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From a PBS website about their “American Experience” series:

Already a strong presence in New York, members of the Mafia saw a business opportunity in catering to the otherwise shunned gay population. By the mid-1960s, the Genovese crime family controlled the majority of gay bars in Greenwich Village, a neighborhood in southern Manhattan that was quickly becoming a hub for the city’s burgeoning gay community. In 1966, young Genovese family member Tony Lauria purchased the Stonewall Inn, then a low-earning ‘straight’ bar and restaurant. “Fat Tony,” as he was known, renovated at low cost and reopened the Christopher Street club as a gay bar, controlling everything from the jukebox to the cigarettes. He bribed New York’s Sixth Police Precinct with around $1,200 a month to turn a blind eye to the goings on at the establishment.
To circumvent liquor license laws, the Stonewall Inn operated under the guise of a private “bottle club” — a practice not unusual for New York’s gay bars at the time. Unlike public bars, private clubs did not require a liquor license, and they were not as easily entered into or raided by the police. To maintain the illusion of a club’s exclusivity, Stonewall required patrons to sign their names in a book upon entry, therefore indicating their membership. (Pseudonyms were used almost exclusively, however.)
With little police enforcement of local laws, Fat Tony was able to cut corners on safety and hygiene. Bartenders did not have access to running water behind the bar, so often served drinks in dirty, used glasses; many Gay Rights groups blamed the Stonewall for a 1969 outbreak of hepatitis among its patrons. In violation of city code, Stonewall also lacked a rear exit, leaving the narrow front door as the only escape in the event of a fire or emergency. The alcohol served at the bar (rumored to be stolen or bootlegged) was watered-down and sold to patrons at top-shelf prices.
Stonewall’s owners also reportedly engaged in extortion. Employees singled out wealthy patrons who were not public about their sexuality, and blackmailed them for large sums of money with the threat of being ‘outed.’ This practice eventually became the most profitable aspect of the Mafia’s club management.