Miami Herald, The (FL) - July 10, 1984

Author: SUSAN SACHS Herald Staff Writer

The executive producers of a much-ballyhooed movie about breakdancing filmed in South Florida this spring are associates of organized-crime figures, law enforcement officials said Monday.

Last week, Cry of the City co-producer Michael Franzese was arrested in New York with 15 other men on a racketeering charge. He is accused of participating in a loan-sharking scheme and is identified in wiretapped conversations as a "high ranking member of an organized crime family," according to the federal complaint.

He was released on a $300,000 personal recognizance bond.

The other producer of the film, which showcased local teen- agers in a street-tough romance, is Jerome Zimmerman, who is identified by Florida and Los Angeles law enforcement authorities as a long-time associate of Franzese’s stepfather, underworld figure John "Sonny" Franzese.

The movie producers, who have a company called Miami Gold Inc. in Fort Lauderdale, have become minor celebrities in South Florida. Miami Beach officials, pleased that the moviemakers used South Beach as a location for a portion of the movie, gave them a key to the city.

In previous interviews, the producers said that Cry of the City, which features Sammy Davis Jr. in a small role, had a budget of $5 million. It is scheduled for release in September.

"Words are just allegations -- my partner is this, his father is that, there’s gangster money involved," said Zimmerman, contacted at Miami Gold’s offices on Monday to comment on Franzese’s arrest. "We made a picture we felt was very successful. We have another one, Game of Chance, that will start filming here in four weeks. We’ll be here."

Zimmerman said the financing for the movie came from "banks" and offered to respond fully to questions about the film company’s backers and the producers’ backgrounds Wednesday.

Michael Franzese, contacted in New York, denied any connections to organized crime and said he would plead innocent to the racketeering charge. He, too, said financing for the movie came from "legitimate lenders" but declined to identify them because "it’s not good business ethics to reveal the source of your financing to the world."

"I have never been convicted of a crime," Franzese added. "I guess it’s because I’m Italian that all this is coming out."

In previous interviews during the filming of Cry of the City, 33-year-old Franzese described himself as a one-time medical student who owned a Long Island car dealership with Zimmerman before the two got into the movie business.

Zimmerman -- six feet five inches tall and heavy-set -- described himself as a former stand-up comic.

Police investigators, however, said Zimmerman, 52, has been an associate of organized crime figures for years. He also is facing 6-year-old charges of grand theft in Los Angeles County in connection with an alleged "bustout" scheme involving several companies, including one of which he was president. The case, which involves charges of ordering merchandise with no intention of paying for it, has not gone to trial.

Los Angeles Police Detective Norm Bonneau said Zimmerman once was convicted of perjury in connection with his testimony before a New York grand jury investigating Sonny Franzese.

NBC News reported Monday night that police investigators had the two men under surveillance during a "wrap party" celebrating the conclusion of the filming in South Florida last month. The television report also suggested that Mafia money is financing the Franzese and Zimmerman feature films.

The elder Franzese, considered a leading figure in the Columbo crime family, served 11 years of a 50-year sentence for bank robbery and was in jail in Otisville, N.Y., until his release last month on separate racketeering charges. Local law enforcement authorities said Sonny Franzese spearheaded early organized-crime involvement in pornography.

The federal complaint against Michael Franzese in New York accuses him and others of lending to various businesses more than $1 million that was obtained from illegal organized-crime activities. The money was lent at "usurious" interest rates of 2 percent or more a week, according to the complaint.

The participants, charged under the federal Racketeer Influenced Corrupt Organizations Act, also threatened their victims with physical violence and claimed, as a further threat, to be connected to organized crime families, the complaint said. If convicted, the defendants could be sentenced to a maximum of 20 years in jail and fines of $25,000.

Michael Franzese is charged with participating in the loan- sharking operation. Executive Assistant U. S. Attorney Jane Parver said wiretaps made by the FBI also contain conversations in which Franzese is identified as a "high-ranking" organized- crime figure who had invested in the loan-sharking operation.

The operation was run out of a business identified at various times between August 1981 and February 1983 as Cooper Funding or Resource Capital Group in Lake Success, a New York City suburb, the complaint charged.

Although Zimmerman is not named in the New York complaint and no reference is made to his and Franzese’s movie-making activities, Zimmerman was at one time associated with a Woodland
Hills, Calif., company called Cooper Funding that is believed to be related to the New York business of the same name, according to police sources.

Los Angeles Police Detective Bonneau said investigators once called the New York office of Cooper Funding for information about financing and were referred to the Woodland
Hills office. The California company has been defunct for several years, he said.

During the filming of Cry of the City, Zimmerman and Franzese told reporters they had produced two low-budget horror films, one starring former evangelist Marjo Gortner, that did surprisingly well and provided them with money to invest in the South Florida movie.

The two films mentioned, Gates of Hell and Mausoleum, were released by a company called MPM . Zimmerman said Franzese owns a distribution company in Los Angeles called Motion Picture Marketing.

Dade County’s film coordinator, Marylee Lander, said she has received no complaints about the producers. "They paid their bills," she said. Several businesses in Broward County that provided services or locations for the filming also reported no problems in getting paid.

Recently, Zimmerman appeared on a local television station escorting one of the film’s amateur dancers to a furniture store. The youth had refused the producers’ offers to fly him to California and introduce him to the movie business there. Instead, the teen-ager had asked for furniture for the apartment of his mother, who is on welfare. The producers obliged, with local television crews present.


The Record (New Jersey) - January 28, 1986
Author: ANN CRAWFORD: The Record

A couple of weeks ago President Reagan was deploring mob infiltration of legitimate businesses. He could have taken for his text the extraordinary federal indictment returned last month in Brooklyn, charging movie producer Michael Franzese and a group of associates with predatory raids that crisscrossed the corporate landscape of the metropolitan area. Franzese's credits include " Night of the Zombies ," "Savage Streets," and the like. The New York Times critic said that "Streets" wallowed in it s own awfulness.

Franzese does a lot more than make bad movies, if one is to credit the details of the 99-page indictment. His enterprises include a disco, Mazda and Chevy dealerships, an auto-body shop, a carpentry firm, a window fabricator, a masonry contractor, a construction company, consulting firms with strange names (M&M Business Relations Corporation, for one), leasing agencies, an oil distributor, a gas station, and a bunch of labor unions.

This empire is reputedly run by Franzese and eight codefendant sidekicks from mansions on Long Island and Pompano Beach, each equipped with fleets of limos, yachts, and a private jet. The schemes alleged by the grand jury run the range of rapine:

A plot to beat New Jersey out of $3 million in gas taxes owed by the gasoline distributorship, Houston Holdings. The insurance company that bonded Houston (on the basis of counterfeit collateral) is now in receivership.

A scheme to con Beneficial Commercial Corporation into financing the purchase of scores of new cars for the two auto dealerships, using forged Treasury bills as collateral. Beneficial never got its money back, and the hapless car buyers never got clear title to their cars.

The body shop was used to defraud another insurance company for thousands in repairs that weren't done.

The grand jury also said that Franzese and his henchmen, as officers of the Allied Security Health and Welfare Fund, used the fund to buy certificates of deposit issued by Dome Insurance Company in St. Croix. Dome's now in receivership, too. The union fund lost hundreds of thousands. In return for the union's business, Dome's president made huge cash payments to Franzese sidekicks and took three of them on a junket to St. Croix. One vacationer was the unions attorney, Mitchell Goldblatt.

We've met Goldblatt before, as attorney for the Federation of Special Police and Law Enforcement Officers. The federation is a unit in the Allied Security group. It aims to organize guards in sensitive spots like the air-freight terminal at Newark Airport or the Meadowlands race track. Under the unsavory leadership of convicted labor racketeer Daniel Cunningham, the union also tried to move into the casinos in Atlantic City and the Three Mile Island, Indian Point, and Salem nuclear plants.

embezzling $225,000 from the union before he could get into nuclear-power plants.

In the Franzese indictment, Goldblatt is charged with simply stealing $50,000 from the welfare fund to share with the union's president, codefendant Anthony Tomasso, and with Cunningham's current wife, Susan.

The grand jury also charges a credit-card scam, in which counterfeit cards were used to ring up $13,000 in phony purchases at a marina in Babylon. There was a boat-insurance scam in which a 1978 Formula was falsely reported stolen. The insurance company paid out $24,000, though the boat's title proved to be a forgery.

Mobil was taken for $60,000 of gasoline delivered to the service station. The Franzese subordinate who ran it submitted a false armed-robbery report to explain to Mobil why he couldn't pay his bills. U.S. Attorney Raymond Dearie asked for forfeitures of $5 million in ill-gotten gains from this assortment of thefts.

It seems a modest enough figure, but it doesn't include reparations for the multiple counts of income-tax fraud. The IRS says that Franzese concealed his assets by placing them in his wife's name, by failing to report cash income, by shifting funds among scores of corporations, real and phony. Extensions were repeatedly sought on false grounds. Checks to the IRS bounced.

The conspicuous victims are big guys: Mobil, Chemical Bank, Beneficial Finance, Chubb and Son, and a flock of lesser banks, insurance companies, and bonding institutions. The unseen victims are all the rest of us.

Members of the union are stripped of protections they earned. Policyholders of the ruined insurance companies are left holding the bag. Dockage fees are up at the marina to cover higher insurance premiums. Credit-card fees will rise. Mobil's customers will make up the $60,000. Taxpayers will pay the tab that Franzese has allegedly avoided together with the immense cost of mounting this prosecution. Welcome to the president's war on the Mafia, and happy hunting.

The Franzese File A Porsche, a pool and not much informing for mobster set free.

Newsday (Melville, NY) - January 6, 1991

Author: Much of the reporting on this story was done by the late Tom Renner, Newsday organized crime reporter, who died in January, 1990. The reporting was completed by staff writer Letta Tayler, who wrote the story.

Less than two years after being released from prison, former Long Island mobster Michael Franzese has resumed his luxurious lifestyle, frustrating prosecutors who say he owes them $14.7 million in fines and information on organized crime.

When not relaxing in his swimming pool or sauna at his Southern California mansion, sources say, the 39-year-old Franzese - once described in Life magazine as the Yuppie mobster - is cruising in a Porsche, or sometimes a Mercedes. He's also working with a best-selling author on his memoirs and is discussing offers to sell his life story, complete with details of his days as a Colombo crime family captain and film producer, for a movie or a mini-series.

What rankles prosecutors in Suffolk County and Florida is that under the terms of a deal the former Brookville resident cut with the federal government, there's little they can do to force Franzese to pay up or begin talking.

Under the deal, Franzese was released from prison in May, 1989, after serving only 3 1/2 years of a 10-year sentence for racketeering and conspiracy. In addition, the pact gave Franzese immunity from prosecution on his past organized crime activities. It kept his five-year probation sentence and his fine.

In return, Franzese was to turn over everything he knew about his mob activities and associates - but prosecutors had only a year, until April 30, 1990, to pump him. He also was required to testify in any trial related to his information if the indictments were filed before April 30, 1990. Law enforcement officials said the time constraints in the deal were virtually unprecedented and made the cooperation clause essentially useless.

As a result, some prosecutors say that Franzese's biggest contribution as an informant has been his 1989 testimony against New York talent and sports agent Norby Walters, who was convicted of racketeering for illegally signing college athletes to professional contracts. But Walters' conviction was reversed in September on an unrelated legal technicality.

"The government gave up one of the most important, up-and-coming members of the Colombo organized crime family in return for information on a booking agent," said Ray Jermyn, chief of the rackets bureau in the Suffolk County district attorney's office, who provided the federal government with much of the information that helped indict Franzese in December, 1985. "We're deprived of his use as a witness, and we didn't get the money he owes us, either."

"Quite frankly, I think Michael ripped off the U.S. government," said James Stein, deputy chief U.S. parole and probation officer for the Eastern District, which includes Long Island.

In a lengthy telephone interview last week, Franzese conceded, "I'm not living in a ghetto." But he denied he was getting a free ride from the government and said he was under constant pressure to pay his fines.

"I can't say that I got away with the better bargain or that the government did great, either. It was a compromise," he said, calling his decision to sign the deal one of the toughest he ever made. ". . . I absolutely do not feel that I pulled the wool over anybody's eyes."

But Franzese, who refused to join the federal witness protection program, also said that "I really didn't hurt anybody" by providing information and that "most of the people I knew were already in jail."

The two officials who were key to engineering the pact with Franzese

- Anton Valukas, then U.S. attorney for Chicago, and Ed McDonald, then chief of the federal Organized Crime Strike Force in Brooklyn, which is now defunct - are now in private practice. In recent interviews, McDonald blamed the terms of the pact on a separate deal he said Valukas made with Franzese for testimony in the Walters case, but Valukas denied he had made any agreement.

John Gleeson, the chief of the organized crime unit in the Justice Department's Eastern District, who is overseeing the pact, refused to discuss the agreement on grounds that Franzese was still linked to pending investigations.

`It's entirely inappropriate for me to comment on whether it's a good deal or a bad deal for the government," Gleeson said. But he added that any time authorities strike a deal with an informant, there is always a critic claiming that "the government gave away the store."

Suffolk law enforcement officials, who were not consulted about the deal, say the time limit placed on Franzese's cooperation has kept them from seeking indictments in five major cases involving gasoline bootlegging and business fraud.

Suffolk did file one loansharking case by the deadline, but Franzese refused to testify, Jermyn said. As a result, the county indicted Franzese. He has been ordered to appear in Suffolk later this month to answer charges of contempt of court.

Asked about the loansharking case, Franzese said he does not intend to testify because "I don't know anything about it."

Because of his notoriety and his lifestyle, Franzese is also being investigated by the federal parole and probation office to see if he is violating his probation. The results of that probe are expected to be presented to a federal judge within two months.

Franzese is no stranger to the parole office. Stein, its second-in-command, was once the parole officer for Franzese's stepfather, reputed Colombo mobster John Franzese, known as "Sonny," who is in prison for parole violations linked to a bank robbery conviction. According to testimony by Lawrence Iorizzo, a former gasoline executive and mob associate who became a federal witness, Michael Franzese in the early 1980s discussed having Stein "whacked" - mob lingo for killed - because the parole officer's investigations into his stepfather's activities were interfering with family business.

Federal officials also plan to make Franzese testify in the next two months about his finances to find out why he hasn't paid the $14.7 million in fines, including about $4 million to Suffolk and $3 million to Florida.

The dark-eyed, smooth-mannered Franzese was considered the biggest - and youngest - money-maker for the Colombo crime family during his days in Brookville in the early and mid 1980s, making Fortune magazine's 1986 list of the top 50 mobsters. He also has been profiled in Life, and will be featured in an article in February's Vanity Fair.

Franzese now lives with his wife, Cammy, and their three children, and has three other children by a previous marriage. He was raised in Roslyn and joined the mob when his stepfather was in jail, prosecutors say. He cut off his biology studies at Hofstra University after three years and went to work for the "family" fulltime, specializing in complicated financial manipulations of legitimate businesses.

By the mid 1980s, investigators believed he was involved in dozens of illegitimate activities using night clubs, car dealerships, gasoline companies and other businesses as fronts. He reached the rank of captain, overseeing about 20 soldiers, prosecutors said.

In those years, Franzese lived in Brookville, docked his boat at the Fire Island community of Saltaire and was seen some nights holding court at the Casablanca restaurant in Huntington Station.

He also moved his interests and his money south to Florida, where he produced four B movies: "Mausoleum," " Night of the Zombies ," "Savage Streets" and "Knights of the City." In Miami Beach, he was given the key to the city and a Bible blessed by the Pope for his film-making enterprises. That was before officials discovered he was running a multi-million-dollar gasoline bootlegging ring in both Florida and Long Island - his biggest known scam.

The ring, which Franzese ran with Iorizzo, bilked the federal, New York and Suffolk governments of an estimated $1 billion in gasoline excise taxes from 1981 to 1985. Franzese created dummy corporations that claimed to have paid the taxes and then vanished once auditors got on their trail.

In December, 1985, acting on information from Iorizzo and Suffolk prosecutors, the federal government arrested Franzese on a 14-count indictment charging him with crimes including racketeering, conspiracy, embezzlement from a union benefit plan, using counterfeit credit cards, and extortion.

In 1986, he pleaded guilty to the racketeering and conspiracy charges in return for the 10-year prison sentence and the the $14.7 million in fines and restitution. That year, he also pleaded guilty in Florida to 65 counts of a state indictment linked to his gas-tax scam and was sentenced to 9 years in prison, to be served concurrently with the federal term.

Initially, Franzese resisted any deal, although he did provide some information about the mob in late 1986, federal officials said. Then along came the Norby Walters case in Chicago.

Franzese's testimony about how he used his mob muscle on Walters' behalf made headlines nationwide. He not only testified that he had contacted college athletes for Walters, but also revealed that he had tried to intimidate other agents into assigning Walters contracts for performers Michael Jackson, Dionne Warwick and the group New Edition.

According to McDonald, U.S. Attorney Valukas was so excited about using Franzese that, in return for testifying against Walters, he promised him he would not have to serve more than another year and a half behind bars - at a "camp" or other minimum-security center. Valukas also did not require Franzese to provide any information about his other crime activities in return for the promise of a shorter sentence, McDonald said.

At that time, Franzese faced at least three more years in prison, after routine reductions in his 10-year sentence for good behavior, parole records show.

McDonald said that he was informed of Valukas' deal with Franzese only after the fact. He said that as a result, the strike force had no choice but to offer Franzese an even better agreement to get any more testimony out of him - the pact signed May 18, 1989, that let him out of prison immediately.

"At that point, our bargaining chips were virtually non-existent" in cutting a deal to get Franzese to testify about additional organized crime activities, McDonald said.

Valukas called McDonald's version an "absolute fabrication." He said that although he considered Franzese one of the best witnesses he'd ever called to the stand, "no one ever went back to him and said, `You are only going to serve one more year.' " He said his office agreed not to return Franzese to a hard-time penitentiary, calling that common procedure for convicts who testify in important cases.

Franzese denied Valukas promised to shorten his term. However, he did say that Valukas wrote him a letter "that I could use with the judge or the parole board . . . and that he'd support whatever consideration they'd give me."

Moreover, Franzese said he was led to believe that "I would have done at the most another 14 or 15 months" after testifying in the Walters trial, but didn't say who gave him that information.

Federal officials in New York familiar with the case, who asked not to be named, supported McDonald's version. They also said that Valukas was able to make his deal because he had far more political clout with the Justice Department in Washington than McDonald, whose strike force was being abolished. McDonald "had to make the best of a sour deal," one source said. Justice Department officials in Washington refused to comment.

Franzese said he had placed the time limit on his testimony because "I wanted to get on with my life. . . I didn't want to become an organized crime witness who was paraded around the country to testify. That kind of thing sickens me.

"My goal in this whole thing was to get out and try to give my family a better life than what my mother and brother and sisters and I went through, because what happened to them was devastating," he said. ". . . There are certain people in government that maybe felt they personally worked on my case and would have liked to have gotten a piece of the pie. But that doesn't entitle them to a piece of me. I'm not a commodity to be cut up."

Apart from the Walters case, Franzese has testified in only one trial in return for his freedom. Last July, Franzese testified in federal court in Uniondale about how he got a former janitor to leak him information about the federal grand jury proceedings that led to his indictment on racketeering charges.

Federal officials said Fran- zese also has testified before at least one grand jury, but refused to give details on what information he has provided. McDonald said only that it was enough to make the pact with the government "worthwhile." Franzese also would not give any details.

But some government sources said they believe Franzese withheld most of the valuable information he had about New York mobsters. "The best information he could give is `enterprise-type evidence' about who's who in the families and what they are doing, but that's what he's holding back on," said one source, who described Franzese as "extremely manipulative." Another source said that Franzese's current lifestyle and the money he owes the government make the results of the deal "laughable."

That opinion was echoed by Dary Matera, the Phoenix-based author who wrote the best-selling "Are You Lonesome Tonight" about a woman who claimed to be Elvis Presley's illegitimate daughter, and who is co-writing Franzese's biography.

"He's given them [the government] nothing. I really think he hasn't given them a thing," said Matera, whose book is slated for release next year under the title, "Quitting the Mob."

Florida officials don't care about Franzese's testimony. They just want their $3-million share of his fine.

"The debt is neither forgiven nor forgotten," said Fred Damski, a state prosecutor in Broward County who prosecuted Franzese, adding that he held the Eastern District office responsible for getting the money for Florida.

One Florida source close to the Franzese case said: "If the guy is making a lot of money and living in a million-dollar house, then somebody should be able to get some of that restitution money out of him without too much trouble."

Officials entrusted with recouping the money disagree. They said that to seize Franzese's house or cars, they would have to prove that he owned or financed them, or was siphoning funds to the people who did. And so far, they have found no proof that he has done that. In fact, Franzese isn't listed as owning any property or being employed in any job, they said.

The government was supposed to receive any profits from Franzese's last film, "Knights of the City," but the books show no profits, said Mary Dooley, the assistant U.S. attorney assigned to collections for the Eastern District. She said the government also was entitled to any rights from distributing the film's soundtrack, but it can't distribute the music without the master tapes - which disappeared after Franzese's arrest.

In addition, Franzese told the government as part of his 1986 guilty plea that it could have all his assets - including the Brookville house, co-ops in Patchogue and a house in Delray Beach, Fla. But there were already so many previous liens on the property that the federal government didn't collect a penny from the holdings, Dooley said.

"My idea of a good plea agreement is where at the sentencing, the guy shows up with the certified check," she said. "Once the agreement is set and the person is out [of jail], it's very hard to get the money."

Franzese said he intended to pay, but doesn't know how long it will take him to earn the money. He said he was working hard, often "12 to 14 hours a day," but wouldn't reveal what kind of activities he was involved in except to say that some of them were linked to the film industry and that they were "100 percent legit." He also wouldn't comment on who owns the house he and his family live in and the cars he drives.

Franzese also denied rumors that he has millions stashed in foreign bank accounts or buried in a back yard. "The belief is that I've got more than bags of money, that I've got barrels," he said. "But if anybody finds it, let me know."

Despite the money owed, McDonald insisted that he thinks the real loser in the deal was not the government, but Franzese, in risking the anger of other mobsters by becoming an informant.

"Did he scam his way into a situation where he isn't being penalized for what he did? I guess in a way you can say he did," McDonald said. "But on the other hand, he's going to be looking over his shoulder for the rest of his life. He's supplied information about organized crime figures who don't take that lightly."

Franzese disagreed.

"I did something that, technically, according to my previous lifestyle, I'm not supposed to do. So technically I'm in trouble even by signing that piece of paper," he said of his deal. "But could I tell you that I live in fear or that I'm concerned? The answer is, no . . . Whatever will be, will be." ***** A Life Like a Mob Movie

He hates being compared to Michael Corleone, but when Michael Franzese saw "The Godfather Part III," he says he identified with the movie don who suffered from his life in organized crime.

"He was in so much pain, and that got to me a little bit," said Franzese, 39, a former Colombo crime family captain from Brookville.

But Franzese said that he sees no parallels between himself and mobster Henry Hill, whose real-life story was the subject of the film "GoodFellas."

Both Hill and Franzese operated in the New York area, and both signed pacts - with the same federal prosecutor - that set them free in return for testifying against their former mob associates.

"I'm not trying to become a crusader for the government, unlike a Henry Hill, who I think is a . . . low life," Franzese said.

Hill went into hiding under the federal witness protection program, but Franzese lives under his own name with his family in Southern California.

Like the fictional Corleone, Franzese says he dreamed of living a legitimate life but was sucked into organized crime out of love for his father. He left his studies at Hofstra University to begin his underworld career when his stepfather, John Franzese, a reputed Colombo mobster known as "Sonny," was imprisoned on a bank robbery conviction.

Michael Franzese, who produced four Grade B movies during his mob days, revealed that he is co-fielding offers to be the subject of a film or a mini-series. But perhaps because of his reservations about the Corleone and Hill characters, he hasn't yet decided if he wants to take that jump.

"That's really putting yourself in a fishbowl," he said.

Franzese would divulge few details about his activities since he was released from prison in May, 1989, except to say he's been working on a book about his life. But he insists that these days, he's just a regular guy.

"I'm not doing anything illegal," he said. "My life now is 100 percent legit." Letta Tayler

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