From 1908 to 1917, he was arrested several times for various crimes. In 1916, he changed his name to Frank Costello. Later that year, he was jailed for carrying a concealed weapon. Thereafter, he decided not to carry gun and turned towards organized crime.
After his marriage in 1918, he began working for the Morello crime family’s boss, Ciro Terranova. Around this time, he met and befriended a Sicilian Charlie ‘Lucky’ Luciano. The other members of the Luciano family did not approve of Lucky’s association with a non-Sicilian like Costello.
Luciano and Costello formed a group with other Italian-Americans and some Jewish partners, namely Bugsy Siegel, Vito Genovese, Meyer Lansky, and Gaetano Lucchese. Together they started running crime operations, such as extortion, gambling, theft, and narcotics. During the ‘Prohibition Period’ of 1920, they earned money by illegally selling liquor. These operations were financed by Arnold Rothstein.
In 1922, Costello, along with Luciano and others, joined the Mafia family of the Sicilian underworld boss, Joe Masseria. In 1924, he got involved with the rum-running operations, ‘The Combine,’ with Irish mafia don, Dwyer.
During the 1920s, Costello became a powerful figure in the crime world. He ran many gambling operations, including punch cards, bookmaking, casinos, and slot machines. He befriended many politicians and formed an important connection between the underworld and the Democratic Party’s organization, ‘Tammany Hall.’ This proved really beneficial for the crime world, as they could bribe or make a deal with the government officials, police, politicians, and judges. Between 1927 and 1929, Costello, Luciano and associates brought together other crime leaders from across the country and initiated the formation of a ‘National Crime Syndicate.’
The ‘Masseria Family’ was facing stiff competition from the relatively new ‘Maranzano Family,’ for the control over the local government. The ‘Maranzano Family’ was from ‘Catellammare del Golfo,’ Sicily, and was rapidly taking over the underworld operations in New York. Rivalry between the ‘Masseria’ and ‘Maranzano’ families created an underworld war, commonly referred as ‘Castellammarese War.’ It continued for almost two years and affected the underworld operations and profits.
'Luciano’ and others decided to get rid of the bosses of both the families. Masseria was killed in April, 1931, and Luciano took over as the head of the family, changing its name to ‘Luciano Family.’ Later, Maranzano, who declared himself as the ‘Boss of all bosses,’ was also shot dead in September, 1931. This is how the ‘Luciano Family’ became powerful in the New York underworld.
Costello earned a lot of money for the ‘Luciano Family’ as he controlled a gambling empire across the country. In 1934, Florello La Guardia, the Mayor of New York City, confiscated and destroyed thousands of Costello’s slot machines. Costello then started his gambling business in Louisiana and New Orleans.
In 1936, Luciano was arrested for running a prostitution ring and was sentenced to 30 years imprisonment. He appointed Vito Genovese as the new boss of the group from the jail itself. The following year, Genovese ran away to Naples, Italy, as he was accused in an old murder case. As a result of this, Luciano appointed Costello as the head of the ‘Luciano Family.’ He proved quite profitable for the family. He was well liked by the capos and the soldiers working for the gang. Costello was averse to drug trafficking. He was a sophisticated don, who preferred intellect to brawn.
In 1946, Genovese was acquitted of the murder charges, and upon his return to the US, he wanted to be reinstated as the boss of the ‘Luciano Family,’ but Costello did not step down and this resulted in a long drawn underworld battle for power between the two.
In 1950-1951, the US Senate carried out ‘Kefauver Hearings’ or the investigations into organized crime. These investigations were conducted by a committee headed by Senator Estes Kefauver. Costello was then considered as America’s top mafia boss, but craved for legitimate respectability.
Costello was convicted for contempt of the Senate as he walked out of the hearings. He was sentenced to 18 months imprisonment. After his release in 1954, he was sentenced to another 5 year term for tax evasion. He was, however, released on an appeal in 1957.
After his release, Genovese made an attempt on his life. Genovese’s driver Gigante shot Costello in the lobby of his apartment building. Costello survived the attack, but refused to identify Gigante as the shooter.
Genovese declared himself as the boss of the ‘Luciano Family’ and called it ‘Genovese family.’ Later Costello made peace with Genovese and retired from active crime. He was allowed to continue with his businesses and gambling setups. Even after stepping down, Costello commanded tremendous respect amongst the underworld.
He remained influential during the later years of his life too as his old associates valued his opinion and continued seeking his advice.