Montiglio, now a Gambino associate, in charge of collecting payments from DeMeo and Gaggi's customers. Montiglio's close involvement in nearly all facets of Gaggi's criminal activities, particularly with the DeMeo crew, would bring heavy repercussions for Gaggi in the mid-1980s. On June 7, 1978, Gaggi and nine other mobsters were charged with racketeering, conspiracy, and fraud charges as a result of a year-long federal investigation into the bankruptcy of a theatre in New York. The majority of the evidence in this case came from wiretapped conversations; fortunately for Gaggi, he never said anything incriminating. In December 1978, Gaggi was cleared of all charges. Eppolito murders By 1979, DeMeo was involved in loan sharking, murder-for-hire, and the operation of an auto theft ring that shipped cars to the Middle East. Gaggi received a large percentage of profits from these rackets, along with money from DeMeo's drug trafficking. The DeMeo crew sold cocaine, marijuana, and a variety of pills in large amounts. DeMeo continued his drug trade despite a public prohibition that Castellano had made against this type of racket. Gambino capo James Eppolito told Castellano that Gaggi and DeMeo were trafficking drugs. Eppolito claimed that DeMeo had cheated Eppolito's son, a Gambino soldato, in a drug deal. In addition, Eppolito accused Gaggi of being a police informant. Eppolito asked for permission to murder Gaggi and DeMeo, but Castellano broke his own rules and sided with them. Instead, he gave Gaggi and DeMeo permission to murder both Eppolito and his son. On October 1, 1979, Gaggi and DeMeo shot and killed both Eppolitos. However, a witness alerted an off-duty policeman, who soon found Gaggi walking away from the crime scene (DeMeo had gone in a different direction). After a brief shootout, the policeman wounded Gaggi in the neck and arrested him. Although charged with the murders, and the attempted murder of the police officer, Gaggi was only convicted of assault. He was sentenced to 5 to 15 years in federal prison. While Gaggi was in prison, DeMeo became acting capo of Gaggi's crew. In 1981, Gaggi's sentence was overturned on appeal and he was released from prison. Gaggi had bribed a juror to make false claims of government misconduct during the trial. Downfall After Gaggi's release, Montiglio had become a drug addict and fled New York for fear of punishment from the Gambino family. The FBI dismantled DeMeo's auto theft ring and