Julius Bernsteinwas a relic of a different era: Raised in the Depression, a genuine World War II hero — and the last of New York’s great Jewish gangsters.
While the Brooklyn native connived for decades in anonymity, his once-secret FBI file — obtained by the Daily News — exposes for the first time a life devoted to earning crooked cash with the Genovese family.
Pages of confidential documents provided via the Freedom of Information Law detail Bernstein’s extraordinary mob life and times:
l Shaking down the Sbarro restaurant chain for cash payoffs across four decades.
l Seizing control of a bus drivers’ union to amass an illegal fortune.
l Working side-by-side with legendary Gambino family capo Matthew Ianniello.
When he finally flipped and became a federal informant shortly before his October 2007 death, no one was more surprised than the gangster known as Spike.
“Wiseguys trust me,” he said on his first day as a turncoat. “That’s why sitting here is killing me.”
Bernstein was born in 1922, before New York’s five Mafia families even existed, and lived long enough to see both the rise and not-quite fall of La Cosa Nostra.
He grew up in gritty East New York in the 1930s, when it was an Italian/Jewish neighborhood and underworld breeding ground.
Jewish gangsters like Meyer Lansky and Bugsy Siegel partnered with Italian mobsters like Charles (Lucky) Luciano. Louis (Lepke) Buchalter ran Murder Inc., a franchise of Jewish and Italian assassins.
Bernstein, after storming the beach at Normandy with U.S. forces on D-Day, formed his own alliance in a midtown restaurant owned by a kindred spirit: Matthew Ianniello.
To his Genovese crime family friends, Ianniello was known as Matty the Horse, a mob up-and-comer who would someday control most of the strip clubs and bars in Times Square.
The two fast friends shared an imposing presence: The 6-foot Spike looked like a longshoreman, while the 6-foot-1 Matty was built like a refrigerator.
Matty served as best man at Spike’s wedding, but there was one thing he couldn’t do for his pal: Bring Bernstein into the Mafia. His Jewish heritage meant Spike would never be a made man.
Bernstein served instead as an “associate,” one of the hangers-on who generate much of the cash that funds organized crime.
“I’ve been a thief all my life,” Bernstein once bragged.
Bernstein was busy doing what he described to the FBI as “street stuff” when his big criminal break came in 1971.
The Genovese were seizing control of labor unions to fatten their bankroll, and Spike was installed at Local 1181 — a school bus drivers’ union that became a crime family ATM.
Over the next 35 years, Bernstein squeezed every illegal penny possible out of the union. His salary ballooned to $216,000 a year, and he drove a union Lincoln Continental.
He shook down bus company owners, uniform makers and a medical clinic.
The mob connection was barely hidden. The Horse was spotted at a union Christmas party, and tooled around in his own union-owned Lincoln.
The friendship was mutually beneficial. Bernstein, after he was “put with” Matty, earned enough trust to manage the bookmaking operation of the then-Genovese boss Frank (Funzi) Tieri.
Bernstein says it was Tieri who told him about the family’s decades-long shakedown of the Sbarro restaurant chain.
The now-global Sbarro empire opened in 1959 as a single Italian grocery in Bensonhurst. As it grew, the family focused on placing restaurants in malls and rest stops — a strategy that paid off dramatically.
Sbarro went public in 1977; by 1991, the company was opening 75 to 100 stores each year.
The Sbarro brothers, Mario, Joseph and Anthony, took the company private in 1999, and continued to run it through 2006.
Bernstein told the FBI that the “protection” payoffs began in the 1960s. By 2004, they were paying $20,000 a year — money that Bernstein paid to recent Genovese boss Dominic (Quiet Dom) Cirillo inside the bathroom of a City Island seafood restaurant.
Bernstein said Cirillo ordered him to take over collecting the two annual payments of $10,000 from someone named Angelo. When Spike met with Angelo, the man gave him $10,000 cash and told him the money was from the Sbarro brothers.
Law enforcement sources confirm Angelo was Angelo Aquilino, a Genovese associate later convicted of shaking down a bakery and a contractor — but not the Sbarros.
The payments appeared to have ended soon after Bernstein met with Cirillo.
Before Christmas 2004, when the second payment was expected, Angelo told Bernstein the Sbarros were refusing to pay and asked for help in collecting.
Bernstein, fearing Angelo was now an FBI cooperator, told Cirillo about his concerns and the matter was quickly dropped.
The Sbarro brothers sold the chain to a private equity firm in 2006 for $450 million. An email sent to Mario Sbarro for comment on the tale went unanswered last week.
The Sbarro shakedown was hardly Bernstein’s first foray into extortion. Twice during his 50-year mob career, Spike beat a pair of extortion raps.
In 1968 Bernstein and three others — including Tony the Gawk — tried to squeeze weekly payments from a man named Saul, owner of the Happy Burger. Saul was told if he didn’t cough up $100 a week, his “head would be put through a cigarette machine.”
After a Brooklyn district attorney’s detective showed up at Happy Burger to interview Saul, Tony the Gawk and Spike returned.
“I ought to cut your heart out for talking to the cops,” an FBI memo quotes Tony as saying.
Cops found two guns in Spike’s car, with Bernstein and his cohorts arrested first by the Brooklyn district attorney and then by the FBI.
FBI records obtained by the News show that — for reasons unexplained — all the state and federal charges against Bernstein were dropped.
In 1975, Bernstein and Ianniello, were charged with shaking down a trucking firm and coat company in Manhattan’s Garment District.
Both companies were actually law enforcement fronts.
Ianniello, Bernstein and two others took the case to trial — and won acquittals.
FBI records from 1977 show the feds dropped yet another investigation of Bernstein, this time involving participating in alleged shakedowns of city restaurants via the Italian American Restaurant Employees Union Local 711.
The gangster’s luck finally ran out in July 2005 when Spike had reached the long-past-retirement age of 82.
After his arrest for union corruption, Bernstein faced up to 20 years in prison — a life sentence at his age.
He pleaded guilty to several extortion charges in 2006 — including the Sbarro shakedown — and made an extraordinary decision:
Bernstein decided to spill his guts to the FBI.
But he never quite reformed. Eight months after flipping, Bernstein took a $20,000 payment from a bus company owner inside a bathroom at the Staten Island Hilton.
At 7:04 a.m. on Oct. 21, 2007, Bernstein died at Montefiore Medical Center in the Bronx. He was 85, and was buried days later in the New Montefiore Cemetery on Long Island.
He died without ever taking the witness stand to implicate his cohorts.
By Greg B. Smith / NEW YORK DAILY NEWS
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