While New Jersey's political leaders tussle over whether to legalize Internet gambling in Atlantic City's casinos, another group of prominent Garden State residents is apparently taking full advantage of the profits available through online wagering.

A federal racketeering case unveiled today in Newark and a state case pending for more than two years in Morris County make it clear: The mob has discovered the Internet.

Thirteen alleged members of a Hudson County, N.J., crew of the Genovese crime family, including its 80-year-old leader and his 72-year-old top associate, were arrested today on racketeering conspiracy charges that focused on a multimillion-dollar sports-betting operation run through an Internet website and an office in Costa Rica.

While the case is built around traditional mob moneymaking ventures like bookmaking, loan-sharking, and cargo theft, "the new wrinkle here is the use of offshore sites and the Internet for processing bets," said New Jersey U.S. Attorney Paul J. Fishman.

"The use of Internet gambling and off shore locales demonstrates an evolution and increased sophistication" in what had traditionally been a staple of the mob's underworld economy, said Michael Ward, the FBI agent in charge of the bureau's Newark office.

Those arrested include Joseph "Pepe" Lascala, the reputed capo or captain of a Genovese crew operating in the Hudson County area. Lascala, 80, of Monroe, N.J., and Pat "Uncle Patsy" Pirozzi, 72, of Suffern, N.Y., who was described as Lascala's "right hand man," were the lead targets named in a 61-page criminal complaint that outlined a four-year federal investigation.

The charges echo a case brought by the New Jersey Attorney General's Office against alleged members and associates of the Lucchese crime family in Morris County, N.J., two years ago. .

Dubbed "Operation Heat," that investigation focused on an Internet betting ring with a base in Costa Rica that authorities alleged generated $2.2 billionin bets over a 16-month period. The defendants, who are still awaiting trial, included several leaders of the Lucchese organization along with Nicodemo S. Scarfo, son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo.

While the criminal complaint made public today did not place a dollar figure on the gambling operation, it included portions of secretly recorded conversations that hinted at the substantial amounts of cash being generated.

In one conversation, Joseph Graziano, reputed owner of the Beteagle.com website used in the sports-wagering operation, talked about the amount he was making and that he had 49 people on his payroll.

"If at the end of the year I can make two million and I gotta give away, like four or five hundred thousand ... that's a million and a half, you know. ... My money," said Graziano, 75, of Springfield, Union County.

At another point, Graziano boasted about the amount of money he was making, claiming that "sometimes I put the money in the bushes, you know. You got money in the bag. ... I don't pay no [expletive] income tax. I mean, I wish I had done it all my life."

The criminal complaint includes references to individuals who are apparently cooperating with the FBI and refers to numerous "consensual recordings," indications that those witnesses were either wearing body wires or allowing their phone calls to be recorded.

Authorities allege that bettors were given usernames and passwords to gain access to the website betting operation and that while bets were electronically forwarded to what was referred to as the "office" in Costa Rica, payouts and collections in cash were made in New Jersey by "agents" for the betting ring.

"Before the advent of computerized betting, these agents would be referred to as bookmakers or bookies," the U.S. Attorney's Office noted in announcing the arrests.

Gambling debts often were converted into loans at exorbitant rates that customers had to repay under the threat of violence from the Genovese family, authorities alleged.

The complaint also detailed a stolen-cargo operation run by the family which referred to the property as SWAG, short for "stolen without guns." The complaint alleges the swag included a shipment of Italian wine taken from a container ship and a container of expensive, 2,000-thread count Egyptian cotton bedsheets.

Contact George Anastasia at 856-779-3846 or ganastasia@phillynews.com.,