How Mafia dons made millions selling property as New York's seedy Times Square area was purged of sex shops and porn theaters in 1980s is laid bare in 'Goodfellas' trial


•           Trial of aging member of Bonnano crime family hears how mafia figures ran swaths of New York in the 1970s and 1980s
•           Son of one notorious figure tells court how he cashed in on sleaze palace in Times Square which he inherited from his father then sold for $18m
•           Brooklyn, New York, federal court is trying Vincent Asaro, 80, on charges of organizing $6m heist at JFK which formed basis of movie Goodfellas
•           Court heard today from John Zaffarano who testified that he willingly gave Asaro - 'cousin Vinny' - $250,000 for negotiating with another don

By ROB CRILLY FOR DAILYMAIL.COM
The porn barons who ran Times Square's sleazy sex theaters made millions out of property deals as the area was cleaned up in the 1980s, according to testimony in the 'Goodfellas' trial of an ageing member of the Bonanno crime family.
On Friday, John Zaffarano said he sold the Pussycat Theatre in 1986 for $18.5m, dividing the proceeds among family and associates.
He was testifying in the trial of his cousin, Vincent Asaro, 80, who is accused of racketeering, extortion and murder in what prosecutors allege was a criminal career that took him to the position of capo.
The case has laid bare how mafia figures ran swaths of New York during the 1970s, 1980s and 1990s, and made money from the sleazy side of Times Square.
Zaffarano, 57, said he was appearing after receiving a subpoena.
Before giving evidence, Nicole Argentieri, assistant US attorney, read an order granting him immunity from prosecution for anything he said in court.
She said: 'Do you want to be here?'
'No I do not,' he answered, as Asaro glared steadily at him through rimless spectacles from across the courtroom.
He was said to be too sick to appear yesterday and the court adjourned early.
When he appeared today, he described being approached by Asaro following the death of his father Michael 'Mickey' Zaffarano - a Bonanno family capo - in 1980. He died of a heart attack in his office on Broadway opposite the theater.
'He said he handed my father some money,' said Zaffarano. 'How should he go about getting repaid.'
He said he agreed to assume the debt of $250,000 and tried to pay off about $2000 a week.
Sometimes he struggled to make the payments because of a 'substance abuse problem', he added, and went on paying the money long after the debt was settled.
'I was in a white cloud,' he said. If payments were late, he would receive a call from the man he referred to as 'my cousin Vinny' throughout.
'He yelled and jumped up and down,' said Zaffarano.
He inherited the Pussycat Theater from his father. The lucrative business at the heart of Times Square's seedy sex industry included a topless bar, two adult movie theaters, a gay bath club and a shop selling sex toys.
He sold it in 1986 for $18.5m. That meant he had to negotiate with each of the businesses in order to bring their rental agreements to a close, he said.
He also had to pay Matthew 'Matty the Horse' Ianniello, a reputed Genovese crime boss, who controlled much of Times Square's sex industry.
Zaffarano said Ianniello 'was looking for $1m and we got him down to $700,000' with the assistance of Asaro. Ianniello died in August 2012.
Asaro received a cut of $300,000 to $400,000, he said.
'I gave money to my family and friends. But for Vinny he helped negotiate that thing over there,' he said.
With the rest of the proceeds, Zaffarano moved to Florida, where he opened a restaurant and nightclub called Blue Bottoms. He said Asaro was among his visitors.
'Do you recall testifying that you gave him $250,000 when he came to Florida?' asked Ms Argentieri, referring to evidence he gave before a grand jury.
'I'm having a little difficulty recalling,' he said
After a break to read his earlier testimony, he said: 'He came down to discuss a business proposition. I gave him $250,000. I thought it was a good deal.'
Under cross-examination, Zaffarano said he had never been forced to hand over money to Asaro and had been happy to assume his father's debt.
'With my condition if you asked me with a smile you got it,' he said, referring to his cocaine addiction.
Elizabeth Macedonia, Asaro's defense attorney, asked: 'Did he scare you?'
'No.'
'Did he threaten you?'
'No.'
Last week, the case heard how Asaro helped assemble the crew behind the notorious 1978 Lufthansa airport heist and drove the 'crash car', designed to stop a police pursuit, on the night.
Gaspare Valenti, a cousin of Asaro, said they had expected to escape with $2m but in fact found more than $6m in cash at Kennedy airport cargo warehouse.
Asaro denies all the charges.


THE KING OF SLEAZE: HOW MICKEY ZAFFARANO PEDDLED SEX FOR THE MOB
Today's trial throws New York's mob history into the spotlight - and with it the life of one of the underworld's sleaziest figures.
Mickey Zaffarano died - apparently of a heart attack - in an office on Broadway on Thursday 14 February 1980. He was 67 and had a history of heart trouble.
But his death was still surrounded by the aura of the Mob - because he had collapsed after fleeing from the Pussycat Theater he owned as the FBI raided it.
They stormed into the notorious sex den as part of what the Associated Press described the following day as 'a nationwide smut roundup', codenamed Miporn.
Zaffarano was found in an office which served as a film-splicing room for pornographic movies. It was across the road from the Pussycat and connected to it by a secret underground tunnel.
Agents believed that he had learned of the impending raid and fled through the tunnel to the splicing room.
He was considered to be one of four kingpins of the hardcore pornography industry, worth $4billion at the time. The other three were arrested in Miporn.
The former bodyguard to Joseph Bonnano, head of the Bonnano crime family, had a 25-year long criminal record, with convictions for assault and robbery, and a seven-year federal prison term for transporting stolen security.
He had the rank of capo in Bonnano's family, under first Bonnano, then his successor Carmine Galante, who had been killed in 1979 when he was trying to be 'boss of bosses' - the head of the Five Families.
In 1978, it had been alleged that Zaffarano was the hidden owner of the Pussycat Theater; the Pussycat Show Center, a topless bar;  the Broadway Arms, a gay film house; Cat's Eye, a disco bar; and Leave It to Beaver, a massage parlor.
But he claimed simply to be a landlord and said: 'I have nothing to do with the tenants. I'm not doing anything wrong or illegal. This is what people want to see.'
The next year, 1979, he was sued in federal court by lawyers for the Dallas Cowboys cheerleaders, because his movie theater premiered Debbie Does Dallas, the notorious pornographic film.
The cheerleaders alleged he was infringing copyright by showing it and eventually the suit was settled  by cutting some of the scenes.
The week before he died he was sued again, this time over 'Fantasy Island' another porn movie.

At the time it was also a popular ABC program and the producers sued because they did not want their title associated with the movie - or the two midgets who promoted it every night outside the Pussycat and another porn cinema, Lido East, on the opposite side of Manhattan.