Alleged underboss of New England Mafia is arrested

Reputed Mafia underboss Carmen "The Big Cheese" DiNunzio was arrested on extortion and illegal gambling charges as he emerged from a North End social club yesterday, potentially ending the reign of an underworld leader credited with uniting the fractured Boston mob into a low-key, profit-focused machine.

After State Police removed $6,000 in cash from his pockets and led the portly mobster away in cuffs, officials predicted his arrest would further weaken an organized-crime syndicate already diminished from decades of investigations and infighting.

DiNunzio, 49, ascended to second in command of all New England mobsters around 2002, according to law enforcement officials, after winning the favor of New England godfather Luigi "Baby Shanks" Manocchio of Providence. Law-enforcement officials allege he set about refocusing the mob on money-making crimes, such as extortion and gambling.

"He's a low-key underboss who has been trying to keep the mob's activities under the radar of law enforcement and the media," said one law enforcement official.

According to a source briefed on the investigation, DiNunzio's extortion and gambling operation had been collecting "hundreds of thousands" of dollars per week and involved a "ton" of operatives.

Many of the crimes date to 2001, when the investigation began, and the statute of limitations was going to expire this month, triggering yesterday's arrest at the Gemini social club at the corner of Lynn and Cooper streets.

DiNunzio will be held on $250,000 bail at the Danvers State Police barracks pending arraignment in Salem Superior Court on Monday.

Thomas J. Foley, a longtime organized-crime investigator who retired as superintendent of the State Police in 2004, said the indictment of a Mafia underboss is always significant.

"It puts definite stress on their organization and their leadership," Foley said.

DiNunzio's arrest stems from a State Police investigation that led to the indictment last February of reputed mob soldier William Angelesco on gambling and conspiracy charges. State prosecutor s announced in court last February that the State Police had seized about $800,000 since the investigation began in September 2001. Angelesco's case is still pending.

A State Police officer testified in federal court last year that Arthur Gianelli, a Lynnfield bookmaker and brother-in-law of former FBI agent John J. Connolly Jr., was paying $2,000 a month to DiNunzio for permission to operate his gambling business. Gianelli is awaiting trial on federal racketeering charges.

An Essex County grand jury indicted DiNunzio yesterday on charges of extortion, maintaining or organizing a gaming operation, and conspiracy to maintain or organize gaming operations, according to the Essex district attorney's office.

DiNunzio faces up to 15 years in prison if convicted.

Law enforcement officials said DiNunzio had been shaking down bookmakers, forcing them to pay his syndicate to stay in business, and running a gambling operation that focused on sports betting.

The State Police Special Service Section's organized crime unit launched the investigation in 2001 and secretly recorded local mobsters, using bugs and wiretaps . It was unclear whether DiNunzio was heard on surveillance.

Law enforcement officials predicted that DiNunzio's arrest would disrupt the activities of the New England family, which remains the dominant organized crime group in the region, despite two decades of prosecutions.

DiNunzio, whose nickname comes from his ownership of the Fresh Cheese shop on Endicott Street, owns an interest in Carmen's Kitchen restaurant in East Boston.

DiNunzio, an East Boston native, rose through the ranks to become the underboss and has helped quell infighting in a family splintered into two factions during the bloody reign of former New England Mafia boss Francis "Cadillac Frank" Salemme, according to law enforcement officials.

DiNunzio left Boston in the late 1980s and lived in California. In 1993, while he was there, he was sentenced to four years in federal prison on a charge of extortion for shaking down a Las Vegas gambler for $27,000. He later returned to Boston.

DiNunzio has modeled himself after the old guard of the Boston mob, the Angiulo brothers, who quietly operated the rackets like a business from the 1960s to the early 1980s, making gambling, loan - sharking, and extortion the bread and butter of the organization , officials said.

Whether DiNunzio retains his alleged leadership position while he is under indictment depends on the current structure of the family and whether anyone is willing to step forward to assume control, Foley said.

Citing the wave of federal and state prosecutions that have weakened the Mafia, Foley said, "There's been so much pressure on [La Cosa Nostra] and the people holding those positions that as soon as you take one of those positions, you have to know that you are going to be a target of law enforcement."

But despite the prosecutions, Foley said the local Mafia remains a sophisticated and violent organization that could easily regain the power it had on the region a decade ago if law enforcement doesn't keep up pressure on it.

"There's always that romantic -- unfortunately -- aspect to the mob, and people are still interested in that part of things," Foley said. "There are always certain people looking for the notoriety or the publicity or the power when they try to step into these positions."

Globe correspondents Franci Richardson and Elizabeth Ratto contributed to this report.