Crime boss

Winter and most of his organization's leadership were sentenced for fixing horse races in 1979, but the FBI persuaded federal prosecutors to drop all charges against Bulger and Flemmi. Bulger and Flemmi then took over the remnants of the Winter Hill Gang and used their status as informants to eliminate competition. The information they supplied to the FBI in subsequent years was responsible for the imprisonment of several Bulger associates whom Bulger viewed as threats; however, the main victim of their relationship with the federal government was the Italian-American Patriarca crime family, which was based in Boston's North End, and in Federal Hill, Providence. After the 1986 RICO indictment of underboss Gennaro Angiulo and his associates, the Patriarca family's Boston operations were in shambles. Bulger and Flemmi stepped into the ensuing vacuum to take control of organized crime in the Boston area.

By 1988, Bulger headed an organization that ran all of the rackets throughout New England, e.g., extortion, loansharking, bookmaking, truck hijackings and arms trafficking. They were also the main cocaine and marijuana distributor in the state, receiving their drugs from a Cuban-American gang based in South Florida.

State and federal agencies were repeatedly stymied in their attempts to build cases against Bulger and his inner circle. This was caused by several factors. Among them was Bulger's paranoid fear of wiretaps, South Boston's code of silence, and also corruption within the Boston Police Department, the Massachusetts State Police, and the Federal Bureau of Investigation. Although disgraced FBI agent John Connolly remained Bulger's most infamous friend in law enforcement, Kevin Weeks has insisted that Lieutenant Richard J. Schneiderhan was valued far more highly. According to Weeks, this was because Schneiderhan was the Winter Hill Gang's only source inside of the Massachusetts State Police.

Drug trafficking

Bulger, Weeks and Flemmi became heavily involved in narcotics trafficking in the early 1980s. Bulger began to summon drug dealers from in and around Boston to his headquarters. Flanked by Kevin Weeks and Flemmi, he would inform each dealer that he had been offered a substantial sum to assassinate them. He would then demand a large cash payment not to do so. Eventually, however, the massive profits of drugs proved irresistible. According to Weeks,

Jimmy, Stevie and I weren't in the import business and weren't bringing in the marijuana or the cocaine. We were in the shakedown business. We didn't bring drugs in; we took money off the people who did. We never dealt with the street dealers, but rather with a dozen large-scale drug distributors all over the State who were bringing in the coke and marijuana and paying hundreds of thousands to Jimmy. The dealers on the street corner sold eight-balls, ... grams, and half grams to customers for their personal use. They were supplied by the mid level drug dealer who was selling them multiple ounces. In other words, the big importers gave it to the major distributors, who sold it to the middlemen, who then sold it to the street dealers. In order to get to Jimmy, Stevie, and me, someone would have had to go through those four layers of insulation.

In South Boston, most of the neighborhood's drug trade was managed by a handpicked crew of prize fighters led by John Shea. Edward MacKenzie Jr., a former member of Shea's crew, has stated that this was done because Shea viewed athletes as less likely to abuse the drugs they were selling. According to Weeks, Bulger enforced strict rules over the dealers who were paying him protection.

The only people we ever put out of business were heroin dealers. Jimmy didn't allow heroin in South Boston. It was a dirty drug that users stuck in their arms, making problems with needles, and later on, AIDS. While people can do cocaine socially and still function, once they do heroin, they're zombies.

Weeks also alleges that Bulger strictly forbade PCP and selling to children, and that those dealers who refused to play by his rules were violently driven out of the neighborhood. In 1990, "Red" Shea and his associates were arrested as part of a joint investigation involving the Drug Enforcement Administration (DEA), the Boston Police Department and the Massachusetts State Police. All refused to testify against Bulger, Flemmi, and Weeks. According to Weeks,

Of course, Jimmy lost money once the drug dealers were removed from the streets in the summer raid, but he always had other business going on. Knowing I had to build something on the side, I had concentrated on my shylocking and gambling businesses. The drug business had been good while it lasted. But our major involvement in it was over.

It would not be until the 1999 cooperation of Weeks that Bulger, by then a fugitive, was conclusively linked to the drug trade by investigators.

Won the state lottery

One week in the summer of 1991, Bulger and 3 friends held the winning Massachusetts Lottery ticket and shared a prize of around $14 million dollars.

Downfall

In April 1994, a joint task force of the DEA, the Massachusetts State Police, and the Boston Police Department launched a probe of Bulger's gambling operations. The FBI, by this time considered compromised, was not informed. After a number of bookmakers agreed to testify to having paid protection money to Bulger, a Federal case was built against him under the RICO Act.

According to Kevin Weeks,

In 1993 and 1994, before the pinches came down, Jimmy and Stevie were traveling on the French and Italian Riviera. The two of them traveled all over Europe, sometimes separating for a while. Sometimes they took girls, sometimes just the two of them went. They would rent cars and travel all through Europe. It was more preparation than anything, getting ready for another life. They didn't ask me to go, not that I would have wanted to. Jimmy had prepared for the run for years. He'd established a whole other person, Thomas Baxter, with a complete ID and credit cards in that name. He'd even joined associations in Baxter's name, building an entire portfolio for the guy. He'd always said you had to be ready to take off on short notice. And he was.

He had also set up safe deposit boxes, containing cash, jewelry, and passports, in locations across North America and Europe including Florida, Oklahoma, Montreal, Dublin, London, Birmingham (UK) and Venice. In December 1994, Bulger was informed by retired FBI Agent John Connolly that sealed indictments had come from the Department of Justice and that the FBI were due to make arrests during the Christmas season. In response, Bulger fled Boston on December 23, 1994, accompanied by his common law wife, Theresa Stanley.