Federal law enforcement officers and a special unit of the Bayonne Police began operations in the early morning hours of May 15, gearing up for a series of raids that would result in the arrest of 14 people in a dramatic conclusion to an investigation started in Bayonne in 2004.
Witnesses saw the police vehicles parked in various parts of the city, on 30th Street and Broadway, uptown near the Quick Chek parking lot on 38th Street, and downtown near North Street in the Bergen Point part of the city.
Some of the vehicles contained local police, part of a special organized crimes unit set up by Police Chief Robert Kubert in 2004 to look into alleged illegal gambling and mid-level narcotics trafficking believed to be going on in the city. Others were members of the FBI, who began working with local police once the investigation began to stretch beyond the borders of Bayonne. Agents with FBI in large letters on their backs watched the street and waited for the command that would set them into action – part of a coordinated operation involving several towns.
Involved in the raids across the state were also members of the Monmouth County Prosecutor’s Office, special agents from the U.S. Treasury Department, and officers from the State Police.
In some ways the investigation had come home, since many of the people that these agents were set to nab once lived or still lived in Bayonne, including Joseph “Pepe” LaScala, who was an alleged “capo” and made member of the Genovese crime family, with a career dating back to an earlier generation of alleged organized crime in Bayonne, said Kubert.
But according to the federal criminal charges, the police were now directed to the various alleged criminal activities of a group of associates referred to in the federal complaint as the “LaScala Crew.” These activities included the alleged theft of goods and cargo, the receipt of stolen property in interstate commerce, extortion, illegal gambling, and the collection of unlawful debt.
Ring organization
According to U.S. Attorney Paul Fishman, the Genovese crime family of La Cosa Nostra operates out of smaller groups, sometimes referred to as “crews,” that work throughout northern New Jersey and elsewhere. Each crew was headed by a “captain,” “capo,” or “skipper.” Each captain’s crew consisted of “soldiers” and “associates.” The captain was responsible for supervising the criminal activities of his crew and providing the crew with support and protection. In return, the captain often received a share of the crew’s earnings.
According to Fishman, LaScala’s alleged crew included other current and former Bayonne residents such as Franklin Militello, Dominick Barone, Eric Patten, Michael O’Donnell, Mark Sanzo, Robert Scerbo, and Kenneth Baran. They often went by odd nicknames such as “The Flea” “Johnny Flu,” “EP,” “Harpo,” “The Fox,” or “Worm.” According to Fishman, all of them have been long under the supervision of the Bayonne special crime unit, which, in conjunction with other law enforcement agencies, used a variety of surveillance techniques to track their activities, such as allegedly operating an illegal gambling operation some local officials believe had been in business for years.
The sweep, conducted on one day in several municipalities, resulted in the arrest of 13 individuals and charges pending on several more.
“One suspect was out of the country, but has agreed to turn himself in when he returns,” said Kubert.
Bayonne residents Michael Healy and Keith Westcott, who were not arrested in the sweep, are facing pending charges, Kubert said, noting that the total number in what is being called “Operation Peps Boyz” is 16, with the investigation still ongoing.
Twelve alleged members and associates of the LaScala crew were charged on May 23 in connection with an illegal, on-line gambling operation, Fishman said, and all but one were charged with racketeering conspiracy
Four of the 14 suspects nabbed in the raids were living in Bayonne when FBI agents and Bayonne detectives raided houses across the city on May 22.
Bayonne residents Eric Pattern, 34, aka “EP”; Mark Sanzo, 53; and Kenneth Baran, 49, were taken into custody on May 22. Robert Scerbo, aka “Worm,” was still being sought as of press time.
Each of the defendants, with the exception of defendant Kenneth Baran, is charged with racketeering conspiracy. Baran is charged with transmission of wagering information, according to federal authorities.
“Today’s arrests serve as a stark reminder that traditional organized crime continues to operate in New Jersey,” said Michael B. Ward.
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Bayonne 2005: the investigation starts
Kubert said the investigation of the LaScala crew began in Bayonne in 2005 as a result of information obtained by the special crimes unit.
“Other law enforcement agencies got involved as we crossed into other jurisdictions,” Kubert said. This included Bergen, Union, Monmouth and Ocean counties.
The investigation mushroomed into other related cases, he said, that resulted in the arrest of groups of other individuals that were revealed as the Bayonne special crimes unit pursued this case.
“We were always interested in these people, but as the investigation went on, we found other situations that led to arrests,” Kubert said.
This included the arrest of more than 40 people in Monmouth County, and a short time later, about 15 others in Union County.
Lead by Bayonne Police Captain James Davis, the five-member special crimes unit continued to pursue LaScala, revealing aspects that indicated that the alleged operation was far more extensive than was first perceived, involving internet operations centered in Costa Rica.
The May 22 arrests were the culmination of the original investigation that started in 2005, Kubert said, noting that the Bayonne Police are pursuing forfeitures in case where there are vehicles, houses and other assets that are believed to have been obtained as a result of alleged criminal activity. This would be a windfall for the city’s police department because under federal law, local law enforcement can use such proceeds to help off set the costs of law enforcement purchases within the community.
Federal Authorities said the scheme involved alleged extortion, illegal gambling, theft and interstate transportation of stolen property.
Some of the defendants appeared before U.S. Magistrate Judge Mark S. Falk in Newark federal court late on May 23.
“The acts alleged in this criminal complaint show that traditional organized crime continues to pursue its bread and butter – illegal gambling, loan-sharking and cargo theft,” Fishman said. “The new wrinkle here is the use of off-shore sites and the Internet for processing bets. Law enforcement will use countermeasures that are just as sophisticated to bring these [alleged] criminal enterprises to justice.”
How the scheme allegedly worked
Members and associates of the LaScala crew and others, together with individuals that own and operate the website Beteagle.com, allegedly used the website to profit through the operation of an illegal gambling business in business in northern New Jersey and elsewhere.
High-level associates of the LaScala crew allegedly acted as agents of an illegal gambling business that was operated through the website. Before the advent of computerized betting, these alleged agents would be referred to as “bookmakers” or “bookies.” Through the use of a username and password, the agents allegedly accessed the website and tracked the bets or wagers placed by their bettors. This “electronic portfolio” was referred to as the agent’s “package.”
The agents also had the ability, through the website, to create packages for sub-agents. Sub-agents, who were also alleged members or associates of the LaScala crew, allegedly operated under the agent, maintained their own bettors, had access to the website related to their package, and were required to share their profits with the agent and ultimately with LaScala.
Bettors allegedly first received a username and password from the agent or sub-agent, which could be used to place bets. The bettor, however, did not use a credit card to either access the website or to pay gambling losses or to receive gambling winnings. The bettor usually was assigned or chose a player name, such as “Shark,” “Colt,” or “Ace.” The agent or sub-agent also established a betting limit for each bettor. The bettor allegedly used his or her user name and password to place bets through the website or over the telephone.
Many of these operations allegedly involved sports betting such as on football games.
Although the website, referred to as the “office,” was maintained in Costa Rica, the bettors allegedly either paid money for losses or received money for winnings from the agent, his sub-agent, or their co-conspirators in New Jersey. If someone was unable or unwilling to pay, the loss was allegedly converted into a debt with exorbitant high interest, and agents would allegedly use veiled threats and other means of extortion to collect the debt.
After the agent allegedly obtained money, usually in the form of cash, from his sub-agents or directly from the bettors, the agent kept a portion of the cash for himself and then allegedly distributed the remainder of the money through intermediaries to others, including members and associates of the LaScala rew and the individuals who owned and maintained the website.
The LaScala crew also allegedly profited by operating social clubs in northern New Jersey and elsewhere. At these social clubs, members of the LaScala crew allegedly profited through card games and other illegal games of chance.
The federal complaint also charges that the Lascala crew allegedly engaged in cargo theft and the receipt and sale of stolen goods in interstate commerce. The stolen goods were allegedly referred to by the members of the LaScala Crew as S.W.A.G. – Stolen Without a Gun.
“Today’s arrests serve as a stark reminder that traditional organized crime continues to operate in New Jersey,” said Michael B. Ward, the special agent in charge of the F.B.I.’s Newark office. “Bookmaking, loan-sharking, cargo thefts, and illegal gambling in social clubs are the staples by which organized crime funds further criminal activity. The use of Internet gambling and off shore locales demonstrates an evolution and increased sophistication, but the threat of force or violence to serve their purpose remains the same, as does the negative impact of organized crime on the citizens of this state.”