The New Jersey State Commission of Investigation (SCI) held a hearing a few weeks ago billed as a look into the “Changing Face of Organized Crime” in the Garden State.
A better title might have been “The Many Faces of Organized Crime.” The mob, Cosa Nostra, the Mafia, whatever you want to call it, still exists and is very much in play. But it’s no longer the dominant, five-hundred-pound gorilla in the underworld.
Gangbangers, outlaw bikers and DTOs (law enforcement bureaucrats love three-initial shorthand, this one for Drug Trafficking Organizations) are all vying for a bigger piece of action. For more than three hours in a committee hearing room on the fourth floor of the Statehouse Annex in Trenton, panels of experts from local, state and federal agencies described how.
Diversity is certainly part of the new look. But the bottom line is unchanged. Every group is predatory, the experts said, and every group is profit driven.
It is, and always has been, about the money.
Groups have augmented traditional money-making operations with more sophisticated and highly lucrative criminal enterprises, said SCI Executive Director Bruce Keller in remarks at the start of the hearing. But, he added, “Money is still the driver behind much of the organized crime activity.”
Social media and the internet are two other factors that have come into play with gangs using those tools to help set up and carry out their operations.
Some street gangs are using Zillow and Google Maps to zoom in on wealthy, upper-class suburban neighborhoods where expensive automobiles are parked in virtually every driveway. Car theft rings – some with young teenage gang members who are not even old enough to have a driver’s license – then swoop in on their targets, driving away with automobiles that within weeks are on cargo ships heading for Europe or South America and eager buyers willing to pay top dollar for a shiny, new set of wheels.
Law enforcement has countered with its own set of electronic surveillance and tracking devices. Some are highly sophisticated. Others are basic but highly effective run-of-the-mill.
Young gang members, one investigator told the SCI panel, often contribute to their own undoing. He then told how his agency monitors Facebook and other online postings by gang members who inadvertently implicate themselves in criminal activity. In one case, a young gangster proudly waved an assault rifle he had obtained illegally. His own video became the basis for his arrest and conviction.
ID theft, especially scams targeting the elderly, has become another new electronic-related gambit for gangs. Authorities also warned about counterfeit merchandising operations – long a big money-maker for the Camorra in Naples – that would be heavily in play this summer during the World Cup games across the United States.
“If there’s a way to make money…they’re going to find it,” Joseph Patricola, a special agent with the U.S. Department of Labor, told the SCI.
Patricola was one of several panel members who brought the hearing back to familiar ground for most Garden State mob watchers. He was one of four witnesses who focused on the activities of Cosa Nostra in New Jersey, pointing out that while there has been a reduction in violence (making money, not headlines, seems to be the marching orders of the day), the mob is still heavily involved in gambling, loansharking and labor racketeering.
Painting a picture in broad brush strokes, none of the witnesses who appeared at the hearing identified individual gangsters. Tony Soprano was nowhere to be found.
But the multi-million-dollar financial scams described by the witnesses offered a look at the new face of even the traditional New Jersey underworld.
Scams that have been well documented in the past would include the gasoline tax fraud, daisy-chain operations of Russian gangsters who, in the 1980s, teamed with Michael Franzese. Franzese, a former capo in the Colombo crime family and now the face of organized crime podcasting (another phenomenon, but a story for another day), was able to generate millions for his crime family by working with the Russians.
Another scam, orchestrated by South Jersey mob figure Nicky Scarfo Jr. and his top associate, Salvatore Pelullo, involved the takeover of the floundering Texas-based First Plus Financial and propping it up while stealing millions from unsuspecting investors. Both Scarfo and Pelullo are currently serving 30-year prison terms.
Finally, one panel member made a broad reference to the multi-million-dollar Par Funding scandal — part Ponzi scheme, part traditional mob shakedown – that rocked financial circles two years ago.
The Par Funding case is the most recent and probably the most accurate picture of the emerging face of organized crime today. The principal players, both of whom have pleaded guilty to racketeering and fraud charges, were brothers Joseph and James LaForte. Their ties to the Gambino crime family were documented as the case unraveled. James LaForte has been identified as a mob soldier who served as an “enforcer” for the Par Funding operation, which over several years defrauded investors of more than $400 million.
The LaFortes’ mob bona fides are significant. Their grandfather, Joseph “Joe the Cat” LaForte, was a capo under legendary Gambino crime family underboss Aniello Dellacroce.
Joe the Cat has been described as a bookmaker and loanshark who built his fortune by investing in New York real estate. His holdings included the Ravenite Social Club on Mulberry Street in Little Italy. It was Dellacroce’s headquarters and later became the Manhattan base for John Gotti after Dellacroce died in 1985.
LaForte’s namesake grandson apparently displayed the same financial acumen as his grandfather. Hundreds of unwitting investors put money into his Par Funding operation with the promise of high percentage returns on their investments. The government later charged that the investors’ initial “returns” from Par Funding came from cash supplied by newer investors, the classic Ponzi scheme maneuver.
Meanwhile, authorities said, Par Funding established itself as a short-term lender for small businesses in need of quick cash. These so-called “merchant cash advance” loans came with exorbitant interest rates that one SCI witness described as “suffocating.” The LaForte brothers then used mob-like tactics to collect when those businesses were unable to meet their payment schedules, with James LaForte threatening to “torch people’s cars” and “kick people’s teeth in,” said investigators.
In all, authorities alleged, Par Funding generated $120 million in illegal income that supported the brothers’ lavish lifestyle. Money also went to the Gambino organization.
James LaForte, among other things, pleaded guilty to assaulting a lawyer working with the Securities and Exchange Commission receivership to confiscate Par Funding assets. The assault occurred in broad daylight on a street in downtown Philadelphia. The lawyer was struck in the head from behind by an assailant wielding what appeared to be a club.
It was a case of 1920s mob tactics used in what the government said was a 21st century mob operation.
