Colombo Cousin Dies, Leaves Heavy Unpaid Debt from Swindles

colombo-crime-family-wise-guysIn his extended family, Frank Persico was the smart one.  A college graduate and computer-savvy Wall Street stockbroker, he knew how to make money for clients, especially when those clients were members and associates of New York City’s Colombo crime family.  That acting Colombo boss Alphonse “Allie Boy” Persico was a cousin didn’t hurt his career.  Now that career has been fatally cut short.  This November, Frank Persico, 43, died of a heart attack, leaving behind more than $15 million in unpaid penalties from the many stock swindles he engineered years before.  The take from those $50 million or more in scams could have been a lot higher had he gained unfettered access to the $50 million pension fund of Local 400 of the Industrial & Production Workers Union where he had served as treasurer.   

Persico was among 120 persons across the U.S. arrested by federal agents in June 2000 in “Operation Uptick.”  Among the persons bagged were various members of all five Mafia families of New York, plus a union officer, Stephen Gardell, treasurer of the New York City Detectives’ Endowment Association.  Persico pleaded guilty the following year to conspiring to defraud penny-stock investors out of at least $50 million, an enterprise enhanced by the Internet.  Over its 10-month investigation, the FBI had bugged more than 1,000 hours of conversations, including those between Persico and Robert Lino, a Bonnano family capo.  Persico had received six cents of each share of mob-controlled stock through a sham company, DMN Capital Investments, Inc., which federal prosecutor Mary Jo White termed “fraud central.”  Through DMN, he controlled any number of New York and New Jersey brokerages.   


At least funds from Persico’s Industrial & Production Workers Local 400 weren’t involved.  It was a close call.  On June 1, 1999, Local President John Gannone, accompanied by Persico, walked into union headquarters in midtown Manhattan, demanding documents revealing the names of all principals connected to its pension fund.  But fund administrator Kathleen Joseph refused to hand over the names.  It was an act more courageous than she could have known at the time.  Only several days before, union Vice President and reputed Colombo underboss William “Wild Bill” Cutolo mysteriously disappeared.  He eventually would be declared legally dead.  In October 2004, Alphonse Persico and John “Jackie” DeRoss, Cutolo’s replacement, were indicted for murder and racketeering.  Two months ago, a jury in Brooklyn, N.Y. federal court announced it could not reach a verdict after a five-week trial and five days of deliberation.  


The death of Frank Persico, released from federal prison this summer after a five-year sentence, might hinder the prosecution, which is planning to file a motion for a retrial.  He left the world owing nearly $15.2 million in back penalties.  He was an expert in money management, but he also could have used a few pointers in anger management.  At a bail hearing, prosecutors noted that Persico had pulled out a gun and shot out a computer monitor, apparently infuriated over a $30,000 debt.  That sort of stress couldn’t have helped his health.  He leaves behind a wife, three children, and other family members.  (New York Sun, 12/14/06; other sources).