk of being sent back to prison after only just having been paroled. But DeSimone’s transgressions with the Gambino family were also strong incentives for the mob to do him harm. As Hill would tell Pileggi in Wiseguy, DeSimone disappeared after he went to a mob meeting where he was to be inducted into the Mafia. He had a short reprieve from his fate because the so-called initiation ceremony had been postponed a day due to a snowstorm. But the next night DeSimone was escorted to his death by mobster Bruno Facciolo and an associate of Vario, according to what Hill told investigators.
DeSimone’s body was never found, and a stunned Burke was told of his friend’s death over the telephone during a visit he and Hill had made to Fort Lauderdale to put together a drug deal—something that would come back to haunt them. Burke had actually made numerous telephone calls to find out if DeSimone had been initiated but got nowhere. Finally, just like in the scene portrayed in GoodfFellas, Burke made one final call, learned that DeSimone was dead, and started to cry.
Returning to New York, Burke visited Asaro at his fence company in Queens. Still upset, Burke started to cry and said “They killed Tommy, they killed Tommy,” apparently without being specific about to whom he was referring. Years later, some authors theorized that Gotti killed DeSimone for revenge. But FBI officials who later investigated and convicted the Dapper Don discounted that idea. In an interview years later, Carbone believed the sudden cessation of the tracking device affixed to DeSimone’s car was an indication that the vehicle was taken to a junkyard and crushed following his murder. The more likely scenario about the demise of DeSimone was that the Lucchese family, with Vario’s assistance, took the murder contract as a favor to the Gambino family, which at that point was led by Castellano.
Edwards’s murder was likely a punishment killing because of his stupidity. But the disappearance of DeSimone was the beginning of a line of sudden misfortunes that befell those connected to Lufthansa: murders and disappearances that steadily started to whittle down the people who were alive as targets of the growing federal investigation and possible weak links capable of cooperating with the FBI.
Burke never liked Martin Krugman. Although the odd-looking wig salesman and part-time bookmaker had made the crucial connection between Werner and Burke’s crew, he still wasn’t welcomed with open arms around Robert’s Lounge. Krugman also was tight fisted, he never paid tribute or protection for his bookmaking activity. Krugman even once threatened to go the district attorney when DeSimone beat up one of his employees.
“Jimmy never trusted Marty after that,” Hill told Pileggi.
Yet, Burke had seen the usefulness of Krugman’s crucial connection to the inside operation at Lufthansa. After the robbery, Krugman became a pest, hanging around a club Vincent Asaro had opened on Rockaway Boulevard and trying to find out about heist money and anything else, remembered Hill. Burke, according to Hill’s recollection to investigators, wanted Krugman killed but then called off the hit. Then, on January 6, 1979, Krugman disappeared. His wife Frances contacted Hill in a frantic state of mind and asked for help in finding her spouse.
In Wiseguy, Henry Hill recalled what he did next: “I drove over to Vinnie’s fence company, and I saw Jimmy’s car parked outside. I walked in and said Fran [Krugman] had just called me. Jimmy was sitting there. Vinnie [Asaro] was sitting next to him. Jimmy said, ‘He is gone.’ Just like that. I looked at him. I shook my head.”
Hill repeated the same story to investigators about Krugman, relating how Burke, during the visit to Asaro’s Astro Fence company, had gestured with a cutting motion across his neck to say that the wig salesman was dead. Later, according to Hill, Asaro pointed to a silver lining of sorts in Krugman’s death. Krugman and Hill were supposed to split a share of the Lufthansa heist but now Hill would be getting the full share.
Hill said Burke told him to take his wife and visit Fran Krugman and to tell her a story about how her husband was with a girlfriend, knowing full well that Martin the wig merchant was another murder victim. Whatever Hill told Krugman’s wife she never believed it. Years later Frances Krugman would have her spouse declared legally dead, even though his body was never found.
The disappearance of Krugman deprived federal investigators of a crucial human connection they needed to solve the case. Perhaps if Krugman had been questioned, he might have folded and thrown himself at the mercy of the FBI to save himself, much as a few others were doing. The case was proving hard to crack and no one could see that better than assistant U.S. Attorney Edward McDonald, into whose lap the Lufthansa case had fallen.
McDonald was a tall, handsome, dark-haired product of a Brooklyn Irish-American family who was on a career fast-track that suited his competitiveness. McDonald continued to live in Brooklyn where he played basketball as a youngster and eventually did well enough to play at Boston College, a fact that would prove to be significant later in the convoluted Lufthansa story. Assigned to the federal strike force in Brooklyn, McDonald worked under the legendary federal prosecutor Thomas Puccio, who would make his name a few years later handling some of the cases against congressmen ensnared in the fabled Abscam bribery investigation, an investigation McDonald would also play a prominent role in. Puccio headed the strike force in Brooklyn, one of several special offices set up by the Department of Justice around the country to handle organized-crime cases. McDonald was his assistant-in-charge.
Although viewed in the early 1970s as a way to focus resources on prosecuting organized-crime cases, the strike f
orce concept of pooling dedicated attorneys to handle those investigations had a rough going in the early days. But by the time Puccio and McDonald were involved in Brooklyn, which eventually would become the largest strike force in the country, the image of effectiveness had been rehabilitated. The Brooklyn strike force in particular had been making Mafia cases and was getting ready to launch a series of major cases on the Five Families when the Lufthansa heist occurred.
While Queens District Attorney John Santucci vied for control of the Lufthansa case, federal authorities took over command, and McDonald was put in charge of the investigation by Puccio. Lufthansa seemed in the beginning like a hijacking case, which was normally not the bailiwick of the strike force. The unit was primed to go after the Five Families of the Mafia, but as it turned out the FBI needed help in getting wiretap authorizations and since McDonald had experience in that specialized area, he remembered being asked by Puccio to help the bureau. Very quickly, the strike force responsibilities spread to the larger aspects of the investigation.
From the very beginning, McDonald and the FBI received intelligence that Burke and his boys were involved in Lufthansa. It really wasn’t a secret to anyone on the street, something FBI agent Steve Carbone had picked up quickly from one of his informants.
In the history of the Lufthansa heist, the investigation became an FBI priority because it involved the theft of property and money in interstate commerce. After years of publicity about the problems of theft at JFK, the FBI set up a small satellite office at the airport and at first the agents there were assigned to work on the case. But after a couple of blind turns in the Lufthansa investigation, Neil Welch, the head of the FBI in New York City decided that the case was too big for the airport office and turned it over to the agency’s staff working out of Rego Park in Queens. Carbone’s hijack squad got the nod and immediately set to work.
Although informants told Carbone and his agents that Burke and his crew were involved, it wasn’t going to be easy to make the case. For a start, the Lufthansa employees who were terrorized by the armed robbers couldn’t pick out any suspects from various photo arrays showed them, Carbone would recall years later. But he added that there was one exception: Kerry Whalen, the pistol-whipped worker, indicated after looking at a photograph that Angelo Sepe resembled one of the men involved.
Informants also mentioned that Sepe and others were talking about the robbery, including in his car. Agents tailed Sepe and found him driving to the Brooklyn social club of Alphonse “Allie Boy” Persico, the brother of Carmine Persico and for a time the underboss of the Colombo crime family. Some of the informants reported back that Sepe had given some tribute from the heist—about $20,000—to Persico. Armed with bits and pieces of information, Carbone and his technically savvy agents got a warrant and late one night placed a bugging device in Sepe’s car outside his house in Mattituck, Long Island. Then everyone, the FBI and McDonald, sat back in the hopes that they would pick up incriminating talk. They would be disappointed.
Sepe had a habit of playing music as he drove, and that created a big problem for the device. Burke and he were overheard talking but the interference from the radio made many of the conversations indecipherable. Surveillance technology would improve by leaps and bounds in the years to come with digital technology. But as Carbone and the others tried to eavesdrop on Sepe, they suffered from the limitations of what now seems primitive technology. To assure good reception from the bug, Carbone’s agents had to follow Sepe’s vehicle with an FBI car carrying detection equipment in a luggage container mounted on the roof. An FBI spotter plane would also have to be aloft. It was a cumbersome arrangement, and in the end the tapes provided some tantalizing conversations but none were clear or complete enough to get an arrest warrant.
At Lufthansa, suspicion had fallen quickly on Werner, and that information was passed along to McDonald who shifted his focus on the troubled employee. Werner was not a hardened criminal like Burke, DeSimone, or the others. Werner not only had troubles with a divorce and a girlfriend, he couldn’t keep quiet about what was going on in his life, and he began telling people close to him that he had been involved in the heist. He had blabbed to his estranged wife, his girlfriend Janet Barbieri, and Bill Fischetti about the crime. He had even offered to give Fischetti money to invest in a cab business. With the FBI hot on the case, it wasn’t long before the agents learned of Werner’s pattern of indiscretions in talking and tightened the screws on him.
Tickling the wire is a term cops use when they try to use information they believe criminals will react to and talk about over wiretapped phones or in conversations captured by eavesdropping devices. McDonald used that tactic as the Department of Justice approved leaks to the news media that investigators hoped would spark conversations among the Lufthansa robbers. It was hoped that one of the bugs placed in Sepe’s car would pick up useful evidence but that didn’t turn out to be the case.
In any case, Sepe was arrested on February 17, 1979, on a parole-violation charge. He was nabbed as he drove with Burke. The hope was that Burke might think that Sepe was now a risk to cooperate. The case stemmed from the fact that Sepe allegedly violated his parole in his earlier bank-robbery case by traveling without authorization to Florida. Bail was set at $1 million as a way of keeping Sepe in custody so that he couldn’t flee or harm any other potential witness in the case, something McDonald believed he was liable to do. The case against Sepe seemed thin, but McDonald was trying hard to get something on the Lufthansa crew any way he could. The day Sepe was arrested, agents raided his home in Mattituck, Long Island, in the hopes of finding evidence, including some of the heist money. They came up empty. Although a federal grand jury was hearing evidence on Lufthansa, there was just not enough evidence to make a case against Sepe, and on March 24, a federal magistrate dismissed the charges against him.
Sepe wouldn’t cooperate with investigators. But McDonald had another avenue with Peter Gruenewald, the Lufthansa cargo employee who several months earlier had actually dreamed up the idea of a big heist and had started sniffing around the bars and dives close to the airport to get help in pulling off such a theft. It was Gruenewald who had tried to work out a plan with him to raid the Lufthansa valuables room. In the end, Gruenewald was cut out and discarded by Werner. McDonald saw Gruenewald as a key witness, and in February 1979 had him picked up by the FBI on a material-witness warrant, a legal process that allowed the government to hold someone who has information about a crime.
Gruenewald was pulled off the street and began to cooperate, telling the FBI how Werner had admitted participating in the robbery and had earlier conspired with him to put together the scheme. To purchase his silence, Gruenewald said Werner had paid him $10,000. McDonald’s strategy of working up the food chain to the top, hopefully to ensnare Burke and the others, appeared to be working. The next link was Werner.
The night of February 20, 1979, FBI agents arrested Werner on a federal criminal complaint of taking a $300,000 cut from the robbery proceeds and being part of the conspiracy. But the arrest was not the end of the game. McDonald brought Werner to his office at Cadman Plaza East in Brooklyn and came in the room with the defendant’s old friend and confidante Gruenewald. Upon seeing Gruenewald, Werner became red-faced and his chest began to heave, leaving McDonald to think for a moment that he might be on the verge of having a heart attack.
“They know everything,” Gruenewald told Werner. “Why should you be the only one punished?”
McDonald was hoping that Werner would see the light and would simply agree to become a government witness himself now that he was faced with the fact that Gruenewald would be giving evidence against him. Gruenewald tried to convince Werner, who if he did cooperate would likely get a light sentence in return for his testimony against the Robert’s Lounge crew. But Werner, despite his initial panic upon seeing Gruenewald, wouldn’t fold for McDonald. He insisted he didn’t know what Gruenewald was talking about and told McDonald to take the case to trial.
On April 6, a Brooklyn federal grand jury indicted Werner for the Lufthansa heist. There was also an added surprise in the indictment. Werner was also charged with the 1976 theft of $22,000 in foreign currency from the Lufthansa cargo building. It was a case in which Werner had initially been the suspect but was never charged. What changed in the intervening two years was that both Gruenewald and Bill Fischetti, who Werner had approached for helping in exchanging the stolen money into U.S. currency, were able to fill in the blanks for investigators. Unable to raise a $1 million bail even with the offer of the posting of property from his family and girlfriend Janet Barbieri, Werner had to cool his heels in jail.
While he was being held in the federal jail, Werner learned some distressing news. His seventeen-year-old daughter Diane had been seriously injured in a car accident in California. The court allowed him to travel to the hospital near the town of El Cajun, with an escort comprised of FBI agents Douglas Corrigan and William Lynch. Compassionate gestures to accommodate defendants and get them out of jail were not uncommon. Who knows, it might spur some cooperation.
After Werner visited with Diane, he and the agents went to a restaurant. While seated at the table, Corrigan couldn’t resist asking Werner a question.
“How do you expect to beat this trial? I am just curious,” said Corrigan.
Werner responded with his stock line: he was innocent.
“Do you mean to tell me that you were not involved in this thing at all?” replied Corrigan.
“I didn’t say that,” answered Werner. He then clammed up.
CHAPTER ELEVEN
“SEE, BIG MOUTH”
THE TRIAL OF U.S. V. LOUIS WERNER, the only one at that point to result from the Lufthansa investigation, began in earnest on May 3, 1979, after one day of jury selection. It had only been about a month since the formal indictment, a remarkably speedy start in such a high-profile case. But then the government had collected a fair amount of evidence and both prosecutor Edward McDonald and defense attorney Stephen Laifer were ready. The jury came into the courtroom of Judge Mark Costantino just a few minutes before noon. The Lufthansa heist had been a major news story for months, with every wrinkle in the investigation covered extensively. Jimmy Burke and his murderous crew had become household names. Now, for the first time, the world would hear the inside story of what had happened at Building 261 in the early morning hours of December 11, 1978. It would all come down around the sad sack Werner.
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