In 1980, Franzese had become a caporegime of a crew of 300.
In 1980, Franzese was contacted by Lawrence Salvatore Iorizzo, who initially thought of a scheme to defraud the federal government out of gasoline taxes. Iorizzo was being hassled by associates of another crime family and promised Franzese a percentage if he would defend and solve the issue. The pair set up 18 stock-bearer companies based in Panama. Once authorities suspected one company of fraudulent activity, Franzese would move onto the next company. Under law at the time in Panama, gasoline could be sold tax-free from one wholesale company to the next. Iorizzo, who later turned informant and testified against Franzese, craved power. As a result of Iorizzo slapping around Shelly Levine over $270,000 debt, Franzese had to cut in Genovese family soldier Joseph "Joe Glitz" Galizia into his operation. He partnered with the Russian Mafia in Brighton Beach, Brooklyn in the gas scheme. The family would collect the state and federal taxes, but keep the money instead. At the same time, they were often selling the gas at lower prices than at legitimate gas stations. In 1986, Fortune Magazine listed Franzese as number 18 on its list of the "Fifty Most Wealthy and Powerful Mafia Bosses". Franzese had claimed that at the height of his career, he was making up to $8 million per week. He bought a home in Delray Beach, Florida.
By 1980, Franzese was a partner with booking agent Norby Walters in his firm. Franzese's role was to intimidate existing and prospective clients. In 1981, Franzese successfully extorted a role for Walters in the US tour by singer Michael Jackson and his brothers. In 1982, the manager for singer Dionne Warwick wanted to drop Walters as an agent; Franzese met with the manager and persuaded him to keep Walters.