Key Figures in L.A. Mafia Case : 2 ‘Made Guys’ Took Only Way Out--Inform for FBI

It all came home to Craig Fiato that summer afternoon when he found out he had been betrayed by a man who had been his partner in crime. It came back, the way the police had showed up after he and the guy did a deal together; the way the police seemed to know everything, and there wasn’t any way for them to know. On that day, affection chilled slowly into vengeance, and he started talking about getting a gun.

“I was devastated by it. That was No. 1,” recalled Fiato, then an associate in Los Angeles’s organized crime family. “The second thing was, I’d like to choke this bastard, you know, really, I felt that in my heart.

“And then the third thing is, I’m thinking, how can I feel like that? I’m doing the same thing he’s doing.”

It was on that afternoon in August, 1985, that Fiato knew his work as a government informant had forever set him apart from the mafiosi heroes of his childhood--and that life would never again be as simple as finding a gun.

It was one of the more wrenching waypoints in Fiato’s two shadowy years as a mob informant, years in which he and his brother, Larry, attempted to gain entry into one of the world’s most secret criminal organizations. Their efforts led to the indictment and conviction of the entire leadership of the Southern California family, including alleged boss Peter J. Milano.

James Henderson, the veteran strike force prosecutor who convinced the Fiato brothers to go undercover, said the two were among the most valuable witnesses ever against the Los Angeles crime family.

“Basically, from February, 1984, to the end of October, 1985, they went around wearing a wire . . . tape recording individuals, participating in narcotics buys, preventing at least one murder that we’re aware of and maybe another, and essentially did an unbelieveably great job for the FBI in putting this case together,” said Henderson, who is now with the Los Angeles law firm of Shea & Gould.

Craig Fiato’s status as a well-connected street tough being courted for membership in the Los Angeles Mafia earned him virtually unprecedented access into the inner workings of the mob at a time when authorities say Milano was making an unprecedented move on loan-sharking, bookmaking and narcotics operations throughout Southern California.

The Fiato brothers’ story starts on the rough streets of Boston’s North End, where “made guys” swaggered down the sidewalks like kings, and it winds up along Beverly Hills’ exclusive Benedict Canyon Drive, where the guy who had spent decades learning how to “quit talkin’ in ‘dese’ and ‘dems’ ” and to wear a good suit when he went in to talk to the don signed his pact to become a cooperating agent for the FBI.

“We were in this thing the whole way. We didn’t have the benefit of being trained as FBI agents, we didn’t have the benefit of knowing the laws of entrapment, we didn’t have the benefit of knowing society’s right from wrong, as opposed to our value system,” Craig, 43, said.

Dreaded Phone

“I dreaded every time that phone rang. You know, it was either the FBI or a Mafia guy calling me to meet him. I dreaded it, ‘cause I mean, the wire was goin’ on and I was goin’ out there.”

In this case, “out there” meant out on the streets, working deals with the men they’d fashioned into heroes in their youth, men who might well have killed them if they’d felt the tape recorder strapped to their backs underneath the tailored Italian suits. But for the Fiato brothers--facing up to 400 years in prison for all the crimes the government was prepared to charge them with--there was no way out.

“Every time you put that wire on, you die,” said Larry Fiato, 31. “Because you’re tape recordin’ these guys. . . . I mean, these are guys that you’ve grown up with, that you’ve admired all your life. And it might not be the immediate faces in your scope. You’re seein’ people from the past.”

“You’re seein’ your father who may be turnin’ over in his grave, lookin’ at you,” Craig interjects. “You’re seein’ guys that knew you as a kid, that came to your father’s wake and gave an envelope to your mother, that looked out for your family. You gotta get pain from that. . . . I mean, when I was a kid and I saw Mafia guys walk down the street, I’d look up at these guys and, oh my God, I’d get such a great feeling when they’d just acknowledge me.”

Craig Fiato knew made guys all his life. His father once worked as a bartender with Mike Rizzitello, a longtime organized-crime figure who was an alleged street boss in the Los Angeles family. Craig himself spent his early years training with the Patriarca family in Boston before arriving in Los Angeles in 1975, ready for work.

“Rizzi’s just gotten out of the can, he just did 10, and this is the first time he’s seen me in all these years,” Craig says. “I’m all polished and groomed, I got the street jargon down, I talk the talk, and I walk the walk, you know. So Rizzitello starts to see me, and he starts to see that I’m a guy that he could really get to like, a guy he could really do something with.”

The Fiato brothers began working for Rizzitello, shaking down bookmakers for tribute payments and cutting up the proceeds. The game was something they called “create and alleviate”: Rizzi knew a guy who had a lot of money, but it was somebody Rizzi maybe knew socially, somebody “he couldn’t go to and say I want an envelope from you.” So the Fiato brothers would go in, fists flying, and pretty soon the guy’s calling Rizzitello for help.

Created Problem

The Fiatos created the problem; Rizzitello would magnanimously alleviate the problem--for a small price.

But Rizzitello was on the outs with the rest of the family, Craig says. Luigi Gelfuso Jr., reputedly the capo of the Los Angeles family under Milano’s reign, called Craig and told him about the recruiting drive Milano was launching and offered him the one thing he’d wanted all of his life: a chance to become a made guy.

The offer was a godsend for more than one reason. With the FBI closing in on the Fiatos’ loan-sharking operation, the brothers could stave off the 400 years in prison they were looking at by offering the FBI a chance to penetrate the Milano family in a way never before possible, eavesdropping on an informant who was about to be inducted into the family.

It was the middle of February in 1984. Both Fiato brothers signed an agreement to plead guilty to reduced racketeering charges and begin working undercover for the FBI.

As the Fiato brothers’ taped conversations show, Milano had plans to end Los Angeles’ historic status as an “open city” by setting up a tough local crime family that would oversee criminal operations from San Diego to Fresno.

“Pete Milano was a man with a purpose,” Craig said. “He had all the experiences of everybody behind him. He knew everybody that was runnin’ between the raindrops, and who didn’t follow through, who hesitated, who’d been involved with stool pigeons and so on. And he was really bulking up his crew. You talk about ambition, he had Caesar’s ambition.”

The son of Tony Milano, a well-known mob figure in Cleveland, Peter Milano found the Fiatos to be just the kind of men he needed to straighten up operations in California, Craig says. They had the background, they had the credentials.

“I mean, let me tell you something about tough guys,” Craig offers. “In my neighborhood, how many tough guys were there, Larry?”

“Everybody.”

“Everybody was a tough guy. Every day, there were guys gettin’ shot, left and right.”

But Milano wanted more than muscle. “He wears the don’s face when he meets you, you know,” Craig recalls.

‘Educated Man’

“The guy is telling me, meaning me and Albie, I want you guys to look good, I want you to get a nice front, even if you don’t make a dime, you know? He’s an educated man, and he gives you advice. When he gives you an order, it’s an order, but it’s advised. He doesn’t say, ‘You go do this.’ He’ll recommend that you do it. He gives you an offer that you can’t refuse. He’s a polished type of a guy, see?

“But Pete is the type of guy, he’s more treacherous than anybody, ‘cause he’s a thinker. He’s a guy, he’ll think a situation 20 times over. He won’t look for one or two ways, he’ll look for eight or 10 . . . He’ll give you a false security, you know, you’ll think you got nothin’ to worry about, and then the . . . hammer gets lowered on you. You know what I’m trying to say? He’s cunning, cunning like a fox.”

For Craig Fiato, those years undercover were some of the hardest of his life. For one thing, there was the sheer terror of sitting down to dinner with guys with a tape recorder on your back, afraid to move, too scared to get up to go to the bathroom, even, because maybe they’d notice.

More subtle, but just as hard, was the fact that some of these new-made Mafiosi were guys Craig used to lord it over on the streets, guys who used to send him drinks in Tracton’s in Encino when he walked in, but now they’d been made by Milano, and that meant he answered to them.

There was the time when he was having dinner with Gelfuso and John De Mattia--a guy who learned everything he knew from Craig, at least as the Fiatos tell it. De Mattia starts talking about how Craig owes him $35,000 from his loan-sharking operation.

“It’s very hard, you know, for me to have the role reversed and me have to answer to him in this situation,” Craig explains.

“I had to eat it and stuff it down, when in reality, he knows it, that I could give him a slap and take his face off. That’s the real truth . . . I mean, I ate crow. When I got home from this experience, I threw up.

“In other words, the FBI is telling me I’m doing the right thing, but my instincts are telling me, I’m doin’ wrong. You know, it was like taking small doses of arsenic, every one of these things. Small doses, not enough to kill you, but enough to make you sick, you know? Really sick. All the time. That’s how you eat humble pie. . . . And pretty soon it tastes like steak to you, you eat it so much. I ate humble pie so long I lost my appetite for arrogance.”

He knew it for sure one day in Boston in 1985, when the FBI sent him in on an unrelated investigation to talk to one of his old mentors, and he had to sit still through the indignity of it all while the man patted him down from head to toe, looking for the ubiquitous wire.

“When I saw myself allow myself to do that, to sit there and let somebody touch my body like that, when before I would stop somebody, you know what I’m sayin’? When I gauged how far I had come from the guy that I thought I could look in the mirror, I mean, when I came back, I lay down and cried. From a man that used to be strong, I started to cry. From a man that had nerves of steel, I started to shake.”

Somehow, the Fiatos have walked across that wide line, stepped from that side of the law to this side, looked back and seen their heroes in handcuffs and shackles while they sat in the witness room with their FBI case agent. There was Craig Fiato, calling the FBI, warning them that the family was planning to hit the suspected informant. There was Craig, of all things, calling the informant last week in the hospital, where he’s dying of cancer, making peace.

De Mattia was talking to one of the FBI case agents a few weeks ago, when most of the 15 men indicted as a result of the Fiatos’ work were in Los Angeles federal court. As Craig tells it, De Mattia said, “ ‘You know, (Craig) coulda been the biggest respected man in this town.’ ”

Craig laughs quietly. “I have no more roots to anything in my life anymore. I have no past. I got no future. But I mean, he still hasn’t learned what this is all about. And the agent told him, he says, (Craig) is the furthest thing from the (Craig) that you knew.’ It’s like I’m still supposed to look up to this stuff, and I don’t look up to it anymore.

“The reality is, you are who you are,” he says. “That’s why I got no complaints. That’s why I can’t complain about how I got caught or why I got caught or that kind of thing--I was that kind of person.

“I’m no better than anybody else, but one difference between me and them was that I chose to cooperate. They’re holdin’ on to some . . . illusion that’s so out of touch with reality, these guys.”