Rise and Fall of ‘Mickey Mouse Mafia’

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.”

Gelfuso said he wanted “the kid grabbed,” but he said to “leave the old man alone.” Once the son was beaten, he said, the family could go to his father and say, “ ‘Now you see what happened to your son, and next time, we’re going to bury your whole . . . family.’ ”

Gelfuso later told Fiato of an encounter he and alleged associate Albert Nunez had with a bookmaker who hadn’t yet paid the $10,000 the family was demanding as a cut of his business. Nunez, Gelfuso said, hit the man several times on the head and stomach with a rolled-up newspaper, “which was deserved.”

Fiato, meanwhile, was pressuring Gelfuso about when he would be inducted as a “made” member of the Mafia, a status that FBI officials believed would give him unprecedented access into Milano’s closely guarded world.

“It’s gotta be 3 in the morning,” Gelfuso explained to Fiato’s brother Lawrence at one point. “You know what I mean. I may say to him, ‘Meet me tomorrow morning. I’ll pick him up at 6. We may drive halfway to San Diego. You have to find the right spot, because that’s a dangerous situation. He’ll understand that. Explain it to him.”

A few months later, Gelfuso brought the issue of Fiato’s membership to the family’s aging consigliere, Jack Lo Cicero, a man who FBI officials say was the No. 2 man in the family during the reign of former mob boss Dominic Brooklier but who because of old age and poor health played a declining role in family affairs in recent years.

As Gelfuso related the conversation: “I says, ‘You know, I want the kid in.’ He says, ‘You want him, you like him, you gonna be responsible for him--what are we waiting for.’ ”

But Lo Cicero, according to the FBI, was becoming increasingly estranged from the family. Meeting one afternoon with Masetta and Milano’s brother Carmen, Gelfuso said Lo Cicero had called a few days earlier and Gelfuso hadn’t even recognized his voice.

Lo Cicero, he said, was upset with Peter Milano, and Carmen appeared indignant. “If he puts Pete down, he puts us all down,” the FBI affidavit relates.

Gelfuso said Lo Cicero “keeps bringing up all that old (stuff) about Dominic (Brooklier).”

Indeed, it wasn’t just a nostalgic longing for the old days that was causing the new boss trouble.

Milano suspected that a man identified by law enforcement authorities as a longtime mob associate, John De Mattia, was leaking information to police that resulted in the arrest of Milano and several other alleged family members on bookmaking charges. (Most were never prosecuted.)

And then there was the problem of gaining respect among East Coast families that were becoming increasingly active in Southern California.

Milano, according to the affidavits, was disturbed that Gelfuso had told a New York mobster of the family’s plans to “hit” De Mattia--a plan that Milano, Gelfuso and De Mattia have since denied. According to the FBI, Milano was worried that the family would look bad if it didn’t make good on the contract.

“It may be a test to see what we will do,” Milano said. “These are the rules.”

“We have more respect now than we have had for 20 years,” he said, but he worried increasingly about the possibility of being betrayed.

“These guys don’t know it,” he told Masetta, according to the FBI affidavit, “but we’re all going away, maybe for the rest of our lives. These guys don’t know how to talk to people, they don’t know what they are saying or who they are talking with.

“It’s a bad situation.”