Tuesday, Sept. 23, 2003 | 9:21 a.m.
NEW ORLEANS -- In 1990, a year before the Legislature legalized video poker machines, four men met in New York to plan their bets.
Two members of the Gambino crime family, boss John Gotti and his righthand man, Sammy "The Bull" Gravano, chatted with two members of the once-powerful Marcello family from New Orleans -- boss Anthony S. "Mr. A." Carolla and associate Sebastian "Buster" Salvatore.
Their purpose: Bring the Gambino family into Louisiana to help the Marcello family cut out a lucrative swath of what they were convinced was the future -- casinos and video poker machines, even though it would be another year before the games would be legal.
Federal prosecutors didn't find out about the meeting until nearly five years later when they debriefed Gravano.
"They discussed and actually planned the re-emergence and takeover of video poker in anticipation of the Legislature legalizing gaming, which didn't occur for another two years," U.S. Attorney Jim Letten said in a recent interview.
They might have succeeded, and New Orleans might still have major mob problems today, if it hadn't been for a wiretap on a delicatessen pay phone.
It's not surprising that the Marcello crime family saw video poker machines here, there and everywhere as its salvation. After all, the family cemented its hold over Louisiana and throughout the South thanks to slot machines.
For the better part of 40 years, Carlos Marcello, a Sicilian whose family had immigrated to the United States from Carthage in 1910, had been the undisputed organized crime boss of New Orleans.
He denied mob ties, usually describing himself as a "tomato salesman" and real estate investor.
An undereducated man who relied on relatives and associates to add up the astronomical figures from his illegal enterprises, Marcello started with an undistinguished apprenticeship in crime, according to various published accounts of his life.
By age 20, he had been packed off to serve a term in the Louisiana State Penitentiary for robbing a grocery store.
After returning to New Orleans and saving $500 for a down payment, Marcello ran what was then known as a "colored bar" on the West Bank of the Mississippi River in Gretna, providing drinks, gambling and marijuana to his customers.
In 1937, he began strong-arming bars and restaurants to take pinball and juke boxes from his Jefferson Music Co. Few establishment owners resisted him.
Marcello got out of the bar business in 1939 after serving nine months for selling 23 pounds of marijuana to an undercover agent. But he continued placing juke boxes and pinball machines and gaining the admiration of the New Orleans mob boss, Sam "Silver Dollar" Carolla.
Then, New York mobster Frank Costello ran into a problem.
Costello was the trusted associate of Charles "Lucky" Luciano, the head of the most powerful of five Mafia families in the New York area. By 1933, Costello controlled New York's slots racket, pulling in hundreds of thousands of dollars per month.
But Mayor Fiorello LaGuardia took office in 1934 and declared war on Costello, removing and destroying his machines. Costello was soon looking for a new home for his one-armed bandits.
Although it is not clear how the deal came about, some historians say Huey Long brokered a deal with Costello to place the machines in Louisiana and by late 1935, at least a thousand were taking in coins around New Orleans.
Marcello proved to be as adept in finding homes for Costello's machines as he had his own juke boxes and pinball machines. In 1944, Marcello was rewarded with part ownership of an illegal casino in Jefferson Parish -- the Beverly Club -- that had been put together by Costello and Meyer Lansky, the financial brains of organized crime.
Well-bribed public officials looked the other way and patrons packed the house.
In 1947, after "Silver Dollar" Carolla was deported to Italy, Marcello was named boss of the New Orleans crime family. He would make a fortune, defy deportation, influence politics -- and, in the minds of some conspiracy theorists, play a role in the killings of President Kennedy and his rackets-busting brother, Robert Kennedy.
In his office, at the Town & Country Motel just outside of New Orleans, Marcello posted a sign on the back of the door for departing visitors: "Three can keep a secret if two are dead."
Marcello eventually failed to take his own advice. His fall came in 1979 when he was convicted as the result of an undercover sting FBI sting investigation known as Brilab, largely executed by an undercover informant that Marcello trusted.
By the time Marcello left prison in 1989, he was in ill health and unable to run his far-flung empire -- or what was left of it. He died in 1993.
About the time video poker machines started coming on line in Louisiana in 1992, the FBI was running a court-approved wiretap on a pay telephone in a French Quarter deli where bookmaking was suspected.
Illegal bets on professional sports have always been a mainstay of organized crime. But there wasn't much worry about organized crime at the time: as far as the federal government was concerned, the Marcello family had fallen so far that New Orleans was just about an "open city" -- not controlled by any particular gang.
But what the feds heard on that pay phone stunned them -- various mob figures in Louisiana talking with their counterparts in the East about infiltrating the video poker businesses through "front organizations."
And the conversations revealed that Anthony Carolla -- who had lost out in the 40s to Marcello as boss -- was now leading the family and would be aided by Joseph "JoJo" Corrozo, described by prosecutors as a captain in the Gotti-dominated Gambino family.
"We had the advantage of being up on a wire, watching and listening day to day the mob literally re-emerging in New Orleans. It was unprecedented," Letten said.
Bally Gaming Inc., a major slot-machine manufacturer, had fallen behind in the game. Its video poker machines were outdated compared to competitors that had beaten Bally to the budding Louisiana market.
Then, as prosecutors would later allege, a former New Jersey casino executive named Steve Bolson and Christopher Tanfield, a rock concert promoter, linked up Bally Gaming with two Louisiana companies -- Worldwide Gaming of Louisiana and Louisiana Route Operators to place Bally machines in restaurants, bars and truck stops.
The deal was a disaster for Bally Gaming. The company terminated its relationship with the two firms and later claimed a $25 million loss from the deal.
That was only the start: In May 1994, a federal grand jury alleged that Worldwide Gaming and Louisiana Route Operators were nothing more than fronts for the Marcello and Gambino crime families, with the Genovese family also along for the ride.
Prosecutors debriefed Gravano and found out about the 1990 meetings between the Gotti and Marcello families, learning for the first time that the scheme was concocted even before video poker was legalized. By the time the pay phone gave away its secrets, the plan was nearly three years old.
The government convicted 25 people of involvement in the scheme. Those included Corrozo, Carolla and Salvatore, along with John "Johnny G" Gammarao, an alleged soldier for the Gambino family, Eugene "Noogie" Gilpin, an alleged Genovese associate, and Carlos Marcello's brother, Joseph Paul Marcello Jr.
One Louisiana legislator lost his political career. Buster Guzzardo, who served in the House, pleaded guilty to accepting $1,200 in cash and a fax machine from Tanfield, the concert promoter.
Bally Gaming was eventually bought by another company.
In local referendums held in 1996, 33 parishes banned video poker. But casinos survived and the Legislature later approved slot-machine casinos at race tracks.
Gotti was convicted of murder and sentenced to life. He died in June 2002.
Gravano confessed to roles in 19 murders when he testified against Gotti and was released after only five years in prison. He eventually left the witness protection program, lived openly in Arizona and taunted the mob during interviews in 1999.
But old habits die hard: Gravano is now serving a 19-year sentence in Arizona for masterminding an ecstasy drug ring.
As far as organized crime goes, Letten says from what he sees, New Orleans is again mostly an "open city," at least as far as traditional La Cosa Nostra goes.
"I think we struck a killer blow to these guys and dismantled a re-emerged family," Letten said. "By the grace of God, we were able to do that."
But Rafael Goyeneche, head of the Metropolitan Crime Commission, a private watchdog group, said the threat likely will never end.
"The climate that they flourish in is when people are convinced that they don't have to worry about organized crime," he said.
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