Murder Retrial of Colombo Crime Family Enforcers Begins

Somebody out there knows who killed William “Wild Bill” Cutolo.  And if the guilty parties weren’t talking when a Brooklyn, N.Y. federal jury failed to reach a verdict last fall in the 1999 murder of the Colombo crime family underboss, they might be saying more soon.  At least that’s what federal prosecutors are hoping, as the retrial of Colombo boss Alphonse “Allie Boy” Persico and Cutolo’s replacement, former underboss John “Jackie” DeRoss, proceeds.  The case involves massive stock fraud, which in all likelihood helped fund a little-known, mobbed-up Manhattan-based labor union.  Union Corruption Update reported a year ago that the trial for the “disappearance” of Bill Cutolo ended in a hung jury after a five-week trial and five days of deliberation.  This time around, defense attorneys are up against a force they hadn’t had to deal with the last time around:  Cutolo’s family.    


Wild Bill Cutolo long had been part of the underworld.  A shakedown enforcer, he’d been acquitted in 1994 in the murder of a Colombo rival and conspiracy to kill outside rivals.  By late in the decade he’d fallen out of favor with Alphonse Persico, who had succeeded his imprisoned father, Carmine “the Snake” Persico.  On May 26, 1999, Cutolo told his wife, Marguerite, that he was off to a meeting with the younger Persico in the Bay Ridge section of Brooklyn.  He never returned.  After several days, it was clear his “disappearance” wasn’t voluntary.  His body was never found.  Prosecutors believe that the defendants had Cutolo murdered because they believed he was plotting to take over the family.  His widow thinks it’s highly unlikely her husband faked his own death.  “I’ve been distressed and depressed for eight years because I don’t know where my husband was,” said Marguerite Cutolo at the retrial in Central Islip, Long Island, N.Y. federal court.  “My husband never would have run away.”  She didn’t testify in the first trial because she had been in the FBI’s Witness Protection Program.   


Lawyers for Persico and DeRoss, each of whom were indicted in October 2004, suggested in the new trial that Cutolo faked his own death, and with his wife’s full knowledge.  They maintained that she stashed away cash obtained from her husband’s loan sharking racket.  She admitted that she hid $1.65 million in an air conditioning vent and moved it when the system was broken, and the repairman – who happened to be DeRoss’ nephew – came to fix it.  She took the money when she became a protected witness in February 2001.  “My husband told me, ‘If anything happened to me, you give them nothing,’” she testified.  DeRoss’ lawyer, Robert LaRusso, produced ledgers at the trial showing William Cutolo had $2.7 million at the time of his disappearance.  Mrs. Cutolo responded that her husband kept two sets of books – one for the Colombos and one for himself.  “I just know what I counted,” she said.  Where did all that money go?  “The government let me have the money,” she said.  “I had to take care of the kids.”  It happened that their son, William Cutolo, Jr., was a spendthrift as well.  And unbeknownst to his family, he’d been cooperating with the FBI at the time of the disappearance, bent on capturing the killers.


The Cutolo family may have been reckless spenders, but that in itself doesn’t exonerate the defendants.  Lawyers for Persico and DeRoss have to account for a few damning facts.  First, on the day her husband vanished, Mrs. Cutolo said, “I knew he was meeting Allie Boy.”  It was an unusual day to have a meeting, too, as this was Wednesday, a day Cutolo normally devoted to visiting his union office in Manhattan, getting a haircut, and dining with his crew at the Friendly Bocce Club in Brooklyn.  Second, DeRoss had visited the Cutolo home in Staten Island the day after Mr. Cutolo’s disappearance, and seemed less than in a grieving mood.  A federal prosecutor asked Marguerite Cutolo on the witness stand whether DeRoss seemed upset.  “Let’s put it this way,” she replied.  “There wasn’t a tear in his eye.”  And third, the couple’s daughter, Barbara Cutolo Cardinale, testified that she had good reason to believe Jackie DeRoss in particular was involved.  At the time she heard the news of her father’s disappearance, she immediately suspected the top of the Colombo family had ordered a hit.  DeRoss learned of her suspicions not long after that, visited her, and warned her to shut her mouth.  But her brother wore a wire, taping DeRoss menacingly reminding her that bad things could happen to her mother, children, husband and siblings if she talked to investigators.  “I was afraid that it would come back and I would get in trouble for it,” she told the court.  

There is a union connection in all this.  William Cutolo had been removed from the Teamsters back in 1990 for suspected mob ties.  More importantly, several years later he later founded another union, Local 400 of the Industrial & Production Workers Union.  The union, more than anything else, appeared to function as a place to park profits from a massive stock fraud scheme led by the late Frank Persico, Alphonse’s cousin, through a sham company called DMN Capital Investments, Inc.  The FBI busted the racket in June 2000 in Operation Uptick, arresting 120 persons, one of whom was Alphonse Persico; he wound up pleading guilty.  It was the largest stock scam in Wall Street history, involving the theft of around $50 million from investors.  According to court testimony, Alphonse met with John DeRoss to seek permission to divert $10 million from the Local 400 pension account toward financing the stock scam.  The money would have been forthcoming, too, were it not for the refusal of the fund administrator, Kathleen Joseph, to sign over the money.  It’s kind of difficult to imagine a new, little-known union somehow amassing this kind of wealth in so short a time.  That, among other incongruities, should be on the jury’s mind.  (New York Post, 11/8/07; New York Newsday, 11/9/07; New York Daily News, 11/14/07; other sources).