Mob Money: Organized Crime Still Big Business

In the 1980s, nobody personified the mafia’s domination of New York City better than John Gotti, boss of the Gambino crime family.

John Gotti
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John Gotti

Aside from commanding a towering criminal empire, he was also an unofficial celebrity. Previous dons had always avoided attention and operated in secrecy, but Gotti appeared regularly in the gossip section of the New York Post, right alongside Jerry Hall and Christie Brinkley. Photographed by paparazzi at Manhattan’s most expensive restaurants and clad in a $2000 suit, he was equal parts crime lord and rock star.

Things are very different today. Like Gotti himself, many of the mafia figures who were once household names are now dead, while others are living in safe-houses or languishing in prison. But while the days of the flamboyant “Dapper Don” are over, the five major crime families—Bonanno, Colombo, Gambino, Genovese and Lucchese—are still functioning. And more importantly, they’re still making money.

"As the economy goes, these guys go," says Michael Gaeta of the FBI’s organized crime unit. "Despite our attacks, they've managed to adapt," Gaeta told the New York Daily News.

21st century mafiosi continue to live off of the traditional rackets that have been their bread and butter for the better part of a century, such as illegal gambling and extortion. They have also held on to their long-standing ties to the construction industry and union members.

As a result, companies with links to organized crime were awarded major contracts during the last decade, such as the creation of a water treatment plant in the Bronx and the rebuilding of the World Trade Center site.

The Five Families have managed to keep pace with today’s volatile economic climate. The Lucchese family took advantage of the Wall Street boom by convincing people to invest in mortgage-backed securities through a hedge fund. Unfortunately for the investors, the hedge fund was a sham that was run not out of a Wall Street investment firm but out of a house on Staten Island.

Family members also took advantage of both the boom and the bust in the housing market. Construction companies with links to organized crime were given jobs pouring concrete and removing waste when times were good, and the Genovese family was on hand to flip foreclosed Westchester County homes when the bubble burst.

One positive development in recent years has been the decrease in mob violence. It marks a welcome return to the crime syndicate’s more discreet behavior of the distant past. While it’s true that La Cosa Nostra has always used force to achieve its goals, the violence spiraled out of control during the 1980s, sometimes spilling out into the street.

One of the most chilling instances occurred on December 16, 1985, when former Gambino family boss Paul Castellano was executed by two gunmen in full public view outside of a Manhattan steakhouse. According to law enforcement officials, this type of brazen, mob-associated violence has dropped significantly since the year 2000.

"They're clearly not as visible as they used to be," says the FBI’s Gaita. "They're smarter about the way they conduct business," he told the Daily News.

A lot has changed since the days of John Gotti, including New York City itself. Bensonhurst, the Brooklyn neighborhood where Gambino underboss “Sammy The Bull” Gravano grew up, is now home to a growing Asian population, as are other formerly Italian neighborhoods like Bay Ridge that once served as the mafia’s seat of power. Tali’s Bar, the nightspot where hits were carried out on Gravano’s orders, is now a Vietnamese restaurant.

But no one should think that the legendary crime syndicate has come to an end. The New York mafia has lowered its profile out of a simple desire to operate in the shadows. And no one knows when the day will come when it can re-emerge and assert its dominance again.

"It’s certainly not the end of them,” says FBI agent Gerald Conrad. “They’re still making wiseguys,” Conrad told the New York Daily News.

"Mob Money," an American Greed Special Presentation, premieres Wednesday June 23 at 9pm ET on CNBC.