Thread by @TotallyNotARus5

Hello again, Brighton Beach Mob Thread #2:
Gasoline scams, the rise of Marat Balagula, and spy games

This thread will mainly be sourced from All is Clouded by Desire by Block and Weaver, Russian Organized Crime by Williams, Blood Covenant by Franzese, and again Red Mafiya by Friedman, and here is a link to thread #1, in case anyone needs a reference point

https://twitter.com/TotallyNotARus5/status/1444796609917857796?s=20

(Graphic) We had last left off with sadistic mob boss Evsei Agron lying dead in a pool of his own blood, and needless to say the list of suspects was long. Given that the perpetrators had intimate knowledge of Agron’s schedule however, the signs pointed to an inside job

Boris Nayfeld—by now Agron’s driver and bodyguard—fell under heavy scrutiny early on, seeing as he was waiting for him outside the building and left the scene in a hurry, although he denies involvement to this day and many attest to his genuine distress upon hearing the news

From a cui bono perspective however, the man who benefited the most from the murder and assumed control of Agron’s organization within days of the hit was the same man Nayfeld became driver and bodyguard for the very next day: Marat Balagula

Balagula’s rise to the top of the Brighton Beach criminal food chain started in an area that most don’t associate with the 1980s cocaine-fueled organized crime era: gasoline racketeering

Now neither Balagula nor any of the Russian emigrés invented gasoline fraud. Greek and Turkish immigrants were running a plethora of scams since the 1960s, with a focus on tax dodging, but the most prominent early figure was a flamboyant bigamist named Larry Iorizzo

In the early 1980s, Iorizzo was being shaken down by a group of thugs who wanted to muscle in on his business, and took his problems to Colombo crime family caporegime Michael Franzese, on whom he made the following impression:

Franzese was hesitant, especially since Iorizzo was coming off of a publicized legal dispute with Martin Carey (top), brother of then-governor of NY Hugh Carey (bottom). In the lawsuit, Iorizzo claimed that Martin funneled illegal gas proceeds to his brother’s election campaign

A subsequent attempted investigation was thwarted by Carey’s lieutenant-governor, and subsequent governor Mario Cuomo. (It was later revealed that Franzese made donations to his campaign, which could have made this a particularly nasty can of worms to open)

Franzese came around and decided to chase off Iorizzo’s would-be extortionists in return for being Iorizzo’s partner in the gas business. Originally, this was more or less the scam:

And then in 1982, the government attempted to curb tax cheating by requiring wholesalers to be responsible for collection. This, ironically, led to even greater profits for the mobsters with Iorizzo’s latest brainchild: the daisy chain method

Iorizzo also made sure to register all of his shell companies in Panama and Austria, helped by a conman named Eric D’Antin, who had charmed his way into the Habsburg royal family (seen below with his wife Michaela von Habsburg)

The last piece of Franzese’s operation fell into place when three major East European players in the gasoline industry fleeing Evsei Agron’s goons came to him for protection: Michael Markowitz (top), David Bogatin (bottom), and Lev Persits (no photo available)

The trio, led by the Romanian Markowitz, had to agree to a 25/75% split Franzese’s way. Unequal? Yes. But it was still more money than they could count. In the words of Michael Franzese (now a born-again Christian and YouTuber), they were making up to 10 million dollars a week:

The good times came to an end for the group in 1986, when Iorizzo testified against Franzese, who ended up pleading to an 8-year sentence— a development which was music to Marat Balagula’s ears

Balagula had started buying up gas stations within his first year in the US, running his early scams by purchasing gasoline from the Nayfeld brothers and splitting the tax revenue, and by the time he assumed the reins of Agron’s gang, he was deep into the daisy chain and more

One of his first orders of business was to energetically cultivate his ties with Agron’s Italian and Jewish partners, which quickly came in handy when Franzese tried to shake him down not long before he was arrested

Rival Italian groups weren’t his only concern either. Agron had a demonic reputation that the (admittedly ruthless) Balagula simply could not match, and since many Russian gangsters viewed his close cooperation with the Italians as a sign of weakness, bullets went flying

The murders came to a (relative) halt when the final challenger to Balagula’s throne made his move by shooting up one of his offices, giving him a heart attack by shoving a gun in his mouth, and was subsequently ambushed and killed by Italian Mafiosi

And as the smoke cleared, Brighton Beach had an undisputed new kingpin, who unlike his predecessor believed more in the carrot than the cattle prod, had bigger criminal ambitions, and possessed a much keener organizational sense

The millions poured in, and Balagula along with many of the benzinshiki (gas men) or kolokoshiki (bell people; after the pump bell) of the era were not shy about making their presence known via either brazen spending or overall eccentric behavior

This was a trend amongst many Soviet criminals of the era, who often couldn’t resist the shiny new toys afforded to them by the capitalist system, but while this drew a lot of unwanted law enforcement scrutiny, they had a card up their sleeve the Italians did not: intel value

Phone calls to local investigators from the CIA, such as the one below pertaining to one of Balagula’s guys, were not uncommon:

Franzese associate David Bogatin also presents an interesting case, as a former Soviet military advisor to North Vietnam during the war, who very likely cut a deal with the CIA to bring his younger (mob-associated) brother to the US

Balagula too was of interest to many intelligence agencies, given his growing rolodex now that he had expanded the Brighton Beach mob beyond its traditional Brooklyn stronghold to a truly global operation, which is where we’ll stop for now

Next up: corrupt African heads of state, diamond smuggling, and KGB/Mossad shenanigans
Thanks for reading, and until next time!