NEW HAVEN, Conn. (AP) – A Danbury trash magnate arrested in a Mafia case in June diverted millions of dollars from his businesses to his minor league hockey team, no show jobs, race cars and questionable stockholder repayments, federal authorities said Thursday.

James Galante, whose businesses handle about 80 percent of southwestern Connecticut’s garbage, carved out exclusive routes for his companies and paid Genovese crime family boss Matthew “Matty the Horse” Ianniello $120,000 a year for mob muscle to enforce his territories, authorities said. That meant higher prices for businesses and homeowners, authorities said.

Galante and Ianniello were among 29 people arrested in connection with the alleged scheme. In a related development Thursday, another trash hauler became the first defendant in the case to plead guilty.

Galante’s defense attorneys challenged a court order putting federal marshals in charge of his businesses, saying they were ruining the businesses.

But federal authorities said they had improved the cash flow by stopping diversions that amounted to more than $4 million last year. They also said the businesses are now facing competition.

“If any ‘blame’ is to be assigned for the changes wrought by these incidents, it lies squarely on the shoulders of the defendants, who decided many years ago to operate the 25 companies as an illegal bid-rigging and price-fixing cartel,” prosecutors wrote.

A hearing is planned Tuesday on the challenge to the federal monitoring.

“Our position is by their own admission they’re running it into the ground,” said Hugh Keefe, Galante’s attorney. “You took a guy’s business away from him and turned it over to a bunch of incompetents.”

Keefe said the reported diversions will be dealt with during the trial.

“Even if that was true, the business itself was thriving up until the day the feds decided they knew more about running a trash business than Jimmy Galante.”

Authorities said they were monitoring the businesses, not taking them over, and denied they intended to sell the businesses.

Galante owns the Danbury Trashers team of the United Hockey League. The team was disbanded after Galante’s arrest in June.

Meanwhile, the trash hauler who admitted his involvement in the scheme Thursday, David Magel, 33, of Baldwin Place, N.Y., pleaded guilty to a racketeering charge in U.S. District Court in New Haven. Magel is general manager of CRP Carting in Elmsford, N.Y.

Prosecutors said the scheme was enforced by extortion and threats, and participants sought to operate it in eastern New York.

Magel met with several other members of the enterprise, two of whom were associated with an unidentified Connecticut-based trash carting company, at a diner in Mt. Kisco, N.Y., in 2004, authorities said.

After the meeting, Magel engaged in a series of telephone calls with other members of the enterprise to implement the scheme, prosecutors said. On Dec. 21, 2004, investigators intercepted one conversation between Magel and two members affiliated with the Connecticut carting company during which Magel agreed to provide inflated quotes to customers of the other participants in the conspiracy, authorities said.

“I’m shootin’ for the … gusto here,” Magel said in the conversation.

Magel faces up to 20 years in prison and a $250,000 fine when he is sentenced Oct. 25.

Keefe said he was not sure if Magel’s guilty po0220nyc–r n BC-CT–TrashProbe 1stLd-Writethru 08-10 0644 nyc,us50,us50n BC-CT–Trash Probe, 1st Ld-Writethru,0572

Galante diverted millions from trash businesses, feds say

Eds: UPDATES throughout to ADD defendant pleading guilty.

By JOHN CHRISTOFFERSEN

Associated Press Writer

NEW HAVEN, Conn. (AP) – A Danbury trash magnate arrested in a Mafia case in June diverted millions of dollars from his businesses to his minor league hockey team, no show jobs, race cars and questionable stockholder repayments, federal authorities said Thursday.

James Galante, whose businesses handle about 80 percent of southwestern Connecticut’s garbage, carved out exclusive routes for his companies and paid Genovese crime family boss Matthew “Matty the Horse” Ianniello $120,000 a year for mob muscle to enforce his territories, authorities said. That meant higher prices for businesses and homeowners, authorities said.

Galante and Ianniello were among 29 people arrested in connection with the alleged scheme. In a related development Thursday, another trash hauler became the first defendant in the case to plead guilty.

Galante’s defense attorneys challenged a court order putting federal marshals in charge of his businesses, saying they were ruining the businesses.

But federal authorities said they had improved the cash flow by stopping diversions that amounted to more than $4 million last year. They also said the businesses are now facing competition.

“If any ‘blame’ is to be assigned for the changes wrought by these incidents, it lies squarely on the shoulders of the defendants, who decided many years ago to operate the 25 companies as an illegal bid-rigging and price-fixing cartel,” prosecutors wrote.

A hearing is planned Tuesday on the challenge to the federal monitoring.

“Our position is by their own admission they’re running it into the ground,” said Hugh Keefe, Galante’s attorney. “You took a guy’s business away from him and turned it over to a bunch of incompetents.”

Keefe said the reported diversions will be dealt with during the trial.

“Even if that was true, the business itself was thriving up until the day the feds decided they knew more about running a trash business than Jimmy Galante.”

Authorities said they were monitoring the businesses, not taking them over, and denied they intended to sell the businesses.

Galante owns the Danbury Trashers team of the United Hockey League. The team was disbanded after Galante’s arrest in June.

Meanwhile, the trash hauler who admitted his involvement in the scheme Thursday, David Magel, 33, of Baldwin Place, N.Y., pleaded guilty to a racketeering charge in U.S. District Court in New Haven. Magel is general manager of CRP Carting in Elmsford, N.Y.

Prosecutors said the scheme was enforced by extortion and threats, and participants sought to operate it in eastern New York.

Magel met with several other members of the enterprise, two of whom were associated with an unidentified Connecticut-based trash carting company, at a diner in Mt. Kisco, N.Y., in 2004, authorities said.

After the meeting, Magel engaged in a series of telephone calls with other members of the enterprise to implement the scheme, prosecutors said. On Dec. 21, 2004, investigators intercepted one conversation between Magel and two members affiliated with the Connecticut carting company during which Magel agreed to provide inflated quotes to customers of the other participants in the conspiracy, authorities said.

“I’m shootin’ for the … gusto here,” Magel said in the conversation.

Magel faces up to 20 years in prison and a $250,000 fine when he is sentenced Oct. 25.

Keefe said he was not sure if Magel’s guilty plea would affect Galante. Authorities would not comment on whether Magel was cooperating against the other defendants.

AP-ES-08-10-06 1853EDT

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