Proverbs, i see where you're going with your reasoning but the thing is, it doesn't matter that he had a misunderstanding of the events. that's, in fact, another reason for the handling of Frankie (he should have saw this coming). At best, Frankie is a stupid, spitefull snitch (for lack of a better term), and that's unacceptable.

"From now on, nothing goes down unless I'm involved. No blackjack no dope deals, no nothing. A nickel bag gets sold in the park, I want in. You guys got fat while everybody starved on the street. Now it's my turn." (King of New York)