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Mafia To combat the Mafia's porn racket, the FBI launched MIPORN. The acronym combined the location of FBI front operations "Miami" with the subject of the investigation "pornography." MIPORN grew out of an investigation by the Dade County sheriff’s office in Florida in 1976. Two detectives from the office opened a retail pornography store and quickly found themselves enmeshed in a highly organized secret and nationwide industry. The two detectives turned for assistance to veteran FBI agent Bill Kelly, who'd covered the obscenity beat since 1962. Kelly persuaded his higher-ups to launch the federal investigation MIPORN. Two FBI agents Bruce Ellavsky and Patrick Livingston moved to Miami in September 1977. Operating out of Miami warehouse, they posed as a pair of sleazy porno film buyers for a company they set up called Golde Coaste Specialties. The agents later set up G&C Sales, Ltd., in the Grand Cayman Islands to lend credibility to the operation. Bruce Ellavsky, tall and handsome, used the undercover name Bruce Wakerly and Patrick Livingstone, short and balding became Pat Salamone. For thirty months (8/77 - 2/80), Bruce and Pat wore open-necked shirts, sharkskin suits, designer jeans, gold neck chains and diamond pinky rings. They drove around in rented Cadillacs, sometimes with a pair of beautiful women hanging on their arms, and boasted their drug dealing. To keep their credibility, they became "dupers," one who makes and sells unauthorized copies of films whose rights to distribution are held by others. The agents infiltrated the porn industry and dealt with top crime figures who pirated mainstream movies as well as producing and distributing smut. The future owners of VCA Russell James Hampshire (born 7/25/46) and Walter Gernert (best known as one of the Dark Brothers, Walter Dark) shipped illegally duplicated videos of mainstream films across state lines for their TVX Distributors boss Phillip Charles Bernstene. Because such theft cost Hollywood a billion dollars a year, mainstream distributors contributed much of MIPORN's $300,000 budget which funded the FBI agents' trips to pornographers and mobsters in every major US city including New York, Los Angeles, San Francisco, Las Vegas, Chicago, Pittsburgh, Minneapolis and Providence. When the wiseguys became suspicious and the lives of the FBI investigators appeared in danger, the undercover agents stopped paying their bills, which helped establish their credibility. Ellavsky and Livingston eventually gained the confidence of LA pornographer Rubin Gottesman who introduced the undercover agents to the industry. They gained these insights: Robert "DiBi" DiBernado, Theodore "Teddy" Rothstein, and Andrew "Andre" D'Apice ran Star Distributors of New York City - the biggest porn dealer on the East Coast. Owned by the De Cavalcante crime family in the '70s, the multi-million dollar conglomerate controlled bookstores, movie theaters, and publishing houses in New Jersey, Pennsylvania, Maryland, Ohio and Georgia. Star's biggest customer for decades was Reuben Sturman. The FBI, with assistance from other law enforcement agencies, documented deals between DiBernardo's Star Distributors and Reuben Sturman, Mike Thevis and Harry Mohney, among others. DiBi helped Sturman gain control of the porno trade on the West Coast by intimidating independent dealers and suppliers through threats and deeds of violence. Mafiosi like Dibi, as a rule, don't run businesses for the mob generally contents itself with a piece of the action. According to Jeremiah B. McKenna, general counsel to the New York State Select Committee on Crime, the mob's main interest in the New York sex business expresses itself through real estate deals. The Mafia leases buildings for ten years from legitimate owners and then subleases them to the fly-by-night operators of massage parlors, adult book shops, peep shows, at $110 - $130 dollars a day cash - double what other businesses would pay. "The shops close up and move on, but that lease stays there until the next fly-by-nighter comes along. The property is held for the sex industry," McKenna said. "A guy can't come in and start selling shoes because the money is too great." (Newsday 10/6/86) Star Distributors first came to the attention of law enforcement when it was a failing business which shipped product only for cash. But the company turned around after the arrival of mobster Robert DiBernado who had the "last word" in the company. He poured money into Star. DiBi had no experience in porn but he knew crime, owning Satellite Wheel Alignment, a Brooklyn company that dealt with stolen cars. Robert lived a hidden life. His suburban neighbors on Long Island knew only that this "real estate investor" who worked in Manhattan could afford a sprawling ranch home and white Mercedes. DiBi seemed a family man and a friendly man - he even coached Little League baseball. In April 1978, undercover FBI agents Ellavsky and Livingston attended a porn convention at the Fairmont Hotel in New Orleans, Louisiana. At a restaurant in the hotel, Rubin Gottesman of National Film Company, Los Angeles, introduced the agents to Star’s Teddy Rothstein who agreed to supply Golde Coaste Specialties with hardcore 8mm films, magazines and videotapes. Rothstein later introduced the undercover agents to his 8mm man Andre D'Apice who said the agents "would have no problem dealing with Mr. Rothstein or Dibi as long as you are 100% good people... but if you should cross Dibi there are plenty of people who would kill for him." D’Apice, a former loan shark and dope dealer, was third in command at Star. Born in 1940, he once told police that he’d "come out shooting" next time anyone tried to arrest him. Norman Arno owned S & L Distributors of Los Angeles. He met with the undercover agents in May 1978 after Arno's employee Tim Burns had dealt with Ellavsky and Livingston for eight months without trouble. Arno said he was dealing with Rubin Gottesman of National Film Company, Los Angeles, for pirated video cassette copies of major mainstream motion pictures such as Jaws. Agent Ellavsky gave Arno a check for $3000. Norman said he'd send Bruce a "phony" invoice for payment of $3,000 for magazines. Arno wanted the remaining $3200 in cash so he would not have to report it as income. Norm said he didn't want any calls concerning mainstream videotape cassettes over his telephone at his home or business. He said that arrangements could be worked out whereby he'd call the agents from a pay telephone to get their orders. Arno said he'd been reluctant to tell the agents he dealt with pirated movies as this violated federal copyright statutes. He said that there'd been a lot of activity by the FBI recently and that several producers of pirated films had been "busted" and now worked for the FBI. Arno, a huge coke user like Harold Lime, rarely bathed. Hookers usually charged him three times as much as other customers because he was so vicious and filthy. During a week in Honolulu, Norm met a rare prostitute returned to him the next day. And the next. He decided it was love. They married. In the early 1980s, Norm's whore-wife placed their two young children in a running car in the garage to die from exhaust fumes. Arno never recovered from their death and his wife's conviction and incarceration. The founder of porn's first major adult video company, VCX, died in November of 1994 after a long illness. In February of 1979, undercover agents asked Gottesman for a print of Debbie Does Dallas, which Rubin had seen the night before. The LA pornographer told them he wouldn't even consider doing this because he wanted to remain healthy. Gottesman said Zaffarano, a former bodyguard for godfather Joseph Bonanno and an associate of strong man Carmine Galante, would not hesitate to use muscle if he believed someone was bootlegging his movies. On March 23, 1979, Gottesman told the agents that in the past an individual who'd pirated hardcore movies was "hit in the head." On Valentine's Day, 1980, at noon (EDT), 400 FBI agents swept into porno movie theaters, warehouses, retail stores and offices in 13 major U.S. cities, arresting many of the mob's biggest names in porn on federal obscenity and racketeering charges. Among the 58 persons arrested (33 from California) were brothers Louis and Joseph C. Peraino - rounded up in the New York office of their company Arrow Film and Video. They were charged with interstate shipment of obscenity in the form of hardcore videos titled Candy Stripers, Liquid Lips, His Master's Touch and Hollywood Cowboy. Michael Zaffarano was the one casualty. When officers arrived at his New York office, 58-year old "Mickey Z." suffered a heart attack and died on the spot, clutching a reel of pornographic film that the officers presume he was trying to destroy. "We killed him for sure," said one policeman at the scene, "and we saved the taxpayers a lot of money." The tabloids noted that none of Big Mickey’s neon displays on Broadway darkened for a moment in his honor. Zaffarano's death created a power vacuum in organized crime's now international porn operations, touching off maneuvering among the main Mafia families for dominance of the sex trade. In November of 1981, Joseph S. Peraino, 55 years of age at the time, was wounded outside his Brooklyn home by men armed with 9-millimeter handguns. A member of the Colombo family, Joseph was one of the major figures behind Deep Throat. On January 4, 1982, Joseph's competitors struck again, chasing him and his 31-year old son Joseph Jr. down a street in the residential section of Gravesend in Brooklyn. The pursued men screeched to a halt at 431 Lake St. and ran up the stairs onto the front porch of a modest brick duplex. The Perainos pounded on the door seeking refuge until a barrage of gunfire cut them down. The father was seriously wounded in the buttocks and legs; the son was hit six times in the head and killed. An innocent bystander was also killed. As Joseph S. Peraino lay bleeding, with his murdered son at his side, he refused to tell police who fired the shots, what kind of car they drove or which way they went. Joseph remains paralyzed from the shooting and lives in Florida. He hates the rest of the Perainos. Joseph's son Bruce died of cancer. For their convictions in the MIPORN case, Louis Peraino and Joseph C. Peraino received prison terms of six and three years. They were not charged with film piracy, even though police found more than 50 major Hollywood movies at their Arrow offices as well as equipment capable of reproducing them in quantity. The list of films confiscated included most of the box-office hits of the previous decade - Animal House, Kramer vs. Kramer, The Sting, Star Wars and The Godfather, Parts I and II. Looking tired and short of breath, Anthony Peraino was sentenced that same month in Memphis to ten months in prison and $15,000 in fines for his original 1976 Deep Throat conviction and subsequent bail-jumping charge. After five years as a fugitive, the ailing Peraino family head turned himself in to authorities in 1981. The shootings and convictions marked the end of the Perainos dominance in porn. As part of their sentence, they were supposed to abstain from all dealings in the masturbation business. They didn't. Instead, they hid their work through false names and dummy corporations. In late 1996, the Perainos sold their porn production company Arrow to Ray Pistol of Las Vegas. Anthony Peraino died soon after. Butchie Peraino died of lung cancer in 1999. MIPORN prosecutors convicted numerous pornographers such as Russ Hampshire and Walter Gernert for shipping illegally duplicated videos of mainstream movies across state lines. The mob forced the sale of pirated tapes through the video dealers they controlled. Movies such as Superman II, Star Wars, and Close Encounters of the Third Kind, for example, made fortunes for the thieves who copied them and offered them for sale on tape. Another charge leveled was that since these criminals presumably controlled much of the video cassette distribution of adult films, they violently suppressed the pirating of their own films. About 50 pornographers have been knocked off by the mob since 1969. The government initially gained convictions of 49 out of the 55 pornographers arrested in MIPORN through the effective work of Fort Lauderdale prosecutor Marcia Cohen. When she took time out to have a baby, a less competent prosecutor took over one of her cases, allowing Ken Guarino to escape conviction. Undercover agent Pat Livingston's
arrest in 1982 for shoplifting damaged his credibility on the witness
stand and complicated the MIPORN prosecution. "I've known Pat since he
was an 18-year old clerk," says Bill Kelly. "Years of working undercover
affected him as he began to model the gangsters he impersonated. Pat did
a lousy job on the stand during the MIPORN cases, changing his stories
and appearing shifty. That allowed six pornographers, including Sturman,
to go free." Bill Kelly remembers: Pat Livingstone was hired as a clerk, just out of highschool, by the FBI in Miami. Excellent employee, hard worker, smart little guy. He was short, almost bald, bowlegged, had a lisp. But tough. Ran marathons. He joined the FBI's agent training school with Bruce Ellavsky who used to look like a movie star. Then in 1977, two Dade County detectives started their own undercover operation to nail pornographers. It got to be too big for them so they came to me to have the FBI take it over. We spent about $488,000 over two-and-a-half years on MIPORN. Patrick and Bruce came down to me in August of 1977 and I trained them. I told them who their targets should be. I told them not to ask for child porn, they'll know you're a cop. And don't pay $60 for a tape that you can get wholesale for $40. And after a few weeks, they went out. We had an electronics genius named Van Ryan who wired their office beautifullly with sound and video cameras. Livingstone and Ellavksy traveled the country for two-and-a-half years. They went to Hawaii to catch a child pornographer. He wound up leading guilty and got 20 years, the most substantial conviction we got. They made 20 trips to Los Angeles, staying first class. I would follow them to porno conventions to harass them and give them extra credibility with the underworld. If I had the opportunity in a hallway or a stairway with other pornographers watching, I would deliberately bump them in the shoulder and try to knock them down. And I'd say, 'You guys are from my hometown. I don't like pornographers from Miami.' They spent a lot of money on rented jewelry, apartments, buying drinks. Everybody took the bait except two pornographers in Palm Beach who were [Gambino family] associates. And these two guys said to Ellavsky and Livingstone, 'No way. You guys are either FBI agents or you're working for Kelly.' And they were right, but everybody else took the bait and sold obscenity to these guys because they were greedy. We originally targeted over 100 figures for MIPORN but the Justice Department chickened out on us and made us reduce the number to 55. Forty nine were convicted. Ellavsky and Livingstone were praised to high heaven as the heroes of the operation, which they were. They lived in constant danger for a long time. Ellavsky went to Boston. All of us could tell Livingstone was mentally disturbed. He was not the guy who went into MiPorn. He was aggravating. He would not answer calls. I had to mediate an almost fight fight between him and one of the prosecutors. He was off the edge from February, 1980. His undercover name was Pat Salamone. The FBI agent in charge of Louisville was told Livingstone was mentally affected by working undercover and he should never work undercover again. First thing when he gets there, an undercover assignment comes up and he volunteers for it. I would say Pat Livingstone became his undercover identity. In November of 1981, while on assignment in a suburb of Louisville, he shoplifted $150 worth of clothes while he had his four year old son in the parking in an FBI car. When he was arrested and the police took him away, he gave them his name Pat Salamone. That destroyed his credibility for the MIPORN cases. We had a four day hearing with Judge Spellman about Livingstone and his credibility, and Pat wouldn't give the judge a straight answer. The judge would say, 'When you went into that department store and was arrested, were you Pat Salamone or Pat Livingstone?' And Pat would say, 'Oh gee, I don't know, your honor. I could've been this. I could've been that.' The judge finally gave up and said, 'Well, all of your credibility is gone.' We had to re-indict all 55 defendants just based on the testimony of Bruce Ellavsky. As far as I know, Pat Livingstone never fully recovered. His life and that of his family was destroyed. He was finally given a mental disability by the labor department and trained to be a polygraph operator. When you're dealing with people in the Gambino and Colombo families, you're naturally in danger. These guys will kill you, along with some of the California people. They [Livingstone and Ellavsky] were travelling, always in dangerous situations where they would go face to face with some of these dangerous hoodlums. They couldn't carry their guns with them when they're going to meet these people. Every place they went, they'd rent two apartments or rooms. They would have an undercover room in one hotel and an FBI room in the other hotel. One thing the pornographers tried to do was stick prostitutes on them as favors. That would be terribly embarrassing if it turned out in court that these two guys were having sexual liasons with hookers that the pornographers gave them. Eventually they got two nice looking FBI lady agents, fortunately we had some at that time, to travel with these guys as their girlfriends. I saw these guys on the road and they played their parts to the hilt. |