Cinzia Mangano, 44, daughter of Vittorio Mangano, one of the prominent leaders of the Lombardy Cosa Nostra in the 1970s, was among eight people arrested Tuesday by an anti-Mafia police unit, Corriere della Sera reported.
Mangano, Enrico Di GruSa, 47 -- Vittorio Mangano's son-in-law -- and 59-year-old businessman Giuseppe Porto are accused of leading an "offshoot" of the Cosa Nostra that generated millions of dollars in cash through a complex network of businesses and services that allegedly engaged in false billing and the exploitation illegal immigrant labor since 2007.
Vittorio Mangano died of cancer in 2000 while under house arrest. In the 1970s he worked as a stable-keeper at Berlusconi's palatial Villa San Martino at Arcore, north of Milan.
The future four-time prime minister entrusted him with the security of the villa and his children, whom Mangano personally accompanied to school, the Italian news agency ANSA reported.
Berlusconi in 2008 described Mangano as a "hero" for not cooperating with prosecutors in what he regarded as politically motivated investigations of his alleged connections with the Mafia.
Mangano left the Arcore villa in 1976, but continued to gravitate to Milan, where he operated a drug trafficking ring on behalf of the Mafia, for which he was arrested in 1980 and later convicted.
Between 1999 and 2000, he was convicted on four other counts by the Palermo courts, including life in prison for a double murder as well as convictions for extortion and drug trafficking.
A criminal complaint issued by Milan Investigating Magistrate Stefania Donadeo accused Cinzia Mangano of being the "money manager" for a criminal enterprise that provided logistical and economic support for mafia fugitives and the families of jailed mobsters, as well as to invest in Lombardy businesses.
The investigation, carried out by the Milan District Anti-Mafia Directorate, also resulted in the seizure of $4 million in assets, with discovered false billings so far amounting to $875,000 -- described by authorities as "the tip of the iceberg."
Among the others receiving cash from the operation were representatives of politicians who turned to Porto "to get help in the upcoming elections," the magistrate alleged.
She said evidence indicated Porto helped fund the 2010 campaign of former Milan regional housing commissioner Domenico Zambetti of Berlusconi's People of Freedom Party, the PDL. Zambetti last year was arrested for alleged vote-trading with the Calabrian mafia, the 'Ndrangheta.
Investigators also believe funds from Cinzia Mangano's enterprise were funneled to PDL politician Gianni Lastella in the 2011 Milan municipal elections.
Dozens of searches connected to the investigation were carried out in Milan and in the province of Varese, as well as in Monza, Lodi and Cremona, ANSA reported.