CHICAGO (CBS/STMW) — It was July 2012, and former Chicago cop Steve Mandell was being introduced to notorious former banker George Michael.

Their table at Near West Side Italian restaurant La Scarola was packed with alleged Outfit cronies.

“He said he was my new doctor, and he’d ‘take care of all my problems,’” Michael testified in federal court Tuesday.

Mandell — a cocksure former Death Row resident suspected in half-a-dozen unsolved murders — was offering to help Michael muscle his rivals out of the ownership of a lucrative Bridgeview strip club, Polekatz.

But he wasn’t solving any problems: He was creating one for himself.

Michael had been working with the FBI since 2009.

And his dramatic testimony Tuesday about the gruesome schemes Mandell allegedly cooked up to murder Polekatz owner Anthony Quaranta, and to kidnap, torture, extort, murder and dismember Riverside businessman Steve Campbell formed the corner piece of the government’s case against Mandell on the first day of one of Chicago’s wildest federal trials in years.

Mandell, 62, of Buffalo Grove, wanted to kill Quaranta and Campbell “for his personal financial gain” by seizing Quaranta’s stake in Polekatz and torturing Campbell into handing over his wealth, Assistant U.S. Attorney Amar Bhachu said in his opening statement.

On the tapes, Mandell is heard telling Michael what to say to police investigating the murder.

“This looks like organized crime. I’m a real estate guy. Why are you bothering me?” and “I have lawyers to tend to this. Now leave.”

FBI informant George Michael offered his interpretation of what we heard in court testifying Mandell planned to use Steve Campbell’s cell phone after the murder to throw off investigators. Prosecutors say the tapes also show Mandell plotting to kill the owner of the Polekatz strip club and the owner’s wife.

Mandell and alleged accomplice Gary Engel aimed to pose as cops to abduct Campbell, tie him to a wheelchair, blindfold him, mutilate his genitals, then drug him with Ambien sleep pills and kill him, Bhachu said.

Jurors’ eyes bulged as Bhachu then brandished the meat cleaver that Mandell allegedly planned to butcher Campbell with after draining Campbell’s blood in a man-sized sink.

Secret recordings Michael made of Mandell laughing about the plots, a video shot inside the killing chamber Mandell built in the 5300 block of West Devon, and frantic calls he made to his wife from jail asking her to destroy evidence, prove Mandell’s guilt, he said.

Faced with all that — and evidence that Mandell and Engel were carrying phony police badges, handcuffs and a gun when they were arrested at the proposed abduction spot on North Milwaukee on Oct. 25, 2012 — defense attorney Keith Spielfogel said Mandell was simply “flinging BS” at Michael in the taped conversations.

Mandell was trying to con Michael out of cash and would never have followed through with the murders, he said, though he acknowledged that “Steve sounds awful on those tapes — plain and simple.”

But in a risky and unusual move, he vowed to the jury that Mandell would take the stand in his own defense to testify that the murders were “a fantasy.”

He painted Michael as an untrustworthy liar, telling jurors Michael was booted out of the banking industry by the FDIC in 2010 for his failed bank’s shady practices. Worse still, Michael cheated on his property taxes by placing pews in the racquetball court at his lakefront Lake Bluff mansion and claiming it was a church, Spielfogel said.

Pre-trial rulings by Judge Amy St. Eve mean jurors won’t hear about Mandell’s own colorful past — including how he was sentenced to death for a 1990 murder, only for that conviction to be overturned on appeal, and how a jury awarded $6.5 million for wrongful prosecution, only for that verdict also to be overturned.

Nor have jurors learned that Engel committed suicide soon after he and Mandell were arrested.

But there was no mistaking the tension in the courtroom when Michael took the stand Tuesday afternoon.

Mandell, who had until then adopted a laid-back expression, gave Michael a wry smile, then fixed him with a steely stare.

Glancing nervously back at Mandell, Michael, 59, testified how, at the FBI’s direction, he’d become fast friends with the former Chicago cop.

He introduced and explained six secretly recorded telephone conversations they had about the alleged Outfit ties of Quaranta and fellow Polekatz owner Demitri Stavropoulos, and about how Michael could help set up Campbell’s abduction and murder by luring Campbell from his home.

In one, Mandell said he’d been rebuffed when he asked a mob figure for help killing Stavropoulos. In others he showed his potentially reckless disregard for Outfit leadership, telling Michael that after the Family Secrets trial in 2007, “the old guys are done.”

Mocking the Outfit’s Italian heritage and ability to protect Polekatz, he added, “Luigi Linguini can go see Sammy Salami once a week.”

Played for jurors, the tapes were full of Mandell’s cinematic codenames for Outfit characters, including one, “The Genius,” which Bhachu asked Michael to explain.

“That’s me,” Michael testified, to laughter.

Mandell’s lawyers may get to test that theory during their cross-examination Wednesday.

(Source: Sun-Times Media Wire © Chicago Sun-Times 2014. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)