In August, the Angelo bugs finally came home to roost. Angelo, Gene Gotti, John Carneglia, and Mike Coiro were arrested pending return of an indictment. Five others-the Gurino brothers of Arc Plumbing, Edward Lino, Anthony Moscatiello, and Mark Reiter-were arrested, too. A day earlier, Reiter, once identified with Carneglia as a member of an auto-theft gang, also had been acquitted of heroin charges in a separate federal case in the Southern District.

Four other defendants could not be found. They included Salvatore Greco and William Cestaro, whose brother Philip would later plead guilty to helping hard-headed Edward Maloney buy drugs. Most of the group had direct links to the Bergin crew, whose boss, despite his worry, was not charged. Nothing on the tapes implicated him; Source BQ's observations were not evidence.

Unknown to most until later, two more Bergin a.s.sociates, the brothers Michael and Louis Roccoforte, who would plead guilty, were arrested in Manhattan that same day as they tried to sell about two kilos of cocaine to an undercover cop.

"John Gotti is on the carpet with Big Paul Castellano over the drug bust," Agent Abbott wrote after Wahoo reported in, "as Paul feels John was either involved himself and if he was not, then he should have known his crew was involved and therefore he cannot control his crew."

Source Wahoo, on the other hand, said Dellacroce "is backing up Angelo's version of the drug bust as cleaning up his brother's operation." Even retiree Carmine Fatico was letting Angelo know he supported him; but the Pope was so angry that Wahoo said Carmine might be unretired "if Gotti cannot convince Big Paul he was not involved in the drug operation."

Because the men were arrested on a sealed complaint, not many details were immediately available to either side.

A few days later, FBI agents picked up rumors that murder contracts had been let on the lives of Special Agents Edward Woods and Donald W. McCormick of the Gambino squad. The rumor ran contrary to Family practice, but had to be checked.

"We spoke to the appropriate people," an agent recalled, "including Gotti, who apparently did not know about it. He was really annoyed." Gotti, he added, said: "That's just Angelo, shootin' off his mouth, blowin' off steam."

Another appropriate contact, Wahoo, "advised that no personal recriminations will be made on any FBI agent as they would have to be approved by Big Paul and at this time Gotti and Ruggiero are lucky they have not been clipped themselves."

The FBI had acted on the case as cautiously as possible for fear the targets might learn in advance of the impending arrests. A week before, Source BQ had stated "that most of the crew will disappear if they know there are [arrest] warrants [out] for them. Only Mike Coiro will not flee."

Once arrested, defendants who secure bail with a deed to a house or cash are more likely to stay around for their trial. This is what happened with the main players, who were released after posting property. Angelo's bail was the highest-$1 million. After making his $125,000 bail, Coiro told a judge: "You can rest a.s.sured, Your Honor, I'm a fighter and will be here."

Soon after this, agents visited Coiro to test his state of mind: Would he want to deal? But Coiro stood on ceremony and did not go bad; he "went straight to John," Source Wahoo said.

Amid all the turmoil, before the indictment, John and Victoria Gotti's eldest daughter, Angela, was married. Among the guests was Wahoo, who told Agent Abbott: "When the indictments come out and Castellano [is] made aware of the particulars, then it is quite possible [those arrested] will be in serious trouble and Ruggiero may yet be killed."

Weeks later, the indictment arrived. Angelo, Gene, and John Carneglia were hit hard: racketeering, conspiracy, obstruction of justice, and harboring a fugitive. As far as Family matters were concerned, Count 2 was the most serious: It stated that the three men were the "organizers, supervisors and managers" of a heroin ring.

Knowing the case was based on tapes, Castellano sent word he wanted copies of the transcripts as soon as prosecutors turned them over, as required, to Angelo's lawyers.

Near the end of 1983, he got a taste of the trouble the tapes might cost his papacy; a grand jury at that time tried to force Little Pete Tambone to talk about Uncle Paul's proposal to the Commission that Tambone be killed. Little Pete would hang tough-he went to court in his pajamas to support a Polisi-type gambit, and when that failed, he kept silent and went to jail for contempt-but, nonetheless, for Castellano the episode was a disturbing harbinger. Just a little while later, when he found out he had been bugged, the Pope knew the swallows had come back to Castellano.

The Pope pressed Angelo again for the transcripts of the tapes, but Angelo kept making up stories and excuses, which was good for Thomas Gambino and Thomas Bilotti, but bad for John Gotti.

That summer, before the Angelo, et al. indictment, a cash-heavy cocaine dealer anch.o.r.ed his yacht in Sheepshead Bay, Brooklyn. Willie Boy Johnson figured the man was a perfect mark for James Cardinali. As with the bodega-owner hammering, John Gotti's pal hid in the background. Since Willie Boy's lecture that Jamesy should not indiscreetly litter streets with bodies, Jamesy had gone to Florida several times to rob drug dealers. He refrained from killing any, he later said.

In the middle of the night, Willie Boy called Jamesy and scripted the score. He told him to meet some accomplices in an after-hours bar. One of these told Jamesy: "The boat is leaving in a few hours. Go by my house, wake my wife, get the bag with the guns and badges, and come here."

At 4:30 A.M., many fishermen clogged the way to the Lucky Lady. Lucky Lady. The others wanted to call it off, but Jamesy strolled past the unknowing anglers and onto the unguarded yacht, opened an unlocked door and began handcuffing the surprised occupants, except for one. The others wanted to call it off, but Jamesy strolled past the unknowing anglers and onto the unguarded yacht, opened an unlocked door and began handcuffing the surprised occupants, except for one.

"The captain of the boat was giving me a hard time. When I woke him and said, 'Police,' he was trying to get up. I kept pistol-whipping him with the gun.

The Lucky Lady Lucky Lady gang got about $10,000 in jewelry and cash. But Jamesy's luck had just run out. He was arrested for the murder of Michael Castigliola, who was killed for ratting Jamesy out to Gotti. Jamesy was looking at 25-to-life, and he spent the night in a Brooklyn jail, alone with his thoughts. gang got about $10,000 in jewelry and cash. But Jamesy's luck had just run out. He was arrested for the murder of Michael Castigliola, who was killed for ratting Jamesy out to Gotti. Jamesy was looking at 25-to-life, and he spent the night in a Brooklyn jail, alone with his thoughts.

Some of these arrived later in a letter to a Daily News Daily News reporter. "I would be willing to sell a story ... or possibly doing a book. I have a lot of interesting stories about Johnny and our crew. Johnny and I were exceptionally close." reporter. "I would be willing to sell a story ... or possibly doing a book. I have a lot of interesting stories about Johnny and our crew. Johnny and I were exceptionally close."

At the jail, for cops the next morning, Cardinali summed up his thoughts this way: "I would be willing to talk."

Late in August, he was taken to the Brooklyn District Attorney's office and began talking about one of his other murders-the one he felt bad about, the collegiate-looking kid at the Riviera Motel at JFK Airport-but he told Mark Feldman, deputy chief of the homicide bureau, that he wasn't the shooter. It wasn't a candid start for someone seeking to deal down a big charge. Feldman, however, told Jamesy to continue talking and so long as he told the truth, nothing he said would be used against him.

Blessed with this absolution, Jamesy admitted he was the Riviera Motel triggerman, but offered nothing about the three victims whom n.o.body with a badge knew anything about: the two c.o.ke dealers in Florida and the Brooklyn dealer anch.o.r.ed in Jamaica Bay. He did offer another body, however, and when he connected the murder of court officer Albert Gelb to John and Charles Carneglia and the Gambino Family, he was on his way to protected status.

Jamesy told Feldman he knew little about Paul Castellano, but he knew a lot about John Gotti.

"Who?"

"He'll be the boss after Paul and Neil are gone."

Feldman worked homicide in Brooklyn, so it isn't surprising he hadn't heard about the capo from Queens. He called then-NYPD Detective Kenneth McCabe, who verified Jamesy's Family observations and called in Detective Billy Burns, who was still working with FBI-less Diane Giacalone.

Giacalone was ready for good news. She had recently lost an extortion case against Castellano's cousin, the case that had caused tension between her and some FBI agents even before the FBI pulled out of her RICO case. Her lost case was based on tapes, but the most memorable line of dialogue came from a witness who quoted an enforcer as saying: "This is La Cosa Nostra La Cosa Nostra-what's yours is ours and what's ours is ours."

Now, Diane told Jamesy: "Tell me everything you know."

Though Jamesy kept his three other murders a secret, he talked all day. It was the first of many marathon sessions and the beginning of a tortuous, fateful relationship between him and Diane, kids from Queens born a year apart who grew up as polar opposites. They fought constantly. To him, she was a deceitful bully. To her, he was a remorseless punk. But as much as they hated it, they needed each other.

After that first day, Giacalone felt her investigation was taking off. Jamesy's stories would have to be tested against others before any deals were made, but they sounded true. In the meantime, Jamesy was transferred to federal custody and lodged in a special dormitory, a prized murderer.

Multiple murderers were part of Paul Castellano's camp, too, and now he began to pay the price as the first shot in the federal Family a.s.sault was fired. Early in 1984, the Pope was indicted as a beneficiary of a conspiracy to steal luxury cars and sell them overseas.

The announcement was made by the new U.S. Attorney in Manhattan, Rudy Giuliani. Paul and 21 others were indicted, making it one of the largest RICO cases ever. The charges were a b.l.o.o.d.y lesson on how quickly the Family kills, and not just its own. The defendants were accused of varying roles in 30 murders tied to the ring's car-theft enterprise. Most of the victims were hoodlums, but one was a twenty-year-old man who happened to witness a double homicide; a second was the nineteen-year-old girlfriend of a suspected informer.

Besides Paul, the key figures in the case were Anthony Gaggi, in whose house Paul had been crowned, and a dead man, Roy DeMeo, whose name had popped up in the death of the Howard Beach service manager, John Favara. The indictment stated that Paul ordered Gaggi to kill DeMeo, a maverick Gambino hit man who fell into disfavor when one of his victims was found in a barrel and the Family got some bad publicity. DeMeo then sealed his fate by refusing to show up for a sitdown.

DeMeo's name had also popped up in an FBI affidavit in support of the White House bug. The affidavit said Paul had "put out feelers" to the Gotti crew about killing DeMeo. It paraphrased one of the last conversations secretly recorded at Angelo's house in 1982-a lengthy Angelo-Gene chat in which Gene seemed wary of accepting a contract on DeMeo because DeMeo had a "small army" around him.

Gene said he and his brother John had "done" only seven or eight "guys" while DeMeo had "done" 37.

DeMeo's army apparently deserted him early in 1983, when he was found dead, shot five times, in the trunk of his car. While DeMeo was alive, the indictment in the stolen-car ring case now charged, Paul had ordered him, Gaggi, and a third man to kill a father-and-son Gambino team who helped stage a phony charity event attended in 1979 by First Lady Rosalynn Carter. The scheme was said to have embarra.s.sed Paul, the upright businessman.

Like Carlo Gambino had been, the Pope was only vaguely acquainted with courtrooms. But now, at age 68, he realized his retirement years might be spent behind bars.

John Gotti realized it, too, and was pleased, according to Source BQ, an a.s.sociate of the crew, but not as active as Wahoo-and also not as big a Gotti fan. Days after the indictment, Gotti and friends were "already contemplating their rise to power." Gotti knew Paul's problems "will only mean better times for himself." Gotti had been at a restaurant in Little Italy and "was quietly gloating in the troubles that have recently befallen" Paul, who was pressing for details on the Angelo heroin-trafficking indictment, but was still being denied "the whole truth."

Wahoo didn't comment on Gotti's state of mind, but he did express surprise that Angelo and the others hadn't met up with no-drugs-enforcer Chin Gigante on some rooftop; he offered this explanation, as rendered by Agent Abbott: "Angelo, et al. may have drafted a phony indictment to display to Big Paul and Neil to tailor their excuses and get them off the hook."

Wahoo also added a bulletin from another front: "James Cardinali has become a rat because he is jammed up with a murder charge." Jamesy had "given up" Willie Boy and was talking about a.s.saults on a cocaine yacht and a bodega owner.

Another rat was about to crawl into a trap laid by cops in Queens. Crazy Sally Polisi was arrested in Ozone Park as he handed over serious cocaine to an undercover detective. Polisi was dealing again because he was broke. He had moved upstate and sunk all his money, including the $90,000 shopping bag of 20-dollar bills from John Carneglia, into a 50-acre weekend retreat for go-cart fans. The property had two tracks, a house, a restaurant, and few go-cart fans. Polisi lost $600,000.

Like Cardinali, Polisi was facing 25-to-life. Lt. Remo Franceschini, who convinced Wahoo to become a Queens informer, knew Polisi had mob ties. He invited him into his office and pointed to a photo gallery of Family men, Queens branch.

"Would you be interested in helping us?"

"Never, never, never."

Polisi was unable to make bail and was jailed. Over the next two months, "never" became "maybe." But what he was maybe ready to give had too much to do with Queens. He was afraid to trust anyone from Queens and so he called the federal probation officer he met on his bank robbery case in 1975 and asked him to take him to Edward McDonald, boss of the Eastern District Organized Crime Strike Force.

McDonald wanted to use Polisi in the case that he and the FBI had underway against the Gambino hierarchy, but Polisi set another agenda when he said: "I can give you a judge in Queens. I paid Mike Coiro $50,000 to fix a stolen-car case against me, my wife, and brother-in-law, and he did. Mike Coiro is the man who can fix cases in Queens."

When Giacalone's boss, Raymond J. Dearie, the U.S. attorney for the Eastern District, was told about Polisi, he took control of him because his staff was probing corruption in Queens County courts; Polisi went into the witness-protection program, was wired up, and set out to get a judge. He would make a bribery case against one who had fixed Family cases for 15 years. As part of the deal, his case in Queens was dropped in favor of a less-punitive federal charge. Instead of 25-to-life, he faced zero-to-15, closer to zero if he continued to cooperate, which is why dates with Giacalone and the trial of John Gotti were in his future.

Giacalone was busy arranging Cardinali's deal. Jamesy had proven his value in appearances before her grand jury. And now he would plead guilty to the Castigliola murder in state court, for a 5-to-10-year sentence. As to his other crimes, including the "I-felt-bad" college-kid murder, forget about it. He would not face any punishment for any as long as he continued to tell the truth and testified at trial against Dellacroce and Gotti.

Minutes after his deal was signed, Cardinali revealed a truth to Edward Magnuson, the DEA agent a.s.sisting Giacalone. He had killed two drug dealers in Florida; when Giacalone was told, she screamed b.l.o.o.d.y murder.

"Tell me everything now! Don't hold back!"

"Well, there was this other murder in Brooklyn."

Jamesy had sandbagged Giacalone. She could respond in either of two ways: She could revoke the deal and cripple her investigation by depriving it of the main witness, or she could carry on with the unseemly baggage of a five-time killer in her corner. She knew that defense attorneys would capitalize on that, but it was nothing new for the government to use creepy witnesses. Often, it is the only way to make a case. Giacalone carried on. It was a legal calculation with an unspoken moral ingredient: The men she was after were more important than the killer of drug dealers.

Jamesy returned to the witness-protection program. He had dealt away five bodies-including two in Florida, which has the death penalty-for one, for which he would get a short hitch in the more palatable federal prison system.

"I think that I made a fantastic deal," Jamesy said.

22.

BETRAYERS BETRAYED.

IN THE CRIME CAPITAL, 1984 was the year of mobspeak and, for FBI informers, the beginning of doublespeak.

New-age surveillance-a bug was placed in the Jaguar of the Luchese boss-was producing miles of transcripts detailing all the Family monopolies. In addition to Giacalone's case and the Family hierarchy cases, a Southern District team-just as the Pope predicted-was targeting the Commission, which Rudy Giuliani was defining as one tremendous conspiracy.

Author Joseph Bonanno was made to regret his anecdotage; he was forced to review pa.s.sages in his book pertaining to the Commission for a grand jury. Later-when prosecutors feared he might die before he could testify at trial-they sought to preserve him on videotape. The ailing Bonanno refused, and, at age 82, he and his oxygen tank were thrown in jail.

In October, the dominoes started falling. Eleven men described as the entire leadership of the Colombo Family were indicted in the Southern District. The announcement was made two weeks before the 1984 national election, and Attorney General William French Smith came up from Washington to hold a press conference with Giuliani and take political credit.

"We're one down and four to go," Smith said.

In the Colombo wake, the first sketchy public report on Giacalone's case appeared in the New York Daily News. New York Daily News. The newspaper said a grand jury had been working on it for 18 months. No targets were named, but a source was quoted saying that soon "Smith might be in a position to say, 'Two down and three to go.'" The newspaper said a grand jury had been working on it for 18 months. No targets were named, but a source was quoted saying that soon "Smith might be in a position to say, 'Two down and three to go.'"

Several insiders snickered when they read this; they were the agents and attorneys on the Gambino hierarchy case, based in part on the White House bug. Castellano, Dellacroce, and several capos-not just John Gotti-were all targets.

Gotti tried out a low profile. Worried about bugs, he opened a satellite office on 101st Avenue. He was concerned about "the possibility of a rat in the Family," Source Wahoo reported; and he also worried about Neil, now stricken with cancer and undergoing chemotherapy.

Angelo called on Neil almost every day and still refused to turn over to Paul any tapes or transcripts-they contained, he said, too many embarra.s.sing remarks; he, Gene, and Carneglia had already spent about $300,000 in legal fees.

Neil won a small legal victory in the fall. The U.S. Tax Court ruled the IRS had incorrectly a.s.sessed him taxes on an unreported bribe. He was able to savor it only briefly. In a month he was arrested on another tax case, by some of the same IRS agents who had arrested him 12 years earlier.

The tax men found a shrunken Neil at the Ravenite Social Club, in the company of Gotti, Angelo, and others who spotted them coming. Neil ducked into the men's room, followed by Angelo. Most of the others skipped out a back door, but not Gotti, who hung around as the agents coaxed Neil out of the toilet.

Gotti was about to acquire his second son-in-law. The bride-groom would be Carmine Agnello, 24, proprietor of Jamaica Auto Salvage. Agnello had recently beaten a counterfeiting case and, in 1980, had been the victim of a beating authorized by his future father-in-law; but all was forgiven, if not forgotten, and on December 9, 1984, he married Vicky Gotti, the former beauty pageant contestant his company had sponsored.

The wedding was unlike the bride's parents' wedding in every way but the "I do." More than 1,000 people attended the reception, which was held at Marina Del Ray in the Bronx. FBI agents observed from two vans near the entrance as the guests arrived, and saw most of Gotti's a.s.sociates, except for Paul Castellano. One guest recalled that at least 30 tables were occupied only by men, who took turns paying their respects to the bride's father.

The men played a find-the-agent game all night long, and thought they had spotted many among the waiters and musicians. Actually, none were inside to review the entertainment, which included singers Connie Francis and Jay Black (of Jay and the Americans), who was related by marriage to a Gambino soldier, and comedians George Kirby, Pat Cooper, and Professor Irwin Corey.

Despite the snoopers outside, it was a happy event, and was followed in a few weeks by another. Self-made and made, John Gotti, age 44, became a grandfather. His daughter Angela gave birth to a baby boy, whom she named Frank-a tribute to her 12-year-old brother, who died on a minibike in 1980 and who was still listed as a member of the family when Angela's mother, in 1983, submitted an item about her family to the local newspaper.

All during the fall of 1984, "the real Italian lady" was lining up her targets. Finally, Diane Giacalone put the names and the evidence into a memo, and was promptly accused of jeopardizing a man's life to get her revenge on the FBI.

One of Giacalone's targets was Source Wahoo. Not only would she ask her grand jury to indict him, but she would reveal that he was an informer. This was, of course, a pressure-coated invitation for him to seek a deal and testify against the Family within a Family.

Wahoo was highly regarded at the FBI. He had provided so much about so many. "Most of this information could not have been obtained by other investigative means," said a memo in his file. "Incalculable hours of investigative time has been saved by this informant's specific information." Several memos ended with cautionary footnotes such as "This informant can in no way testify to the information supplied by him since to do so would ... place the lives of his family, as well as himself, in extreme jeopardy."

The FBI had not told Giacalone about Wahoo. Once into her investigation, however, she could have deduced it in a number of ways. For instance, the Queens District Attorney's detective squad was helping her by turning over its Bergin gambling tapes; Wahoo had helped the Queens D.A. squad back in 1981, after he was squeezed on an attempted-bribery rap. It was reasonable to suspect and conclude: once a snitch, twice a snitch.

By including Wahoo in her case, Giacalone was setting up a mechanism for disclosing his informer status. Even though her case was not based on information he had given the FBI, she would argue that defense attorneys would be ent.i.tled to information he gave about codefendants.

The FBI felt Giacalone was playing games, and trying to sh.o.r.e up a case at the last moment by pressuring Wahoo into the witness-protection program and onto the witness stand. If she wanted to have him indicted, she should do it separately. Then she would not have to expose Wahoo-and thus ruin forever a "top-echelon" informant, while undermining the confidence of other informers in the ability of the FBI to keep a bargain.

Two top FBI officials in New York, Thomas Sheer and James Kossler, protested to Washington to get Giacalone to back off. But she had the backing of her boss, Eastern District U.S. Attorney Raymond J. Dearie, and of her underboss, Susan Shepard, chief of the major-crimes unit. Dearie and Shepard had recently been married. The Justice Department bra.s.s understood the FBI angst, but gave the decision to Dearie, who admired Giacalone's devotion to duty and gave her his approval.

Wahoo, playing ends against the middle since 1966, was cornered. He was warned by Agent Abbott that he might be revealed, and he was horrified.

"I will be killed," he said. "My family will be killed."

Abbott told Wahoo there was a way out, the way Giacalone wanted: He could take a plea, testify for a light sentence, and fade away in the witness-protection program, like Cardinali and Polisi.

"I will never testify," Wahoo said.