Local News in Brief : Mob Informants Plead

Two brothers who infiltrated the Los Angeles Mafia and provided key evidence that helped convict most of the crime family’s top leadership pleaded not guilty Tuesday in Los Angeles federal court to an extortion conspiracy charge.

Craig Anthony Fiato and Lawrence Fiato, who secretly recorded dozens of conversations with reputed mob boss Peter J. Milano and his top lieutenants, were among the first organized crime informants to be solicited for actual membership in the Mafia, federal prosecutors said.

According to government affidavits, Craig Fiato began loan sharking with co-defendant Robert Zeichick in mid-1981, arranging to have a bookmaking suspect, Gene Holden, who is also a defendant in the case, finance most of the loans in return for interest of up to 1.5% a week.

Larry Fiato and a reputed mob associate were enlisted as “enforcers� to help collect on the loans, according to the affidavits.

Over the next two years, the operation made loans of about $1 million to 30 steady customers, collecting interest of up to 5% a week, the government alleges.

The Fiato brothers have admitted that “a combination of fear, threats and physical abuse� were used in collecting on the loans, in part through reference to the brothers’ purported Mafia ties, according to affidavits.