Three decades ago, Mafia enforcer Frank Capri cut a deal with federal prosecutors to get out of prison.
In mob speak, he flipped. Named names. His testimony helped break the back of the New York City mob and put dozens of organized crime figures behind bars.
Authorities repaid him with a new identity in the Federal Witness Protection Program and a new life as an Arizona businessman.
This week, Capri cut a new deal. He admitted in federal court that — using the name given to him by the government — he orchestrated a nationwide fraud scheme involving country-music themed restaurants.
Capri said he forced the collapse of Toby Keith and Rascal Flatts-branded restaurants from Hawaii to Florida, at one point pocketing as much as $250,000 a week.
Speaking via telephone to a near empty courtroom, Capri pleaded guilty on Tuesday to one count each of conspiracy and tax evasion and agreed to repay up to $18 million that he swindled out of developers between 2011 and 2015.
“Guilty,” Capri said as U.S. Judge Magistrate John Boyle read the charges. “Guilty.”
Capri lured developers into paying him upfront fees to build restaurants, then walked away with millions of dollars meant for construction.
Capri is best known for the epic failure of his Toby Keith’s I Love This Bar and Grill restaurant chain, which went under in 2015 amid allegations of fraud and theft. He was also behind the financial ruin of 19 Rascal Flatts restaurant projects that he set up and secretly ran.
In 2017, Capri was identified as a former “made man” in the notorious Lucchese crime family, who traded his rank as Mafia soldier for government witness in 1993 when he negotiated protection agreements for himself and his immediate family.
Capri moved to Arizona in the early 2000s and made a name for himself as a real estate and restaurant developer.
Capri’s lawyer, Steve Wallin of Phoenix, declined comment on Tuesday.
Asked about his client’s past as a mobster, he said, “We have not conceded that” and indicated he had no intention of doing so: “Hell, no.”
The plea agreement makes no mention of Capri’s former life of crime or past deals with federal authorities.
In exchange for Capri’s guilty plea, prosecutors agreed to drop the bulk of the charges against him.
Avoiding a trial through the plea agreement ensures Capri will not face scrutiny about his Mafia past in court.
It also allows the U.S. Attorney’s Office to avoid any potentially embarrassing disclosures about the Witness Protection Program and its oversight of Capri while he was under its supervision.
Assistant U.S. Attorney Monica Klapper declined to speak about Capri’s plea agreement after the hearing.
The FBI and the U.S. Department of Justice for years have refused to talk about Capri or answer questions about the trail of financial destruction that followed him out of the Witness Protection Program. The U.S. Marshals Service, which manages the Witness Protection Program, will not discuss Capri.
Officials are legally prohibited from acknowledging if anyone is or was enrolled in the Witness Protection Program.
Capri’s true identity was first raised during a 2007 child custody battle in Maricopa County Superior Court.
A report prepared in 2007 by Arizona private investigators first detailed Capri’s entry into the witness protection program along with his father, mother, sister and brother-in-law.
Rich Robertson, owner of R3 Investigations in Tempe, testified about the findings in a closed hearing. He said U.S. Marshals Service officials didn’t deny Capri’s involvement in the program but suggested they would resolve the custody case.
Five years later, in 2012, Capri’s role in the Mafia again arose in the custody case. Capri unsuccessfully petitioned the court to seal the records from public view.
A grand jury indicted Capri in 2020 on 16 counts of fraud, conspiracy and money laundering that could have sent him to prison for almost 34 years. At 54 years old, it represented a life sentence for Capri.
Capri was charged along with his mother, Debbie Corvo, 68, of Cave Creek, and former business partner Chris Burka. A lawyer who worked for Capri and two other business associates were charged separately. All took plea deals in which they agreed to cooperate with authorities.
Conspiracy and tax evasion each carry a maximum five-year prison sentence. But prosecutors agreed that Capri could serve any prison terms concurrently.
That means he will likely get no more than five years, a fact Capri made sure to clarify with the judge, who confirmed the five-year cap. “Yeah, Capri said. “I understand the agreement … OK.”
Capri also faces $350,000 in fines and up to five years’ probation. He also must pay $1.5 million to the Internal Revenue Service for failing to disclose income in 2013, 2014 and 2015, according to the plea agreement.
Capri has spent more than 18 months in federal custody, meaning he could be released in about three years — or sooner.
He has been held without bail since his arrest in February 2020. Prosecutors described him as a danger to the community and said in court filings in 2020 that he posed an extreme flight risk, with access to loose diamonds, business accounts, credit cards and artwork that could be converted quickly into cash.
At the time of his arrest, authorities said Capri was living off of his ill-gotten gains and still had access to tens of millions of dollars he defrauded from developers.
They said he had access to more than 100 bank accounts and sold high-end real estate and deposited the funds into an account controlled by his mother. Those properties included condominiums in the Kierland Commons area, houses in Paradise Valley and Scottsdale, a condominium in Chicago and properties in Malibu and San Diego, California.
Authorities originally accused Capri of bilking developers out of $64 million. The plea deal, however, caps the amount Capri can be held responsible for taking.
At sentencing a judge could rule Capri’s fraud amounted to no more than $9.5 million.
The deal stipulates that “the loss associated with the defendant’s fraudulent conduct is between $9.5 million and $25 million.”
The most, however, that Capri will be required to repay to victims of his fraud under the deal is $18 million.
The plea agreement deals exclusively with development fraud.
It does not address claims raised by contractors in cities across the country who said they were never paid for work on the restaurants. That includes painters, plumbers, welders and other blue collar workers who said the jobs cost them tens of thousands of dollars.
Nor does it mention claims by former employees at Capri’s restaurants, who said they were shorted wages or owed pay when his restaurants abruptly closed.
Federal authorities don’t name Toby Keith or Rascal Flatts in court documents, which reference them by initials TK and RF and refer to them as the “branded restaurants.”
Capri’s company, Boomtown Entertainment, built 20 Toby Keith restaurants beginning in 2009 and announced plans to build 20 more that never opened.
It closed 19 restaurants in about 18 months beginning in 2013. Even as restaurants went under, Capri was announcing plans to open new ones that never got built.
Judges in cities across the country ordered Capri or his companies to pay at least $65 million in civil judgments.
Capri denied pocketing development money and described the Toby Keith closures as nothing “other than the product of a business failure.”
Yet after the collapse of his Toby Keith chain, Capri was back in business with Rascal Flatts.
Capri’s name does not appear on corporate documents tied to the Rascal Flatts restaurants. But working from behind the scenes, he oversaw hiring, firing, employee payments, permits, construction schedules and collection of development fees.
Secretly recorded audiotapes of Capri’s phone calls provided a vivid picture of his role. In the profanity-laced recordings, Capri threatens and intimidates developers in an attempt to squeeze cash out of the Rascal Flatts projects.
Neither Keith nor Rascal Flatts was involved in the operation of the restaurants. They sold naming rights to Capri or his companies.
Keith has declined for years to talk about his business arrangements with Capri. Rascal Flatts in 2019 terminated its licensing agreement as the restaurants failed and told fans the project was no longer happening.
Capri promised property developers and mall owners long-term leases in exchange for up-front cash to build the restaurants.
These tenant improvement payments are supposed to serve as a kind of collateral, released in stages as construction goals are met. Except Capri didn’t meet his goals so much as make them up.
Capri admitted that he had no experience building, owning or operating restaurants when he began negotiating deals with developers.
Capri and his associates “provided inflated financial projections to property developers during lease negotiations and agreed to pay significantly increased rental amounts, so the developers would agree to larger TI fund amounts,” according to the plea agreement.
Capri said he started defrauding developers about two years after he opened his first Toby Keith restaurant at Mesa Riverview in 2009, according to the plea agreement.
Capri told Boomtown employees in 2011 to fake construction records in order to pull money out of the projects, according to the deal. They used fraudulent paperwork, fabricated contractors, forged signatures and false notary stamps to convince developers that work was progressing on projects when it wasn’t.
They also created virtual offices with phone numbers and addresses in case developers tried to verify information on the bogus paperwork, the deal said.
Capri admitted that he used the money to buy luxury vehicles, expensive property and jewelry. He also used Boomtown debit cards to pay for personal expenses. He spent more than $2.7 million of Boomtown funds on jewelry alone, according to the plea agreement.
Capri said between 2011 and 2015, property developers paid Boomtown $12,997,478 for work on Toby Keith restaurants that were never completed or didn’t open.
Capri also admitted to conning developers out of another $5,035,225 on the Rascal Flatts projects.
No developer was going to do business with Capri after what happened at Boomtown.
Capri needed a front man, or woman, to carry out his development scheme. He got one of each.
Former Arizona restaurant owner Chris Burka told federal authorities he teamed up with Capri’s longtime girlfriend and their Scottsdale attorney in 2016 to coax developers into putting money into a chain of Rascal Flatts restaurants.
Burka, who pleaded guilty to a single count of conspiracy to commit wire fraud in April, said they hid Capri’s identity through a trust, a string of limited liability companies and secretly controlled bank accounts.
By the end of 2018, the team had negotiated deals in 19 cities to bring in more than $20 million, Burka said.
Burka acknowledged his involvement in the restaurants. But he pointed the finger at Capri’s girlfriend, Tawny Costa, saying she controlled all of the finances.
Costa, who is the mother of two of Capri’s children, admitted to running the Rascal Flatts projects.
In a series of texts in 2019, Costa said Capri and Burka set up and secretly ran the projects in her name. She said they manipulated her into putting her name on corporation and business records for restaurants.
Federal authorities have not charged Costa with any crime. They refer to her as a Capri “nominee” in court records.
Costa in her texts claimed to be naive and inexperienced.
But between them, she and Capri have orchestrated the failure of 65 restaurant projects since 2013 that either closed after opening, were left unfinished or never started; 39 under Capri and 26 under Costa’s name.
In addition to Toby Keith and Rascal Flatts, Capri was involved in restaurants Costa operated in Tempe, San Diego, Atlanta and Boston.
On that list is a Phoenix restaurant called Parma Italian Roots that was shut down in December after the Arizona Department of Liquor Licenses and Control questioned the “legality of her ownership” and documented Capri’s financial ties to the restaurant.
Investigators are asking similar questions about Costa’s ownership of a second Parma restaurant in Scottsdale.
Capri in court on Tuesday told Judge Boyle it was his birthday. He said he was 54 years old.
“Some birthday present,” Capri said, chuckling.
It wasn’t, however, the birthday he was born with.
Capri’s real name is Frank Gioia Jr., a third-generation mobster from New York’s Little Italy. Mafia historians say he is one of the most important government witnesses ever to testify against the mob.
As a boy, Gioia dreamed of joining the mob.
His father, Frank Gioia Sr., was a “made man” in the Genovese crime family. His grandfather, Nunzi Russo, ran a social club on Grand Street in the 1960s and 1970s that fronted a bookmaking operation.
By his own admission, Gioia was a regular racket boy at 12, loan-sharking, bookmaking, stealing cars and doing the occasional stickup. He first shot someone at 18 and became a “made man” in 1991 at 24.
He earned the nicknames “Baby Face” and “Spaghetti Man.”
Gioia was running a heroin pipeline from Boston to Manhattan when he was arrested in 1993 on federal drug charges. He was facing 30 years to life in prison when he got word the mob planned to kill his father.
He became an informant instead. He testified that as a soldier in the Lucchese crime family, he plotted murders and committed assaults. He said he was an arsonist, shakedown artist, drug dealer and gun runner.
Capri won’t talk about his past. He maintains stories about him are “false and defamatory” but has offered no proof to support his claims.
He was scheduled for sentencing on the fraud and tax evasion charges in January.