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Reputed Outfit associate’s jail calls get him in more trouble when cops find cocaine, sources say

A reputed Chicago mob associate has learned the hard way that you don’t want to do business on jailhouse phones, law enforcement sources say.

Robert “Bobby” Panozzo Sr., 54, currently behind bars on racketeering charges, allegedly made calls that led investigators to a brick of cocaine in his West Town home, law enforcement sources say. He was speaking in code in the conversations.

Panozzo was arrested in the racketeering case on July 19. At the time, Cook County prosecutors filed charges accusing Panozzo and his alleged crew with home invasions, armed robberies, burglaries, insurance fraud, prostitution, arson and a plot to murder a witness.

Sources said investigators were then tipped to a kilogram of cocaine in Panozzo’s home because of calls he was making from the Cook County Jail, where he’s been locked up since his original arrest. The calls are routinely recorded.

On Aug. 7, Chicago Police investigators executed a search warrant at his home at 514 N. Claremont and found the cocaine wrapped in black tape and clear plastic in a first-floor apartment, according to a police report. The cocaine was worth about $25,000 on the street, the report said. On Oct. 24, Panozzo was charged with manufacturing and delivery of more than 900 grams of cocaine, court records show. He is being held in lieu of $1 million bail.

The investigation is being conducted by the FBI violent crime task force, which includes officers from the Chicago Police Department and Cook County Sheriff’s office.

Panozzo is one of seven defendants in the racketeering case, dubbed Operation Crew Cut. Prosecutors said Panozzo and Paul Koroluk, convicted high-end burglars, led the crew and are tied to Albert “Little Guy” Vena, the reputed head of the Outfit’s Grand Avenue organization.

Prosecutors say members of the brazen Panozzo-Koroluk crew posed as police officers to rob stash houses belonging to Mexican drug cartels.

One crew member, Jeffrey Hollinghead, was sentenced to 15 years in prison last year for his role in kidnapping a disabled gang member to obtain a ransom. Hollinghead began cooperating with investigators against Panozzo and the rest of the crew in November, just before Hollinghead pleaded guilty in the kidnapping case, sources said. Hollinghead told authorities he was out on bond in the kidnapping case when he and Panozzo discussed killing the victim, who went into hiding, officials said.

Prosecutors have painted Panozzo as a violent mobster. Panozzo, who is 6-foot-3 and weighs 240 pounds, according to police records, is separately charged in Rockford with beating a McHenry County man who owed him money and paying an associate to set fire to the man’s house and car. He’s also accused of cutting off a man’s ear during a home invasion.