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September 9, 2020 32 mins

Champagne escapades, sexual favors and now the mob?? The Sopranos may have been a hit, but this is real life. Prosecutor Art Leach breaks down the charges against the Gold Club and explains how the club’s money was funneled up the ranks of none other than... the Italian mafia. 

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Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
School of Humans. I'm Christina Lee. This is Racket Inside
the Goal Club, Episode three, Dirty Money. When I was
researching this podcast, I thought it'd be a good idea

to learn more about the Mafia's influence on pop culture, right,
So I started by watching Good Fellas, and then I
moved on to The Sopranos. We've officially pulled up the
HBO Now app and we got the cursor set on
season one, episode one, the pilot of The Sopranos. All right,

here we go. Honestly, Jersey kind of looks like gettysburg Pa. Oh,
but then they pull it to this Kardashian type house. Okay,
got it. This is definitely different from Oh my Life.
I always wanted to be a gangster. So my whole

coupe about Goodfellows is that this is what happens when
men can't talk through their feelings, Like especially the Joe
Pesci character. You give like a live wire gun and
look what happens. Right, But in this very scenario, it's
the complete opposite. I didn't even think about how ironic
that was, but the fact that we're literally starting with
Tony Soprano going to therapy is hilarious to me how

much time it's going to pass until I see somebody off.
Oh oh okay, no, come back. Let's talk about the ducks.
Let's talk about the ducks. Come back. I watched this
first episode with my husband and we had a lot

of thoughts after the episode about mafia archetypes. So I
guess perhaps if people understood the mafia archetype like clear
as day, I could see why people would be really
drawn and intrigued by these very personas that we've come
to know being sort of like taken apart and sort

of like interrogated in a way. Well, The Sopranos was
funny in that way because it was very explicitly supposed
to be like, yeah, you know, deconstructing the American mobster, right,
But despite it, they still ended up being kind of
like those good good fellas as you know, like yeah,

cool guys, gobba gool got it all figured out. Yeah,
kind of like as a nervous tick, right, like you
don't know how else you're supposed to act. Yeah, Yeah,
people still end up seeing them as like aspirational figures.
In the second episode of season one, at The Sopranos,
a mobster informant says this, You're always going to have

organized crime. Always. As long as human being has certain
appetites for gambling, pornography, or whatever, someone is always going
to surface to serve those needs. Always. The first episode
of The Sopranos aired on January twelfth, nineteen ninety nine.
The FBI raid on the Gold Club was on March nineteenth,

nineteen ninety nine. By the time of the trial in
two thousand and one, The Sopranos was arguably one of
the most popular shows on TV, so for millions of
Americans who followed the trial, the Italian Mafia was on
the mind. Atlanta's Gold Club was an end of twentieth

century bacchanal, one big champagne room for the rich and famous.
Sexual activity happened in the privacy of the Gold rooms upstairs,
and the clubs swindled its patrons in a variety of ways,
dumping champagne into the carpet or potted plant, charging tips twice,
maxing out credit cards. But as much fanfare and excess

as there was, the prosecution was mostly interested in pinning
down Gold Club's owner, Steve Kaplan, as an associate of
the Italian Mafia. The lead prosecutor on this case was
Art Leech. I'm Art Leech. I am a former Assistant
United States Attorney. I was with the Department of Justice
for nineteen years. I am the lead prosecutor on the

Gold Club case. Through the work of the FBI, we
knew what was happening, and we saw set out to
prove what was happening with regard to the Gambino crime family,
which is one of the five crime families out of
the New York City metro area. Art Leech describes himself
as a patriot. This goes back to when he was

in the second grade the year John F. Kennedy was assassinated.
Leech says he remembers being deeply affected. In nineteen ninety three,
Leech became the assistant US Attorney in Atlanta. Leech's job
led him to prosecute a variety of organized crime syndicates
in the South. At one point, he had to have

a security detail of US marshals because a Vietnamese gang
he was prosecuting was plotting to invade his home. You know,
I had threats, and you know, you take precautions. I
take precautions to this day, just because there's a lot
of people that I prosecuted over the twenty one years
that I was a prosecutor, both in state and federal court.

I'd had nineteen years with the Department of Justice, so
you know some people out there they're not happy with me.
In Atlanta, Leech became the head of the Organized Crime
Strike Force. The Organized Crime Strike Force was part of
a larger federal justice initiative, and of all the organized
crime in the country, their primary target was the Italian mafia,

also known as the Mob. Let me just see how
much I can talk about on this. I think I
can say the Organized Crime Strike Force is a nationwide organization, okay,
And I think I can go so far to say
that the plan in my time frame was a full

court press on the organized crime families with a perspective
of eradicating them as a criminal force in the United
States at that point and for all time in the future.
Leech believes without a doubt that Caplan was involved in

the mob, specifically the Gambino crime family, and if Caplan
got away with it, the mafia could take hold down South.
I think I can venture to say, without any opposition
from anyone, that this situation was unique in Atlanta, unique
in Georgia and needed to be addressed because it's like

a fester in cancer. I mean, if you're going to
allow it to grow and prosper, you're going to have
a problem going forward. We'll be right back. The sordid

history of the Gold Club is inextricably tied up with
the history of the Mob. The first major Italian mafia
incident in the United States was in New Orleans in
eighteen ninety a police officer was murdered execution style. But
as we know from The Sopranos and all the Mob movies,

the Mob primarily operates out of New York. Tony Soprano
commutes from his home in New Jersey. The Mob is
also in South Florida and other big cities up north
like Philadelphia and Boston. The Italian mafia and the United
States is also known as LaCOSA nostra, which translates to
this thing of ours, and the mafia is divided into

five main families. They're named after significant leaders they had
at one point or another Banano, Colombo, Gambino, Chenevis, Lukees,
and in New York. Their primary goal is extorting money
from businesses, nightclubs, strip clubs, you know, cedier enterprises. They

order business owners to give them protection fees to protect
these businesses from other crime organizations. As prosecutor on the
Gold Club case, Leech knew he had to spell out
exactly what the mafia was capable of, so he brought
an FBI aged Jack Stubing, who was following one of
the five families. An actor is reading Stubing's testimony as

an expert witness. The purpose of the cosin Nostra family
is simply to generate income and maintain the hour to
keep generating that income, and these individuals are key in
carrying out those day to day duties. Each crime family
is organized as a pyramid. The boss is at the top.

The boss of the family's word is supposed to be absolute.
He's assisted by an individual who's known as the underboss, who,
for lack of a better word, might be thought of
as the vice president. Then there is the concilierre what
it means is counselor The level below them is the

captain's In Italian, they're also known as capo. Under them
are the people who are said to be in their
cruise or regime, and these people are referred to as soldiers.
To be an official member of the mob, an associate
must be of Italian origin on their father's side and
be recommended and vetted by another member of the family.

Then they undergo an initiation ceremony. Here's how the ceremony
is ascribed in Jack Stubing's testimony. It's very dramatic. There
will be a gun and a knife laying on a
table traditional ceremony, they would take that knife and prick
the individual's trigger finger. Then they would squeeze a drop

a blood onto what's called a holy card. It's a small,
maybe a four inch tall card with a picture of
a Roman Catholic saint on it. Then the card placed
in the individual's cupped hands, and it's lit a fire,
and the individual is given an oath to recite, but
in essence, he is swearing his undying loyalty to LaCOSA Nostra,

that he will not discuss LaCOSA Nostra's affairs outside of
the family, and that if he should ever betray his oath,
may he burn like the image or like the paper
that's burning in his hand. They emerge from the ceremony
of fully initiated maid member. Now, according to these rules,

Steve Kaplan could not have been an official made member
because he is Jewish, but the FBI had an eye
on him for a while because of his father, George.
The government alleges that George was an earner generating family
income for the Gambinos, and when Steve Kaplan entered the
family business, he continued his father's legacy. As a mob associate,

Steve Kaplan was what we know as an associate of
the crime family. Generally, made members of the crime family
have to be of Italian lineage, and Kaplan was not.
But associates are just as important within the family as
maid members, and that goes from soldiers, which are the

bottom admitted members, all the way up to the boss
of the family. Kaplan was one of their biggest earners.
And earners are people who are supplying cash to the family,
and the cash is what provides them the ability to
carry on day to day, month to month, year to year.

It is what lines the pockets of everybody up the
chain of command. So an associate would be basically partnered
with the soldier. He would be associated with a captain
who runs a crew within the organized crime organization. And
ultimately the captain is also paying up to the boss,

the underboss, and the concieri, if that is what the
organization is at the time. But to prosecute Kaplan Leech
couldn't just follow the chain of command. A case involving
the mafia needs to show a pattern of illegal behavior.
The FBI didn't know that LaCOSA Nostra existed until nineteen

fifty seven, and then in nineteen sixty three, Joseph Vlacke
became the first mob member to violate the Klos Nostro's
code of silence called Omerta. Thanks to Vlacke's testimony, the
FPPI would see just how far the mob would go
to make money illegally, what's known as racketeering. This led

to the passing of the Racketeering Influenced and Corruptions Act
or Rico. RICO was passed in the nineteen seventies as
a means of dealing with organized crime. It allows the
government to go after leaders and members of a criminal
enterprise even if the government can't prove that the individual
was an acted part of each specific criminal act. It's complicated,

and it has been used to prosecute a variety of
cases across the country. So here's Art Leach explaining. It
is a statue that the Department of Justice passed way
back when Bobby Kennedy was Jorney General, and it was
aimed at the mafia and has been used for that
purpose over time. It is also used for complex cases

where you have a variety of crimes spread over a
wide area. So one of the many cases that I
did when I was Chief of the Organized Crime Strikeforce
involved the game that worked the entire United States and
they would do home invasions, murders, murder for hire, kidnapping,
all sorts of thefts, extortion. And so what RICO allows

you to do is if there's a murder in the
state of New Jersey, you can charge that murder under
New Jersey law in a case in Georgia. So the
whole idea is to bring all of the criminal activity
together in a single indictment, regardless of where it occurred
in the United States. RICO is what Art Leads used

in the Gold Club case. It was perfect. Everything could
fall under RICO. Prostitution, money laundering, fraud, Dozens of defendants
could be charged with dozens of different crimes occurring in
different states, all in one giant case starring the FBI
and the Gold Club. The government envisioned seizing millions and

shutting down the Gold Club for good. There's no denying
that Kaplan was closed with Gambino members. John Gotti Jr.
Was the boss of the Gambinos at the time. Kaplan
was close enough to call him by his nickname Junior.

In nineteen ninety six, Kaplan hosted Junior for a weekend
in Atlanta at the Gold Club. But what art Leage
alleges in the indictment is that Kaplan was more than
a friend. Let's take a look at the indictment. There
are going to be a lot of names, and it's
going to sound like the cat of a Scorsese film.

It's nineteen eighty eight. At a nightclub in New York
called Bedrock. A guy named Shorty Mascuzio is in a
rage because he was just fired from the club. He
goes downstairs to the bathroom and when a Bedrocks owners,
David Fisher, follows him. When Shorty's on the toilet, Fisher
shoots him in the head. Shorty dies. Now one of

the other owners of the club is none other than
Steve Kaplan, and apparently Shorty is a soldier with the
Gambino crime family. There's a problem. An employee named Douggie
Chittam witnessed the murder. Crime families like to keep things
within the family. They don't want the police in their affairs,
so Kaplan takes Douggie to meet with the Cambinos to

see what they should do about the murder. John Gotti Jr.
Instructs Kaplan to hide Douggie from law enforcement investigating the murder.
Kaplan flies him down to bulk of her Tone, where
he owns a home and operates a nightclub. He lets
Dougie hideout in his home. In retaliation. Dino Basciano, a

Gambino associate, wants to murder Fisher, and he wants to
do it at Bedrock. Kaplan asked him not to, assuring
Basciano that he will provide him with Fisher's address. Kaplan's
Gambino involvement continued in Florida, which, besides New York, is
another mob hotspot. In nineteen ninety four, a Banano family

associate operated a hot dog stand out of Kaplan's Florida
nightclub called Kloboca. Kaplan fiers. This associate is trying to
muscle him out of his own business. He asked the
Gambinos for help. The associate is successfully removed and the
threat against Kaplan is resolved. Kaplan participated in numerous loan

sharking schemes in Florida where he'd lend people money at
high interest rates and get Gambino as see it's to
beat people up if they didn't get their interest payments
in on time. He'd fly Gambino members on reduced fare
tickets on Delta, and he'd have meetings with Gambino members
in New York. And then there's the score situation. According

to the indictment, Kaplan and Gotti Jr. Were plotting to
extort money from a strip club in New York culled Scores.
You might know Scores from Hustlers, the twenty nineteen films
starring Jennifer Lopez and Constance Wu based on a true story.
Hustlers is about a group of strippers trying to financially

survive the economic collapse of two thousand and eight. To
do so, they drugged men, brought them back to scores,
and maxed out the credit cards before the controversy. In
nineteen ninety five, John Gotti Junior was staging a takeover
and he'd bring Kaplin for several cozy sitdowns with scores
own nurse. It was owned by two individuals. The Gambino

crime family made a decision to try to basically take
that over. And what had happened is when you're a
club in New York City, you are going to be
associated with one of the crime families, and from the
view of the crime family, you are protected by that family,
which means that no other family can come in. If

you have some sort of problem, they will address it,
but the ever present threat is of physical violence for
failure to pay your tribute to the family that is
protecting you. Well, the two owners of the Scorers nightclub
had been paying that tribute to the Gambino crime family
for a period of time and it was such a

moneymaker that they decided to take it over. And the
way they were going to take it over was through
Steve Kaplan. The Gambinos were apparently so impressed with the
Gold Club and how Caplan was motivating and boyees with
speeches and cash. They sought as counsel for Scores. Years later,
when three Gambino members pleaded guilty to the racketeering scheme

involving scores, Kaplan wasn't among them, but the indictment alleged
that he played a pivotal role in extorting scores regardless.
All right, so you're one step away from the actual
administration of the family. So I mean, in terms of
kind of measuring how important Steve Kaplan was viewed within
the Gambino crime family, the fact that he has got

that sort of access tells you that he's incredibly trusted,
which is why he ends up in the whole Scores situation. Because,
as somebody who has run a successful club, if they're
going to take it over, they've got to have somebody
that can run it. And they're soldiers, their captains. They
can't do it. They don't have the acumen, they don't

have the knowledge, they don't know what needs to be
done on a day to day basis to run a
business like that. So, you know, I just think that
it was it was a mutual relationship. It was highly
beneficial to the Gambinos, and he enjoyed it. He just
liked it. You know. That's that's the way that I
would characterize it. The FBI started surveillan Kaplan in nineteen

ninety six. A year later, the bureau had twelve boxes
of surveillance tapes. We had sources, we had agents, you know,
we had surveillance, you know, we had all the normal
things that you see in any criminal investigation. We had
all those things happening there. One of the things that

the FBI is really sensitive about a source of methods.
So I really can't talk very much about what it
is we were doing or what the objective was. And
you know, something's work, something's fail, but that's the nature
of conducting an investigation. Art Leech is vague about what
exactly the FBI was tasked with doing, but he makes

it clear that the FBI had people surveilling the Gold
Club from the outside in We'll be right back among
the Gold Club employees, like Catherine, the cocktail waitress. There

was definitely a sense that something sketchy was happening at
the club. I didn't know they were mafia at first.
I hadn't. I didn't know, but it's definitely like a
feeling like I knew in that office was Steve Kaplin
that I was kind of like with a shark. I
just because I'm a pretty intuitive person, you know. I
was like, oh, this is like, no fucking Joe. But

the entertainer Jacqueline Bush, who was close with Kaplan, said
all of Leech's accusations about the MOV tie for bullshit. No,
And see that's the thing that made me kind of
laugh at first. But then like later under in the trial,
I realized I had met John Gotti Junior and didn't

even know it. They had a video of me shaking
his hand out from the Gold Club. They didn't introduce
him as John Gotti Junior. They just said, this is John.
He's here visiting from New York. He wants to see
the Gold Club, and he wants the best of the best.
And so I had to round up ten of my
girls for him and his friends that night because he

wanted to experience the Gold Club and because he was
on in our building. All of a sudden, now my
Jewish boss, my Jewish boss is in the Italian mob. Now,
come on, are you kidding me? It's hilarious. They're from
New York. All of those people, the rich people, their

kids all go to school together. So his kids went
to school with John these kids, So what that doesn't
make him in business with this man? Are you kidding me?
And I've been to New York with Steve so many
times and I was never around anybody that was a gangster.

The Gold Club case was going to be Art Leech's
last as assistant US Attorney. He was pulling out all
the stops to take Kaplin and the Gold Club down,
and he decided to take advantage of the country's witness
security program. We had several witness security witnesses, in other words,
former mafia people who decided to cooperate with the Department

of Justice and are now in a program that we
call Whitseek Witness Security, and they go to different prisons.
When they're transported, they're transported in a very different way.
They're just not on commercial lights and so forth. In
order to tell the story, you have got to put
those people on the stand so that they can say

from the inside, this is what we were doing and
why we were doing. Leech found several mobsters who said
they would give testimony about Steve Kaplan and the Gold
Club in exchange they would get their sentences reduced. The
guys he got were torturers and murderers who had done
some pretty gruesome stuff. We'll get into all that in

a later episode, but for now, one guy liked to
do is torturing and a bathtub. It makes clean up easier.
Leech thought presenting these people would help the jury understand
how vital it was to bring down Kaplan and Gold Club,
because he feared that people might get caught up in
a romantic view of the mafia, in part because of

the hit show The Sopranos. For somebody who was an
organized crime prosecutor in that timeframe, I thought the Sopranos
did a pretty good job of showing the ugly side
of what happens within the mafia as well. But they
did it all under circumstances that kind of made the
role of the boss and the captains and the soldiers

kind of a romantic sort of thing. So this deconstruction
of the archetype that I mentioned at the top of
the episode was rubbing off on the public. Our idea
of a made member wasn't Joe Pesci and Goodfellows, it
was Tony Soprano. At his first therapy appointment, Leech explains
what mafia members were like in his experience you by

and large their sociopaths. By that, I mean that you
know they have been engaged in criminal conduct the better
part of their lives and it doesn't bother them at all.
To prove that Steve Kaplan was an earner, the FBI
and Leech needed to find evidence that the Gold Club
profits were going from the hands of Steve one into

the hands of a mobster, and that alleged mobster is
Michael de Leonardo. People call him Mikey Scars. According to prosecution,
Di Leonardo was Kaplan's main point of contact with the Gambinos.
He was a capo or a captain, and Kaplan gave
him money in the form of protection fees. I was

viewed Michael de Leonardo as kind of being the leader
of the band and someone who was making strategic decisions,
the way that the club operated, the way that it
attracted people, the prices that had charged. I mean, there
was a good bit of money that was never accounted
for in terms of the United States government, as you

might imagine, and that money, in turn was going to
pay the Gambino crime family. There was also a variety
of illegal activity that was going on, all of which
went kind of into the pool of earnings, and then
Steve Kaplan would pay up through his captain, which was
Michael de Leonardo, and then de Leonardo would pay up

ultimately to the hierarchy. In art Leech's opinion, the stakes
were extremely high. Atlanta was fertile ground, so if the
Gambinos took hold at the Gold Club, they could take
over other clubs and businesses in the city. As Leech said,
they were a festering cancer. It was an objective of

organized crime at the time to spread their influence, and
of course it's an objective of the organized crime program
at the Department of Justice during my time to stop them.
But the problem was with their twelve boxes of tapes.
All the government had was one person saying that on
one occasion Caplan gave de Leonardo a brown paper bag

of cash. Former owner John Kirkendall told the government something similar,
that CAPN paid their lawyer fees in cash and brown
paper bags. Employees also said they got paid in cash.
There was just a lot of cash floating around Kaplin,
like the millions in his basement. The FBI conducted a

search of Kaplan's residence, but when they got that Kaplin
had gone and departed. Apparently somewhere another somebody tipped him off.
The FBI was in route to search his house. Well
when they went down in this basement and they found
about two million dollars of wet money, what we call
the molded money, that captain discarded just didn't even want it.

The government estimate. He took a duffle bag out of
that basement with a little over five billion dollars in
cash in it and left two million and there was
wet that he didn't want. On the next episode of Racket,
you guys need to call me more offering. I don't

get any fucking phone calls. And then as soon as
we get on this, I feel like eight phone calls
that this was gonna need into the biggest case that
I ever handled. And I was thrilled. And they're just
buying more and more booze, and there's more and more
girls coming up. I guess you could say they were
being taken advantage of it, but they were willingly spending

their money. You've got a dirty cop that you're thrown
into the slad. What you're trying to do is give
it some local flavors so people if they would just
have a bad taste in the mouth. Steve comes to
me in the office. He says, Hey, I don't want
these New York lawyers anymore. How much more money do
you want to just run the whole show? And I

said finally. So they brought it south thinking that they
can make a moralative prosecution. You know, at some point
in time, people got to realize the Civil War is over.
I'm Christina Lee. This is Racket Inside the Goal Pub
Oh My Life, Racket, Racket, Oh My Life, My lone Husband,

Oh My Life, Racket Inside the Gold Club is a
production of School of Humans and iHeartRadio Rackets, written and
narrated by me Christina Lee and produced by Gabby Watts.
Caroline Slaughter is our supervising producer, special thanks to Taylor

church In Sonambashi. Music is by Claire Campbell and sound
design and mixes by Tune Welders. Executive producers are Brandon Barr,
Elsie Crowley and Brian Lavin, along with Scott Grubman and
Lauren Zimmerman. M h m hm hm hm. School of

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