During the course of the counterfeiting investigation, Secret Service Agent William Flynn allowed DiPrimo's underworld associates (primarily Ignazio Lupo and Giuseppe Morello) to believe that he was providing evidence against them. DiPrimo's perceived violation of omerta led to the brutal Mafia slaying of his brother-in-law Benedetto Madonia (the "Barrel Murder").

Newspapers of the time, unaware of Flynn's manipulations, attributed Madonia's killing to a squabble over counterfeiting racket proceeds. In a series of articles published years later, Flynn acknowledged the divide-and-conquer effort that cast suspicion on DiPrimo and triggered the death of Madonia.

Morello enforcer Tomasso Petto was indicted for the Madonia murder. Of the suspects arrested, he was the only one still bearing incriminating evidence. But Petto escaped prosecution by changing his name and fleeing to eastern Pennsylvania. (At the time of the arraignment, police had been led to believe that Petto was in custody. But they actually held a different man of similar build.)

DiPrimo swore revenge against the Lupo-Morello organization for Madonia's death. It was widely believed that he tracked Petto to Pennsylvania and killed him there in October 1905. However, the timing was wrong, as DiPrimo was still in prison at the moment Petto was shot and stabbed to death at his home.

DiPrimo might have supplied later evidence that resulted in the 1909 counterfeiting arrests of Lupo and Morello and much of their gang.

Released from prison, DiPrimo fled back across the Atlantic. He was later gunned down in Italy.