COLUMN ONE : Chasing a New Type of Mob : Witnesses describe a Mafia-like group that ran an immense gambling enterprise in Chicago’s Chinatown. The case is the centerpiece in the war on Asian organized crime.


The aging Chinese men sit at five defense tables in the enormous courtroom, looking like retired businessmen. White-haired Wilson Moy, 74, the unofficial mayor of Chinatown, keeps adjusting his glasses and tugging his cardigan sweater tighter around him. Henry H. Fong, 69, is natty in a crisp white shirt and dark suit.

As they listen, Sheu Mon Moy describes being dragged into Chinatown’s city hall and beaten severely by members of a street gang called the Ghost Shadows. Moy, his Chinese translated for the jurors, says he was battered after he complained about being cheated at Chinatown’s gambling casino, which was in the same building.

Federal prosecutors hope the testimony of Moy and more than 40 other witnesses will convince the jurors that the 12 men on trial are leaders of an immense gambling enterprise that stretched across the nation and reaped millions of dollars in illegal profits.

In a three-year investigation, the FBI used undercover agents, informants and electronic surveillance to penetrate the closed Chinese community and the secret world of one of the nation’s largest Chinese organizations, a century-old alliance called On Leong.


Witnesses have testified that On Leong catered to the gambling passion of hard-working Chinese immigrants at all-night casinos in several big cities. To protect the lucrative enterprise, prosecutors charge, On Leong leaders used armed gang members to beat and murder rivals, fixed a murder case and paid off mobsters, politicians and even Chicago police.

The trial in U.S. District Court here is the centerpiece in the new war against emerging Asian criminal organizations, which law enforcement authorities fear may one day rival the Mafia at its zenith. In much the same way similar trials crippled mob leadership in recent years, prosecutors hope to strike a blow at Chinese groups with this trial.

Atty. Gen. Dick Thornburgh says the Justice Department’s strategy for the 1990s ranks prosecution of Asian organized crime groups right behind the top priority, finishing off the Mafia hierarchy.

One reason for this elevated concern is the sharp rise in Chinese immigrants from Hong Kong as the island’s Communist takeover in 1997 approaches. FBI officials say the new wave of immigrants includes members of secret criminal societies known as triads and similar organizations known as tongs, which are sometimes run by criminals.


In Los Angeles, FBI agent Thomas Parker says sophisticated Chinese crime organizations are expanding from extortion and gambling into drug-trafficking, particularly involving heroin from Southeast Asia. And in New York, authorities claim that Chinese crime groups already control the heroin trade and are moving into other criminal areas.

“We have to make sure the Chinese triads and criminally influenced tongs never develop into the threat to our society that La Cosa Nostra became,” says Jim Moody, chief of the FBI organized crime section in Washington.

Lawyers for the Chicago defendants scoff at such a notion, at least as it relates to On Leong. They describe On Leong as a benevolent fraternal group providing aid and comfort to ethnic Chinese, including small-scale gambling as entertainment.

“These people are not criminals,” says Patrick Tuite, the lawyer for Wilson Moy. “They are not bad guys. It’s a traditional thing to gamble. That’s all it is.”


Mention organized crime and Americans usually picture Italians and the Mafia, also called La Cosa Nostra. Organized crime members come from many backgrounds, but the most powerful group has long been the Mafia, whose members, rituals and codes have been romanticized in books and movies.

The Mafia’s origins lie in old Sicilian guerrilla bands that deteriorated into criminal alliances. Transplanted to the United States as part of the Italian immigration, they started out preying on their own communities and then expanded.

China’s triads are far older. They were created in the 17th Century by monks trying to oust the Manchu Dynasty. They were united by secret oaths, ceremonies and nomenclature that still survive. But the triads, too, turned to crime. Faced with execution when the Communists took over China in 1949, the triads shifted to Hong Kong and became powerful criminal societies.

Just as a Mafia family has its boss, underboss, consiglieri and soldiers, each of the 50 or so triads has a leader known by the number 489, an enforcer known as the Red Pole or No. 426, and other functionaries. Triad soldiers are all 49s. The numbers are a combination of Chinese superstitions; they also make it harder for police to identify triad members.


When the first wave of Chinese laborers came to the United States in the mid-1800s, the triads came, too. In the book “Warlords of Crime,” author Gerald Posner describes how triads set up American branches called tongs.

The tongs began as benevolent societies for Chinese workers, providing food and places to live as well as prostitutes and gambling. Distrustful of governments and police, Chinese immigrants shunned the outside world and permitted the tongs to emerge as unofficial governments in Chinatowns nationwide.

Tongs have their own hierarchy and rituals, including an initiation ceremony in which members kneel before crossed swords and swear an oath of loyalty and brotherhood.

The largest tong now is believed to be On Leong, with 5,000 to 6,000 members and chapters in 15 cities, from New York to Los Angeles. On Leong performs many charitable acts, providing scholarships for Chinese students and assistance to newcomers and the elderly.


“There are a lot of tongs in the United States that are not criminal,” says the FBI’s Moody. “But we believe that some of them have become criminal.”

The Chicago racketeering indictment is the first official accusation that a tong engaged in widespread criminal activity. The 29 individual defendants include eight past national presidents of On Leong. Also charged were the national On Leong organization and chapters in Chicago, Houston and New York. So far, the Houston chapter and 16 individuals have pleaded guilty.

The case started with Robert Cooley, a former Chicago policeman and lawyer whose clients and associates included politicians and mobsters. In 1986, Cooley had a change of heart and offered to turn informant.

For the next three years, he wore a hidden tape recorder to gather evidence about corruption involving judges, politicians and mobsters. His undercover work led to the indictments of five Democratic politicians in Chicago, including a state senator, a judge and the alderman from the 1st Ward, long a mob bastion.


Among the charges was an allegation that the alderman, Fred Roti, had taken $70,000 to bribe a judge in a 1981 murder trial. Cooley said the cash had been handed to him by leaders of On Leong in New York and Chicago.

According to court records, a contingent of Ghost Shadows with guns and bulletproof vests was sent to Chicago from New York in 1980. The Ghost Shadows were to provide security for the On Leong casino at its headquarters in Chinatown after threats from a dissident gang faction. They also were to retaliate for the beating of Henry Fong, an On Leong leader.

On Aug. 9, 1980, four rival gang members were caught in a barrage of gunfire in Chinatown that killed one of them. The shots came from the On Leong building. Before he died, the victim identified his attackers as Ghost Shadows from New York, and three of them were charged with murder. But the next year they were acquitted by a judge in a trial without a jury.

Prosecutors were keenly interested in the man who allegedly sent the Ghost Shadows to Chicago--Eddie T. C. Chan, a former national president of On Leong.


Chan was a former Hong Kong police detective. At the height of an investigation into massive police corruption in 1975, Chan fled to Taiwan and then the United States, reportedly with $19 million. In New York, he invested in numerous businesses, including a bank, a funeral parlor, a jewelry store and several restaurants.

But, according to testimony before a presidential commission in 1984, the balding, stocky Chan also was a triad leader who controlled the On Leong tong.

The case being built against Chan and On Leong centered on the gambling casinos at its chapters across the country. The FBI began monitoring telephone calls between On Leong offices and members. But they ran into trouble because of a shortage of agents who could translate the conversations in Chinese.

Help came when a Hong Kong immigrant and inveterate gambler named Simon Au Yeung began to cooperate as an undercover informant. He provided a new avenue into On Leong’s empire because he could go places forbidden to Cooley.


There was a lot of ground to cover. Witnesses and court records indicate On Leong ran gambling in New York, Chicago, Boston, Minneapolis, Miami, New Orleans, Houston and Pittsburgh, Pa.

FBI sources say the West Coast is dominated by other Chinese organizations, and there is no evidence that On Leong engaged in gambling in Los Angeles. Nonetheless, Los Angeles City Councilman Michael Woo said gambling and extortion exist in the city’s Chinatown and outlying communities with large Chinese populations, such as Monterey Park.

On Leong’s most extensive gambling operation was beneath the twin pagodas of its headquarters in Chicago, an ornate three-story structure that had served as Chinatown’s unofficial city hall since it was built in the 1920s.

The On Leong building stands beside the ornamental gateway to Chinatown, home to 15,000 to 20,000 ethnic Chinese. The first Chinese immigrants arrived in Chicago in 1870 and settled near what is now the Loop business district. In about 1900, they moved into what had been a modest Italian neighborhood south of the Loop and set up their businesses and restaurants.


It is a working-class community, with small, crowded homes and few signs of wealth. For most of Chinatown’s history, the On Leong building was the center of cultural life, the place where the elders settled disputes in a quasi-courtroom and merchants and waiters alike gathered for entertainment.

Behind its elaborate facade were electronically controlled steel gates and doors, a video surveillance system and a vast second-floor gambling hall. Traditional Chinese games, such as pai gow and fan tan, were played from early evening until dawn, seven days a week.

On Leong defense attorneys say the gambling was small time. But Au Yeung and others have described gamblers winning or losing as much as $100,000 a night.

Prosecutors estimate that profits from On Leong-backed gambling nationwide topped $11 million between 1974 and 1988. A percentage of each chapter’s profit was paid to the national organization. Defense attorneys claim the figure is inflated and that a big chunk of the take went to payoffs anyway.


“Early on, the Chicago mob came along and said, ‘You guys want to gamble, you’re going to have to pay,’ ” says lawyer Tuite. “Instead of helping, the Chicago police said, ‘We want ours.’ These cops thought the sign on their squad car said ‘We serve and collect.’ ”

Court records and testimony claim that the Chicago On Leong paid $15,000 every two weeks in protection money to the mob and Chicago police.

Those alleged payments might explain the confidence Wilson Moy showed in April, 1987, at On Leong’s national convention in Taiwan. According to the indictment, he told Au Yeung that the ad hoc gambling casino set up at each On Leong national gathering would be “100% safe” at the 1988 convention in Chicago because it was protected by local police.

With a major exception, On Leong’s national conventions were similar to those of other fraternal groups. The exception was gambling. Authorities say chapters with casinos filed written reports on the year’s take and handed over the national chapter’s percentage, in cash, and at least one room of the convention hotel was turned into a smoke-filled gambling operation.


In the middle of the 1988 convention in Chicago, federal agents proved Wilson Moy wrong. They raided the gambling operation set up at a Quality Inn as part of the convention. Simultaneously teams of FBI and Internal Revenue Service agents smashed their way into the Chicago On Leong headquarters, seizing $300,000 in cash, gambling paraphernalia, bet slips and records.

As the raid on the On Leong building commenced, federal officials say, the agents rushed past two Chicago policemen providing security for the casino.

Over the next months, prosecutors seized the Chicago headquarters through a civil action and assembled the gambling, tax and racketeering case. Last August, the far-reaching indictment was finally handed down.

The trial started in April and is expected to continue several more weeks. Eddie Chan is a fugitive, believed to be hiding in the Philippines or Taiwan.


The trial is a cumbersome affair, held in the huge ceremonial courtroom to accommodate the large number of defendants and lawyers. The original defendants included eight named Moy, and the witness list included 12 Moys. Guilty pleas have reduced the number of Moy defendants, but increased the number of Moys testifying for the government.

Most witnesses are Chinese and speak little or no English, so two pairs of translators work in shifts. One person translates English into Chinese and another translates Chinese into English. In addition, the prosecution hired its own translator to monitor the accuracy of the court’s translators.

There are frequent pauses to allow translators to catch up and the going is generally slow. At the close of a recent day, Judge John Nordberg sent the jurors home and asked lead prosecutor John Scully how many more witnesses he expected to call.

“About 40,” said Scully.


“Won’t they be cumulative?” asked the judge.

“No, your honor, they’ll be Chinese,” quipped defense lawyer Rick Halprin.

Twenty blocks south of the federal courthouse in the Loop, the On Leong building is padlocked. Its windows are grimy. But Chinatown’s surrounding streets still bustle with tourists and Chinese of all ages.

The few Chinese who speak any English are reluctant to discuss On Leong. “On Leong sometimes helps people who just arrive,” says King Hung Wong, president of the Chinese Community Center. “I know nothing more.”