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Rise and Fall of 'Mickey Mouse Mafia'

March 30, 1988|KIM MURPHY | Times Staff Writer

The plan had the irresistible lure of easy money and an unexpected added attraction: It was legal. Peter Milano, a San Fernando Valley vending machine company owner who authorities say also heads the Mafia in Los Angeles, sat down with his son-in-law one day in 1985 to talk about the mob's latest moneymaking enterprise, a proposal to set up tourist junkets between San Diego and Las Vegas.

The son-in-law, Russell J. Masetta, said his contact on the deal was going to come into town that night to introduce him to the president of a major Las Vegas casino and "get the ball rolling."

But Milano, according to investigators' affidavits, was noncommittal. The deal would either hit, he said, or it would miss. "And the way things are going, it will probably miss," he reflected.

Milano had presided over a major attempt to recruit new membership into the Los Angeles crime family and extend the family's influence over organized crime throughout Southern California, law enforcement officials say. But on that day in 1985, a little over a year after Milano took over an organization that Los Angeles Police Chief Daryl F. Gates has dubbed "the Mickey Mouse Mafia," all was not well in the underworld.

Already, the Los Angeles family was fighting off encroachments from New York and Chicago criminal organizations. One of their most trusted associates had been identified in a police report as a law enforcement informant. And Luigi Gelfuso Jr., identified by the FBI as Milano's caporegime, or "street boss," had been on the phone recently and sounded distraught.

"Is anything wrong?" Milano had asked.

"Everything's wrong," Gelfuso replied.

Indeed, they didn't know then just how wrong. Two young toughs whom the family had been courting for membership, Craig Anthony Fiato and his brother Lawrence, men who had been privy to some of the family's most intimate dealings, had been wearing body recorders strapped under their clothing and were hand-carrying tape recordings of those dealings to the FBI.

The FBI was in the early stages of electronically eavesdropping on Milano's Rome Vending Co. in Westlake Village, on his house and on Gelfuso's house. By the time it was all over, the FBI would have accumulated 600 hours of secretly recorded conversations--enough to indict Milano and 14 of his alleged family associates on a broad range of racketeering, extortion and drug-dealing charges.

The conversation about the Las Vegas junkets was one of those monitored by the FBI and described in a series of affidavits filed by agents in the case. Together, they portray with startling clarity a family of suspected gangsters, a coalition held together by a common bond of loyalty and bravado, an organization whose link is a fondness for making money--and a nagging fear that one of their own would betray them.

Their conversations revealed in the affidavits sometimes seem cryptic, both because the FBI has often summarized them and because of the vague, guarded language adopted by men accustomed to federal surveillance.

During 1984 and 1985, when many of the conversations documented in the FBI affidavits took place, the family was apparently attempting to force bookmakers in Los Angeles to begin paying up a share of their proceeds. It also was negotiating for "tribute payments" from narcotics dealers and was conducting clandestine meetings--some of them with undercover FBI agents--promising that the family could deliver labor peace on Hollywood productions.

(Gelfuso and Masetta, a labor organizer for

Teamsters Local 848 in El Monte, were named in a new indictment unsealed this week charging them with conspiring to accept $25,000 from an FBI agent posing as a Hollywood movie producer to guarantee freedom from labor troubles in Los Angeles, Chicago and New York.

The deal is one of at least two labor-related activities documented in the FBI affidavits. In another, Milano's brother, alleged underboss Carmen Milano, asked Fiato to help him in creating "a situation" with an unspecified labor union at Los Angeles International Airport.

From the moment Craig Fiato began penetrating the family--with the promise of eventually becoming a "made" member of La Cosa Nostra--Gelfuso told him of plans to strengthen the family and run it more like organized crime families in the East.

Fiato, according to the affidavits, was told he had permission to do "anything he wanted" in Los Angeles--so long as he reported on his activities to Gelfuso and paid a share of any of his earnings into the family "kitty."

On behalf of the family, Fiato and his brother began making contact with various Los Angeles bookmakers, loan sharks and others who purportedly owed money to the family, and Gelfuso, according to the affidavits, made it clear he meant business.

At one point, the FBI says, Gelfuso took Fiato into his bedroom and ordered him to locate the son of a man who reportedly owed the family more than $480,000 and "put him in the hospital."

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