New team, tactics hastened Whitey Bulger's fall
3/05/1995
This Spotlight report was researched and written by Gerard O'Neill,
Dick Lehr and Kevin Cullin.
On a gray day of sleet in Chelsea nearly a decade ago, the mob's banker had
some financial advice for the region's biggest bookie -- change horses and
start paying the Italian mob for protection instead of the Irish gang. Switch
sides, was the message, and get more bang for your buck.
No one knew it at the time -- not even police listening over bugs hidden
in Heller's Cafe -- but when the money man told the bookmaker that the Winter
Hill Gang couldn't carry the Mafia's "jockstrap," it would mean the fall of
Whitey Bulger.
That bit of mob byplay was overlooked in 1986 and nearly lost entirely
before emerging from the wiseguy wiretaps years later as the starting point
for a major racketeering case against the most elusive gangster in Boston
history -- James (Whitey) Bulger of South Boston.
By the early 1990s, the potential case that had been lying there against
Bulger -- "tribute" allegedly extracted from bookmakers, loansharks and drug
dealers doing business on his turf -- finally got deciphered and sent to the
right place: The Strike Force of the US Attorney's office in Boston.
Efforts to nail Bulger, who was indicted in January and is now on the run,
had been mired in an internecine crossfire over Bulger's status as a top
echelon FBI informant. The investigation needed a new team and a coordinated
approach. It got both.
In 1991, federal prosecutors, working mostly with State Police leads, began
corralling middle-aged bookies accustomed to paying small fines and hammered
them with money-laundering charges carrying stiff sentences. The goal was to
force the bookies to testify about extortion payments. It began to work, and
the FBI jumped on board.
The strategy took about two years to play out, but the shift in tactics
produced a singular prize: a major bookie informant who will testify about
direct dealings with the insular Bulger and his longtime partner, Stephen (The
Rifleman) Flemmi.
The case against against Bulger marks a sea change in local law
enforcement, an unprecedented coalition that has done much to overcome the ill
will arising from Bulger's role as an informant and his uncanny ability to
dodge electronic surveillance used by the Massachusetts State Police and US
Drug Enforcement Agency.
But despite the bold initiatives and teamwork that led to his indictment,
the story about the legendary Bulger has had a familiar ending: Where's
Whitey?
He was nowhere to be found when indictments were in the air and police were
combing eastern Massachusetts in January. Caught instead was Flemmi, now
proclaimed to be the crux of the racketeering case.
But Bulger, the marquee player, is still missing, having ducked a dragnet
two months ago that ensnared several other prominent organized crime figures,
including his partner Flemmi and Robert J. DeLuca, a Patriarca crime family
soldier from Rhode Island. Francis P. (Cadillac Frank) Salemme of Sharon, the
boss of the Patriarca family, also fled and is the subject of a manhunt.
With the 66-year-old Bulger out there, the case is treading water and the
fragile coalition that assembled the evidence is starting to fray at the
edges. Some State Police, who have long carried the fight on Bulger, are
rolling their eyes while buttoned-down FBI agents are glaring back. "We will
absolutely catch him," vowed one law enforcement source.
Still, Bulger, the only leader left standing after prosecutions wiped out
the New England Mafia in the 1980s, may survive even if he gets caught. Some
prosecutors concede he may be able to counter the racketeering charge with an
allegation of his own -- that his criminal activity was just part of doing his
job for the FBI.
Two years ago, a high-level law enforcement official told the Globe that
there would be as much trouble as glory for the FBI in building a case against
Bulger. He saw a public relations debacle down the road if Bulger went to
trial and used his role as a bureau informant as a defense -- that he was only
doing what the FBI told him to do.
"This guy," said the official, "has been miraculously lucky, and in the
past it has been more than luck. Information was traded when the value he
received was far greater than what law enforcement was getting. That's a view
shared by a lot of people in law enforcement."
One veteran from the trenches said Bulger's relationship with the bureau
has resulted in the FBI's blind pursuit of the Mafia rather than Bulger's
Irish-dominated Winter Hill Gang that started out in Somerville decades ago.
He said some agents believe cases only count if they concern the LCN -- La
Cosa Nostra. "But in Boston, at least, there is another faction that isn't
LCN," he said. "The FBI doesn't want to hear that."
Detective uncovers bookies' clearinghouse
In November 1983, State Police Detective Joseph Saccardo checked a tip
that a prominent bookmaker was seen entering Heller's Cafe near Chelsea City
Hall. When Saccardo got there, he ran the license plates of several cars
parked near the barroom through the Registry of Motor Vehicles' computer and
found that he had stumbled into the bookies' clearinghouse.
The computer spat out a Who's Who of Bookmaking -- Eddie Lewis, Jimmy Katz,
Chico Krantz, Howie Levenson, Joe Yerardi, Fat Vinnie Roberto.
Saccardo realized that he had found the "bank," the place where gambler
losses -- in checks made out to cash or bogus names such as Ronald Gambling
and Arnold Palmer -- were turned into bookmaker profits. He and other troopers
spent the next two years in a nearby construction trailer logging the comings
and goings, obtaining the "probable cause" necessary to get court approval for
the experts from the FBI to plant bugs inside Heller's.
In the middle of the night, technicians put a tiny microphone in the top of
a bullet-proof teller booth where all the business was done and spliced one
into a nearby window frame. Two phones were also tapped.
So, when Burton (Chico) Krantz walked into Heller's in December 1986, he
was 48 years old, head of the biggest gaming syndicate in New England, and
heading for a fall.
Krantz was a master of the sports "line," an expert at setting the point
spreads or odds so that gamblers bite equally on both sides in a game and the
bookies pocket their "vigorish," or extra fee charged for the bet, with a
minimum risk of loss.
Everybody used Chico's line.
Michael London, who owned Heller's and ran the bank that washed $50
million a year before he was sent to jail, knew all the players and proclaimed
Krantz the best in an aside picked up by one of the hidden microphones.
''There's only one sharp guy in this whole town for bookmaking . . . Chico."
Krantz was just one of the motley cast of underworld characters who drifted
in and out of Heller's. The bugs were as useful in providing a primer for the
gambling networks as they were for making specific cases. The taps verified
the common understanding that bookies had to pay extortion money to either mob
capos such as Vincent Ferrara or to the Winter Hill Gang.
Gradually, prosecutors and detectives realized that the bugs in Heller's
had produced a twofer: money-laundering cases against bookmakers -- and a
roadmap to extortion charges against the underworld's elite who shook the
bookies down for monthly payments. A few began to see Bulger skulking
backstage behind the paunchy bookies who paid him "tribute."
When Mikey London gave Krantz what turned out to be a futile pep talk about
changing sides from Winter Hill to the Mafia, it wasn't London's advice that
later mattered to prosecutors. It was the fact that Krantz's affiliation with
Flemmi and Bulger was established for the first time -- a relationship now at
the core of the racketeering case confronting them today. The extortion
section of the indictment is a list of Heller's clientele.
"Stevie can't hold this guy's (Ferrara's) jockstrap," London told Krantz in
a recorded conversation. "Vinnie will work for you. I'm not saying he (Flemmi)
ain't a good guy. I'm saying that if you're with this guy, there's a big
difference in being with him and being with Stevie. Stevie's not a collection
agency, personal protection. Stevie don't do nothing. This guy here will go to
bat for you."
And London's lecture on the facts-of-underworld-life to another bookie, a
rookie who was not paying anybody, became the foundation for the extortion
cases that followed. London told Phil (Beeshi) Cali that his free lunch was
about to end, that Vinnie knew he was making book. "They know you're not
paying rent to them. They want rent from you, that's all. Cut and dry. If they
don't have your name, the other guys are going to get your name -- Stevie and
Whitey."
But the first round of prosecutions out of Heller's was confined to Mikey
London's money-laundering machine and Ferrara's extortion. Once again, the
emphasis was on the Italian mob, not on Whitey Bulger and Chico Krantz.
While federal authorities have traditionally spurned making cases against
lowly bookies, it has been the stock-in-trade of the State Police. In the
1990s, detectives began to make use of the Heller's leads about Krantz's
gambling empire and then started on the trail of another Winter Hill minion
and Heller's patron -- Joseph Yerardi.
While Joe "Y" ran some bookies, he followed a more violent and flamboyant
path to Heller's. He is a reputed loan shark with assault and weapon
convictions on his criminal record and he lived in an $800,000 condominium
above Boston's Four Seasons Hotel until recently.
Both Yerardi and Krantz came into focus as targets in 1990. Prosecutors and
State Police working with the Middlesex District Attorney's office, first
under Scott Harshbarger and then Thomas Reilly, began closing in on them with
electronic surveillance.
Their Winter Hill franchises for gambling and loansharking were belly up by
last year, with Krantz in the witness protection program and Yerardi hanging
tough in jail awaiting trial for extortion and money laundering.
Yet the cases against the pair were only way stations on the road to a
racketeering case against the underworld's top tier.
It began as a mundane matter when detectives such as Saccardo realized that
while the Mafia may be in shambles, no one was chasing Bulger. They began to
press the point with prosecutors in Middlesex County who began to see the
possibilities of rolling up bookies to get at the hierarchy.
The key to it all became the one that opened Krantz's safety deposit box at
the Dedham Institution for Savings. By the spring of 1991, prosecutors had
evidence that his gambling syndicate took in $1 million a week. Krantz and 14
bookies were indicted on gaming charges.
But police had Krantz where they wanted him when they confiscated his $2
million in cash found in the deposit box. When Krantz came back from Pompano
Beach, Fla., to surrender in March 1991, he sought out State Police Sgt.
Thomas Foley and tried to make a fast deal to trade some information.
But Foley played hard to get, keeping Krantz off guard -- and in the dark
about his stack of cash. Krantz was also looking at a state prison sentence
for the first time, a sharp departure from his six prior convictions, with the
stiffest penalty being a $3,750 fine.
In the beginning, Krantz was looking for a deal that did not require him to
testify in court against Bulger and Flemmi. Foley, a street-smart veteran from
Worcester, slowly reeled him in, finally landing Krantz during a two-day
debriefing in Florida. They talked about Flemmi, Yerardi, and George Kaufman,
another alleged Winter Hill intermediary with bookies. Krantz is likely to get
back half of his $2 million stash if he delivers his end of the bargain,
authorities acknowledge.
After the Florida debriefing, investigators had a roadmap aimed at Bulger
and a strong sense that Krantz would cross all the way over and testify.
One night that spring, Foley and Charles Henderson, head of the State
Police, and District Attorney Reilly had supper at a Watertown restaurant to
chew over what they had and what to do with it.
They decided that Bulger and Flemmi were within law enforcement's grasp,
but the case needed the firepower of tough federal sentences to crack bookies
and get them on the road to Winter Hill. They all agreed that it had to be a
joint venture, a partnership with something for everybody.
US prosecutor takes two crucial steps
The ball that had been fumbled so often was handed off by Foley into the
sure hands of Fred M. Wyshak Jr. The new prosecutor at the US Attorney's
office was waiting with US code 18, section 1956 -- the money-laundering
statute with heavy sentences to change a bookmaker's mind.
Born in Boston 42 years ago, Wyshak forged an early career as a prosecutor
in the rough and tumble of Brooklyn and New Jersey. He is known as a
workaholic who pushes hard. Not everyone likes him.
Now the lead prosecutor in the racketeering case against the Boston
underworld, he took two crucial steps to advance the Bulger case. He developed
the legal strategy to flip bookmakers such as Krantz with money laundering,
and he refused to get stuck in the quicksand of interagency politics that has
so long divided law enforcement in Massachusetts.
Breaking new ground in Boston, Wyshak and his Strike Force associate, Brian
T. Kelly, added money laundering to the standard gambling charges lodged
against the bookmakers. It was a culture shock that had bookies reeling. The
stakes were upped from months in jail to years in prison.
In November 1992, bookie James Katz howled in disbelief when he was
indicted and learned of the prospect of facing 10 years or more in federal
prison -- instead of the customary wrist slap in state gaming cases. Katz is
cooperating with investigators; he entered the witness protection program last
year.
"What they did is change the rules of the game," said one defense attorney
of the Wyshak-Kelly strategy. "They put bookies into situations they haven't
been in before. . . . Hey, it's working."
Other lawyers, including Richard Egbert, who represents Flemmi, disparage
the indictment as thin, and contend that the informants will be assailable as
puppets mouthing whatever the government wants to hear. Some in law
enforcement, however, imply that the indictment could be amended with other
evidence when Bulger and Salemme are caught.
In any event, the knuckling of bookmakers with money-laundering charges hit
an unexpected obstacle in 1993 -- a federal judge. US District Court Judge
Joseph L. Tauro refused to impose the harsh sentences on two of the
bookmakers, declaring the money-laundering charge unfair.
In a decision crucial to the Bulger probe, the US Court of Appeals
emphatically disagreed with Tauro last year, ordering him to impose the
tougher penalties.
Besides marshalling cases against the bookmakers, Wyshak and Kelly reviewed
the Heller's Cafe transcripts and other wiretaps, sifting them for
corroborative material to use against Bulger and Flemmi. Wyshak monitored the
Heller prosecution as it progressed, actually sitting in on interviews with
some witnesses.
"You have to have someone who worked somewhere else," said one prosecutor
of Wyshak, "someone who realizes how provincial Boston is to overcome the
turf-fighting here. There were times he was so frustrated and could not
believe the mistrust here. To his credit, he refused to accept it."
1990 arrests leave no mark on Bulger
The Wyshak stategy of using bookie shakedowns to bring charges against
Flemmi and Bulger proved far more effective than the traditional approaches of
bugs and drugs.
In August 1990, for example, authorities thought they finally could dispel
the myth that Bulger keeps drugs out of Southie. After a 15-month
investigation led by the US Drug Enforcement Administration, 51 people were
charged with being part of a South Boston-based cocaine ring.
The ringleaders, Paul (Polecat) Moore and John (Red) Shea, were alleged to
be part of Bulger's crew. The idea of jamming the leaders with long prison
terms was to no avail as Moore and Shea stuck by the never-be-a-rat credo and
went off to prison for the next decade.
Only one of the South Boston 51 flipped -- Ed MacKenzie, who managed a
notorious local bar called Connolly's Corner Cafe.
But he insisted on cooperating with the FBI, not the DEA. As it appears to
be playing out, MacKenzie gave the bureau nothing useable about Bulger or
anyone else in South Boston. He helped make a major cocaine case against a Los
Angeles-based cartel that had several dealers in Greater Boston. But to the
DEA's dismay, MacKenzie -- a New England kick-boxing champion and ex-Marine,
which made him a Bulger favorite -- has delivered nothing that meets the eye
about the South Boston drug operation.
Not so with MacKenzie's boss, Timothy A. Connolly 3d, who owned the Corner
Cafe. In a deal brokered by then-US Attorney John Pappalardo in 1991, Connolly
became an FBI informant when he could not make his alleged extortion payments
to Kevin Weeks, a close Bulger associate.
Connolly, who worked for a Waltham mortgage company, was pushed into
investigators' arms, according to interviews and court records, simply because
he took too long to help a drug trafficker in South Boston pay off a $40,000
debt to Bulger.
Connolly was summoned to the backroom of the Rotary Variety store in South
Boston in July 1989. And it was there, according to a court affidavit, that
Bulger threw caution to the wind and did his own dirty work, menacing Connolly
by drawing a long knife from a sheath on his leg, punctuating a tirade by
stabbing nearby boxes and waving the blade around Connolly's face. Connolly
was purportedly "fined" $50,000 that was to be split between Bulger and
Weeks.
Two years later, broke and afraid for his life, Connolly went to the US
Attorney's office and is now a cooperating witness who is believed to have
worn a body wire around town through last year.
Mood grows anxious as indictments near
As the racketeering case against the Boston underworld neared indictments
in the first week of January, a sudden crisis loomed. Authorities feared that
some of the targets were about to skip town as the grand jury heated up. The
top cops and prosecutors huddled at the FBI's Boston office and decided to do
hang back surveillance to locate all subjects before making arrests.
The mood was anxious, and some believed that they were in a can't-win bind.
Arresting any target would likely send the others into hiding. But sitting
back might give them all a chance to slip away.
Flemmi, it was decided, would be the one detained above all others as he
was seen as the linchpin in the case, linking the Mafia and the Winter Hill
Gang.
But the arrest plan in January was a scramble that started with no leads on
Bulger's whereabouts and ended the same way. In fact, Bulger had not been seen
in the area since mid-December.
Unlike Bulger, Mafia boss Francis Salemme was inept at keeping law
enforcement at bay. He had become the boss of disarray, clinging to the
remnants of the fractured Patriarca crime family, falling into an FBI sting
and getting himself bugged at a mob meeting in Boston soon after he took over
in 1990.
By contrast, Bulger has been bug-proof for 15 years, quickly spotting
hidden microphones. His skill at sidestepping wires made him the prime target
of the recent joint effort.
Although Salemme was seen near his Sharon home at noon on the day of the
arrests, it was Flemmi who was spotted first when police fanned out later in
the day looking for people to charge with racketeering. He was seen the
evening of Jan. 5 entering Schooners on High Street in downtown Boston, a
restaurant that was being watched because it was being renovated by Flemmi's
two sons.
Around 7 p.m., State Police Sgt. Tom Duffy, Trooper John Tutungian and DEA
agent Dan Doherty saw him enter the restaurant with his female companion, Jian
Fen Hu.
The standing orders were to arrest him only if he went "mobile." After the
couple left the restuarant, got in the girlfriend's white Honda Accord and
drove off, the detectives boxed Flemmi in with their cars on nearby Broad
Street, and raced to the Honda with guns drawn. Flemmi tried to duck under the
dashboard, but he was ordered out.
After flinching, Flemmi remained calm, saying only that he wanted to speak
to his attorney. The cops took a knife and Mace from his pocket. Flemmi's
girlfriend told police that they had no grounds to hold her and refused to go
into the FBI offices. "She knew the drill," one investigator said.
Three hours later, Weeks, Bulger's top man in Southie, was playing cards in
the L Street Tavern there when news of Flemmi's arrest flashed across the
television. Obviously surprised by the announcement, Weeks rushed out, jumped
into his 1994 black Bonneville and drove off at breakneck speed. Agents who
had been watching him in the bar gave chase, but lost the car as it roared
south on the Southeast Expressway.
Five days later, James Ring, the former head of the FBI's Organized Crime
unit in Boston and a member of the old guard, went on television to put a
positive spin on settling for half a loaf with Bulger at large.
"Individuals who are fugitives," he said, "cannot operate a business. You
can survive, but you can't be a leader and you can't operate a business."
This story ran on page 1 of the Boston Globe on 3/05/1995.
© Copyright 1995 Globe Newspaper Company.
