Closing Arguments Slated Today in Loan-Sharking Trial

Two Orange County men--including the owner of a pizza-parlor chain--are among the defendants on trial in Los Angeles for running an alleged loan-sharking operation that one federal prosecutor says relied on “brass-knuckle therapy” to exact payments from customers.

John James Barro, 46, owner and former president of Irvine-based Barro’s Pizza Inc., and Frank (Big Frank) Serrao, 57, a Garden Grove resident who installed air-conditioning systems in Barro’s pizza stores, are among the seven men on trial.

The seven were indicted in July, 1984, for making high-interest loans and threatening borrowers--mostly gamblers--with bodily harm if the payments were late.

All seven defendants have pleaded not guilty.

Closing arguments in the five-week-long trial are scheduled to begin today, according to U.S. District Judge William Matthew Byrne.

One FBI agent involved in the case described the lengthy trial, with its dozens of witnesses and colorful testimony, as a “circus.”

A visibly weary Byrne and the jury have listened to hours of testimony detailing the loan-sharking operation allegedly organized by Vito Dominic Spillone, a grocery company owner, and Barro between 1979 and 1981.

Prosecutors said most borrowers were gamblers who frequented the California Bell Club, a legal poker casino in the Los Angeles County city of Bell. However, one woman who was refused a bank loan for a child-custody battle was charged $1,400 interest on a $700 loan, an FBI agent assigned to the case said in an interview.

Barro was allegedly the No. 2 man in the operation, but the 53 pizza stores bearing his name were not involved, according to Assistant U.S. Atty. James Henderson, a member of the federal government’s Organized Crime Strike Force.

“I’m innocent,” Barro, a stocky, curly-haired man, said in an interview at the federal courthouse last week. He claimed the government is prosecuting him because he is Italian. “I’m very angry at America,” added Barro, who owns 80% of the stock of Barro’s Pizza Inc.

Prosecutors said the loan-sharking operation was headed by Spillone, 49, whom Barro described as a childhood friend from Chicago. Spillone’s grocery company provides Barro’s pizza stores with produce, paper goods and other supplies.

Spillone was convicted on loan-sharking charges in Chicago in 1971. He served five years of a 12-year sentence before being paroled to Los Angeles in 1976, according to government prosecutors.

According to the indictment, borrowers paid interest--called “juice”--at an interest rate of 5% to 20% a week. The loans ranged from $200 to $40,000, but prosecutors said they do not know how much money was borrowed or how many people borrowed from the group.

During the trial, government prosecutors contended that collectors doubling as enforcers were not averse to roughing up some borrowers who were late in repaying loans.

“Brass-knuckle therapy” was how Assistant U.S. Atty. George Rosenstock described the defendants’ approach to debt collection to the jury.

In one tape-recorded telephone conversation admitted as evidence, Spillone and Serrao discuss killing borrowers or breaking their legs. Although several people were beaten by Spillone’s collectors, prosecutors said no one was murdered over the delinquent payments.

Richard Sherman, Spillone’s attorney, said his client runs a legitimate wholesale grocery business in El Monte with sales of about $8 million a year.

At one time, Barro said he was a professional gambler. But, in an interview last week, he said he stopped gambling professionally after his divorce a few years ago. After his divorce, Barro moved from his family home in Brea to Hacienda Heights. He said his uncle, John Barro, is acting president of the pizza company.

Barro is charged with racketeering and racketeering conspiracy. He also faces one count of making an extortionate extension of credit and one count of collecting an extension of credit by extortionate means.

The racketeering counts carry a maximum prison sentence of 20 years and/or a $25,000 fine. The count relating to making and collecting extortionate extensions of credit carries a maximum sentence of 20 years and/or a $10,000 fine.

On Sept. 3, 1985, the California Franchise Tax Board revoked Barro’s Pizza Inc.’s corporate status for failure to pay state income taxes, according to a spokeswoman for the board. However, Barro said Friday that his tax payments are current and that the board must have made a mistake.

“We are a small company with a big name,” said Michael Rendino, vice president of Barro’s Pizza Inc. Rendino, who testified about Barro’s business dealings at the trial, said the privately held company was founded in 1975.

Most of Barro’s Pizza stores are in Southern California. There are three in Arizona, three in Atlanta and two in Illinois, according to company officials.

According to government prosecutors, Serrao not only installed air-conditioning systems in Barro’s Pizza outlets, but made loans and threatened borrowers who were slow in repaying them. He is charged with two counts of making extortionate extensions of credit and five counts of collecting extensions of credit by extortionate means.

Others standing trial are John Clyde Abel, 41, of Chicago, who is serving a 25-year prison term for a 1981 bank robbery; Joseph Bolognese, 52, and Frank (Little Frankie) Citro, 38, both of Las Vegas, and John (Mitch) Meccia, 51, of LaSalle, Ill.

“This will make a good movie,” Bolognese said in a federal courthouse interview last week. Charged with racketeering and racketeering conspiracy, Bolognese said he is a Las Vegas real estate developer who “doesn’t even have a traffic ticket.”

Bolognese, also known as Joe Bello, said he is confident that the jury will acquit the defendants because the government’s case has depended heavily on testimony from paid witnesses serving time in prison for other crimes. Government prosecutors acknowledged that some witnesses were paid for their assistance.

The July, 1984, indictment followed three sets of grand jury hearings dating back to November, 1981.