Wiseguys, Rabbis, and the FBI: How one man became the biggest loanshark in New York City, went to prison, and escaped.

“Case dismissed,” says the judge. 

Melvin Cooper smiles. Sitting at the defense table in the courtroom of the Suffolk County courthouse, Mel turns to his lawyer, Scott Stadtman, and says, “congratulations.” Stadtman shakes Mel’s hand but there’s no time for conversation. A sheriff is waiting to escort Mel Cooper out.

The sheriff leads Mel out of the courtroom and into the hallway, where an elevator takes them back down to the basement. The officer guides Mel to a holding cell, where Cooper has already spent numerous hours over the last month waiting for his minutes in court. It’s the fourth or fifth time he’s been in this underground cell. This time there are no handcuffs or leg shackles. 

“Double jeopardy,” the judge had declared. After almost three months, the case was thrown out. Naturally, Cooper is relieved. But he isn’t surprised since the State’s case against him was an afterthought, an imitation of the Federal charges he faced a year earlier. The loansharking charges brought against him by New York State were as flimsy as a two-dollar umbrella. No one else is surprised at the ruling either, not even the officer who escorted Mel back from the courtroom. 

“What happened in there?” he asks.

“They dismissed the charges,” replies Mel. 

“Yeah, that’s what I thought,” says the officer. The justice system isn’t much of a mystery if you spend enough time inside it. 

An hour passes, and Cooper is still savoring the judge’s words when the officer returns. He opens the pen door and orders Cooper to follow him out—still no cuffs. He guides Mel past the row of cells to an office. They enter and he directs Mel to a cubicle. 

“Wait here,” he orders, leaving Mel alone in the cubicle with a skinny Hispanic kid. 

Something is not right. Mel should not be here. He definitely should not be here with someone who looks like he’s waiting for his mom to pick him up and take him home. 

“What are you doing here?” Mel asks the kid casually. 

“The judge wants me back in two weeks,” says the kid.

The officer returns and tells the young man to follow him. A few moments later he’s back for Mel, and then it’s on to another room where a sergeant at a raised platform steps down, shoves an index card in front of Cooper, takes a thumbprint, and asks for Mel’s date of birth. He gives Mel papers to sign. Cooper has been handed off enough times now to know something is definitely wrong. Don’t they know who he is? 

Apparently not. The sergeant marches Mel to a door. He opens it, and daylight pours in. Mel squints. 

“Have a nice day,” the sergeant says, and he ushers Mel outside, into the courthouse parking lot. 

“Thanks,” Mel answers. “You too.” 

The officer shuts the door. 

Cooper stares at the empty lot. It’s just Mel Cooper and the quiet Hauppauge morning. He can smell the May air, the scent of the breeze coming off the Long Island Sound. He can hear the cars passing on the road just beyond the parking lot, the low roar they make as they pass, followed by silence. It’s morning but the sun is already bright and gold above the treetops. It’s a beautiful, clear day, and Mel Cooper is free. 

He looks at the sky and at the trees bordering the lot. Mel is free to walk away after three months in a Long Island jail and almost a year in maximum security federal prison. This is not what he expected considering he had twenty-nine years left to serve on his sentence. Cooper was supposed to have been delivered to the custody of U.S. Marshals. They were supposed to take him back to prison in Indiana. 

It is 9:30 am, May 5th, 1986. Someone just made a big mistake and let Mel Cooper out. 

Escape from Federal prison is rare. Despite the compelling tales, from Andersonville to Alcatraz, despite the Hollywood blockbusters with star-studded breakouts, it almost never happens. As unlikely as escape is, accidental release is even more unusual. It’s like winning the lottery. 

When it does happen, accidental release is a humble type of escape, almost always the result of an administrative error. Sentencing orders are lost or never sent. Parole eligibility is miscalculated. One of the most famous cases took place in Texas in 1926. 

One day in June of that year, a warden named White told a prisoner named Pearlman his term was about to expire. He would soon be free, where would he like to be dropped off? Pearlman told Warden White there must be a mistake. He owed the government five years and had only served three. The warden said the record stated three years, and Pearlman was free whether he liked it or not. White sent the prisoner on his way, and Pearlman went home and resumed his life. 

But Pearlman was correct. There was an uproar when the mistake was discovered, but Mr. Pearlman was never required to complete his sentence. A court decided that sending him back to jail after he had restarted his life would have amounted to cruel and unusual punishment. This mundane incident is the legal precedent for what happens when the Bureau of Prisons accidentally lets someone go.

It may not be the action-packed scene the word “escape” usually conjures. But if you’re away for thirty years like Mel Cooper, you take escape whichever way it’s offered. When the hapless sergeant showed Cooper the back door, Mel didn’t argue. 

At the moment Mel stood outside the Long Island courthouse, his former partner Jesse “Doc” Hyman was engaging in a different kind of escape. Doc and Mel had been convicted in federal court in New York City of loansharking, extortion, racketeering, and conspiracy. Charged along with them were seven top Mafiosi from the Gambino, Colombo, Genovese, and DeCavalcante crime families. The US Attorney who had prosecuted them was Rudolph W. Giuliani.

Cooper and Hyman had been arrested in 1984, just as Rudolph Giuliani was making a name for himself as a prosecutor willing to go to any lengths to take down New York’s organized crime families and clean up the city. Giuliani had a reputation as a crime-fighter back then, and Cooper’s trial, with its 15 defendants, represented one of the Justice Department’s first racketeering “megatrials.” After being found guilty, Cooper was dispatched to Federal Penitentiary in Terre Haute, Indiana, while Doc was sent to Petersburg, Virginia. 

Doc Hyman negotiated his escape directly with the federal government. He agreed to tell the Justice Department everything he knew about the mobsters he did business with in New York, Chicago, Cleveland, Buffalo, and Las Vegas. Doc also knew a lot about a few Teamsters Union officials in Queens who had given him access to millions of dollars in pension funds. The money had disappeared into Las Vegas hotels and casinos. 

In exchange for his testimony, Doc was about to enter the witness protection program. The red-haired dentist didn’t have the stomach for maximum security prison, and by agreeing to testify, his thirty-year sentence would be reduced to time served. Doc Hyman would rat on his old friends for years to come. 

Mel Cooper had also been pressured to make a deal. He had refused. Unlike Doc, Mel had chosen to serve his time, seeking recourse through his appeal lawyer, Thomas Puccio. Until Mel Cooper was summoned East to stand trial on state charges, he had been uneventfully serving his time. Cooper had just completed one year of his thirty-year sentence when he was released to the custody of a Long Island parking lot. 

Back in the courthouse, nobody realized a mistake had been made. Mel knew it was only a matter of time before US Marshals arrived looking for him. If he hoped to profit by their error, he would have to put distance between himself and the courthouse. Still, when the impossible actually happens, you take a moment to absorb it. 

“I actually looked up at the sky just to see—I don’t know—to put some reality to where I was,” Cooper remembers. “When I looked up at the sky, I think the feeling was stronger than euphoria. This was after thirteen months, with twenty-nine years ahead of me. All of a sudden, this guy opens the door and says ‘Have a nice day,’ and that’s that. That’s the end of thirty years, and that’s the beginning of life again, and it’s the sky, it’s the smell of outdoors. I knew instantly that I can’t stand there staring at the sky. I had to move away from the court.”

Mel checks his options. He sees a small, two-lane road to the left of the parking lot, and across the road, a DMV. 

“I walked quickly, I didn’t want to run. I was dressed with my khakis and my sneakers and I had a manila legal file with my legal papers in it. I got across the road to the Motor Vehicles Bureau parking lot.”  Mel’s only plan was to get out of Hauppauge.

In the mostly empty parking lot, Mel spots two men and a woman getting into a small car. He walks over and speaks to the driver, a young black man, nicely dressed.

“How ya doin’?” says Mel in his heavy Brooklyn accent. Then, speaking as a free man for the first time in over a year, he musters whatever normalcy is left in him and continues: “I have an emergency and I have to get to Kennedy Airport.” 

They stare at Mel as he spins a story about a fight with his girlfriend and his brother’s imminent arrival at the airport. Most convincing is Mel’s offer of a hundred dollars if they would give him a lift. 

“Get in,” says the guy. He does not see the number stamped on Mel’s pants and the back of his shirt.

Getting a bulky, six-foot Mel Cooper into the back seat of a small, two-door car is not easy. It takes valuable seconds. Time passes in slow motion as they open the doors and push the seats forward so Mel can climb in. At last the doors slam shut. 

The driver puts his foot on the gas and is heading out of the lot when he remembers one important task. He turns his right hand upwards towards the back seat. Mel stares at the palm and realizes the man wants his money. 

Cooper thinks fast. He explains someone is going to meet them at Kennedy airport with the money. He doesn’t actually have the cash with him. The driver puts his foot on the brake.

A moment later, Mel climbs out of the back seat. His escape is not going well.

The case that had put Mel Cooper and Jesse “Doc” Hyman away was called United States of America v. Vincent Joseph Rotondo. It was named after “Jimmy” Rotondo, a powerful organized crime captain based in Brooklyn and associated with the DeCavalcante crime family of New Jersey. 

Rotondo worked out of the International Longshoreman’s Association headquarters in Carroll Gardens. Nowdemolished, the headquarters of Local 1814 represented dockworkers on the Brooklyn waterfront. After working on the docks himself from 1947 to 1960, Rotondo became an organizer for the union where he supposedly spent half the day on union business and the other half on his own “projects,” including running New York operations for the DeCavalcante organization. Rotondo answered directly to family boss, John Riggi, who oversaw the New Jersey Mafia’s vast gambling, labor racketeering, extortion, and loansharking operations. 

Though Jimmy’s affiliations were in New Jersey, he was a player in New York City thanks to his power on the Brooklyn waterfront. Says a neighborhood acquaintance, “Jimmy was a guy that was around a lot. He was a big action guy. He knew fifty different people, had fifty things going on, and made money lots of ways. He was a well-heeled guy, he was a big earner. The more you look like you’re important, the more guys bring you deals.” Jimmy had a lot of deals. It would soon emerge that Jimmy was skimming massive amounts of money from another union, Teamsters Local 804, with the help of Doc Hyman.

Says Mel, “He was a little under six foot, and he carried himself like a strong guy, in every sense of the word. He was a made guy, he was a captain in his family, and he snapped his fingers and he got things done. He had many people like Doc working for him.”

Though Mel and Doc had the most charges against them, Giuliani must have reasoned that naming the case after a mobster would garner more attention than naming the case after, for example, defendant Dr. Jesse Hyman—a Long Island dentist. In spite of the name, Doc and Mel were labeled “the masterminds” behind the enterprise that pulled together defendants in United States v. Vincent Joseph Rotondo.

The Justice Department claimed Mel and Doc’s company, Resource Capital Group, was a front for the Mafia’s moneylending activities in New York City. Thomas Sheer, head of the FBI’s New York office, called it a “super-Shylock operation,” referencing, intentionally or not, the fact that the two “masterminds” were Jewish; the word “Shylock” has its origin in Shakespeare’s The Merchant of Venice, in which the antagonist is a Jewish moneylender.

Giuliani stuck to legal terms. The operation “may be the largest and most sophisticated loansharking operation ever uncovered by the Govern­ment,” said Giuliani in a 1984 article in the New York Times, and he used the RICO Statutes—the Racketeer Influenced and Corrupt Organizations Act—to charge Cooper, Doc Hyman, and thirteen other men. 

The mobsters indicted with Mel and Doc cut across New York’s Mafia elite. It included several powerful captains from different organizations, each with his own universe of criminal activities. Besides Jimmy Rotondo, there was Michael J. Franzese, captain in the Colombo family and son of jailed underboss, John “Sonny” Franzese. Michael ran multi-million-dollar gas tax scams, and would soon make a name for himself fixing fights in Atlantic City, allegedly with promoter Don King. There was Benedetto “Benny” Aloi, Colombo family captain and son of mob boss Sebastian “Buster” Aloi, who would eventually be jailed for conspiracy to murder, after a career of gambling, loansharking, and trucking rackets; Anthony “Tony Nap” Napoli, captain in the Genovese family and son of “Jimmy Nap”, boss of the Genovese family for thirty years; and Carlo Vaccarezza, John Gotti’s driver and bodyguard, and part-owner of a restaurant with the baseball player, Rusty Staub. Rounding out the Gambino group with Vaccarezza were two more tough guys, Francesco “Frankie the Hat” Di Stefano, and Leonard Di Maria.

Besides Cooper, Hyman, and the seven wiseguys, Giuliani also indicted six employees from Mel’s company including a Great Neck rabbi. According to the indictment, they were all involved in one long chain of rackets. 

But Cooper has another story, an alternate version of the government’s narrative. It unfolds in a parallel world, where the money used to fund loans didn’t come from mobsters at all. The money came from a group of Long Island rabbis and their friends. One of the rabbis was a famous scholar and writer. Another was an Israeli war hero, a Hebrew school teacher, a mensch. And in this alternate story, the reason Cooper did not rat or testify was not because he was particularly loyal to the code of his Mafia partners, as the government claimed; he didn’t flip because he had nothing to tell. 

As Mel sees it, he was just a financier, a pioneer venture capitalist, a broker, an inspired lender of funds to businesspeople. Yes, the loans Mel Cooper and Jesse Hyman made at Resource Capital Group pushed the limits of legal moneylending. The government called it loansharking. But much like the imaginative executives of Enron and Worldcom and so many corporations to come, Mel called it “creative financing.” And like Donald Trump—another up-and-coming New York entrepreneur—Mel surrounded himself with lawyers, relying on the legal system to insulate himself.

“Those loans were a small part of our total business. They represented nine or ten loans out of thousands of loans we did, between equipment, car leasing, and mortgages,” says Cooper. “It was a very insignificant amount of clients and dollars. To us, they were “emergency loans”—people who came in and needed money to stay afloat. These people were begging to have this bridge money to get them over a hump.” According to Cooper, he and Doc Hyman had done nothing but broker risky, short-term loans to people with poor credit. His clients owned flashy, entertainment-oriented businesses in New York City, and did not have the collateral to take to a bank. And though Mel and Doc’s lending rates of 104 percent to 208 percent a year might appear usurious to conservative observers—the legal limit was 25 percent at the time—they were really just a mixture of fees, commissions, and legal charges with some interest added. These fees totaled as much as $75,000 a week, paid in cash which Mel and Doc stuffed into shoeboxes, briefcases, and safe deposit boxes. 

As for the victims of his so-called loansharking activities, Cooper laughs at the notion. “The victims all made hundreds of thousands of dollars. Who’s the victim?” says Cooper. “It was a situation where nobody was beaten up to get money back, there were actually mortgages set up with each loan. There was a lawyer at every closing. To collect, we used a pen, not a bat.” 

But where Mel saw rabbis, the Justice Department saw Mafia. According to Assistant US Attorney Bruce Baird: “Resource Capital Group was a front, a front for an enormous loansharking business. It depended on the threat of force and the fear of organized crime to do its criminal business.

“This was a business that got money from illegal union and organized crime sources,” said Baird, “a business that threatened, a business that took control of the businesses of victims who couldn’t pay.” He called Mel Cooper “the small tip of a large, ugly iceberg.”

Bruce A. Baird and Aaron J. Marcu were the assistant US attorneys who prosecuted United States v. Rotondo. They were sharp young men, well dressed, and dripping with what Mel calls “Ivy League status.”  In soft-spoken voices they explained to the jury how Melvin Cooper only looked like a businessman: all clean, nice, and legitimate. But like an iceberg, the part beneath the surface was murky, dirty, and dark. If clients didn’t pay money on time each and every week, “the real powers behind this enterprise came up, the bottom of this iceberg”—the capos of four New York crime families and their soldiers.

Back in Hauppauge, the tip of the iceberg stood in the parking lot wondering how, with no money and wearing only prison khakis, he could get out of New York.