The anonymous jurors deliberated 11 days before notifying the judge they were hopelessly deadlocked over racketeering conspiracy and murder charges. Prosecutors accused Gotti of ordering gangland hits to settle scores and of secretly pocketing drug money despite insisting he'd gone straight.
U.S. District Judge Kevin P. Castel freed Gotti - behind bars for more than a year - on $2 million bond while the government decides whether to seek a fifth trial.
About three hours later, a smiling Gotti walked out of Manhattan federal court and told a crush of reporters that he was looking forward to spending time with his children. The family planned to celebrate the outcome with a steak dinner.
"It was difficult for me," he said. "I can only imagine what it was like for them."
He also thanked the jury for keeping an open mind despite mob lore - "a hard thing to do."
Three hours earlier, the jury had sent U.S. District Judge Kevin P. Castle a note that read: "Judge Castel, we cannot reach a unanimous decision on any count."
Castel notified the jury that he was declaring a mistrial, and applause erupted in the courtroom among Gotti supporters. Once the jury left the courtroom, Gotti hugged his attorney. Victoria Gotti, Gotti's sister, tearfully said outside court: "We're ravaged. We're beaten down, but we're not broken."
Asked about a possibility of another trial, she said: "Just let it go. We're no organized crime family. We're a family. That's all we are."
Afterward, some jurors said they were evenly split throughout their deliberations on all counts. But they were unanimous on one point: The government's star cooperator, admitted mob enforcer and former Gotti friend John Alite, bombed on the witness stand.
"The whole jury agreed he was the least credible," said one juror who refused to give his name. The jurors identities were withheld by the court for their protection, a common practice in mob cases.
Gotti's assessment of Alite: "He meant nothing to me. He was an animal then. He's animal now."
Three previous trials in the same Manhattan courthouse - alleging the 45-year-old Gotti orchestrated a kidnapping and attempted murder plot against Guardian Angels founder Curtis Sliwa - ended in hung juries in 2005 and 2006.
"We are evaluating how to proceed and, in the near future, will inform the Court and the defense of our decision," U.S. Attorney Preet Bharara said in a statement.
Prosecutors in the latest case renewed the Sliwa accusation, but also raised the stakes by alleging that Gotti left behind a trail of bodies while following in the footsteps of the late John "Dapper Don" Gotti. Claims by the Don's eldest son that he quit the Mafia in 1999 were preposterous, they said.
"It makes no sense," Assistant U.S. Attorney James Trezevant said in closing arguments. "He never, never quit that life."
In his closing argument, Gotti's lawyer recounted how Gotti, while visiting his imprisoned-for-life father, confided that he didn't have the stomach for La Cosa Nostra.
"It's not working for me, and it's not working for my kids," attorney Charles Carnesi quoted his client as saying.
Carnesi also attacked the prosecution's turncoat witnesses. He argued they were willing to tell lies about Gotti to reduce their own prison sentences.
Alite testified about the younger Gotti's rise through the family ranks - and about his violent temper. He claimed Gotti once shot a man for mocking the size of his handgun.
"Is this big enough?" Alite quoted Gotti as saying as he grabbed a nearby rifle and shot the man in the hip.
Alite told jurors that Gotti drafted him for a 1990 hit - the victim was an associate who had dared to ignore one of his father's orders - in the parking garage of the World Trade Center. He also said the defendant repeatedly urged him to earn his organized crime stripes by killing a childhood friend of Alite who was telling people that he was selling drugs for Gotti.
"John Gotti Jr. kept saying to me in '88: `You didn't kill this kid yet, you didn't shoot him, you didn't do this.' ... He wanted me to kill him," Alite said.
The trial was punctuated by hysterical outbursts. With the jury on a lunch break and Alite leaving the witness stand, Gotti lost it: A deputy U.S. marshal told a prosecutor that he saw him mouth the words: "I'll kill you" to Alite. When Alite responded, Gotti erupted, shouting: "You're a punk! You're a dog! You're a dog! You always were a dog your whole life, you punk dog."
Gotti's mother, also named Victoria, erupted another time with the jury absent, screaming out to her son, "They're railroading you! They're doing to you what they did to your father!"
Her husband, like their son, had a knack for evading convictions on a variety of mob indictments brought against him, earning him his other nickname, "Teflon Don." He finally was convicted in 1992 of murder and racketeering and died in prison.