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It took a while for Karen Hill to figure out exactly what line of work her husband was in. She knew he was a knock-around kind of guy. She once watched him take on three men, all football players from New Jersey, with a tire iron outside Jackie Kannon`s Rat Fink Room in Manhattan. She knew some of his friends were jailbirds and she knew he sometimes carried a gun.

But certainly Karen Fried Hill, from Lawrence, L.I., had no reason to believe that she would wind up in the middle of a grade-B movie. All she knew was that her husband`s main income came from his job as a bricklayer and low- level union official.

Karen: ”The first time it really dawned on me about how different his friends were from the way I was raised came when Helene, the wife of Bobby DeSimone, one of his friends, was having a hostess party. I was the new girl in the group, and they were all very, very nice.

”But then, when they started talking, I was shocked. One woman was talking about waiting three years for her husband, who was away in jail. It was the first time I had ever had a conversation where the women talked about jail.

”Other women accepted hustling cigarettes, selling swag, and even hijacking as normal for any ambitious guy who wanted to make decent money. It was almost as though I should be proud I had the kind of husband who was willing to go out and risk his neck getting us little extras.”

Then Henry was arrested.

Karen: ”He called up and said he`d had a little trouble. It turned out he and Lenny Vario were arrested for transporting untaxed cigarettes. It wasn`t a big crime, but he got arrested. I still thought he was a bricklayer. I was mortified. I never mentioned it to my mother. After he got out of jail, I asked what happened. `I got fined $50,` he said. He was laughing.

”None of us knew what our husbands were doing. We weren`t married to 9-to-5 guys. We knew that Friday was always card-playing night. Later, I found out that it was also the girlfriend night. Nobody took his wife out on Friday night. The wives went out on Saturday night. That way there were no accidents.”

Soon after the Idlewild Golf Course in Queens was converted into a vast 5,000-acre airport in the early 1950s, the area hoods quickly learned every back road, open cargo bay, freight office, loading platform and unguarded gate. Wiseguys who could barely read learned about bills of lading, shipping manifests and invoices.

By the early `60s, when $30 billion worth of cargo a year passed through Kennedy Airport, the challenge of relieving airlines of their cargo and freight carriers of their trucks had become the principal pastime for scores of local wiseguys. Jimmy Burke was the king.

Those imprudent enough to talk were routinely murdered. Corrupt cops on Burke`s payroll tipped him off about informants and potential witnesses. The bodies, sometimes a dozen a year, were left strangled, trussed and shot in the trunks of stolen cars left in the long-term parking lot. Henry Hill was part of the airport gang, and Jimmy Burke was its leader, and at Burke`s invitation, Henry went on his first hijacking in 1966, at age 23.

Henry: ”Most of the loads hijacked were sold before they were even robbed. They were hijacks to order. We`d get up in the morning and go to Robert`s, which was a bar that Jimmy used to own in South Ozone Park. It was perfect. There were barmaids who drank Sambuca in the morning. There was

`Stacks` Edwards, a black credit card booster who wanted to join the `May-fia.` It was a hangout for truck drivers, freight handlers, cargo dispatchers, and backfield airport workers who loved the action.

”I got into hijacking because I had customers looking for merchandise. I was a good salesman. Early on, Jimmy told me that I should start using some of the same people who were buying my cigarettes to buy some of the swag. I had a drugstore wholesaler who`d take almost everything I had. Razor blades. Perfume. I had Vinnie Romano, who was a union boss down at the Fulton Fish Market, who would buy all the frozen shrimp and lobster I could supply.

”It was overwhelming. None of us had ever seen opportunities for such money before. The stuff was coming in on a daily basis. Sometimes, I`d go to Jimmy`s house, and it looked like a department store.”

Air France made Henry Hill`s reputation. Near the end of January, 1967, he was running an airport route selling untaxed cigarettes and one stop was at the Air France cargo dock, where the cargo foreman, Bobby McMahon, was one of his best customers. In return for a share of the booty, he also helped arrange cargo thefts.

One night, McMahon told Hill about a money shipment coming into the Air France depot. He said the money, in white canvas bags with red seals, was easy to steal because Air France was building a new strong room and until it was finished, the money bags were kept in the cargo office.

The problem was that the security guard with the key would not cooperate. So Henry hired a prostitute to lure the guard into a motel sauna, stole the key from his jacket pocket, which was hanging on a chair, and duplicated it before the guard returned to dress.

Henry hit the cargo office on a Friday night. The theft was not discovered until Monday, and by the time Air France realized it had lost $480,000, Henry and his pals had already given away $120,000 of it as tribute to the mob chiefs who considered Kennedy Airport their turf. They gave $60,000 to Sebastian (Buster) Aloi, the capo who ran the airport for the Colombo crime family, and the other $60,000 to their own capo, Paul Vario.

Henry: ”About this time, another business opportunity arose. There was a terrific supper club and restaurant called The Suite near Forest Hills. Its owner, Joey Rossano, was a gambler. He needed money. We made a deal that I`d take over the place, but that he would keep his name on the papers.

”Before I did, I talked it over with Paulie. He liked the idea so much he ordered it off limits for the crew. I was in the place every day and Karen would bring the kids in and help with the books. All the books. The books for the State Liquor Authority and the IRS and the real books.

”We were doing real well for a couple of months, then one by one, the guys started showing up. Jimmy Burke brought his wife Mickey and a plant with a good-luck banner on it.”

Within six months, The Suite had turned into a gathering place for Henry and his friends. Henry saw that his best friends were drinking him broke. Most of the debts eventually were paid off, but payment often arrived in the form of swag–hijacked liquor, crates of shrimp, phony credit cards and stolen travelers` checks. Instead of making his life simpler, The Suite was making it more complicated and crazy.

And then there was the violence.

Henry: ”Murder was the only way everybody stayed in line. It was the ultimate weapon. Nobody was immune. Get out of line, you got whacked. Everyone knew the rules, but still people got out of line and people kept getting whacked. Johnny Mazzolla, the guy I used to go cashing counterfeit $20s with when I was a kid, his own son was killed because the kid wouldn`t stop holding up local card games and bookmakers. The kid was warned a hundred times. It was only because of Johnny that they let the kid live until he was 19. He got two, close range, in the heart. That was out of respect for his father. They left the kid`s face clean so there could be an open casket at the funeral.

”It didn`t take anything for these guys to kill you. One night, we were having a party for Billy Batts. Billy had just gotten out of prison after six years. We usually gave a guy a party when he got out. Food. Booze. Hookers. Billy was a made guy. He was hooked up with the Gambinos.

”We`re all bombed. Billy turned around and saw Tommy DeSimone, who he knew from before he was sent away. Tommy was only about 20 at the time, so the last time Billy saw him Tommy was just a kid. Billy started to kid around. He asked Tommy if he still shined shoes. It was just a snide remark, but you couldn`t kid around with Tommy. He was wired very tight. But he knew if he so much as took a slap at a made man, he was dead. We kept drinking and laughing, and Tommy leaned over to Jimmy and me and said, `I`m gonna kill him.”

A couple of weeks later, DeSimone beat Billy Batts to death with a pistol at The Suite, in a corner booth. If the Gambino people ever found out about it, DeSimone, Henry Hill and anyone else they suspected would die. Batts` body had to disappear. DeSimone had a friend who lived in upstate New York and owned a dog kennel, and it was there, in a grave that took an hour to dig because the ground was frozen, that he and Henry Hill buried Billy Batts.

In 1969, at age 26, Henry was living in a rented house in Island Park, just two blocks from Paul Vario. He and Karen had brand-new Buick Rivieras and closets filled with new clothes. He had 15 Brioni suits, for which he had paid $1,000 each, over 30 custom-made silk shirts, and two dozen pairs of alligator and lizard shoes dyed to match his suits and cashmere sports jackets. There were so many clothes that they used to fight over hangers. There were bureaus jammed with bracelets, platinum and gold watches, sapphire rings, antique brooches, gold cuff links and tangled webs of silver and gold chain necklaces. Karen had a maid and four fur coats, and when she needed cash, she used to separate her thumb and index finger to indicate whether she needed a half inch, an inch or an inch and a half of money. Henry had it all–cash, cars, jewelry, clothes and, after a while, even a girlfriend. Her name was Linda, and she was the cause of frequent, bitter fights at the Hill`s rented home.

But for Henry Hill, serious trouble was just around the corner.

Tuesday: Big business behind bars.