Reputed Mobster Among 26 Charged In Gas-Tax Scheme
POMPANO BEACH, Fla. (AP) _ A reputed mobster charged in New York with racketeering also has been accused of teaming with a leader of a ″Soviet mob″ to direct a fraud scheme that deprived Florida of millions of dollars in tax receipts.
Michael Franzese, 25 other people and nine corporations were named in charges filed Thursday in Broward County circuit court by the state attorney’s office, authorities said.
The charges in the 177-count criminal information stemmed from Operation Tiger Tail, a 16-month investigation into theft of gasoline tax money.
Florida authorities said Friday that the groups involved may have stolen up to $40 million in gas-tax revenues. More charges are expected in the future, authorities said.
Fred Schneyer, spokesman for the Florida Department of Law Enforcement, said the defendants were charged with combinations of racketeering, conspiracy, theft of state funds, failure to account for taxes collected and uttering a forged instrument.
Friday night Franzese was being held at the North Dade Detention Center, near Miami, for a Monday arraignment, said shift supervisor Albert Snyder. Franzese’s attorney, John Jacobs of New York, had said his client would surrender first to New York authorities on Thursday’s indictment there and ″then turn himself in to Florida authorities.″
Franzese’s stepfather, John ″Sonny″ Franzese, 65, has been identified by authorities as a leader in the Colombo crime family. The younger Franzese was identified in a Senate Judiciary Committee hearing as a member of that family.
The 34-year-old Brookville, N.Y., resident also has a home in Delray Beach. He became a state celebrity in 1984 when his movie company filmed ″Cry of the City,″ a break-dancing movie, in south Florida. The film has never been released.
His movie company, Miami Gold, had its office at the same Fort Lauderdale address as Houston Holdings Inc., a wholesale petroleum company that state authorities allege was the hub of the gas-tax scheme.
Florida authorities allege that Franzese and Michael Markovitz, 39, of Brooklyn, N.Y., conspired to use Houston Holdings and other businesses to steal state gas tax revenues by filing fradulent returns showing false amounts of gasoline sold and false amounts of gasoline held in inventories.
″The resulting money would be split between their two factions,″ Schneyer said.
Franzese met with Markovitz, a Romanian immigrant, in New York in June 1983 to set up the elaborate scheme to steal state gasoline taxes, authorities said. Officials in south Florida and New York have said Markovitz is a leader of a ″Soviet mob″ of mostly Soviet immigrants who came into the United States in the 1970s.
The Fort Lauderdale News and Sun-Sentinel reported Dec. 8 that the ″Soviet mob″ has been working with the Colombo crime family.
The schemes operated over a two-year period when taxes on gasoline sold in south Florida ranged from 18.7 cents per gallon to 23.7 cents, authorities said.
Franzese was among nine people charged Thursday in New York in a 28-count federal indictment accusing them of defrauding major corporations and the state of New Jersey.
The indictment charged some defendants duped the Union Indemnity Insurance Co. of New York into putting up a $500,000 bond for their firm, Houston Holdings Inc., to do business in New Jersey.
Houston Holdings failed to pay New Jersey more than $3 million in motor fuel taxes, leaving Union Indemnity liable. The insurance firm has since been placed in receivership, officials said.