See also Russ Hampshire, Mark Carriere, John Stallion, Joseph Abinanti, Ted Snyder, Bobby Genova, Jimmy Caci, Kevin Beechum, Michael Esposito, Reuben Sturman, David Sturman, Mel Kamins, Teddy Rothstein, Tommy Sinopoli, Milton Luros Norman Arno Vincent DeStephano
Organized crime plays a significant role in the sex industry. For instance, it dominates porn duplication and distribution.
Numerous American law enforcement agencies during the 1970s and 1980s declared that the Mafia controlled porn. See for example: (1) U.S. Department of Justice, Attorney General's Commission on Pornography, Final Report (particularly pages 1040-1240), Washington, 1986. (2) Gary Potter. "The Porn Merchants" Kendall Hunt. Dubuque, Iowa. 1986. (3) Series in the LA Times Calendar section on the Perainos, 6/13/82 and 6/20/82. (4) Parade magazine 8/19/79 (5) Forbes magazine 9/18/78 (6) report by the Task Force on Organized Crime published by the Law Enforcement Assistance Administration as quoted in the 1/30/84 Congressional Record – Senate, beginning on page 845. (7) Anthony Fiato's 1998 book, "The Animal In Hollywood."
"You cannot be in the field and distribute pornography without their consent," said FBI agent Homer Young in 1986. (Meese Commission, p. 1040)
The owner and operator of an "adult" bookstore, and veteran of the porn trade, provided similar testimony to the 1986 Attorney General’s Commission on Pornography (best known as the Meese Commission after President Reagen’s attorney general of the time Edwin Meese).
Interviewer: "If the mob says, 'I do not want this, boy.'"
Subject: "You don’t sell it. Even if they don’t even talk to you. You’re not going to sell it nowhere. If you go to the store on 14th street and put in there, they’re gonna bust his ass. Or they’re gonna break your legs when you start going through them. There was a man who went from New York City…went into Atlanta. Had films to sell… They found him at the airport, with a $5,000 Rolex watch on and about eight grand in his pocket, and four rolls of film in his hands, with his head blown up in the trunk of his car. Nobody robbed him, nobody took a dime off him. They didn’t even take the film. But he was at the airport with a New York ticket shoved in his coat pocket. Don’t come down from New York, selling unless you’ve been sent down." (Meese Commission p. 1041)
Examination of the porn industry’s distribution structure leads many to believe that organized porn is simply another face of organized crime. For instance, the Organized Crime Division of the Washington D.C. Police Department said in 1978: "The pornography industry is characterized by a vertical distribution and a pyramid structure with a limited number of documented distributors within individual states. Porn is initially supplied to national distributors who then sell to inter-state distributors who in turn distribute to intra-state distributors.
"This limited number of pornography distributors may indicate the lucrative profits in the distributorship and production of porn with the capability of dictating prices to independent bookstore owners. As an example of high profits... A magazine can be produced for approximately fifty cents; wholesaled for five dollars and retailed for ten dollars. This computes to a 1900% profit production to consumer sale. In general, there is no competition or price wars, which indicates price control." (Organized Crime’s Involvement in the Pornography Industry, Investigative Services Division, Metropolitan Police Dept., Washington, D.C..1978.)
The report revealed the methods used by the Mafia's pornographers to avoid detection by law enforcement:
1. Names of corporate officers are used without the individual's knowledge or consent.
2. Notary Publics are employed to notarize signatures without confrontation of signees.
3. Rubber stamps of signatures are used without the authorizing individual's knowledge.
4. Corporate names are constantly changed.
5. Controllers do not appear on corporate papers but are major stock holders.
6. Pornography entrepreneurs appear as corporate officers for a legitimate business which may have pornography distributors as subsidiaries.
An Investigator with the Solicitor General's Office in Fulton County (Atlanta), Georgia, Robert K. Abel, said in a report at a seminar on obscenity conducted by the National College of District Attorneys in November of 1981: "The tremendous profits that are made (by organized crime) in the pornography business are used in several ways.
"1. A large portion of the profits are taken by the top people within the organizations in the form of salaries and fringe benefits.
"2. Much of the money made stays within the organization because of constant expansion and the large overhead costs of maintaining warehouses, stores, inventories...
"3. Money is invested in legitimate businesses such as real estate, record companies, night clubs, restaurants and others.
"4. A percentage of the profits is funneled into other illegal ventures including drugs, gambling and loan sharking."
Retired FBI agent William P. Kelly told the Meese Commission: "In my opinion, based upon twenty-three years of experience in pornography and obscenity investigations and study, it is practically impossible to be in the retail end of the pornography industry without dealing in some fashion with organized crime…" (Meese Commission)
Officer Thomas Bohling of the Chicago Police Department Organized Crime Division, Vice Control Section reported, "it is the belief of state, federal, and local law enforcement that the pornography industry is controlled by organized crime families. If they do not own the business outright, they most certainly extract street tax from independent smut peddlers." (Ibid. p. 1048)
Los Angeles Police Chief Daryl F. Gates told the Meese Commission: "Organized crime infiltrated the pornography industry in Los Angeles in 1969 due to its lucrative financial benefits. By 1975, organized crime controlled eighty percent of the industry and it is estimated that this figure is between eighty-five to ninety percent today." (Ibid)
Based upon such evidence, the 1986 Meese Commission echoed the findings of such earlier reports as the 1978 FBI Report Regarding the Extent of Organized Crime Involvement in Pornography:
"In conclusion, organized crime involvement in pornography…is indeed significant, and there is an obvious national control directly, and indirectly by organized crime figures of that industry in the United States. Few pornographers can operate in the United States independently without some involvement with organized crime. The huge profits gathered by organized crime in this area and redirected to other lucrative forms of crime, such as narcotics and investment in legitimate business enterprises, are certainly cause for national concern…" (Meese, p. 1070)
A police captain in Fayetteville, North Carolina, warned the Meese Commission: "Left unchecked, organized crime can suck the lifeblood out of a community. Many times, their enterprises have been viewed as "service" oriented or victimless crimes. However, it tears at the moral fiber of society and through unbridled corruption, it can weaken the government." (Meese, p. 1071)
Through the early 1990s, many organized crime experts considered the American Mafia aka Cosa Nostra (means "our thing") the most dangerous criminal organization in the world. (Goombata, 1992.) "In the past few decades, when every other social institution in America has either been shattered or changed forever, the Mafia has continued to thrive," write the authors of Goombata, a 1992 book on Gambino family leader John Gotti. "Like a virulent parasite, it has adapted to the host body, fastening on whatever the law or social convention allowed: organized kidnapping was abandoned for rum-running during the Prohibition, bootlegging was replaced by the black market during World War II, which was replaced by illegal gambling and narcotics trafficking, and so on."
A direct descendent of the Sicilian organization transformed by US mores and modern corporate methods, the American Mafia is a coalition of 24 separate groups (each known as a "family") who mainly reside in New York. Families are composed of "made men" (those sworn into the family, probably no more than 2,000 in the U.S.) and "associates" (those who work actively with the Mafia but have not been sworn in). In the early 1990s, law enforcement estimated Cosa Nostra’s annual income at $60-$100 billion. A substantial part of that comes from the sex trade, of which porn is a significant component.
Organized crime began its infiltration of the porn industry when porn became an industry - the 1960s. Grand juries in New York and Bexar County, Texas said in the early '70s that organized crime controlled 90% of America's hardcore pornography business.
In his 1986 book Porn Merchants, Professor Gary W. Potter of the Administration of Justice department at Pennsylvania State University, wrote "that any business that offers such a large flow of hard cash, little competition from "respectable" businesses, and a clandestine environment, would inevitably attract organized crime."
Cash businesses such as porn allow the mob to introduce money earned from drugs and other illegal schemesinto the general economy. Joseph, Anthony and Louis Peraino, for instance, used profits from Deep Throat to build a vast financial empire in the 1970s that included, according to the FBI, "ownership of garment companies in New York and Miami, investment companies... The Perainos also may have used profits from Deep Throat to finance drug smuggling operation in the Caribbean." (LA Times 6/13/82)
The Peraino family, the Mafia's leading direct producer of porn, emerged out of the bloody Brooklyn gang bang of 1931 known as the Castellammarese War. Named for one of the factions - immigrants from the town of Castellamare del Golfo in Sicily - it was the first great Mafia power struggle in America. Such legendary mobsters as Lucky Luciano and Vito Genovese rode to power on the killings.
Among those who died was Giuseppe Peraino, a member of the Profaci crime family which became part of the Colombo family. Giuseppe left a wife Grazia and two sons, Anthony, 16, and Joseph, 5, who later produced and distributed the most profitable film of all time - Deep Throat. In the same year as his father died, a prosecutor charged Anthony with committing homicide by auto. As with his next six arrests, Anthony escaped conviction.
Law enforcement considers the late Anthony and his brother Joseph as "made" members of the Colombo crime family. Officers call the brothers "Big Tony" and "Joe the Whale" for they each weigh about 300 pounds.
An initiated member of the Colombo Mafia family in New York, Anthony Peraino jumped in at the start of the burgeoning porn business, which became organized crime's biggest new moneymaker after drugs. Pornography has been at least a billion dollar a year business since the early 1970s. Law enforcement estimates the Mafia's take approaches half.
In the late 1960s, Peraino and the Colombo family led Cosa Nostra into porn. John "Sonny" Franzese, a Colombo member, began supplying 8-millimeter hardcore stag movies to the coin-operated peep show machines in sex shops around New York's Time Square. The Colombo family soon controlled its own plant for processing 8mm movies - All-State Film Labs in Brooklyn. Anthony Peraino's 26-year old son, Louis "Butchie" Peraino officially owned the lab. A capo in the Bonnano crime family, Michael Zaffarano AKA Mickey Z. ran All-State's porn operations.
Anthony Peraino and Michael Zaffarano dominated distribution of loops to Mafia-controlled outlets in New York City. According to the FBI, they sold their films secretly out of automobile trunks, coffee catering trucks, unmarked warehouses, several restaurants, a chain of meat markets and a Brooklyn candy store. Their primary sales representative was Cosmo Cangiano from Brooklyn, whose arrest record included larceny, forgery, mail theft and interstate shipment of stolen securities. Cangiano became "a millionaire at least four times over" from a variety of illegal activities, according to the sworn affidavit of an FBI agent who monitored the operations of Peraino and Zaffarano for five years. Besides selling porn to customers in New York, Pittsburgh, South Carolina, and Baltimore, Cosmo dealt in counterfeit Chanel perfume, Omega wristwatches, Department of Motor Vehicle documents and such false identification as licenses, registrations, birth certificates and Social Security Cards. (LAT 6/13/82)
Louis Peraino entered the legitimate movie business through All-State Film Labs. When he presided over Bryanston Distributors in its Hollywood heyday, a company brochure said it all began in 1965 when "Mr. Peraino combined a hobby and a deep interest in cinema techniques by forming his own motion-picture processing laboratory All-State Film Labs, specializing in processing and editing facilities and high-speed animation..."
Law enforcement investigators consider Louis, along with his older brother Joseph S. Peraino, a Colombo family "associate" rather than a "made" member. One veteran investigator echoes the consensus among his peers when he says of Louis, "His grandfather was in organized crime, his father is in it, his uncle is in it, his brother is in it, so he's in it. That's the way it is. You don't get out."
That "You don't get out" theme flows through the romantic Godfather saga, the book and movie that defines the Mafia in the minds of millions of Americans. "A scene right out of The Godfather" was a common refrain amongst those who talked about Louis to the LA Times for its 1982 piece on the Perainos. Many described Louis as a Michael Corleone figure - the brightest of the Peraino men who's driven by a desire for respectability. Actor Al Pacino portrays Michael Corleone, the college-educated favorite son of Mafia boss Vito Corleone (Marlon Brando), in Francis Ford Coppola's Godfather movies. Michael wants no part of the family business but gets sucked in after his father is shot and ultimately becomes the godfather.
"There is nothing ominous about Butchie Peraino," movie producer Frank Avianca told the 6/13/82 LA Times. "He's a big teddy bear." Peraino financed and distributed Avianca's 1975 movie The Human Factor, and Sandy Howard's The Devil's Rain and Echoes of Summer. "Lou wanted to make an image for himself as a decent man," says Howard. "He tried to build a legitimate business."
Movie distributor Fred Biersdorf says "Louis Peraino was the best, the nicest guy. You'd think that you hadknown him for years when you first met him." Biersdorf distributed all of Peraino's legitimate movies in the Southwest U.S.. "It was the best business relationship I've ever had."
Linda Lovelace gives a different picture of Butchie in her 1980 bestseller Ordeal. Louis was "heavy and sloppy... What I remember most about him was his loud mouth. He was always yelling at somebody about something. And he never went anywhere without his bodyguard, Vinnie."
The Perainos didn't know what to do with the large profits they received from Deep Throat. "Here were a couple of guys from Brooklyn who never had much money before and all of a sudden they're millionaires," a lawyer who represented the mobsters told the 6/13/82 LA Times. "The amount of money coming in was frightening. Nobody could have handled it. Whatever you've heard about how much Deep Throat earned, it's underestimated. I'd say that $100 million in gross income would be underestimated, and most of it was cash."
Dallas-based movie distributor Fred Biersdorf remembers the heady days in Louis Peraino's New York office at 630 9th Ave. "You just wouldn't believe the calls that Lou was getting from people who wanted a print of the movie to watch. Prominent people, government officials. And I remember that whenever somebody's secretary would call for them, Lou would get on the phone and say, 'Hey, if he wants a print then he can damn well call me himself.' There were dozens of phones on the table. And at 9 o'clock in the morning there was all this food - sandwiches and cole-slaw and bottles of wine. And Nicky and Dicky were coming in and whispering in his ear and it was unbelievable, out of The Godfather." (Ibid.)
A 1975 LAPD memo said that the success of Deep Throat prompted a large migration of major New York mob figures to Los Angeles. The report warned that, once established in porn, the mob's next logical move would be into the legitimate Hollywood movie business. And that's what happened.
In September of 1973, a Hollywood showbiz paper announced that "two New York businessmen" named Louis and Joseph Peraino had established "a major new film production and distribution company" called Bryanston, with plans for making "at least 10 feature motion pictures within the next year."
The Perainos established Bryanston in July, 1971, shortly after creating Damiano Film Productions. The two were "twin companies engaged in the financing, acquisition, production and distribution of motion picture film products of every kind, nature and gauge," according to a joint company prospectus that Louis Peraino prepared for a New York bank. Damiano made porn while Bryanston went legit.
One of the first movies that Bryanston financed and produced in-house (for $600,000) was The Last Porno Flick, released in August, 1974 as The Mad, Mad Moviemakers. Two cab-driving buddies raise $22,000 to make a porno by telling their Italian family and friends they're making a religious movie. Complications arise when the porno becomes a hit. The film, which bombed, also features a Brando-esque Mafia boss. The Last Porno Flick pokes fun at the Perainos experience with Deep Throat, which cost them $22,000 to make. According to a Bryanston press release, the film was "based on a story and concept by Joseph Torchio."
As Louis Peraino took his share of Deep Throat profits and turned his attention to mainstream movies in 1973, father Anthony and uncle Joseph took over the distribution of Throat, shifting the base of operations from New York to a network of companies in Miami. But Louis oversaw LA area distribution of the porno even as he pursued success in Hollywood. One of his key Throat reps was former Brooklynite Joseph (Junior) Torchio, described by one LAPD investigator as "the best-known trunk-buster (auto break-in artist) in New York." In 1973, Joseph became Bryanston's director of finance.
Torchio first came to the attention of police in 1969 when, on March 14, he set up the shooting of Mafia associate Alfred Adorno. Junior, who didn't appear to have an IQ above room temperature, moved to LA later that year and set up a porn production company with William Amerson and Jacob (Jack) Molinas, described in a California Department of Justice report as a "con man, swindler, disbarred attorney and former pro basketball player [Fort Wayne Pistons]."
An All American at Columbia University in the 1950s, Molinas was convicted in 1963 as the "master fixer" in a point shaving scandal that rocked college basketball in 1961. After his release from prison in 1968, Molinas moved to Los Angeles and entered porn. He dealt with several known figures in organized crime including Michael Zaffarano. Torchio and Molinas received loans of $250,000 from Louis Peraino in 1973 and 1974, on which they defaulted. With partner Bernard Gussoff, Molinas used his money to set up a fur importing company called Berjac as a front for distributing porn.
In September of 1974, Bryanston filed a lawsuit against Molinas for non-payment of the loan. Two months later, Gussoff was beaten to death in his Los Angeles apartment. The murder was never solved. Less than a year later, in August, 1975, Molinas was shot and killed as he stood with his girlfriend in the backyard of his Hollywood Hills home. Three weeks later, Torchio, a day before he was scheduled to talk to the feds, was struck by a car and killed on the Las Vegas strip. All three murders appeared to be mob hits.
In 1974, trade papers like Daily Variety heralded Louis Peraino's Bryanston as the hottest independent distribution company in the motion picture industry. In October, 1974, the company rode a crest of hits: Andy Warhol's Frankenstein, Return of the Dragon and The Texas Chainsaw Massacre. With Chainsaw and Throat, Louis produced the sex and violence trendsetters of the late 20th Century.
A prominent movie producer recalled a business meeting with Louis, saying "I didn't know if I was negotiating for my picture or my life." During a disagreement, "There were threats made against me... My nose was threatened, my ears..." One respected studio executive was unnerved when an LA Times reporter called to ask him about an experience he had with Perainos. "No way," the executive said. "As far as I'm concerned, this phone call never happened." Then he hung up.
Director Tom Hooper, who made The Texas Chainsaw Massacre, and Poltergeist, begged off an LA Times interview about the Perainos and Bryanston. "All I know is that about two months after Chain Saw was released, I heard a rumor that Bryanston was a Mafia operation... If these guys are behind door No. 1, then who's behind door No. 2 or door No. 3?" Other movie makers describe Louis Peraino - who was arrested in Brooklyn in 1971 for chasing his wife down the street with a gun - as a warm family man.
Al Ruddy, who produced The Godfather, made a 1975 animation feature Coonskin that was distributed by Bryanston. "I knew Lou had done Deep Throat and I know that pornography is generally controlled by certain people. It didn't matter to me."
It didn't to most persons in Hollywood who did business with the Mafia front company. Many knew about it, but few cared.
Paramount financed Ruddy's Coonskin. In an unusual move that smelt like a payoff to the Mafia for their cooperation with the filming of The Godfather, the Barry Diller operated company gave the picture to Bryanston to distribute.
In a 1976 confidential memo, the California Department of Justice placed Bryanston at the top of a list of "key corporations," believed to be "controlled" by the mob. "It appears that Bryanston coordinates the nationwide distribution of full-length films for organized crime."
Not only does Hollywood like the Mafia, but the Mafia likes Hollywood. Show biz is not only fun, but a great way to launder money. Most movie makers will do anything to get financing for their projects, and couldn't care less about using proceeds from drugs. Because the law requires reports to the IRS on all cash transactions in excess of $10,000, the immense profits of organized crime cannot be deposited in a bank. Instead, criminals clean their money by passing it through legitimate cash businesses like bars, parking lots and movie companies.
An FBI agent told the LA Times that Hollywood doesn't care about dirty money. "If you find that, in general, the people who should be your witnesses are not willing to give you the sweat off their brow, then you realize that you are faced with a situation where there is a community acceptance of a set of standards that might be offensive in some areas, but not here. And we have to look at it that way, just like we look at pornography, based on community standards. Unfortunately, we have a set of standards about how to finance motion pictures in Hollywood that is incredibly lax. In the last ten years or so, we've made six or seven efforts to try to ferret our allegations of organized crime in the movie business. And we got zero support from the industry. They don't view it as a threat. It's good money to them. It's a way of life, condoned, even embraced. Nobody wants to expose it." (LA Times 6/15/82)
The Perainos distributed Deep Throat between 1973 and 1976, using "checkers" and "sweepers" who traveled the country changing aliases and meeting secretly in hotel rooms and public restrooms to exchange information and cash. Federal agents shadowed them, as they had all of the Perainos' porn operations since 1969.
In August, 1974, a federal grand jury in Memphis indicted Louis Peraino, along with his father Anthony and uncle Joseph on charges of transporting obscene materials (Deep Throat) across state lines. Damiano Film Productions also was indicted but not Damiano for he no longer held an interest in either Deep Throat or the production company.
"With a gun at this head" as one porn distributor put it, Damiano sold his interest in the movie to Louis Peraino in July, 1972, for $25,000. When a reporter said to Damiano that he'd received a lousy deal, Damiano replied, 'I can't talk about it.' When the reporter persisted, Damiano said, 'You want me to get both my legs broken?'" (New York Times 10/12/75)
A few years later, when mainstream director John Landis of Kentucky Fried Movie, Animal House and Blues Brothers fame became interested in shooting a porno, even hiring porn star Terri Hall whose emergency appendectomy postponed the shooting, he received a visit from two goons who told him to stay away from the biz if he knew what was good for him. He did.
In a front page article on the mob's infiltration of the porn industry 10/12/75, New York Times journalist Nicholas Gage described brothers Anthony and Joseph S. Peraino as the "most successful of all Mafia figures involved in the production and distribution of hardcore films. Moreover, the great success of these pornographic films has given several porno movie makers with Mafia connections the money to go into the production and distribution of legitimate motion pictures.
"Louis Peraino has used profits from Deep Throat to help establish a company called Bryanston Distributors, which has become a major distributor of legitimate motion pictures.
"A spokesman for Louis Peraino insisted that neither his father Anthony nor his uncle Joseph is in any way involved in Bryanston."
A day later, a similar report published in the New York Post, headlined "How the Mob Moved Into Times Square" linked Louis Peraino to the Mafia, identifying him as a "reputed" member of the Colombo crime family.
Former Bryanston publicist Patty Zimmerman says that the company's Beverly Hills Office didn't receive a single inquiry from the West Coast media following the New York articles. Nor did the articles cause much of a stir among Bryanston employees. "I didn’t want to know anything more than I needed to do my job," said one employee. "I didn’t ask people who came into the office their business..."
Two months later, Variety published a long and upbeat report on Bryanston, making no mention of Deep Throat, the coming Memphis trial or the NY newspaper allegations. The trades gushing coverage of Bryanston peaked in January 1976 in a Variety article headlined "Bryanston Expanding Its Operations": "The Bryanston operation is seeking out producers and talent who may have the idea but lack either the capital or the deal. Company appears willing to look at anything beyond the fringe and take chances accordingly."
Along with Harry Reems and eight other defendants, Anthony, Joseph and Louis Peraino went on trial in Memphis on March 1, 1976. Prosecutor Larry Parrish, an assistant District Attorney, put together his case with help from the FBI, the IRS, and the U.S. Justice Department organized-crime strike forces in Brooklyn and Miami.
The government spent a million dollars to protect the moral standards of the citizens of Memphis. Or so it seemed. But Bruce Kahmer, the attorney who represented Harry Reems in the case, says that "it wasn't an obscenity trial at all - it was a racketeering and tax evasion trial." After the case, Parrish took over the Brooklyn Strike Force which only investigates organized crime.
The prosecutor spent most of the trial describing how Deep Throat's distribution system worked. He called more than 50 witnesses who'd worked for the Perainos. Parrish supplemented the testimony with charts and graphs of the operation, leading the jury through the maze step by step. Defense attorneys offered little opposition to the government's description. Instead, they concentrated on the issue of Deep Throat's supposed obscenity.
The prosecution showed that after the film's New York debut in June 1972, the Perainos distributed Deep Throat in the regular fashion through shipping prints to theaters by U.S. Mail and Parcel Post. Even though it was a federal crime to transport an obscene movie across state lines, the risk of prosecution seemed slight because the law contained no precise definition of obscenity. But this changed dramatically in June, 1973, when the U.S. Supreme Court handed down its landmark "community standards" decision on pornography.
In a five-to-four decision largely dictated by the four Nixon appointees, the High Court removed from the language of the law the "utterly without redeeming social value" phrase that had long been the favorite loophole for pornographers. As a result of the new law, any prosecutor wishing to ban a sexual work no longer had to prove that it was "utterly without" value; it merely had to be lacking in "serious literary, artistic, political or scientific value" to be considered obscene. In other words, Times Square and Sunset Boulevard no longer determined censorship laws across the nation, for now "community standards," instead of "national standards" ruled First Amendment Obscenity cases. This meant that magazines like Playboy and Penthouse or films like Last Tango in Paris might be banned in towns with conservative sexual values.
A few days after the Miller ruling, police in Salt Lake City closed a theater showing Last Tango. Jack Valenti, president of the Motion Picture Association of America, said that it was now impossible to determine in advance whether a film violated obscenity law because the Supreme Court's ruling created "50 or more fragmented opinions as to what constituted obscenity." The New York Times wrote that Miller gave "license to local censors. In the long run it will make every local community and every state the arbiter of acceptability, thereby adjusting all sex-related literary, artistic and entertainment production to the lowest common denominator of toleration. Police-court morality will have a heyday." (Thy Neighbor's Wife, p. 338)
In Hollywood, two studios negotiating to film Hubert Selby's book about working-class homosexuals, Last Exit to Brooklyn, abandoned the project. Art directors for Playboy, Screw and other sex publications quickly modified their front covers. Customers at adult bookstores across the country stood in line to buy merchandise they feared would soon be banished from the shelves.
"The immediate effect of this decision," said Bob Guccione of Penthouse, "will be to drive a multibillion-dollar industry underground - and that means graft and crime in the real sense. It's the same thing as a return to prohibition."
After Miller, pornographers who lacked the money to pay attorneys got out of the business. "Miller made it all but impossible to distribute a film across state lines," says Arlene Elster, who now runs a commercial plant nursery in Northern California. "I knew the films would never get better if you couldn't distribute them, so I gave up and got out."
The Miller decision was bad news for the distributors of Deep Throat for it meant that they were vulnerable to federal prosecution based on the most blue-nosed views of any Bible belt township. So the Perainos developed a new distribution system to confound the feds. "Checkers" carried Deep Throat across state lines to adult theaters. Perainos reps then stayed on to count the customers and collect at the end of the day's showings their share of the take, usually half. Sweepers moved from checker to checker collecting money and shipping it or carrying it back to company offices in New Jersey and Florida. Those who didn't cooperate received threats of physical harm.
Jim and Artie Mitchell originally confined Behind the Green Door to a handful of theaters because they feared harassment from the FBI and the Justice Department. While getting busted for obscenity in a city like San Francisco was a hassle, what producers mainly feared were the feds. If a California pornographer got convicted of showing an obscene film in a place like Cincinnati, which, after Miller, was more likely, and if the feds could prove the person shipped the film over state lines, the pornographer was in trouble. Defending yourself in federal court takes more time and money, and the penalties were more severe.
With people standing in line to see Deep Throat, The Devil in Miss Jones and Behind the Green Door, the Mafia recognized an opportunity. Through their organization they could distribute films under the table, taking the heat off producers, or they could copy the film and distribute it themselves. In 1973, representatives for godfather Carlo Gambino (Robert De Salvo and James Bochis) tried for the rights to Behind the Green Door. They told Jim and Artie Mitchell that they could share the profits of national distribution of Green Door 50/50 or they would simply steal the prints to the movie and cut them out of the money altogether. The brothers refused the offer. A few weeks later they discovered that Gambino had made hundreds of pirated versions of the movie, creaming the market.
On April 30, 1976, the Memphis jury found the Perainos and all other defendants guilty on conspiring to distribute obscenity across state lines. Louis and his uncle Joseph S. Peraino received one-year prison sentences and fines of $10,000. The judge delayed sentencing of Anthony Peraino until his capture. The three Peraino owned companies, Bryanston, Damiano and Plymouth, received $10,000 fines each.
A month after the trial, Bryanston closed up its West Coast office and disappeared as quickly as it had come, leaving behind a score of puzzled employees and a trail of debt. In addition to nearly $750,000 in taxes, the company owed undetermined millions throughout the movie marketplace. In August 1976, Louis Peraino made his last public statement to the movie industry, in the pages of Variety. "Don't worry about it. I can't say more now...but I'll be back in business."
Louis returned to legitimate entertainment in September 1977, lending $50,000 to the owner of a Los Angeles-based music company in return for a 40% interest. According to the LAPD, Peraino showed up at the music company office carrying an envelope which contained a revolver and a document naming Peraino sole owner of the company. Louis put the envelope on the desk. Upon seeing it, a partner signed the document and went into hiding.
Peraino's $50,000 loan was in the form of a check drawn on a bank in Panama, which eventually bounced. Louis took over the company, and milked it for cash before moving on to establish Arrow Film & Video with offices in New York City and Van Nuys. An LAPD officer, Sgt. Joseph Ganley, testified in the FBI's MIPORN case that Louis Peraino on two occasions in 1979 threatened the owners of Los Angeles-area porn film companies with "bodily harm" if they continued to reproduce and sell prints of Deep Throat without paying the royalties demanded by Peraino.
An inspiration for Mario Puzo's godfather character, Carlo Gambino operated his porno business via his lieutenant, Ettore (Terry) Zappi and Zappi's son Anthony. When the video cassette revolution arrived, Carlo set up companies that handled the new business, which his family soon dominated. "Gambino was much more circumspect about his connection to the extremely profitable field of child pornography. His family dominated that trade, despite the reluctance of some Gambino chieftains; their normally quiescent wives were raising hell about being involved in a "filthy" business.
"Gambino, a premier criminal capitalist, plowed profits from crime into cash-transaction businesses in which the proceeds of illegal activities could be hidden. Favorites included garbage collection, vending machines, trucking, construction, garment manufacture, restaurants, and assorted restaurant supply companies. All of these specialized businesses were suited perfectly for Gambino's favorite ploy, the "vertical monopoly," in which he controlled the business, it's workers and largest customers. The potential for profit under such an arrangement, a monopolist's dream, were breathtaking." (Goombata, p. 77-78)
According to mobster turned informant Jimmy Fratianno, Carlo Gambino protected porn king Reuben Sturman. (Demaris, 1981)
Competition can be deadly when the mob enters the game. Fighting between mobsters over the sex industry killed at least 25 persons in the last half of the 1970s in New York City, Long Island, upper New York State and northern New Jersey. At stake were mob-dominated printing, distribution and sales of X-rated books, magazines, toys, and movies in addition to control of massage parlors and other forms of prostitution.
The book Murder Machine details the exploits of the DeMeo gang who worked for the Gambino family. Roy DeMeo and his boss Anthony "Nino" Gaggi were made members of the Gambinos. Nino was particularly close with Carlo Gambino and his successor as godfather, Paul Castellano.
In the late 1960s and early '70s, Paul Rothenberg, with his partner Anthony Argilla, dominated the processing of porno films in New York. DeMeo muscled in on the business and on July 27, 1973, murdered Paul. "After you kill someone, anything is possible," the 32-year old DeMeo told his followers.
Over the next 15 years, Roy and his gang mowed down about 100 persons. As well as dealing in extortion, car theft, drugs and murder, DeMeo bought and sold porn, specializing in children and animals.
In early 1970, elements of the Colombo, Bonanno, Gambino and DeCavalcante crime families moved from the East Coast and established porn operations in California. As money from Deep Throat poured into organized crime through the Perainos, the Mob increased its infiltration of the porn business. During the mid 1970s, they engaged in extortion and violence to control independent pornographers.
A report by the Administrative Vice Division of the Los Angeles Police Department estimated that by 1976 organized crime controlled 80% of the Los Angeles-based porno movie production and distribution business. "Organized crime families from Chicago, New York, New Jersey, and Florida are openly controlling and directing the major pornography operations in Los Angeles."
An investigative report submitted to the California Legislature by the Attorney General of California discussed organized crime infiltration into the pornography industry:
"In the early 1970s...four organized crime groups moved in on pornography operations in California. They met relatively little resistance because the weak-structured organized crime group of Southern California lacked the strength to deter the infiltration of organized crime from the East.
"Organized crime figures first focused on production and retail operations in California. In this effort, they established national distribution networks and effectively resorted to illegal and unfair business tactics. The newly arrived organized crime groups formed film duplication companies which illegally duplicated the films of independent producers and displayed them at nationwide organized crime controlled theaters. Faced with continued piracy and lost profits, many legitimate producers were forced to deal with organized crime controlled distribution companies and film processing labs.
"After gaining control of many wholesale and retail companies, organized crime forced other independent retailers out of business through price manipulation. Wholesale prices to independent retailers were raised while prices to organized crime controlled outlets were lowered. Independents were undersold by organized crime controlled outlets until lost profits forced them out of business. Many competitors were bought out which allowed the subsequent raising of prices in other parts of the market."
Each of the major Cosa Nostra crime families in New York maintained West Coast representatives. Robert DiBernado represented the DeCavalcantes, Thomas Ricciardi the Colombos and William Haimowitz (William Bittner) the Gambinos. Riccardi worked frequently with LA pornographer William Noel Fine who operated Fine Films and Billy Fine Productions. Haimowitz was raised by Carlo Gambino's lieutenant Ettore Zappi and said that Zappi sent him to California to corner the porn market for the Gambino family.
Mafia member Pasquale John Antonelli moved to California from New Jersey in 1965 and prospered from operating massage parlors and adult bookstores. He became the nucleus of a small band of Italian-American hoods who moved to San Diego from the Northeast. They owned a concentrated number of storefront operations in a four square downtown block of San Diego featuring adult bookstores, peep shows, massage parlors and hardcore movies.
Though living in Cleveland, Reuben Sturman made his presence felt in California porn, taking over the operations of Milton Luros in 1974. By 1986, according to the Los Angeles Police, companies controlled by Sturman owned 580 of the 765 city’s adult video arcade machines.
During the 1970s, Sturman opened up porn distribution centers in most of America's largest cities. His first was Cuyahoga News named for the river. As Reuben grew, he thought more grandly. He founded Sovereign News, then Royal News, Castle, Noble, Crown and the rest. Reuben came to regard his choice of names as a mistake for their similarity enabled the government to trace his network.
A store owner in San Diego, described Sturman's control of porn. "People are afraid of him because of his power. He could just cut people off. You could just die out there. Paranoia sets in and I'm sure he uses it to his advantage."
Reuben structured his many companies from video production to adult bookstores in a honeycomb of nominees, false names and dead associates to avoid obscenity and tax prosecutions. Over the years a number of Sturman's associates were convicted on obscenity charges and other violations of the law, but Reuben evaded the consequences of his deeds.
A 1982 Report to the Governor of Ohio named Sturman as an associate of Ettore (Terry) Zappi - Carlo Gambino's lieutenant. Sturman ate many meals with Carmine (The Snake) Persico, the head of the Colombo crime family in New York now serving a 100-year sentence on his conviction for loan-sharking, racketeering and murder.
Michael Zaffarano, a captain in the crime family of Joseph Bonanno and Carmine Galante, operated the porn companies J & G Sales and Miracle Film Releasing Corporation of Los Angeles with partners Stuart Charles Segall and Tommy Sinopoli, associated with the DeCavalcante family in New Jersey.
Segall began his career in entertainment as a porn actor working for Ted Paramore, later becoming a director and businessman. With Theodore Gaswirth and John Holmes' manager William Amerson, Stu owned Capricorn Industries in Beverly Hills.
Zaffarano served as president of Stu Segall Associates which had offices in New York and Hollywood. During the 1970s, Zaffarano and Segall directed the nationwide Pussycat Cinema chain of adult theaters. In the 1990s, Stu became a powerful producer of mainstream entertainment, including the TV show Renegade.
During his heyday in the 1970s, Atlanta's Michael Thevis owned about 40% of the nation's smut business with an annual take of $100 million. He controlled his more than 400 bookstores and theaters in the Southeast United States through bombings, arson, extortion and murder.
Born in Raleigh, North Carolina in 1932, Thevis was raised by strict immigrant grandparents in the Greek Orthodox Church. When other boys played games, Mike worked for he was taught that toil, education and success were a natural order of life.
He began offering pornographic materials at his newsstands in the 1960s, expanding from publications such as Playboy and Oui to magazines and films featuring bondage, sadism and masochism, bestiality and child porn.
Career criminal Roger Dean Underhill met Thevis in the fall of 1967 and together they developed a profitable peep show machine that was manufactured and distributed by two Thevis-controlled corporations, Automatic Enterprises and Cinematics. Underwood and Thevis set fire to competitor's buildings and even murdered a fellow Atlanta pornographer in November of 1970. A couple of years later, they knocked off an employee who complained about his wages.
After getting paroled in January 1977, Underhill turned FBI informant in exchange for immunity for his crimes. Due in part to his assistance, prosecutors put together an airtight case of racketeering against Thevis. Before the information could be given to a federal grand jury, on April 28, 1978, Thevis escaped from jail and had Underhill murdered. Michael was arrested and confined to a federal prison in Danbury, Connecticut where he confessed his crime to a cellmate. Thevis remains in jail to this day. His ex-wife, sons and former secretary Laverne Bowden are thought to control many of the pieces of his former empire.
Thevis's counterpart on the West Coast, Milton Luros, made his fortune pirating the line of literary pornography that Olympia Press first introduced into the U.S. in the late '60s. A former art director for several skin magazines, Luros owned a printing press in Chatsworth, California and a corporation known as Parliament News. He made a deal with prosecutors in 1974 to leave porn and eventually sold most of his companies to Reuben Sturman who copied his corporate spider web structure.
Sturman's problems with the federal government began in 1964 when FBI agents raided his Cleveland warehouse and seized 590 copies of a paperback called Sex Life of a Cop. Sturman responded to his indictment on federal obscenity charges by suing J. Edgar Hoover and eventually the charges against Reuben (and Hoover) were dismissed. For the next two decades, state, local, and federal officials constantly raided Sturman’s warehouses. Indicted on federal obscenity charges four more times during these years, Reuben avoided conviction on every count and never spent a day in prison. Like John Gotti, Reuben’s stature increased with each victory over the federal government.
Sturman created porn companies in England, France, Switzerland, Germany and the Netherlands. He opened factories in Asia to make sex devices such as dildos and vibrators. As early as 1974, Sturman recognized that the future of porn lay in videotape. He put his films on video, opened retail video stores and began distributing hardcore videos in the United States and Western Europe. Sturman commanded 800 adult bookstores in 60 countries, 50 states and 40 foreign countries and a chain of peepshows under the name of Western Amusements. He manufactured his own peep machines (Automatic Vending), provided lie-detector tests for employee security (National Polygraph) and distributed sex toys under the trade name Doc Johnson (Marche Manufacturing).
How did this son of Russian immigrants build his empire? An FBI report lays out Sturman's methods: "…The strong-arm shakedowns of other dealers, distributors and suppliers throughout the United States, particularly on the West Coast. Sturman has accomplished almost a total takeover with the assistance of Robert DiBernardo (DiBi)."
Working with DiBi, Reuben earned millions of dollars through the production and sale of child pornography, including the magazine Lolly Tots. Sturman's Parliament News turned out loops featuring sex with children.
Sturman hated paying taxes. During 1974 his Cleveland warehouse filled with briefcases of cash from his retail stores and peep shows. Buying a Dutch passport in the name of Paul Bekker, he opened several Swiss bank accounts. He asked his eldest son David and partner Ralph Levine to sign the accounts. Zurich police caught Reuben who told the arresting office he only wanted to hide money in Switzerland to avoid paying U.S. taxes. Sentenced to a month in prison, he was barred from the country for three years. Unrepentant, Sturman sent David and a lawyer to another Swiss bank to close down an account. To avoid creating bank transfer records, they took the money in the form of 22 gold bars and $400,000 cash.
News of Sturman's escapades prompted IRS agent Richard Rosfelder to begin a long investigation of the Sovereign News owner, tracking Sturman's paper empire from Switzerland to the Cayman Islands to Cleveland, discovering more about creative corporate financing and state-of-the-art money-laundering techniques than about porn.
After Thevis and Sturman, the third porn mogul of the 1970s was Harry Virgil Mohney of Durand, Michigan. He imported large quantities of Euro-porn and controlled about 60 adult bookstores, a string of massage parlors, X-rated theaters and drive-in movies, go-go joints and a topless billiard hall. Sharing Reuben's passion for privacy, Mohney worked closely with the Colombo and DeCavalcante families who dominated, with the Gambinos, East Coast porn distribution.
Escaping conviction in MIPORN, Mohney, during the 1980s, owned the large porn production company Caribbean Films and the even more dominant mid-West distributor of porn films Entertainment World International.
Since before the days of Al Capone, Chicago has hosted murderously aggressive mob families. Midwestern hoodlums muscled their way into the burgeoning sex business in the 1970s through extortion, arson, bombings, and murder. The Gambino, Colombo, Bonanno-Galante and the DeCavalcante mob families ran the show with help from locals Michael Glitta, Anthony DeFalco, Joseph "Doves" Aiuppa, Gus Alex, James "Turk" Torello and the Anthony "Big Tuna" Accardo family.
The Mafia exacted 50% tribute from almost all the porno shops in Chicago, verified by frequent trips to the accounting books. Two partners who refused to submit received threats followed up by violence. Thugs tossed a pipe bomb through the window of one of their bookstores, and firebombed a porn distribution center. Chicago's smut merchants promptly fell into line.
"What the speakeasies were during Prohibition," writes Clifford L. Linedecker in his 1981 book Children in Chains, "porno is today. It is a product for which there is a demanding market, it is handled by cash sales, and to a large extent it is clandestine. Undertakings closed to public scrutiny allow crime to breed much more easily than those open to inspection and control. But the pornography trade attracts stubborn, determined men. Some of them are willing to fight and put their lives on the line, even when they are facing professional hoodlums and killers."
After losing thousands of dollars providing art films to their fellow Chicagoans, Paul Gonsky and company switched to porn and rapidly bought six theaters in Chicago and Indiana. They earned money and enemies in the mob, who firebombed three of Gonsky's theaters. A competing company operated by a cousin of Mafia boss Phil Alderiso opened a new X-rated theater a few blocks from one of the theaters operated by Gonsky. On the night the new movie house opened, a bomb blew away the entrance to Gonsky's theater.
Around noon on a crisp September day, 1977, Paul Gonsky was found lying on the ground in a parking lot near one of his theaters in Old Town, a three-block-long corridor of bars, arcades, head shops and strip joints. One or more of the seven bullets that had smashed into his body shattered Gonsky’s head.
The slaying was never solved, for among the problems investigators face with the violence and terrorism associated with commercial sex is the reluctance of victims and witnesses to talk. One of the first lessons learned by people who deal with the Mafia is to keep their mouths shut.
Suspects in the slaying include mob enforcer Frank Schweihs, pornographer Patrick "Patsy" Ricciardi (cousin of Mafia assassin Felix Alderisio) and Gonsky's partner Steven Hal Toushin. Steve had been taken to court by Gonsky and his other partner Jeffrey Begun for funneling money from their business into his own pockets. Begun understood the Gonsky assassination as a message and fled to California. Bereft of partners, Toushin put the aborted partnership into receivership and took over the Chicago porn operation by default.
Toushin refused to cooperate with police investigating the Gonsky slaying, fueling their suspicion of him. In 1978, Steve switched from heterosexual to homosexual films. Three years later he established himself in San Francisco, leasing the Screening Room. He renamed it Savages, brought in gay films and turned the basement into a carpeted orgy room. Movie houses in San Francisco and Chicago became the first of what Toushin hoped would be a nationwide gay chain.
Police suspect that Steve hired mob enforcer Frank Schweihs to murder Gonsky in 1976 and Patrick Ricciardi in 1985. In 1990, a federal judge sentenced Schweihs to 13 years in prison for using organized crime as a weapon to extort money from porn store owner William Wemette.
Wemmette began leading a double life as a pornographer and FBI informant in 1971. He first made payments to the mob in 1974 when he opened his Old Town porn shop. Street boss Joseph Lombardo, now in prison, set the figure of $250 a week. Other thugs who shook him down included Marshall Caifano, in prison, and Louis Eboli and Albert "Obbie" Frabotta, now dead.
Chicago produced little pornography but consumed tons. The largest distributor was Capitol News Agency owned by Reuben Sturman and operated by Neil Traynor. Capitol controlled 80% of the distribution of porn magazines and films in Chicago.
"The Chicago police concluded that "nearly all of the sexually explicit magazines and films distributed here" were produced by organized crime groups in California and New York and distributed by Reuben Sturman through his Sovereign News conglomerate. Pornographic materials move from Sovereign News in Cleveland, to Capitol News in Chicago (both Sturman run companies), to Weintraub, DeFalco, Gorman and other distributors, and eventually to the bookstores." (Porn Merchants, p. 82)
The idea of converting run down theatres in the Midwest into pornographic adult movie houses to launder cash from other illegal rackets was the brainchild of Chicago organized crime figure Patsy Riccardi. In 1977, he started the porn movie distributor Chicago Booking Service. Patsy was no patsy for he had close ties to the mob. A cousin of the late Felix Alderisio, a member of Chicago organized crime, Riccardi hung out with assassin Frank Schweihs and Las Vegas mobster Anthony Spilotro. In July 1985, Patsy was murdered in a mob-style hit.
Chicago organized crime member Marshall Caifano owned adult bookstores in Chicago and, as of 1977, had Reuben Sturman paying him protection money of $500 a week. Through Mike Glitta and Anthony Juliano, Caifano collected protection money from numerous businesses. Glitta served as the street boss for organized crime figure Joe DiVarco. Mike's ties to organized crime date to the 1950s. He ran B-girl strip joints in Chicago and later embraced X-rated films and tapes. In 1982, the Chicago Crime Commission said he supervised porn for the mob from the North Side to the Wisconsin state line. Glitta apparently reported to labor leader and North Side rackets boss Vincent Solano.
Anthony DeFalco and Paul Gorman ran A & A News in Chicago, which offered an extensive bestiality collection. Gorman told two FBI undercover agents that he could get sound projectors for Golde Coaste Specialties at a good price. Paul said that these projectors were often "too hot to touch" and that there might be a truck having an accident in the near future, at which time he'd have several hundred projectors available. DeFalco described the pornography industry as a close knit group of individuals who'd known each other for years, and that it was almost impossible for someone new to break into the business.
John Krasner, who built a smut empire based in Allentown, Pennsylvania that spread throughout the northeastern United States, proclaimed himself the "Prince of Pornography." In reality, he was a puppet of Reuben Sturman.
Before Krasner went bankrupt in 1966, and then began, with Al Morrow, to publish porn, his arrest record included robbery, narcotics and gambling. He financed his porn career with $160,000 in loans from Willie Weisberg, a major organized crime figure in Philadelphia whose career began with Prohibition. For years Weisberg was second-in-command of Philadelphia’s Rosen Mob, a highly organized criminal network.
Krasner had close business relations with Norman Arno and Teddy Gaswirth.
"Krasner’s business operations were incredibly sophisticated and complex. A single Krasner-owned bookstore would be concealed in a maze of corporations and individuals acting as "straw men." Fromer Krasner employees have revealed that a typical bookstore may have involved as many as eight corporations, thereby concealing actual ownership." (Porn Merchants, p.93)
Bouncing from one crisis to another during the 1970s, Krasner was convicted of conspiring to kill Al Morrow, a former business partner. While free on appeal, his wife was kidnapped and held for ransom. She finally escaped. Then several of his stores were bombed. The Krasners fled to Florida.
In 2/6/79, Krasner was gunned down in a Fort Lauderdale parking lot in what looked like a mob style hit, possibly ordered by his former partner Morrow. Krasner's son Phil took over his dad's operations, and was eventually busted for laundering money.
On 5/29/79, Morrow was
shot but survived. He was later convicted for arson and fraud.
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 1990s, 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.
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."
Many pornographers work with the Mafia reluctantly. According to law enforcement, most, if not all, important figures in the sex trade have to work with organized crime because of its muscle and dominant role in distribution. In 1981, David Friedman through an associate offered Kelly an office, expense account and $5000 a month to run the Mafia out of porn but the Catholic refused, saying that he'd never work for a pornographer.
Carlo Gambino's lieutenant Ettore Zappi ran the family's porn operation through the '70s until he was gradually supplanted by the more financially agile Robert DiBernardo, a long time partner of Mickey Zaffarano. A former member of the DeCavalcante family, DiBi joined the Gambinos in 1976.
Robert oversaw Mike Thevis's operations. "Don't forget, Mike," a police wire-tap recorded DiBi saying when Thevis boasted of owning 90 per cent of the peep show machines in the country, "you manage the machines. The family is in charge."
In 1984, when Geraldine Ferraro was the Democrats' vice presidential candidate, news broke that her husband John Zaccaro managed a building in which a DiBernardo company leased space for its porn operation. Through her husband Ferraro received $350,000 in rent from DiBernardo which she used to finance her political campaigns.
DiBi met frequently with Gambino godfather Paul Castellano at his Todd Hill mansion - the highest location in New York City - on Staten Island. While friendly with Paul to his face, behind his back, DiBi supported the ambitious drug dealer John Gotti.
"He [Castellano] uses me," DiBi said in a conversation bugged by the FBI. "He makes me look bad. 'Look at DiBi. He makes his money in pornography.' Like he's some kind of high-and-mighty. Mr. f---ing Clean. Does it stop him from taking his cut? 'Sorry, Paul, you don't wanna touch those dollars - there's pussy on 'em.' Ha! He'll take 'em anyway. He wants it both ways. Get paid. Act clean. My ass."
That the Gambino's main men like DiBernardo talked bad about Castellano back in 1983 gave the FBI an early warning that the godfather was in trouble. On December 16th, 1985, Castellano and his chauffeur were gunned down in a Mafia hit that led to the ascension of John Gotti.
Talking ill of the next boss of the Gambino Family ended DiBernardo's career.
By 1985, after decades assembling a porn empire, Robert told friends and family that he wanted to relax. He gave his daughter a $15,000 gold watch and helped his youngest son become the first DiBernardo to graduate from college.
DiBi faced a five-year prison sentence for his MIPORN conviction. Moreover, another federal investigation began to focus on his role in child pornography. "Despite his troubles, DiBernardo was known within the Gambino organization as a ferocious money-earner, and he was entrusted with investing the organization's rich cut from the concrete industry bid-rigging scheme. That reputation for making money grow on trees led Gotti to promote him to capo shortly after taking over the family [early 1986], but almost at once, he realized his mistake. The problem was that DiBernardo... was skimming a good portion of the payoff money entrusted to his care, and building his own real estate portfolio, which by 1986 amounted to over four million dollars. Much worse, there were rumbles that DiBernardo had tried to deal his way out of his imminent prison sentence by attempting to become an FBI informant. And to top it all off, he was also reputed to be attempting to forge a secret partnership with the Genovese Family's New Jersey division. In sum, enough malfeasance for a death sentence. On June 5, 1986, DiBernardo and his white Mercedes disappeared." (Goombata p. 247-248)
Independent MP Dennis Stevenson told the ACT Legislative Assembly, the governing body of Australia's capitol city Canberra in April, 1991, that organized crime dominated the porn industry in Australia and America.
Stevenson said Australia's video market began in the 1970s when American pornographers shipped down under various porn tapes. These were copied and sold furtively.
Various organized crime figures, including Norman Arno and Theodore Gaswirth, visited Australia in the 1970s and several times in 1980 and 1981 to set up an organized crime porn industry.
In 1972, Gaswirth hosted two New Yorkers wanted for the murder of Carlos Lombardi and suspected in a large heroin distribution network in New York, Peter Salanardi and Nicholas Musolino. While investigating Teddy, the Los Angeles District Attorney’s office sought assistance from the Cleveland Police Department to trace Gaswirth’s frequent calls to a Cleveland number which turned out to be Discount News Company, which was housed with Sturman’s Sovereign News.
During the early video era, Arno was a business partner of Michael Zaffarano, a leading New York mafiosi and key link between the New York families and Southern California porn. Norm, with help from his vice president Ed Krasnof, presided over North Hollywood-based VCX Incorporated, a US Mafia-linked porn company which in 1985, according to estimates, controlled 40% of the US porn market, then estimated at $5-$9 billion. California's Organized Crime Control Commission named Arno, Gaswirth and Zaffarano as leading powers in the Mafia porn trade.
Theodore, also a Mafia associate of Zaffarano, made three trips to Australia in 1981. Shortly after his MIPORN arrest, Arno applied to the court to have bail conditions relaxed so that he could visit Australia, which he did 5-21-80. Meyer Lansky associate Daniel M. Stein, who had visited Australia several times between 3/71 - 4/76 to meet with famous Sydney criminal George Freeman, arranged the initial connections between Australian hoods and American Mafiosi.
While down under in 1980, Arno signed a deal with leading Australian porn company operating in Fyshwick, in Australia's capitol city. Arno and Gaswirth's main contact was Alexander Gajic, who, with his father Todor, served as directors of Sienna Pty. Ltd, a company formed in South Australia but now (1991) operating at Fyshwick in the ACT with Australian United Videos and Private Screenings Home Video.
Private was run by Alexander Gajic and Barry Taylor, who was arrested in Asia for drug trafficking. During the 1980 New South Wales state Royal Commission on Drugs, Justice Woodward named Alexander Gajic as a major drug trafficker along with Bruce "Snapper" Cornwell and Barry Bull. Gajic did business with Adivi Trading Nominees Pty. Lmtd., one of its directors being Cornwell. At the Australian inquiry into drugs in 1985, Justice Steward described Snapper as a drug baron. Cornwell was convicted for his crimes in 1988 and is serving a long jail sentence.
Testifying before the Woodward Commission, Alexander Gajic confessed to dealing in marijuana and heroin. With Joseph David Shellim, Gajic operated a web of porn companies throughout Australia including Curbydex Pty. Ltd and Hollywood House Video.
MP Dennis Stevenson says: "Organized crime figures in the US and Australia have been able to put on a face of respectability by using the proceeds of criminal activities to buy into legitimate businesses. This gives them the opportunity to launder money and also to hide illegal activities behind a façade of legitimacy. Organized crime in Australia has created an interlocking series of companies to provide a corporate shell to dispose of illegal money by shuffling it backwards and forwards, through fake invoices and borrowings, until it gets lost in the paper trail."
Wanting to expand his porn operation, Alexander Gajic sought to buy porn titles to distribute in Australia. Among Gajic's written instructions to Zwier was a report on Al Tapper, the president of CPLC (Curbydex Party Lmtd?).
"Speak to him, he's a top bloke, who virtually controls the West Coast market in pornographic books and accessories. I will be importing books etc from him as well, as soon as I get more cash together. He knows Australia well, being a friend of Abe Saffron. His attitude is always cash up front."
Todor and Alexander Gajic formed TAG Video, named after their initials, to distribute porn across Australia supplied to them by VCX. TAG worked with Gerald Gold in Melbourne, an associate of Mark Arthur Clarkson who hired a hit man to murder Melbourne barrister Roger Wilson. Though Clarkson was acquitted of murder, he was convicted of fraud in connection with the collapse of the Athena Building Society in Victoria, which did substantial business with pornographers.
Gerry Gold employed corrupt accountant Charles Maxwell McCready to launder money. McCready was eventually arrested for conspiring to free two drug traffickers from Pentridge Jail with a helicopter.
Two other business partners for the Shellim/Gajic network were convicted drug traffickers Amos Kormornick and Esmond Mooseek.
In 1983, Australia's Costigan Royal Commission named pornographers Joseph Shellim, Alexander Gajic and Gerald Gold as leading eastern States organized crime figures. They signed a deal through their company Sienna Pty Ltd with US organized crime company VCX for Sienna to pay $30,000 for the rights to duplicate and sell 12 pornographic videos in Australia, New Zealand, Papua New Guina and the Antarctica. The three year contract, dated 10/1/85, was signed for Sienna by Todor Gajic under the name Tom Gadjic and for VCX by Norman Arno.
In April 1991, MP Dennis Stevenson said: "…Organized criminals cover their underhand dealings by laundering money through legal businesses. If we are to be serious in attempting to control organized crime and its insidious undermining of judges, police and politicians, then we must take the actions necessary to limit or stamp out one of their favored activities, the trade in X-rated video pornography...
"Pornography in the US is controlled by organized crime. We have learnt of the identities of some of the major crime figures in America who profit from pornography. We can see that Norman Arno and Theodore Gaswirth came to Australia with the intention of setting up similar contacts and operations as those they run in the US.
"We have learnt of the connections that Arno and Gaswirth made with criminals in Australia. These criminals, like their US counterparts, are also involved in drugs, prostitution, fraud, money laundering, tax evasion and control of both the legal and illegal porn video trade. Does anyone doubt that these same people control the illegal porn trade in Australia?
"These Canberra identities have once more proven by their actions of advertising illegal material in each and every State that has outlawed X-rated videos, that they hold nothing but contempt for the law. We have seen the web of interlinking criminals in Australia that might make one ask: Why are all these criminals so closely associated with each other? I believe the answer is: That is why it is called organised crime.
"These criminals are organised. What we need to do, as lawmakers, is to organise against them. We need to put aside party affiliations or personal conflicts and do our utmost to act in the best interests of all Australians and ban these X-rated videos that are currently protected in the ACT."
Chicago pornographer Steven Toushin rose to the top through murder. The shooting of his partner Paul Gonsky put Steve in charge of their porn operation in 1976, and the shooting of competitor Patrick Ricciardi on July 24, 1985, placed Toushin among the city's most powerful pornographers.
Unable to tie Steve to the crimes, police and FBI agents huddled with IRS investigators to figure out how to get Toushin. Veteran investigator Dennis Czurylo tracked Steve's spending and compared it to his reported earnings. The figures didn't add up. During 1978 and 1979 for instance, Toushin reported earnings of $11,435 and $26,630 while paying $23,000 in cash for a Lake Shore Drive condo. He also bought a Rolls Royce for cash.
Investigators received help from Steve's ex-wife Susan, who broke up with Toushin in 1980 after balking at signing their fraudulent tax return. She estimated her husband's income at $75,000 per month.
Toushin spent the 1990s in prison for tax evasion and mailing "obscenity."
In February, 1987, Steve's competitor Marco Glitta was sentenced to eight years in prison for purchasing remote-control bombs intended to blow up competitor Paula Lawrence. Two of Lawrence's buildings suffered mysterious fires in 1986.
Marco's brother Michael took over the Mafia's porn trade in Chicago in 1987, after the death of Tony Eboli. For several months, Mike struggled for control with mob assassin Frankie Schweihs. It proved too much. In 1988, Glitta died of a heart attack.
Known in mob circles as "The German," Schweihs is suspected of murdering such businessmen as Paul Gonsky, Patsy Ricciardi, and Allen Dorfman. Along with Toushin, Schweihs spent the 1990s in prison.
A tall stylish woman, Paula A. Lawrence, born around 1947, distributed up to 80% of the porn around Chicago and the Midwest. Fond of jogging and silk blouses, she began working for Reuben Sturman in the early '70s as a stock clerk at Castle News Agency in Milwaukee.
Paula moved to Chicago in 1980, buying Capitol News and other businesses from Hollywood pornographer Donald Gittleson. Indicted in Cleveland in 1985 along with four other Sturman assistants for conspiracy to conceal millions of dollars in profits for the porn king, she eventually pled guilty.
Under pressure from government investigators during the mid '80s, Reuben verbally sold all his sex shops, including several to Paula and her new husband Roy May.
According to government documents filed in Chicago in early 1993, Paula and Roy paid Sturman $1,374,270 from 1979 to 1991 out of fear of economic harm and violence.
In 1987, Indiana's largest porn distributor before Carriere, Burton H. Gorelick, pled guilty to federal racketeering, conspiracy and tax fraud charges. He received a five-year prison sentence for such crimes as skimming at least $560,000 from X-rated drive-in theaters he operated in Indiana and Ohio.
In October 1989, federal agents seized almost $600,000 kept in safes on the premises of Mark Carriere's company Multi-Media Distributing in his hometown Merrillville, Indiana. In 1991, Mark and his brother Brad were convicted of cheating on their taxes. They'd kept millions of dollars in cash and two sets of books. The phony one they presented to the IRS.
Brad committed suicide (or was murdered) on June 13, 1991.
Carriere's chief lieutenant, Perry Ross, died under mysterious circumstances in Holland in 1992.
Much of the government scrutinty of Carriere can be attributed to his vicious often illegal ways and the bad company he keeps.
For several years, Mark was married to ex-porn star Tina Marie, forcing her retirement from performing.
A porn source tells Luke 5/01:
"Tina Marie's brother John Stallion [Laolagi] used to hang out at mobster Joe Isgro`s office. Tina Marie met mob guys like Rocky at POLO Lounge and wanted them to hurt her ex-husband Mark Carriere, owner of Leisure Time. Joe Isgro is Gambino Family MEMBER and Record guy Payola and Shylock. He is in the book Hit Men by Fredric Dannen. He was under Joe Piney and met with John Gotti.
"Tina Marie's brother John Stallion organized the big Pornathon in 1989 for Mark Carriere. They shot about 60 porn movies in 30 days and all the talent got bad checks. It was organized by John, and Ben Silver the Israeli and Jerry Zimmerman. All the organizers got new cars. Carriere got all the masters and all the model releases and none of the talent got paid a dime.
"The late Jerry Zimmerman was a tremendous con man, close to Sonny Franzese and his Sonny's son Michael. Michael stole $300 million. They made a breakdancing movie "Knights of the City," starring Sammy Davis Jr and Janet Jackson. And they made another movie starring Linda Blair, Mausoleum.
"Then Jerry Zimmerman and John Stallion brought the Russian circus over (The Great Circus Bim Bom) in 1990. And it ran out of money in Missouri because Jerry and John stole all the money. The animals were starving. It was on 60 Minutes. They had to feed these Russian people and send them home. The circus had been around 100 years and they bankrupted it in two months."
Following the 1986 Meese Commission, federal agents traveled to the Bible Belt to seek obscenity convictions against California pornographers like Carriere. The definition of obscenity since the Supreme Court's 1973 Miller ruling has been whether the average person, applying the standards of his community, finds the work lacks serious value and appeals to prurient interests. Rural areas tend to have more conservative values than urban ones. The feds eventually convicted 20 pornographers, sending many to jail, and collecting millions of dollars in fines.
In September 1991, a federal grand jury in Oxford, MS, indicted the owner of Vivid Video, Steven Hirsch, for Interstate Transportation of Obscenity and conspiracy to avoid taxes. In a plea bargain, Vivid forfeited $500,000 to the government, and toned down their product.
In late 1991, Russell James Hampshire, along with his company VCA and his employees Nolan Quan and Don Diekman were charged with Interstate Transportation of Obscenity. In a plea bargain, Russ served a year in jail and his company forfeited two million dollars.
In 1992, Carriere and his company agreed to pay $3.5 million in his fines, which his lawyer called a record, after an obscenity conviction in Tallahassee, Florida.
In February 1996 a federal judge sentenced Carriere to three years probation, 2400 hours of community service and a fine of $850,000 for interstate transportation of obscene material. Carriere also agreed to donate $250,000 to three children's charities.
Carriere avoided jail time in his 1996 conviction by squealing to the feds about veteran New York pornographer Ted Rothstein.
Al Goldstein broke the news in an editorial in his Screw Magazine, 7/15/96. "He [Carriere] caved in to [that] pressure and delivered to the FBI a true prize: Teddy Rothstein, a pivotal figure in the distribution of adult material nationwide."
Rothstein's attorney, Paul Cambria of Buffalo, says that the testimony Carriere gave the government was untrue. "He made up things about Teddy Rothstein so he could escape going to jail."
During the 1980s, porn retreated under the aggressive assault of federal investigators, Christians and feminists. Leading pornographers such as Gregory Dark and Hal Freeman left the medium to work for mainstream independent filmmakers. Shooting on film virtually ceased. During 1988 and '89, the X-Rated Critics Organization (XRCO) chose to give no award for Best Film due to the paucity of product.
Circulation of sex publications such as Penthouse plunged when the 7-11 corporation, pressured by the Meese Commission, decided to stop selling their magazines. From 1988 to 1989, X-rated tape rentals fell by three million to 395 million, constituting 12% of all rentals.
One pornographer who suffered keenly from this retrenchment was veteran Teddy Snyder, who began shooting loops in New York in the late 1960s, including several starring Eric Edwards and Linda Lovelace.
After moving to Los Angeles with in 1980 with fellow New Yorkers Bobby Hollander and Bob Genova, Snyder formed a series of production companies including Video Cassette Recordings (VCR).
Snyder wore gold chains, a gold ring with "Ted" spelled out in diamonds and cowboy hats. He called most people he met "kid." He drove a Rolls Royce and took friends flying in his seven-seat airplane. "There was an air of Mafioso" about him, said one pornographer.
"There are lots of Jewish heavies in the industry," explains writer Wally Wharton about tough guys like Snyder, "who know that Jewish guys have a wimpy reputation. And they know that people [in porn] don't necessarily respond to 'I'll sue your pants off,' because these people [porn business owners] can always file bankruptcy. You can't get blood out of a turnip, right? So instead, they do the strong-arm thing. 'I'll have your f---ing legs broken, buddy.' A lot of them [Jews in porn] pretend to be Italian [Mafia types]. They affect the tan, gold chains, big collars, steel grey hair and open shirts."
Porn Jews who wish to appear like Mafiosi include Bobby Hollander, Lenny Friedlander and Paul Norman.
"The Mafia is a comfortable persona to hide behind," says Wally, "because then you're able to victimize women... It's your job. Genuine Italians like John Stagliano don't draw on the Mafia phenomenon like the posers do."
Teddy Snyder produced such schlock as the compilation tapes Screaming Desire and Naked Night. As the porn business turned down in the late '80s, Teddy and associates made inept ventures into distributing educational tapes for children, frequently placing porn tapes by mistake into children's box covers.
Snyder worked with the mob his entire career. In 1989, his VCR company owed thousands of dollars to Martin Taccetta, named in court documents and by federal prosecutors as an organized crime figure. Martin's older brother Michael ranks high amongst members of the Lucchese crime family, an Assistant District Attorney in Newark told the 8/20/89 LA Times. "Martin was his right hand man who engaged in certain activities outside of New Jersey."
Snyder's VCR was one of several companies that received about $100 thousand dollars worth of stolen videotape from Martin's company Ollinor Video. Bobby Genova, Ted's VCR partner, stamped his signature on a $2000 12/29/87 check from VCR to Marty. Former VCR salesman Joseph Abinanti handled the payroll for one of Taccetta's companies in Los Angeles. While under surveillance, Taccetta met several times with Abinanti, whose "godfather," according to law enforcement ranks near the top of the Luccheses.
Like Bobby Hollander, and many pornographers, Snyder was a cocaine addict. Genova remembers him as a drug-abusing creep who didn't care about their business.
In early August 1989, Snyder, a vial of cocaine in his hand, was gunned down on his front lawn in what looked like a Mafia-style hit. His wife Sharon was later charged but not convicted of hiring the assassin.
Three months pregnant at the time, Sharon said her husband wanted to leave porn because his customers didn't buy enough. "Maybe people aren't as perverted as we thought."
Rome's Social and Political Studies Institute declared in 1991 that Italy's Mafia laundered millions of dollars in profits from criminal activity through the country's booming multi-billion dollar porn industry.
"Pornography has become
a phenomenon which gives ample space to illegality, profiteering and violence,
especially on minors." The report claimed that organized crime dealt in
porn "to recycle illegal profits from prostitution and in many cases from
drugs." Total Italian Mafia proceeds from all activity was estimated in
1991 at $150 billion dollars year.
An Internal Revenue Service agent who spent most of his adult life investigating Reuben Sturman finally brought the porn king behind bars. At age 27, Richard N. Rosfelder Jr. began investigating Sturman in 1975 because he suspected that Sturman used his elaborate corporate structure to avoid taxes. And he was right. Reuben skimmed millions of dollars from his peep machines each year and hid the money in offshore accounts. In his view, paying taxes was subsidizing the enemy.
After years of detective work, Rosfelder tracked down Sturman's Swiss bank accounts - and in an unprecedented move, the Swiss government gave the IRS access to those accounts. The Justice Department gave secret documents to the Swiss, showing that Sturman worked with organized crime families like the Gambinos of New York and the De Cavalcantes in New Jersey.
Shortly before his 1985 indictment for tax evasion, Reuben began funneling his money to Swiss bank accounts through sham corporations. His main Swiss helper, businessman Edouard Stockli, was arrested and jailed in March 1997.
Sturman delayed his tax trial until 1989 by challenging the legality of the Justice Department's actions, demanding to see the secret documents given to the Swiss and denying any connection with the Mafia.
During the late '80s, Sturman verbally sold off his porn holdings, some to family and friends. Reuben's son David, born around 1952, took over General Video West, the dominant porn distributor on the West Coast.
In 1989, Reuben and David were found guilty in the tax case. David served two years. The U.S. Justice Department reached a plea bargain with Reuben that reduced his prison sentence to four years and assured that Sturman would not be retried after a Las Vegas jury hung on whether nine tapes Reuben's company shipped to undercover federal agents were obscene or not. Sturman also paid a one million-dollar fine.
His jury squirmed in their seats while watching Reuben's tapes of human - animal sex, torture and the eating of excrement but wouldn't declare the videos obscene. The tapes came from the huge Talk of the Town bookstore and its Lacy Bodine catalog of films, described as "not for everybody." At $100 per film, the catalog offered the so-called "Animal Special" series. The videos showed young women having sex with horses, pigs, ponies, dogs, a cow and a chicken. One episode portrayed two women dressed as nuns having sex with each other and a mule.
Three years later, Reuben finally went to Boron Federal Prison in California. Sturman's lawyer Sanford I. Atkin told him that he'd be able to avoid a long jail term by bribing his judge David D. Dowd. Atkin offered the $500,000 bribe through Sturman's bodyguard, money collector and hit man, James "Diz" Long.
Atkin knew that Sturman planned to flee the country but persuaded him to stay by promising he could arrange to reduce his ten-year sentence to one year. But the bribe didn't work.
While serving his sentence, Sturman became angry that operators of twelve of his bookstores failed to kickback to him as verbally agreed. When the owner of Phoenix's sex shop Pleasure World died in 1990, his widow took over. She noticed that $1000 monthly payments had been made to a man named Reuben Sturman but she could find no bill or contract to justify them. So she stopped paying. Reuben called her to explain the arrangement but she ignored him. Around Thanksgiving, 1991, Sturman arranged for thugs to smash the store's video machines. The payments resumed.
Owners of several Chicago sex shops, Paula Lawrence and Roy May supposedly owed Reuben about $100,000 a month. Sturman sold the stores to them in a verbal agreement for $35,000 a month and two percent of the gross sales. With Reuben incarcerated, the operators made payments to the IRS instead of Reuben.
Getting help from Herbert Feinberg aka Mickey Fine as well Kevin Beechum and Russell Hampshire, Sturman hired outlaw bikers from California to smash eight porn shops in Chicago and four in Milwaukee as payment overdue warnings.
Taking plastic explosives onboard, the bikers flew to Chicago. They drove in two different vehicles to blow up a selected store. Stray electronic signals from a traffic light accidentally ignited a bomb in one car, killing one thug and injuring another. The survivor became a witness for the government against Sturman who realized that he was going to be convicted of the bombing conspiracy.
With the aid of a helicopter, Reuben escaped on the night of December 7, 1992 from his low security prison, disappearing into the Mojave Desert. Federal officials assumed that he'd fled the country and would never be seen again. But eight weeks later he was found in an apartment near Disneyland.
Within a month of his capture, Sturman was indicted and accused of hiring men to damage and destroy peep-show booths at bookstores in Cleveland, Chicago and Phoenix. The jury acquitted him of the bombings, but convicted him of conspiring to commit extortion through the use of violence.
After deliberating less than two hours, a federal jury in 1994 convicted Herbert "Mickey" Feinberg of attempted murder through his hiring of four men to bomb the sex shops.
Because Sturman owed $29 million in back taxes, the IRS seized all his available assets. "This was the biggest case the IRS criminal division had ever seen," says Rossfelder. "It's effect on the rest of the porn industry was monumental. There were a lot of people in this industry reporting nickels and dimes who now reports hundreds of thousands of dollars."
In September 1995, a mysterious fire virtually leveled the Doc Johnson plant in North Hollywood. Then someone blew up a bank in the Cayman Islands. Law enforcement speculates that the two events amounted to a last battle for control of Sturman's remaining empire. According to insiders, three major factions fought for control of the porn industry, and the retaliatory bombing targeted a place where a significant amount of one of the faction's assets resided. The bombing concluded the struggle, and the three groups -one of them headquartered in Paris - agreed to divide the international porn market into equal shares. (What Wild Ecstasy p. 371-372)
In late 1997, Sturman died of a stroke. His successor at General Video of America, which is headquartered in Cleveland, is convicted tax evader Melvin Kaminsky aka Mel Kamins. Another convict, Denver’s Eddie J. Wedelstedt, received most of Reuben's retail store empire in the late '80s and early '90s.
"Two types of "organized crime" dominate the $8 to $9 billion porn-obscenity industry," wrote retired FBI agent Bill Kelly in the 8/21/87 Tidings of Los Angeles. "The first is the one that most people ordinarily think of – the Mafia. That small group is extremely important in the industry, not by their numbers, but due to their huge influence.
"The second grouping is non-Mafia, but consists of still highly organized enterprises which may or may not be closely associated with the Mafia. These corporations usually possess warehouses of varying size, considerable number of employees, toll free telephone numbers and often travelling sales people. And, when these people pander hard core sexually explicit materials found in a court of law to be legally obscene, they too constitute 'organized crime'."
"The people who put conventional [non-pornography] magazines on the newsstand and in your drugstore are mostly Mafia front companies," a pornographer in the late '80s told Dr. Robert Stoller. "That and the vending machine business. Cigarettes, candy, mobile catering businesses that go around construction sites, these are traditional organized crime business for one good reason. They do a tremendous volume of cash in small amounts. Organized crime has lots of cash that it needs to launder from its other businesses: drugs, prostitution...
"What would you do if you found yourself with $200,000 in $20 bills that you could not take to the bank? It takes up a lot of room. Can you go out and buy a house with $20 bills? Not unless you want a visit from the IRS. You can't even buy a car that way. You've got to figure out a business that takes in a lot of $20 bills, into which you could stream the $20 bills from your other business...
"Porn video is perfect... It's done with anonymous consumers through hole-in-the-wall outlets all over the country. The collection system for the money is full of holes, so shaky and uneven and complicated and convoluted that it's impossible for investigators to trace the money that comes through them back to its source.
"The real money is made in income streaming. They're making their money laundering through the distribution side. People who make pornographic films complain endlessly that they never see the money that comes in off them.
"They started in the distribution end and it turned out to be so successful that they decided to move into production. That's one reason why there's so much porn being made: they need to put stuff on the shelves so they can show income." (Porn)
Video's emergence in the '80s changed the Mafia's porn role. No longer could the mob dominate distribution by simply running adult theaters and peep shows. In New York, Gotti and Basciano allowed businessmen without ties to the Mafia to move into retail stores. Immigrant entrepreneurs, particularly from Israel and Sri Lanka, multiplied X-rated video shops in neighborhoods from Greenwhich Village to Queens.
"It used to be if you wanted to open a sex shop you'd have to get permission," said William Daly of the Mayor's Office of Midtown Enforcement. "Now that the mob has lost muscle, they don't have control of the industry like they used to."
Daly estimates that New York City's porn industry earned $160 million in 1992.
To increase his profits, Dibernardo's successor Richard Basciano leased his Times Square buildings to separate corporations under his control to carry the retail sale of X-rated tapes and toys. He worked with veteran pornographers Theodore Rothstein and Nathan Grama, both of whom were convicted for Interstate Transportation of Obscenity in MIPORN.
In 1994, an Israeli porn shop owner told the New York Daily News: "Everything used to be owned by the Mafia. But in 1986 John Gotti let everybody in."
"The days of Mob influence are gone," claimed a Sri Lankan businessman. "There's no money in the business for them. Tapes used to be $100 each. Now they're selling for $3.99."
Sri Lankans worked for Mafia-run sex shops through the 1980s and moved into ownership when the Mafia left. Already in wholesale electronics, Israelis entered porn to diversify.
Many shop owners pay a direct tax to the mob, say law enforcement, and all of them buy their product from mobbed-up porn distributors like General Video of America.
New York zoning law changes closed most of Times Square's sex shops in the mid '90s, but Basciano profited as always, selling many of his buildings to the City. Their relationship goes back decades. In 1977, Show World received a $65,000 loan from the federal Small Business Administration. In 1989, officials with David Dinkins' mayoral campaign paid tens of thousands of dollars to rent office space from Richard.
The Italian-American ultimately responsible for convicting John Gotti and who led the government's onslaught against organized crime, Rudolph Giulani, became on January 2nd, 1994, the 107th mayor of New York. He then led New York City's crackdown on the sex industry, taking on the likes of Mafia associates Martin Hodas and Richard Basciano. In a series of court cases, Mayor Giulani defeated his pornographer and civil libertarian opponents, and pushed ahead with his clean up of Times Square.
At the end of the 20th Century, zoning restrictions against sex shops remain a favorite weapon of local governments trying to reduce crime and clean up their communities.
Ken Guarino, who dined with John Gotti in 1992, ranks among porn's most powerful. Lucky to avoid MIPORN conviction, Ken controls one of the four main producers of sex videos along with Vivid, VCA and Leisure Time. Owner of the North Star distributorship, the Italian-American took over Intropics and Cal Vista Video, revived dormant lines like Paradise Visuals and Soho Video and added a magazine publication company to create, wrote AVN in 1994 "the closest thing to vertical integration in the entertainment industry, period." Majority owner of the porn conglomerate South Pointe Enterprises, Inc., the corporate parent of Metro Home Video, Guarino sent his company public in 1994 "to become more acceptable" by buying an inactive corporate shell rather than using the traditional method of a public offering.
An expert corporate shell shuffler, Guarino, like Sturman, Mohney and Milton Luros, spends his considerable talents creating dummy corporations and business spider webs to launder mob money, avoid taxes and set up large offshore savings accounts.
Adult Video News gushed about the mobbed-up company's NASDAQ listing in its 10/94 issue: "...[N]o move in industry history; no television interview or personal appearance; no post-adult career of an actress or actor; no court victory; no business success or humanitarian gesture; does more to promote the social and legal acceptance of adult entertainment than the simple act of placing South Pointe on the same legal and financial level as thousands of other public companies that provide jobs, make products and provide services to the consuming and investing public."
Through his skillful selling of pornography, Harry Mohney improved upon a $2,000 income in 1966 to become a millionaire by 1970, and eventually one of the three most powerful American pornographers. And like his peers, he devised elaborate schemes to cheat on taxes. Convicted in the late '80s, he eventually served three years in prison.
Upon release, he resumed control of his rapidly expanding sex businesses that include the Déjà Vu strip club chain. Harry's thought to own considerable amounts of the porn industry as well but his holdings are hard to measure due to his devious ways.
By mid-1996, federal prosecutors had either on trial or under indictment almost all persons reputed to be underworld members and associates in the porn industry. Some of the thugs got away, others didn’t.
Law enforcement lost a big federal obscenity case against the Perainos-owned AFV Releasing in Las Vegas in the summer of 1996. After two hours of deliberations, the jury acquitted Louis and Joseph Peraino of obscenity and racketeering charges. Defense attorney Dominic Gentile says the government has been out to get the Perainos since 1972 when "Deep Throat brought the dirty movie business out from the underground and into the sunshine. The government hoped to drive it back underground with this conviction." Gentile says the prosecution was a last vestige of the late-1980s onslaught against several Los Angeles pornographers.
Charges pended against Northridge resident Anthony Peraino when he died at age 80 in October 1996. The Perainos sold Arrow and AFV Releasing later in the year to Las Vegas pornographer Ray Pistol.
Butchie Peraino died of lung cancer in 1999. One of his sons got killed in prison because he had a big mouth and was on drugs. Butchie's other son, Patsy, owned LP Duplication which sold out to Ray Pistol in 2000.
Many of porn's biggest
duplicators are believed by law enforcement to be at least associates
of organized crime - including Lou "Patsy" Peraino Jr, Vinnie
DeStefano and Joseph Abinanti.
In September 1996, Ken Guarino’s North Star Distributors pled guilty in Las Vegas District Court to a federal charge of obscenity. As part of the deal, the government dismissed charges against Guarino personally and Salvatore Richichi.
In November 1996, a federal judge in the Southern District of Florida sentenced Salvatore’s late father Natale to six years in prison for his convictions of racketeering and extortion. The Florida case demonstrated the infiltration of the Mafia into the strip bar industry in Florida and neighboring states.
In January 1997, Guarino and Natale Richichi plead guilty to charges of conspiracy to defraud the government. Had the case proceeded to trial, the government said in the Memoranda of Plea Agreement that it would have presented evidence that Richichi is a "capo in the Gambino crime family of Cosa Nostra" and that Guarino made "tribute payments" to Richichi for protection of his multi-million dollar pornography empire against extortion attempts by other factions of the Mafia. By signing the agreements, Guarino and Richichi acknowledged that "each understood the factual basis for his plea.
"Unlike most [captains] who can only deal with the boss of their family through an adviser, and who would not be in a position to advise higher ranking members of other La Cosa Nostra families, Richichi has dealt directly with John Gotti…
"…He has also been intercepted providing extensive advice to Frank Salemme Jr., the boss of the New England La Cosa Nostra family. Richichi is also known to be highly respected by other La Cosa Nostra families and (captains) of various La Cosa Nostra families who reside in the Las Vegas area appear to give Richichi deference as well."
Ken paid Natalie Richichi, a confidante of John Gotti, and his son Salvatore $15,000 a month and laundered millions of dollars for them to prevent invasion of his porn empire, to get permission from the New England branch of Cosa Nostra to operate a precious metals business in the Northeast and to use their influence with union officials for favorable treatment. (Providence Journal-Bulletin 1/11/97.)
In April 1997, Guarino was sentenced to 16 months in federal prison and fined $250,000.
Metro Home Video (MGMA) was delisted from NASDAQ in 1999 but they resumed trading under the symbol MGBL.
"For 17 of the 30 years I've been in retail," said Eddie, "I've had to turn myself in to probation officers or wardens. I spent 1700 days in prison for free speech. When I get these awards, I want to think back to the legends who made this possible. People like [convicted thief] Reuben Sturman, Michael Thevis [convicted murderer], DiBi [member of Gambino and DeCavalcante crime families], the Luros family [which rose to fortune through pirating]..."