Seventeen people have been arrested after raids against suspected members and associates of the Gambino mafia family.
US and Italian authorities said a two-year investigation had uncovered "the solidity of the existing relationship" between New York and Sicilian mobsters.
The Gambinos are one of the traditional five mafia families of New York, along with the Bonannos, Colombos, Genoveses and the Luccheses.
Notorious crime boss John Gotti, who died in 2002, was the former 'godfather' of the Gambinos.
He earned the nickname "Teflon Don" after repeated acquittals at trials in the 1980s, but in 1992 he was sentenced to life in prison for murder, racketeering, extortion and tax evasion. He died of cancer 10 years later.
Coordinated raids took place in both countries and the 10 US-based defendants face charges including assaults. arson, racketeering, extortion, witness retaliation and union-related crimes.
Among those held, according to the US Justice Department, are 'Mommino' - an alleged Gambino captain, Joseph Lanni - known as 'Joe Brooklyn', and Diego "Danny" Tantillo.
Alleged Gambino soldiers Angelo 'Fifi' Gradilone and James LaForte also face charges.
The suspects are accused of committing the crimes in a bid to control New York's lucrative rubbish collection and demolition industries.
Some of those arrested are accused of threatening an extortion victim with a baseball bat and setting fire to the steps of his house while his family was inside, prosecutors said.
"For years, the defendants committed violent extortions, assaults, arson, witness retaliation and other crimes in an attempt to dominate the New York carting and demolition industries," said US Attorney Breon Peace.
The 16-count indictment was unsealed at a federal court in Brooklyn and the defendants were due to be arraigned on Wednesday afternoon.
Investigators said seven people were also detained in small towns around Palermo in Sicily.
They allege the Sicilians were teaching their US counterparts their extortion method - demanding smaller sums and using less violent means "to build the loyalty of the extorted".
Coded text for 'made' man
Tantillo and another man were allegedly "made" (formally becoming mafia members) on 17 October 2019.
Prosecutors said an associate who was barred from the ceremony - as he wasn't a "made" man himself - sent Tantillo a coded congratulations message.
The text is said to have read: "Good morning Dani have a great day so happy for your new job and when you sign the contract even if I'm not there is like I am very proud good luck !!"
Tantillo allegedly responded: "Ty Vito I really wish you were there since you were one of the people help me get this contract.
"I hope we continue getting more work and everything gets better than before. Ty as always."
New York's mafia families used to have a vice-like grip on organised crime in the city.
However, after the convictions or deaths of many top leaders - as well as competition from other groups - their influence is believed to have waned in recent decades.