Newsday reported Kevin Bonner, an alleged former member of Gotti's crime family, testified Tuesday that Gotti, 45, had been beating a man nicknamed "Elf" in March 1983 when a bystander named Danny Silva attempted to intervene.
Gotti, who is facing racketeering and murder charges in U.S. District Court, stabbed Silva during the melee, Bonner alleged.
"As I was tussling, I looked over at John and I seen him, he stabbed this kid," said Bonner, who reportedly is helping prosecutors in an attempt to shorten his 25-year armed robbery sentence. "As I was fighting, I see the kid get stabbed."
Prosecutors introduced a death certificate citing the death of Silva, 24, of a fatal stab wound on March 12, 1983.
Gotti also is accused of ordering the fatal shootings of George Grosso in December 1988 and Bruce Gotterup in November 1991, Newsday reported.
Gotti's father, mob figure John J. Gotti, died in prison in 2002.