The plan, which ultimately succeeded and is responsible for Bulger's trial, was to hit the bookmakers whose extortion payments were a major source of Winter Hill income. The investigators hoped to pressure bookies to cooperate by threatening them with hefty fines and long sentences for gambling and financial crimes.
The problem, at least initially, was that the bookies were more afraid of Bulger, Flemmi and other gang members than of going to jail.
Katz, a wiry, raspy-voiced retiree who also spent his adult life taking sports bets, testified that after his arrest, he first lied to the grand jury investigating Bulger's gang and later refused to appear before it. He said he continued to refuse even after he had been sentenced to four years in prison on bookmaking charges, to another 18 months for refusing to testify, and after learning that the Department of Justice was taking his house and putting his wife and children on the street to satisfy a $1,055,900 fine.
"I knew that the people who I would testify against had reach," Katz testified Friday. "They could even reach me in jail."
Katz ultimately changed his mind, in March 1994, after federal prosecutors agreed to give him a new identify, relocate him and place him in the Federal Witness Protection Program. A judge also reduced his sentence to time served and waived the fine.
Bulger was tipped off in 1995 to a pending indictment. He was a fugitive for 16 years until he was caught two years ago.
Bulger lawyer J.W. Carney Jr. implied through his questioning on cross-examination that Katz was testifying falsely, essentially giving the government what it needed to convict Bulger out of gratitude for his sentence reduction and the financial support that he and his wife received while in the witness program.
Bulger's lawyers are expected to cross-examine O'Brien when the trial resumes Monday. The government indicted O'Brien on charges of perjury and obstruction of justice before he agreed to testify against Bulger.
O'Brien told the jury during his direct examination Friday that he was so afraid of Flemmi that he tried to avoid meeting him whenever possible.
Flemmi wasn't around, he said, when Bulger imposed rent payments on him. He was, as O'Brien put it, "on the lam" in Canada. Tipped off by a friendly FBI agent, Flemmi fled an indictment accusing him of setting a car bomb that crippled a lawyer for a government witness.
But later, O'Brien said, Flemmi proved helpful. O'Brien dragged another debtor he identified in court as "Timulty" to a meeting with Bulger and Flemmi. O'Brien said that Bulger and Flemmi took Timulty into an office and asked O'Brien to wait outside.
Timulty emerged, shaken, sometime later.
"He said, 'Will you drive me somewhere where I can get a drink?'" O'Brien said. "And I said, 'Certainly.'"