Law enforcement victim becomes a suspect anew
Limone ran gambling ring, police charge
Peter J. Limone, one of four men awarded $101.7 million last year by a federal judge who said the FBI framed them for a notorious 1965 gangland murder, was arrested yesterday on charges that he ran a tightly controlled illegal gambling operation that brought in hundreds of thousands of dollars.
Limone, 74, who spent 33 years in prison before his murder conviction was thrown out in 2001, allegedly engaged in loan sharking and extortion and made four illegal gambling parlors in Middlesex County pay him tens of thousands of dollars in rent or face the threat of violence, according to Middlesex District Attorney Gerard T. Leone Jr.
The Medford man was among 20 people indicted by a Middlesex County grand jury investigating illegal gambling and organized crime. Underlings referred to him as "Chief Crazy Horse" and "The Camera Guy" in conversations secretly recorded by the State Police, Leone said. He gave no nickname explanations.
"We are alleging Peter Limone led an extensive and organized crime ring," the prosecutor said in a news conference at his office in Woburn yesterday evening. "We are alleging he was the COO," or chief operating officer.
At the State Police barracks in Danvers yesterday afternoon, Limone could be seen from the foyer seated in the booking room, wearing a jacket and an open-collared shirt, his arms folded across his chest. He appeared to be saying little to officers.
His lawyer, Juliane Balliro, who was on a legal team that won the landmark judgment against the FBI last year, believes Limone was arrested because of his past.
"Because he's Peter Limone, he's an easy target," she said in maintaining his innocence. "This was completely unnecessary, and it's just another example of subjecting this man, who has already been through a tremendous ordeal, to a completely unnecessary ordeal."
Limone was arrested at his two-story house in the late afternoon and booked at the State Police barracks in Danvers. The arrest was made nine months after State Police investigators executed a search warrant at the residence in connection with the alleged gambling ring. Leone said the illegal activities continued despite the search.
Balliro said in a phone interview that she had been in touch with law enforcement officials since the search of Limone's house. She said she had told them that he would turn himself in if he were indicted.
Limone's arrest marked a startling twist in the saga of the four men who were wrongly convicted of the March 12, 1965, gangland killing of Edward "Teddy" Deegan in Chelsea, a case that has haunted the FBI.
Limone spent half his life in prison, including four years on death row, before he walked out of Middlesex Superior Court a free man on Jan. 5, 2001, one arm cradling a bouquet of yellow roses, the other wrapped around his tearful wife.
A state judge threw out the murder conviction based on evidence that a onetime FBI informant planned Deegan's murder, not Limone, and that the bureau withheld that information.
In July 2007, US District Court Judge Nancy Gertner ruled that the FBI deliberately withheld evidence that Limone, Louis Greco, Joseph Salvati, and Henry Tamaleo were innocent of Deegan's slaying, and ordered the government to pay the men or their estates $101.7 million collectively. The award, which is being appealed by the federal government and has not been made, was believed to be the largest of its kind nationally.
Leone said State Police found Limone was running a gambling racket during a two-year investigation that initially focused on another, loosely controlled ring. He said Limone's alleged racket collected hundreds of thousands of dollars in bets on football, baseball, basketball, and horse racing.
The gambling ring had an office in Boynton Beach, Fla., that kept records of customers identified by code names.
The bets were called into the Florida office. Limone had final approval over any loans, according to Leone, and he insulated himself by delegating underlings to make the actual transactions.
"These interest rates were so high that these debtors couldn't pay their debts off," he said. The rates rose 2 percent per week, while state law does not allow more than 20 percent in a year, Leone said.
Limone was arrested yesterday on a dozen extortion, loan-sharking, and gambling charges, each of which carry a sentence ranging from two to 15 years.
Three other men who allegedly helped run the gambling ring were also arrested on gambling and extortion charges: Thomas Palladino, 75, of Malden, Joseph DiPrizio, 50, of Florida, and Anthony Squillante, 73, of Boston. All four will be arraigned today in Middlesex Superior Court in Woburn.
Officials said the three men arrested with Limone were his top underlings in the crime ring: DiPrizio ran the office out of Florida; Squillante served as the intermediary between Limone and his agents; and Palladino was the organization's primary "runner," handling payments and collections of debts.
Sixteen others were indicted but have not been arrested yet. All told, prosecutors filed 140 charges.
Shelley Murphy and Kathy McCabe of the Globe staff contributed to this report. 