This Spotlight report was researched and written by Gerard O'Neill, Dick Lehr and Kevin Cullin.
On a gray day of sleet in Chelsea nearly a decade ago, the mob's banker had some financial advice for the region's biggest bookie -- change horses and start paying the Italian mob for protection instead of the Irish gang. Switch sides, was the message, and get more bang for your buck.
No one knew it at the time -- not even police listening over bugs hidden in Heller's Cafe -- but when the money man told the bookmaker that the Winter Hill Gang couldn't carry the Mafia's "jockstrap," it would mean the fall of Whitey Bulger.
That bit of mob byplay was overlooked in 1986 and nearly lost entirely before emerging from the wiseguy wiretaps years later as the starting point for a major racketeering case against the most elusive gangster in Boston history -- James (Whitey) Bulger of South Boston.
By the early 1990s, the potential case that had been lying there against Bulger -- "tribute" allegedly extracted from bookmakers, loansharks and drug dealers doing business on his turf -- finally got deciphered and sent to the right place: The Strike Force of the US Attorney's office in Boston.
Efforts to nail Bulger, who was indicted in January and is now on the run, had been mired in an internecine crossfire over Bulger's status as a top echelon FBI informant. The investigation needed a new team and a coordinated approach. It got both.
In 1991, federal prosecutors, working mostly with State Police leads, began corralling middle-aged bookies accustomed to paying small fines and hammered them with money-laundering charges carrying stiff sentences. The goal was to force the bookies to testify about extortion payments. It began to work, and the FBI jumped on board.
The strategy took about two years to play out, but the shift in tactics produced a singular prize: a major bookie informant who will testify about direct dealings with the insular Bulger and his longtime partner, Stephen (The Rifleman) Flemmi.
The case against against Bulger marks a sea change in local law enforcement, an unprecedented coalition that has done much to overcome the ill will arising from Bulger's role as an informant and his uncanny ability to dodge electronic surveillance used by the Massachusetts State Police and US
Drug Enforcement Agency.
But despite the bold initiatives and teamwork that led to his indictment, the story about the legendary Bulger has had a familiar ending: Where's Whitey?
He was nowhere to be found when indictments were in the air and police were combing eastern Massachusetts in January. Caught instead was Flemmi, now proclaimed to be the crux of the racketeering case.
But Bulger, the marquee player, is still missing, having ducked a dragnet two months ago that ensnared several other prominent organized crime figures, including his partner Flemmi and Robert J. DeLuca, a Patriarca crime family soldier from Rhode Island. Francis P. (Cadillac Frank) Salemme of Sharon, the boss of the Patriarca family, also fled and is the subject of a manhunt.
With the 66-year-old Bulger out there, the case is treading water and the fragile coalition that assembled the evidence is starting to fray at the edges. Some State Police, who have long carried the fight on Bulger, are rolling their eyes while buttoned-down FBI agents are glaring back. "We will absolutely catch him," vowed one law enforcement source.
Still, Bulger, the only leader left standing after prosecutions wiped out the New England Mafia in the 1980s, may survive even if he gets caught. Some prosecutors concede he may be able to counter the racketeering charge with an allegation of his own -- that his criminal activity was just part of doing his job for the FBI.
Two years ago, a high-level law enforcement official told the Globe that there would be as much trouble as glory for the FBI in building a case against Bulger. He saw a public relations debacle down the road if Bulger went to trial and used his role as a bureau informant as a defense -- that he was only doing what the FBI told him to do.
"This guy," said the official, "has been miraculously lucky, and in the past it has been more than luck. Information was traded when the value he received was far greater than what law enforcement was getting. That's a view shared by a lot of people in law enforcement."
One veteran from the trenches said Bulger's relationship with the bureau has resulted in the FBI's blind pursuit of the Mafia rather than Bulger's Irish-dominated Winter Hill Gang that started out in Somerville decades ago.
He said some agents believe cases only count if they concern the LCN -- La Cosa Nostra. "But in Boston, at least, there is another faction that isn't LCN," he said. "The FBI doesn't want to hear that."
Detective uncovers bookies' clearinghouse
In November 1983, State Police Detective Joseph Saccardo checked a tip that a prominent bookmaker was seen entering Heller's Cafe near Chelsea City Hall. When Saccardo got there, he ran the license plates of several cars parked near the barroom through the Registry of Motor Vehicles' computer and found that he had stumbled into the bookies' clearinghouse.
The computer spat out a Who's Who of Bookmaking -- Eddie Lewis, Jimmy Katz, Chico Krantz, Howie Levenson, Joe Yerardi, Fat Vinnie Roberto.
Saccardo realized that he had found the "bank," the place where gambler losses -- in checks made out to cash or bogus names such as Ronald Gambling and Arnold Palmer -- were turned into bookmaker profits. He and other troopers spent the next two years in a nearby construction trailer logging the comings and goings, obtaining the "probable cause" necessary to get court approval for the experts from the FBI to plant bugs inside Heller's.
In the middle of the night, technicians put a tiny microphone in the top of a bullet-proof teller booth where all the business was done and spliced one into a nearby window frame. Two phones were also tapped.
So, when Burton (Chico) Krantz walked into Heller's in December 1986, he was 48 years old, head of the biggest gaming syndicate in New England, and heading for a fall.
Krantz was a master of the sports "line," an expert at setting the point spreads or odds so that gamblers bite equally on both sides in a game and the bookies pocket their "vigorish," or extra fee charged for the bet, with a minimum risk of loss.
Everybody used Chico's line.
Michael London, who owned Heller's and ran the bank that washed $50 million a year before he was sent to jail, knew all the players and proclaimed Krantz the best in an aside picked up by one of the hidden microphones. ''There's only one sharp guy in this whole town for bookmaking . . . Chico."
Krantz was just one of the motley cast of underworld characters who drifted in and out of Heller's. The bugs were as useful in providing a primer for the gambling networks as they were for making specific cases. The taps verified the common understanding that bookies had to pay extortion money to either mob capos such as Vincent Ferrara or to the Winter Hill Gang.
Gradually, prosecutors and detectives realized that the bugs in Heller's had produced a twofer: money-laundering cases against bookmakers -- and a roadmap to extortion charges against the underworld's elite who shook the bookies down for monthly payments. A few began to see Bulger skulking backstage behind the paunchy bookies who paid him "tribute."
When Mikey London gave Krantz what turned out to be a futile pep talk about changing sides from Winter Hill to the Mafia, it wasn't London's advice that later mattered to prosecutors. It was the fact that Krantz's affiliation with Flemmi and Bulger was established for the first time -- a relationship now at the core of the racketeering case confronting them today. The extortion section of the indictment is a list of Heller's clientele.
"Stevie can't hold this guy's (Ferrara's) jockstrap," London told Krantz in a recorded conversation. "Vinnie will work for you. I'm not saying he (Flemmi) ain't a good guy. I'm saying that if you're with this guy, there's a big difference in being with him and being with Stevie. Stevie's not a collection agency, personal protection. Stevie don't do nothing. This guy here will go to bat for you."
And London's lecture on the facts-of-underworld-life to another bookie, a rookie who was not paying anybody, became the foundation for the extortion cases that followed. London told Phil (Beeshi) Cali that his free lunch was about to end, that Vinnie knew he was making book. "They know you're not paying rent to them. They want rent from you, that's all. Cut and dry. If they don't have your name, the other guys are going to get your name -- Stevie and Whitey."
But the first round of prosecutions out of Heller's was confined to Mikey London's money-laundering machine and Ferrara's extortion. Once again, the emphasis was on the Italian mob, not on Whitey Bulger and Chico Krantz.
While federal authorities have traditionally spurned making cases against lowly bookies, it has been the stock-in-trade of the State Police. In the 1990s, detectives began to make use of the Heller's leads about Krantz's gambling empire and then started on the trail of another Winter Hill minion and Heller's patron -- Joseph Yerardi.
While Joe "Y" ran some bookies, he followed a more violent and flamboyant path to Heller's. He is a reputed loan shark with assault and weapon convictions on his criminal record and he lived in an $800,000 condominium above Boston's Four Seasons Hotel until recently.
Both Yerardi and Krantz came into focus as targets in 1990. Prosecutors and State Police working with the Middlesex District Attorney's office, first under Scott Harshbarger and then Thomas Reilly, began closing in on them with electronic surveillance.
Their Winter Hill franchises for gambling and loansharking were belly up by last year, with Krantz in the witness protection program and Yerardi hanging tough in jail awaiting trial for extortion and money laundering.
Yet the cases against the pair were only way stations on the road to a racketeering case against the underworld's top tier.
It began as a mundane matter when detectives such as Saccardo realized that while the Mafia may be in shambles, no one was chasing Bulger. They began to press the point with prosecutors in Middlesex County who began to see the possibilities of rolling up bookies to get at the hierarchy.
The key to it all became the one that opened Krantz's safety deposit box at the Dedham Institution for Savings. By the spring of 1991, prosecutors had evidence that his gambling syndicate took in $1 million a week. Krantz and 14 bookies were indicted on gaming charges.
But police had Krantz where they wanted him when they confiscated his $2 million in cash found in the deposit box. When Krantz came back from Pompano Beach, Fla., to surrender in March 1991, he sought out State Police Sgt. Thomas Foley and tried to make a fast deal to trade some information.
But Foley played hard to get, keeping Krantz off guard -- and in the dark about his stack of cash. Krantz was also looking at a state prison sentence for the first time, a sharp departure from his six prior convictions, with the stiffest penalty being a $3,750 fine.
In the beginning, Krantz was looking for a deal that did not require him to testify in court against Bulger and Flemmi. Foley, a street-smart veteran from Worcester, slowly reeled him in, finally landing Krantz during a two-day debriefing in Florida. They talked about Flemmi, Yerardi, and George Kaufman, another alleged Winter Hill intermediary with bookies. Krantz is likely to get back half of his $2 million stash if he delivers his end of the bargain, authorities acknowledge.
After the Florida debriefing, investigators had a roadmap aimed at Bulger and a strong sense that Krantz would cross all the way over and testify.
One night that spring, Foley and Charles Henderson, head of the State Police, and District Attorney Reilly had supper at a Watertown restaurant to chew over what they had and what to do with it.
They decided that Bulger and Flemmi were within law enforcement's grasp, but the case needed the firepower of tough federal sentences to crack bookies and get them on the road to Winter Hill. They all agreed that it had to be a joint venture, a partnership with something for everybody.
US prosecutor takes two crucial steps
The ball that had been fumbled so often was handed off by Foley into the sure hands of Fred M. Wyshak Jr. The new prosecutor at the US Attorney's office was waiting with US code 18, section 1956 -- the money-laundering statute with heavy sentences to change a bookmaker's mind.
Born in Boston 42 years ago, Wyshak forged an early career as a prosecutor in the rough and tumble of Brooklyn and New Jersey. He is known as a workaholic who pushes hard. Not everyone likes him.
Now the lead prosecutor in the racketeering case against the Boston underworld, he took two crucial steps to advance the Bulger case. He developed the legal strategy to flip bookmakers such as Krantz with money laundering, and he refused to get stuck in the quicksand of interagency politics that has so long divided law enforcement in Massachusetts.
Breaking new ground in Boston, Wyshak and his Strike Force associate, Brian T. Kelly, added money laundering to the standard gambling charges lodged against the bookmakers. It was a culture shock that had bookies reeling. The stakes were upped from months in jail to years in prison.
In November 1992, bookie James Katz howled in disbelief when he was indicted and learned of the prospect of facing 10 years or more in federal prison -- instead of the customary wrist slap in state gaming cases. Katz is cooperating with investigators; he entered the witness protection program last year.
"What they did is change the rules of the game," said one defense attorney of the Wyshak-Kelly strategy. "They put bookies into situations they haven't been in before. . . . Hey, it's working."
Other lawyers, including Richard Egbert, who represents Flemmi, disparage the indictment as thin, and contend that the informants will be assailable as puppets mouthing whatever the government wants to hear. Some in law enforcement, however, imply that the indictment could be amended with other evidence when Bulger and Salemme are caught.
In any event, the knuckling of bookmakers with money-laundering charges hit an unexpected obstacle in 1993 -- a federal judge. US District Court Judge Joseph L. Tauro refused to impose the harsh sentences on two of the bookmakers, declaring the money-laundering charge unfair.
In a decision crucial to the Bulger probe, the US Court of Appeals emphatically disagreed with Tauro last year, ordering him to impose the tougher penalties.
Besides marshalling cases against the bookmakers, Wyshak and Kelly reviewed the Heller's Cafe transcripts and other wiretaps, sifting them for corroborative material to use against Bulger and Flemmi. Wyshak monitored the Heller prosecution as it progressed, actually sitting in on interviews with some witnesses.
"You have to have someone who worked somewhere else," said one prosecutor of Wyshak, "someone who realizes how provincial Boston is to overcome the turf-fighting here. There were times he was so frustrated and could not believe the mistrust here. To his credit, he refused to accept it."
1990 arrests leave no mark on Bulger
The Wyshak stategy of using bookie shakedowns to bring charges against Flemmi and Bulger proved far more effective than the traditional approaches of
bugs and drugs.
In August 1990, for example, authorities thought they finally could dispel the myth that Bulger keeps drugs out of Southie. After a 15-month investigation led by the US Drug Enforcement Administration, 51 people were charged with being part of a South Boston-based cocaine ring.
The ringleaders, Paul (Polecat) Moore and John (Red) Shea, were alleged to be part of Bulger's crew. The idea of jamming the leaders with long prison terms was to no avail as Moore and Shea stuck by the never-be-a-rat credo and
went off to prison for the next decade.
Only one of the South Boston 51 flipped -- Ed MacKenzie, who managed a notorious local bar called Connolly's Corner Cafe.
But he insisted on cooperating with the FBI, not the DEA. As it appears to be playing out, MacKenzie gave the bureau nothing useable about Bulger or anyone else in South Boston. He helped make a major cocaine case against a Los Angeles-based cartel that had several dealers in Greater Boston. But to the DEA's dismay, MacKenzie -- a New England kick-boxing champion and ex-Marine, which made him a Bulger favorite -- has delivered nothing that meets the eye about the South Boston drug operation.
Not so with MacKenzie's boss, Timothy A. Connolly 3d, who owned the Corner Cafe. In a deal brokered by then-US Attorney John Pappalardo in 1991, Connolly became an FBI informant when he could not make his alleged extortion payments to Kevin Weeks, a close Bulger associate.
Connolly, who worked for a Waltham mortgage company, was pushed into investigators' arms, according to interviews and court records, simply because he took too long to help a drug trafficker in South Boston pay off a $40,000 debt to Bulger.
Connolly was summoned to the backroom of the Rotary Variety store in South Boston in July 1989. And it was there, according to a court affidavit, that Bulger threw caution to the wind and did his own dirty work, menacing Connolly by drawing a long knife from a sheath on his leg, punctuating a tirade by stabbing nearby boxes and waving the blade around Connolly's face. Connolly was purportedly "fined" $50,000 that was to be split between Bulger and Weeks.
Two years later, broke and afraid for his life, Connolly went to the US Attorney's office and is now a cooperating witness who is believed to have worn a body wire around town through last year.
Mood grows anxious as indictments near
As the racketeering case against the Boston underworld neared indictments in the first week of January, a sudden crisis loomed. Authorities feared that some of the targets were about to skip town as the grand jury heated up. The top cops and prosecutors huddled at the FBI's Boston office and decided to do hang back surveillance to locate all subjects before making arrests.
The mood was anxious, and some believed that they were in a can't-win bind. Arresting any target would likely send the others into hiding. But sitting back might give them all a chance to slip away.
Flemmi, it was decided, would be the one detained above all others as he was seen as the linchpin in the case, linking the Mafia and the Winter Hill Gang.
But the arrest plan in January was a scramble that started with no leads on Bulger's whereabouts and ended the same way. In fact, Bulger had not been seen in the area since mid-December.
Unlike Bulger, Mafia boss Francis Salemme was inept at keeping law enforcement at bay. He had become the boss of disarray, clinging to the remnants of the fractured Patriarca crime family, falling into an FBI sting and getting himself bugged at a mob meeting in Boston soon after he took over in 1990.
By contrast, Bulger has been bug-proof for 15 years, quickly spotting hidden microphones. His skill at sidestepping wires made him the prime target of the recent joint effort.
Although Salemme was seen near his Sharon home at noon on the day of the arrests, it was Flemmi who was spotted first when police fanned out later in the day looking for people to charge with racketeering. He was seen the evening of Jan. 5 entering Schooners on High Street in downtown Boston, a restaurant that was being watched because it was being renovated by Flemmi's two sons.
Around 7 p.m., State Police Sgt. Tom Duffy, Trooper John Tutungian and DEA agent Dan Doherty saw him enter the restaurant with his female companion, Jian Fen Hu.
The standing orders were to arrest him only if he went "mobile." After the couple left the restuarant, got in the girlfriend's white Honda Accord and drove off, the detectives boxed Flemmi in with their cars on nearby Broad Street, and raced to the Honda with guns drawn. Flemmi tried to duck under the dashboard, but he was ordered out.
After flinching, Flemmi remained calm, saying only that he wanted to speak to his attorney. The cops took a knife and Mace from his pocket. Flemmi's girlfriend told police that they had no grounds to hold her and refused to go into the FBI offices. "She knew the drill," one investigator said.
Three hours later, Weeks, Bulger's top man in Southie, was playing cards in the L Street Tavern there when news of Flemmi's arrest flashed across the television. Obviously surprised by the announcement, Weeks rushed out, jumped into his 1994 black Bonneville and drove off at breakneck speed. Agents who had been watching him in the bar gave chase, but lost the car as it roared south on the Southeast Expressway.
Five days later, James Ring, the former head of the FBI's Organized Crime unit in Boston and a member of the old guard, went on television to put a positive spin on settling for half a loaf with Bulger at large.
"Individuals who are fugitives," he said, "cannot operate a business. You can survive, but you can't be a leader and you can't operate a business."