Looming over the table in the social club, Michael Franzese listened as his team read back the list they had pulled from the internet. It was a ranking of the ten most profitable rackets in the history of the American Mafia, complete with estimated annual earnings. The numbers, he knew, were pure invention. No one outside a given operation ever knew its true take, not the FBI, not the press, and certainly not the men who published these lists.
They were guessing, and their guesses ranged from the laughable to the absurd. His team had arranged the list from the least to the most profitable, and he was ready to offer his own corrections. But before he reviewed the rankings, he laid down the one rule that had governed his own time in the life: no drugs. He was told in no uncertain terms that involvement in narcotics meant death.
It was a strict prohibition that separated his era from others, and it was the reason the Gambino family’s leadership, including John Gotti, had run afoul of the old boss Paul Castellano. Franzese made it clear that while some men dabbled in small-time dealing to make ends meet, the family itself was never a major narcotics operation, and they were nothing compared to the cartels. With that established, he began his review of the list, item by item. At the bottom of the rankings was cargo hijacking, with an estimated net of twenty to one hundred million dollars a year.
The media pointed to the theft of shipments from trucks, warehouses, and air freight facilities, particularly at John F. Kennedy International Airport. Franzese dismissed the figure as nonsense. Cargo theft was never a formal Mafia business.
It happened, but only when an opportunity presented itself, usually through an insider. A man working at a shipping company might tip off someone like Jimmy Burke or Henry Hill, telling them a valuable load was coming through and that he could give them access. They would pull the job and split the proceeds. It was not a matter of assigning a crew to the airport and stealing cargo on a daily schedule.
The twenty to one hundred million figure, in his view, was pulled from thin air, a fabrication by law enforcement with no basis in reality. He conceded that some stolen merchandise did come through the back channels, the old joke about a suit falling off the back of a truck, but it was an inside job when it happened, never an institutional racket. Next on the list was the shakedown of restaurants and bars, with an estimated profit of fifty to one hundred fifty million dollars. Franzese admitted that he had shaken down businesses.
If a man walked into a restaurant and saw that no other crew had a claim on it, he could tell the owner he needed to pay protection money. When asked what the mob would protect them from, the answer was blunt: from themselves. Pay up, or the restaurant starts having problems. But this was not a designated Mafia enterprise.
There was no formal allocation of restaurants and bars to specific crews. It was simply a tool available to anyone with the leverage to use it. A man could try to extort a car dealership, a film producer, or anyone else, provided he had the muscle to back it up. The fifty to one hundred fifty million figure, Franzese insisted, was completely ridiculous.
Extortion was a technique, not a fixed business with a reliable revenue stream. The list then moved to bid rigging and financial fraud, bundling contract tampering, health insurance scams, stock market fraud, and prepaid phone card schemes into a single category, claiming fifty to two hundred million per scam. Franzese found the idea of per-scam earnings laughable. The Mafia kept no records, and there was no central accounting, so no one could possibly know what any individual scheme earned.
He acknowledged that contract rigging happened, particularly with union contracts. But the health insurance fraud he attributed primarily to Russian organized crime, not the Italian families. In fact, he had helped introduce some of those Russians to government fraud, tipping them off about cheating the state on fuel taxes, and in Los Angeles, the Russians were heavily involved in healthcare scams. Prepaid phone card fraud was a relic of an earlier time, impossible to pull off in the modern era.
The Mafia did have a hand in stock market fraud through penny stocks, but only when they had cooperation from insiders on Wall Street. This pointed to a broader truth about how these crimes actually worked. The public often imagined mobsters sitting in their social clubs, plotting which major corporation to target next. That was not how it happened.
Except for the unions, which were controlled from the 1920s onward, the pattern was nearly always the same. Someone inside a legitimate company came to the mob with a plan for defrauding his own employer. He wanted their help, their protection, or their money, because he trusted them not to reveal him. Franzese had seen it countless times, including in his own fuel business, where an insider brought him the idea that launched his fortune.
So while the list made these frauds sound like structured enterprises, the reality was that they were driven by opportunistic insiders, and the fifty to two hundred million figures were pure speculation. Loansharking came next, with an estimated annual profit of one hundred to three hundred million dollars. Franzese dismissed the number outright but conceded that usury was a major business for those who had capital. He himself had more than a million dollars on the street when he was arrested.
He charged one percent interest per week, sometimes two, which equated to fifty-two percent annually. He typically gave money to his soldiers, who then lent it out at their own rates, three, four, or five percent, as long as he received his one percent. He also lent directly to businesses that could not get bank loans for whatever reason. For those with money, loansharking was enormous.
For the men without capital, it was nothing. The hundred to three hundred million figure, like all the others, had no basis in fact. The list then turned to union corruption and pension fraud, again estimating one hundred to three hundred million. Franzese told his team to discard that number as well.
But he acknowledged that the Mafia had used unions heavily and effectively. The tactic was straightforward. A crew would approach a workplace and announce they were going to organize the employees. If the owner did not want a union, he could pay twenty-five thousand dollars every year.
Or he could hire two of their men. If he refused, they would set up a picket line and make sure no one could get in to enjoy his food. Pension funds, he admitted, had helped build Las Vegas. The unions had also been a way to win favor with politicians, since the mob controlled both money and votes.
Franzese himself controlled two locals. He had the bartenders and waiters local, and he had a security guards local. At one point, the security guards union held the contract to provide security at nine decommissioned nuclear power plants, which by law required protection for a hundred years. His partner in that venture, Daniel Cunningham, eventually turned against him and testified, though Franzese was acquitted.
He acknowledged that the entire Commission case against the Mafia leadership was built on labor racketeering. The historical fact of union infiltration was undeniable, but the profit figures were not. Extortion and racketeering, including protection money, forced contracts, and control of the waste management and construction industries, was ranked next, at two hundred to four hundred million. Franzese said the description was accurate.
The mob had controlled the entire garbage carting industry in New York through a trade association that regulated the territory. Even in the modern era, there was residual influence, though not to the same degree. He pointed to Salvatore Avellino, a waste industry figure whose Jaguar had been bugged by the FBI, a case that produced a wealth of information used in the Commission trial. So yes, the racket was real.
But again, the two hundred to four hundred million figure should be ignored. Then came the one Franzese knew intimately: fuel tax fraud. The list claimed that skimming excise taxes through phantom fuel companies cost the government up to a billion dollars a year, with an estimated annual profit of two hundred fifty to five hundred million. One commenter had even claimed agents were making five to ten million a week at the height of the scheme.
Franzese believed he had run the best operation in the business. He was not the only one in the field, but many operators came to him and used his licenses, for a price. He was accused by the government of stealing two billion dollars over two years. Whether that charge was accurate, he would not say, but it was a lot of money.
He considered fuel tax fraud the second most profitable enterprise in Mafia history, behind only Prohibition-era bootlegging, which the list ranked first. The practice had largely died out, he believed, when his partner became an informant. It might still be done in limited areas, but nothing could approach what he and his crew had pulled off. He disagreed with the list’s placement of fuel fraud at number four.
It deserved second place. Drug trafficking was placed above fuel fraud by the list, at five hundred million to a billion dollars. Franzese rejected this outright. He went back to his core rule.
In his era, narcotics were forbidden. The Pizza Connection case, which the list referenced, involved Sicilian mafiosi, not the American families, and those men were all arrested and convicted. They were not making that kind of money. He cited Vito Genovese and Lucky Luciano as examples of men who were major figures but never came close to five hundred million a year.
The cartels made billions, but the Cosa Nostra never matched them. Even when drugs were permitted in earlier eras, many men did not want the business. It was ugly, and it brought trouble. On a practical level, the mob’s political connections would have evaporated if they had been tied to narcotics.
And, as Franzese put it, they did not want to hurt children. The numbers attached to the drug trade in the list, he said, were absolute nonsense. Gambling, ranked second in the list, was different. Illegal casinos, bookmaking, sports betting, and numbers operations generated an estimated five hundred million to a billion and a half.
Franzese said to throw the figures away, but he confirmed that gambling was enormous. He personally had twelve bookmakers working for him on Long Island and in Brooklyn. They had to answer to him because the family did not allow them to operate without approval. Gambling was a massive revenue source, then and now.
There was no argument about its importance, only about the made-up numbers. At the top of the list was Prohibition, the bootlegging era from 1920 to 1933, with an estimated annual profit of a billion dollars or more. Franzese did not argue with this ranking. In his view, Prohibition was what built the Cosa Nostra into the institution it became.
Before 1920, the Mafia was a collection of neighborhood toughs shaking down Italian shopkeepers and running small-time betting operations, struggling to get by. When alcohol became illegal, the demand never went away, and men like Lucky Luciano, Al Capone, and Meyer Lansky seized the opportunity. The money was staggering, and it allowed them to build their organization into a national power. Without that capital, the Mafia would have remained a minor criminal enterprise.
As Franzese put it, nothing works without money. No matter how many men you have, without capital, you are not strong. He closed by reiterating a broader point. The public should never trust the numbers published about Mafia earnings.
Informants, desperate to reduce their prison sentences, routinely exaggerated their claims, and federal agents, with no other way to verify the truth, accepted them. The figures were invented. Franzese also reminded his audience of the basic rules that governed his own operation. Any street crime, from hijacking to extortion, had to be officially registered with the family.
There were two reasons for this. First, if a man had a dispute with another member over an unregistered enterprise, he would lose the argument. Second, the administration wanted a record of his activities in case something happened to him. For any street activity, he always paid a share of at least twenty-five percent.
His legitimate businesses, however, were different. He had car dealerships, an entertainment production company, and other ventures, and while he informed the family of their existence, he was not required to give them a cut. That was the system.
A man could pursue almost any enterprise he chose, as long as he registered it, paid his share, and followed the one great prohibition: no drugs.