Here is how one Mafia real-estate scam worked, according to an insider. Several years ago, the mob sidled up to an employee at a certain depository of home supplies in South Philly. The employee was able to order doors, windows, lumber, flooring tiles and other building items, and set them aside for "special customers." The real-estate-savvy mobsters then reached out to small-time construction contractors while real-estate agents, along with mob associates, were buying row houses throughout the city to rehab and rent or sell. Mob-connected realtors then hooked their contractor buddies with the guy inside the housing-supply business. The contractors picked up their building supplies for free and used the materials on their own projects. Not having to pay for thousands of dollars worth of building supplies made for handsome profits at the business's expense. But of course, there was a catch.

In return for the free building supplies, contractors agreed to work on properties owned by mob associates for cost. The contractors returned to the store for more free materials and hired cheap labor to complete the work on mob homes. When reconstructed properties were rented or sold, a percentage of the profit went to the mob.

Then, as real-estate prices continued to skyrocket, mobsters with dirty cash formed partnerships with investors and sank their money in larger construction companies and legitimate development projects. Some mobsters worked all the angles, using girlfriends and wives to front for them in development deals and in the mortgage business.

One former Scarfo mob member is now frequenting nightclubs in Old City and Atlantic City with a realtor from Washington Township, N.J., and is said to be handing out business cards listing himself as a mortgage broker.

"They all want to be business tycoons now," says an insider. "They're making money and they're declaring it to the IRS. But they're gonna get caught because the IRS is gonna want to know where the money they invested in these deals came from. And these guys can't explain that!"

When William "Billy" D'Elia was indicted last month for allegedly laundering drug money, many locals paid close attention.

D'Elia, who pleaded not guilty to the federal charges, is the reputed boss of one of Pennsylvania's oldest crime families, the upstate Pennsylvania mob which was founded in the late 1880s by a Sicilian immigrant. His local ties are extensive.

In 1986, D'Elia held a no-show job at the Philadelphia Industrial Correctional Center construction site and, for decades, he visited Jewelers Row to hang out with a longtime friend who ran a profitable business there.

In the early '90s, D'Elia was seen dining about town with John Stanfa and when federal wiretaps planted in the New Jersey law office of Sal Avena in 1992 and 1993, the feds overheard D'Elia talking business with reputed mobster Salvatore Profaci.

In 1996, D'Elia allegedly took new Philly mob boss Ralph Natale to Brooklyn to meet the leaders and members of the Colombo crime family. That November, he was photographed by organized crime investigators as he attended a christening party for then-underboss Joey Merlino's daughter at the old Ben Franklin House on Chestnut Street. Two years later, the FBI watched D'Elia walk into a South Philly restaurant to celebrate Merlino's birthday with Natale and 40 members and associates.

"He's our pal," says one associate who's known D'Elia for years. "He's a very smart businessman. He knows how to make a lot of money the legit way."

D'Elia's name has even been tied to the City Hall corruption probe. According to an Inquirer article, in the summer of 2000, D'Elia dined at the Saloon in South Philly with Muslim cleric Shamsud-din Ali, Laborers Local 332 business manager Samuel Staten Sr. and consultant Joseph Moderski to discuss setting up a demolition company to obtain work from the City of Philadelphia. Though Ali was sent off to serve seven years for paying to play, the idea never went anywhere.

Not all of D'Elia's business trips to Philly involve visits with alleged mobsters. Billy's daughter, Miriam D'Elia, has a Center City law office. Last year, the City gave Miriam and her law partner, Simone White—yes, Ron's daughter—bond work for the Philadelphia airport. D'Elia and White are the minority co-underwriting counsel on the $150 million bond issue. Published reports indicate that Street's top aide at the time, George Burrell, pushed for White and D'Elia to get the bond work.

"Billy loves his daughter," a mob insider says. "He's proud that she's a lawyer and she's making it in the legit legal world. Well, if you can call what goes on in City Hall legit!"