Repeal did come in and the Organization went out of the business of illegal liquor. Gambino went out quietly buying up all the stills he could and went into manufacturing moonshine on a wholesale scale. He had appraised the situation accurately. Taxes on legal liquor were high. Those who had grown accustomed to drinking moonshine preferred it to the legal whiskey which they said was no better and certainly a great deal more expensive.
Gambino became the biggest moonshiner in the country. He had large stills in Brooklyn, the Catskills, Long Island, New Jersey, and in the hills of Pennsylvania, and in Maryland. Despite the vastness of the operation he kept a close control. He had learned the intricacies of organization from the masters of it in the underworld.
He operated his stills for almost six years before the Internal Revenue agents caught up with him. He was arrested and charged with running a million gallon a year still in Pennsylvania. He was duly convicted, and on May 29, 1939, he was sentenced to a term of twenty-two months in the Lewisburg Federal Penitentiary. It was his only prison term.
When he was released, World War II had begun. With the war in full swing, rationing became a law. Everything was scarce. Ration stamps were necessary for shoes, gasoline, meat, and other goods essential to the war effort. There already was a black market. Making huge profits.
Gambino talked with his brother Paola.
“This black market business, Paola, it is big money. Have you looked into it?”
“Yes. It is big, and it is simple to take.”
“Take?”
“Yes. The ration stamps are distributed by agencies. But I have learned that in Michigan, in Detroit, Grand Rapids and other cities there, the stamps are distributed from schools. Poof! They are kept in plain office desks. We will get a good burglar to break into these schools, take the stamps and deliver them to us.”
“Someone we can trust, eh?”
“Of course. We will make it worthwhile for him to be trusted. That — or else.”
“Yes, that is good. Set it up.”
There was one other thing that took Gambino’s interest at this time. Luciano was in prison. Although he continued to wield a great deal of influence from his prison cell, he was not able to hinder the grasping for power on the part of Vito Genovese, Albert Anastasia, Frank and Joe Scalise, and a few other up and coming young hoods. Genovese was particularly in the forefront for the role of capo di tutti capi — boss of all bosses.
At the moment, however, Gambino gave his attention to the matter of the ration stamps. Gambino brought Sam Accardi, a New Jersey gangster, who later was deported to Italy, into the plan.
Accardi knew several professional burglars. He talked two of them into accompanying him to Detroit, where they looked the situation over and found it exactly as Paola had said.
Schools in Detroit and several other surrounding cities were raided and hundreds of thousands of ration stamps for gasoline, meat, shoes, and other products were taken. Back in New York, Accardi and the two burglars broke into the Office of Price Administration offices in New York and New Jersey. Their haul in both areas were in the hundreds of thousands again. The government then put these stamps in banks but the damage largely had been done.
Gambino got rich.
He then penetrated legitimate businesses on a broad scale. The Castellanos had gone into the wholesale and retail meat business and many of the meat stamps were distributed through them. It was a case of keeping it all in the family.
Gambino brought his skills into garment factories, supermarkets, parking lots, pizza parlors, bars, restaurants, nightclubs, vending machine companies, garbage hauling, real estate, and construction firms. He hired the best brains for each of these business ventures, and through a clever corporation lawyer set up a parent organization and holding companies. He had a strong hold on many union locals and used his influence there to abet his legal and semi-legal or semi-lawful activities.
In order to hold a strong hand on the various unions he opened up an office of labor consultants under the name of SGS ASSOCIATES. The G stood for Gambino. His partners were Henry Saltzstein, an ex-con, a convicted burglar, probably one of the men involved in the ration stamp burglaries, and George Schiller, of whom little is known in underworld circles.
SGS ASSOCIATES was one of the most successful firms in labor relations. Word got around that anyone engaging SGS would never have any labor problems. Among their clients were the Concord Hotel in the Catskills, Howard Clothes, and the real estate firm of Wellington Associates which owned the Chrysler Building.
Gambino also expanded his illegal activities on broad fronts which included gambling, loan-sharking, hijacking, narcotics, and other nefarious deals and dodges. Despite the fact that Gambino had entered this country illegally, he made a trip to Palermo, Sicily, in 1948, where he met with Lucky Luciano to discuss the narcotics traffic. It was a memorable meeting.
Luciano said, “Carlo, I have never forgotten your loyalty to me and so I will give you complete control of all the white stuff that will come from here for delivery to the United States.”
Gambino bowed. “I appreciate it, Don Charles. You may depend on me. I shall follow your advice and orders.”
“Yes, yes, I know. Now, there are many men here and in Italy who wish to go to the United States. They will be smuggled aboard freighters and passenger liners. They will carry the white stuff and deliver it to you as payment for their passage. You will make some arrangements to see to it that these men are taken care of in some way. You may be able to use some of them yourself or obtain some sort of positions for them with others of our friends.”
Gambino nodded. “It will be taken care of.”
“Good. I am told you have been very successful, that you have many enterprises going for you. No trouble with anyone?”
“None. I leave them alone, they leave me alone.”
“That is good. Very well, Carlos. You will receive word from me each time there is to be a shipment. It will come to you through various sources. It was good seeing you again, Carlos. Good day.”
The FBI learned that Luciano was involved in the smuggling of heroin. The Bureau forwarded its information to the Bureau of Narcotics and that department put some of its best agents to work on the case.
It was discovered that about forty Sicilian aliens had been smuggled aboard the SS Pamorus which docked at the Port of Philadelphia in May, 1948. The Bureau of Narcotics also learned that Gambino was the contact but didn’t have enough evidence to bring Gambino into court. He was too smart to leave himself open to any charge of smuggling or possession. Everything was handled through several parties until, when the stuff finally reached him, no one could say for sure that the heroin had actually been delivered to him.
Gambino’s friendship with Luciano and his control of a great deal of the narcotics trade did not set too well with Vito Genovese. He believed that he had an “in” with Luciano and that Charlie Lucky would throw all the business his way. The truth of the matter is that Luciano didn’t like Genovese.
This dislike went back to the days when Genovese broke with Meyer Lansky, Joe Adonis, Frank Costello, and Willie Moretti. Genovese had taken Albert Anastasia with him at the time and formed his own family. He stepped on toes at every turn.
Now, he was being paid back in the coin of the realm. He wasn’t one to take it lying down. He schemed how to take over from Gambino. What he didn’t know, or forgot, was that Gambino was a deeper plotter and that his intrigue and tactics made Genovese look like a rank amateur at the business.