The Falcone Crime Family was a mafia family led by Carmine Falcone that maintained a stranglehold over all of Gotham City's crime before the rise of Batman. Following Falcone's arrest and incarceration at Arkham Asylum, most of the family's power was given to the Maroni Crime Family.
Since the Gotham Depression that was stopped by billionaire couple Thomas and Martha Wayne, the Falcone crime family all but controlled the criminal underworld of Gotham City, flooding it with crime and having most of it's politicians and police on their leader Carmine Falcone's payroll (examples being two councilmen, a union official, an unnamed policeman, High Court Judge Faden, Gotham Police Det. Arnold Flass, and Arkham Asylum Dr. Jonathan Crane). It was mentioned that while in prison, Falcone shared a cell with Joe Chill, who murdered the Waynes. When Chill planned to testify against their relationship for an early parole in court, Falcone had a female operative (disguised as a reporter) kill him after the trial, thus depriving the Wayne's now grown-up son Bruce of the chance to take his own revenge. Bruce confronted the crime family at an underground establishment and told Falcone himself that not everyone in Gotham is afraid of him. The mob boss dismissed the young billionaire as a harmless nuisance and had his men beat him up to teach him a lesson, also showing that he effectively "owned" the city due to some council people, policemen, and a judge being under his payroll while giving the implied threat of killing Bruce right then and there.
Seven years later, the family went into business with Crane and Ra's al Ghul, smuggling a fear toxin into Gotham for the two through their own drug shipments. In addition to the partnership, Crane set up his psychiatric credentials into declare any of members of the family, including hit-man Victor Zsasz, insane once they were tried in court. He transferred them to his secure wing at the Arkham, where they enjoyed more luxurious conditions than in prison. This eventually frustrated the Gotham DA office, including the assistant District Attorney and Bruce's childhood best friend Rachel Dawes, who commented on the high number of Falcone's associates that he had at the asylum and implied that he was corrupt in his assessments. In the last of the drug shipments for the toxin, Falcone was informed that the packets containing the drugs hidden inside toy bears went to the drug dealers, and those containing the fear toxin hidden inside toy rabbits went to the Crane's apartment in The Narrows. Crane also explained that the less Falcone knew, the better. When learning about Crane's problem with Rachel, he sent a few of his men to kill her while he went with Flass down to the docks to pick up the shipment. However, Bruce, who by now became Batman, discovered their plan and foiled their assassination attempt before confront the rest of the crime family down at the docks, where a firefight against him broke out. Falcone was knocked unconscious and tied up to a to a searchlight while his men were tied nearby for the police to find. The trussed-up mobster, surrounded by a tattered overcoat, projected a bat-like shape into the sky, importuning a calling card would later evolve into the Bat-Signal. Batman also gave evidence to Rachel to blackmail the judge into giving an unbiased verdict, ensuring that Falcone would finally face jail time.
Unfortunately, a humiliated Falcone tried to blackmail Crane into allowing him a part in the upcoming fear toxin project, but Crane instead put on a freakish scarecrow mask he used in his experiments on the asylum's inmates and gassed him with the toxin. This literally terrifies his former partner-in-crime out of his mind and left in a wild state of psychosis. Falcone was then incarcerated in Arkham, continuously muttering the phrase "Scarecrow", but escaped with the many criminals in his crime family that Ra's' League of Shadows released from Arkham as a diversion to get the toxin into the main waterline, though he was eventually recaptured. With the Falcone Crime Family now shut down, its control over Gotham was given to the Maroni Crime Family.