Soon Luciano joined forces with Joe Masseria, then the most powerful mafioso in New York. But the partnership was doomed from the start, as Luciano’s and Masseria’s methods of business differed greatly.
Masseria was a "Mustache Pete," an old-school mafioso who wanted to preserve the old Mafia ideals of "honor," "tradition," "respect" and "dignity" in America. Luciano, on the other hand, was a "Young Turk.", they formed a young, ambitious, impatient group which challenged the established order.
One day in 1929, Luciano was forced into a limo at gun point by three men, beaten and stabbed, and dumped on a beach on New York Bay. Luciano survived this attack, but was forever marked with the now famous scar and droopy eye, hence earning him the name "lucky".
After his abduction, Luciano found out through Meyer Lansky that it had been ordered by Masseria's enemy, Salvator Maranzano. Luciano eventually did what Maranzano wanted and killed Masseria, on the condition that Maranzano establish Luciano as an equal boss.
Salvatore Maranzano made Luciano his number two man, and set up the Five Families of NewYork under him, promising that they would all be equal and all be free to make money.
However, at a meeting of all the heavy-hitting gangsters in Upstate New York, Maranzano declared himself capo di tutti capi (Boss of all Bosses), which meant every Don in the country had to pay up to him. He also whittled down the rackets of the rival families in order to strengthen his own family.
Meyer Lansky told him that Maranzano had plans to kill him. Luciano could no longer stand still. Lansky assembled a hit squad to pose as government agents.
On the day Maranzano was to hire Luciano's assassin they stormed Maranzano's office, who thought he was being arrested. The squad cut Maranzano to ribbons with a volley of gunfire and repeated stabbings.
Luciano was now the model mobster, with businesses throughout the country
Charles Luciano was a young, powerful and influential gangster who led the underworld along with the other top Bosses. He sat atop the most powerful crime family in America, which now bore his name and controlled the most lucrative criminal rackets in New York such as gambling, bookmaking, loan-sharking, drug trafficking, and extortion.
During World War II, the U.S. government reportedly struck a secret deal with the imprisoned Luciano
His help was sought in providing Mafia assistance to counter possible Axis infiltration on U.S. waterfronts, during Operation Avalanche, and his connections in Italy and Sicily were tapped to furnish intelligence and ensure an easy passage for U.S. forces involved in the Italian Campaign
1946, as a reward for his wartime cooperation, Luciano was paroled on the condition that he depart the United States and return to Sicily, he accepted the deal.