Reno Gazette-Journal from Reno, Nevada on July 18, 1985 · Page 21
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Reno Gazette-Journal from Reno, Nevada · Page 21

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Reno, Nevada
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Thursday, July 18, 1985
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Page 21
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20A Reno Gazette-Journal Thursday, July 18, 1985 Gllck News Glick knew his casino financing We can't understand how the Teamsters can grant Glick-type loans. We are ; equally at a loss as to how the Nevada Gaming Control Board and Commission can license such operations. Why are we concerned? We feel that thp imafft , of the entire industry is affected. Rouge et Nolr By Ken MillerGazette-Journal LAS VEGAS If the defunct international casino periodical Rouge et Noir News was troubled by the so-called . "Glick-type loans," it was a voice in the , wilderness. The loans didn't bother Teamsters officials. They didn't bother Nevada gaming regulators. And they sure didn't bother the syndicate bosses who, according to federal affidavits and statements by Nevada gaming agents, profited as much as anyone from.the unsecured financing. But Allen Robert Glick, who was 32 years old with just four years of business experience under his belt, zapped the Teamsters Pension Fund for almost $63 million to become the second-biggest casino owner in Nevada. Only Howard Hughes, the billionaire flash-in-the-pan gaming czar, has ever controlled more casinos. Glick, who now lives in a high-security complex in the plush San Diego community of La Jolla with a mob contract on his head and escorts for his kids, was never charged in court with violating Nevada's gaming laws or federal racketeering laws. A letter to one of his Los Angeles attorneys, requesting an interview with Glick, went unanswered. MANY OF those who surrounded Glick at the Stardust and Fremont in Las Vegas await trial this year on interstate racketeering charges, but Glick stands innocent among the deposed. One of Glick's associates, Frank "Lefty" Rosenthal, is lucky to be alive, having survived a car bomb attack in a Las Vegas parking lot. Glick's empire collapsed as quickly as it rose, and while he has long since abdicated his casino throne, he is almost universally accepted as but a link in the mob's long line of landlord "fronts" at the Stardust. His presence in Nevada gaming reshaped the way the state views casino financing and, in a broader sense, casino operations. His uncanny business acumen led those in the Kansas City-Chicago underworld to dub him "Genius." He was a financial Midas. He could parlay a meager investment into a multimillion-dollar empire. He makes Horatio Alger look like Oliver Twist. Glick graduated from Ohio State University with a political science degree in 1964. Three years later, he had a Western Reserve Law School sheepskin and decided to join the Army. After soaring to captain in two years, he left the service and moved to San Diego, where he took a job with the American Housing Guild. Two years later, in 1971, Glick associated himself with a real estate firm, Saratoga Development Corp., and this is where his story takes off. Saratoga was formed in 1965 by Dennis Wittman, and the firm had rapidly 7 T Monsy skimmed during Glick's ownership An estimated $7 million was skimmed out of the four casinos owned by Allen Glick's Argent Corp. between 1974 and 1976. This chart shows the amounts skimmed from the slot departments at each casino and the approximate dates. Stardust iiiiiiiuii riiiiuieu v between Oct. 7ndJ5eb.f 9 3 J Ul . nK hi I I $2.17 million skimmed po A Nk H I between Feb. 75 and May 76 Jf J ilA 7 Hacienda f'!iinrs. ; $1.26 million skimmed V nsL-v AlH i $55l!oOO skimmed &y jMK HYW between Oct. 75 and j Pjf acquired a reputation for the fast, profitable deal. Former Dallas Cowboy star Lance Alworth joined Saratoga the same year. According to the Teamsters' Overdrive Magazine, which has written extensively about Glick and suspect union loans, Glick had a net worth of about $250,000 in 1972. THAT WAS THE year Glick arranged for a $2.3 million loan from Saratoga, money he would use to buy into his first casino. In 1972, he became majority stockholder of the Hacienda Hotel-Casino on the Las Vegas Strip. It was a banner year for the 30-year-old businessman, who skated through the state Gaming Control Board with a glowing recommendation. A gaming investigator later told Overdrive: "The kid's as clean as anyone I've ever seen in my life. No arrests, no lawsuits, no questionable associates, nothing. It's too good to be true. There's nothing derogatory on him anywhere. And brother, we looked." In 1973, Saratoga made millions on shrewd land deals, and Glick was gaining attention as a financial wizard. Exhaustive investigations may not have unearthed any untoward alliances with Glick, but in 1973, Overdrive reported, an incident occurred on a tiny San Diego air strip that raised some new questions. A private Lear Jet, owned by Jet Avia Ltd., a Glick partnership, skidded off the runway in light rain at Palomar Airport, serving Rancho La Costa. La Costa, heavily financed with Teamster loans and engineered by Las Vegas gaming magnate Moe Dalitz, is a playground for the rich and famous. Famous entertainers and politicians trek to La Costa to relax, as do labor bosses and organized crime figures. Among the passengers on that private jet was Teamster "consultant" Allan Dorfman, later a victim of a gangland execution after being convicted in an attempted bribery scam involving former Paul CarboGazette-Journal Nevada Sen. Howard Cannon. Also on board were Jay Sarno, who used Teamster loans to finance Caesars Palace and Circus Circus in Las Vegas; and Albert Matheson of Detroit, a Teamster Pension Fund trustee who was convicted with Dorfman a few years ago. GLICK NEVER explained how such a collection of Teamster-connected men found themselves on the same airplane at La Costa that day. With the gambling bug taking hold, Glick met later that year with Dorfman ' aide Alvin Baron, who eventually took over Dorfman's job as Teamsters assets manager. Baron was later forced out after being convicted in 1978 for taking a $200,000 kickback in exchange for securing a $1.3 million loan for a California cemetery operator. Also at that meeting was Ed Buccieri, a former Caesars blackjack dealer who federal authorities have identified as a mob courier and "go-fer" for the late Mafia financier Meyer Lansky. The topic at hand: An attempted purchase of the Teamster-funded King's Castle at Incline Village, Lake Tahoe. The deal fell through, and after repeated financial problems, the club was taken over by Hyatt, which owns it today. Glick's interests weren't confined to casinos. In 1974, over a two-month period, the fund loaned $15.6 million to Hudson Properties in Texas. Among the partners were former Los Angeles Rams quarterback John Hadl and former San Diego Charger Steven DeLong. Other partners in Hudson Properties, according to Overdrive, were Saratoga (Dennis Witman, president); Altam Corp. (Allen Glick, president) and former New York Jet James Hudson. The first installment of that Hudson loan, $12.6 million, was secured with a 9 percent deed of trust recorded March 25. The remainder came in June. Ironically, Overdrive would report later, the 29 acres securing the fund loan I QJDuiBfJl) ) - ' include several federal buildings, among them a complex housing the IRS. Still looking for a casino, Glick spotted the Stardust. Long before his takeover was announced in 1974, the wheels were spinning for a landmark deal. FEDERAL COURT records on file in Kansas City show that on March 20, 1974, two organized crime families were joined at a single meeting. From Kansas City came La Cosa Nostra chief Nick Civella and his aide, Carl DeLuna. From Milwaukee came LCN boss Frank Balistrieri, whose son, Joseph, was Glick's college chum years before. The subject was Glick. Federal affidavits claim Balistrieri met with Glick on April 5, 1974, to discuss Glick's plans to purchase Recrion Corp. from Delbert Coleman. Coleman had owned Parvin-Dohrman, which had in turn owned the Stardust. On June 15, Joseph and John Joseph Balistrieri entered into an agreement that would give them an option to buy half of Argent Corp., the new casino umbrella, for a mere $25,000. "Not a bad investment," Charlie Parsons, FBI assistant agent-in-charge of Kansas City, joked last month before the President's Commission on Organized Crime. That agreement would be discovered later with the help of search warrants. But by mid-1974, the Milwaukee crime family was entrenched in the deal in exchange for Frank Balistrieri's help in getting the Teamster loan. If there were any questions as to Glick's ties to the mob, they would be disposed of when Frank Balistrieri phoned Glick that June to remind him of his obligations. Glick, who would later meet with Nick Civella about the $62.75 million loan, was suddenly the second-biggest casino owner in the state. The transaction was actually a one-year loan at 12 percent, which would turn into a 20-year mortgage at 9 percent on the assets of Glick's wholly owned Argent Corp. Another source of cash for Glick was the late Tamara Rand, a wealthy Southern California investor who loaned Glick about $2 million between 1971 and 1975. Described by a former gaming audit agent as having a "very, very close relationship" with Glick, Rand's bank records showed check stubs with notations such as "5 Recrion," apparently noting interest to be paid for her help. SHE WAS murdered in 1975, three weeks after a Hacienda meeting with Glick and nine months after a "consulting contract" with him was drafted whereby she would receive $100,000 a year through 1985. The contract was never consummated and Rand's killer was never found. It was established that Mrs. Rand, a wealthy real estate broker who at the time of her gangland-style killing had $453,000 in fresh cash bills stowed in a San Diego bank safe deposit box, had a falling out with Glick. Glick was never implicated in her death. The style of her execution was not unique, and while Glick was not tied to it, Mrs. Rand's killing no doubt gave him cause for concern: In 1975, the late Chicago Mafia don Sam Giancana was gunned down while cooking a late-night snack in his basement. The murder weapon was a .22-caliber High Standard, equipped with a silencer. Mrs. Rand was killed with the same style gun, also silencer-equipped, and in the same general body areas as Giancana. As various forms of torture and murder are known to have unique meanings in the underworld, so did the shot in the mouth: silence. The same style of gun was used in the killing of the late Teamsters "consultant" Allen Dorfman. The same style of gun was used in the murder of Marty Buccieri, the man tabbed to run the ill-fated King's Castle. Rouge et Noir News commented on Glick's reputation and his uncanny ability to deflect criticism: "With the recent death of Howard Hughes, Allen Glick now controls more Nevada resorts than any other person in the state. Glick's Argent Corp. consists of the Stardust, Hacienda and Fremont Hotel-Casinos (it would later also include the Marina). "Glick has suffered from a great deal of unfavorable publicity as the press has speculated as to how a 32-year-old lawyer could overnight become such a factor in Nevada casino gaming. Thinly veiled inferences as to hidden ownership have plagued Glick, and he has altered his public relations approach to meet such charges head-on." The magazine, too, interviewed Glick and walked away satisfied with his explanations. "THE FEDS have investigated Glick from top to bottom, and front to back, but haven't been able to find anything detrimental. The Nevada Gaming Control Board has also run an extensive investigation into Glick's personal background and finances without finding anything to disqualify him from licensing in the Nevada casino industry." It wasn't for the lack of trying, but it points to the deftness with which organized crime is able to almost invisibly slip into the casino business. An FBI affidavit on file in Kansas City gave this blunt scenario: "Four organized crime groups arranged for Glick to buy the Stardust and Fremont in exchange for hidden interests in four Argent casinos via 68-plus million dollars in Teamsters loans. Constant jockeying occurred between organized crime groups for greater control and a greater interest in Argent." The history of the Stardust and its sister casinos under Glick's ownership is well documented, and it wasn't until 1979 when the man the mob called Genius was tossed out of gaming. At 37 years old, he retreated to La Jolla, Calif., where he lives today still under the threat of a Mafia contract. The late Joseph Agosto, who died of natural causes while testifying to the government about his life in the mob, is quoted in federal affidavits as saying DeLuna approached him one day about Glick. DeLuna, according to the affidavit, asked for a layout of Glick's residential compound, and then asked for guns and C-4 explosives. Said Agosto, "It was to do harm to certain unnamed individuals." That would hold especially true if, as several sources familiar with the Glick case believe, Glick has testified to prosecutors about his role in the Argent saga. And that would also explain the Mafia contract on his head. One well-placed source speculated that the reason Glick has never been prosecuted is because of his cooperation, and that he has testified his way into a sort of life insurance policy: "Somewhere along the line, he's got enough hard evidence to blow the boys right out of the box if they knock him off." Stardust's problems started long before its opening By Ken MillerGazette-Journal LAS VEGAS The Stardust Hotel-Casino was the dream of a Southern California gangster, and most experts familiar with the resort say it's been a family operation until just last year. Not family as in Uncle John's Pancake House; family as in La Cosa Nostra. In fact, the Stardust's problems began long before the proceeds of the first stock sale were used to erect a sign on a' vacant lot touting the "Site of the new Stardust Hotel-Casino " , . The Stardust was the brainchild of Long Beach gambling boat operator Tony Cornero, who ran an offshore casino in the 1930s until then-California Attorney General Earl Warren forced him to weigh anchor. It was to be a state-of-the-art pleasure palace with 1,000 rooms, the biggest, fanciest, gaudiest casino on the glittery Las Vegas Strip. Better, Cornero promised, than Bugsy SiegePs Fabulous Flamingo, the desert edifice that didn't really become fabulous until Siegel was murdered and Lucky Luciano and Meyer Lansky moved in. With his project under way in 1955, Cornero dropped dead at a Desert Inn craps table, suffering a heart attack while shooting for 10 the hard way. His death threw the entire project into financial uncertainty. With the cloud of bankruptcy now stationed over the project, work stopped about seven months later. ..... . Anxious creditors asked a judge to place the project in bankruptcy, a move fought by the new Stardust president, Cornero's brother, Louis, despite more than $2.3 million in claims against the project. . EVENTUALLY, THE yet-to-open casino went bankrupt, and a judge began accepting plans from prospective iterating companies. Finally, Rella Factor whose husband John ("Jake the Barber") was the brother of cosmetics 4 i: czar "Max Factor, was chosen as landlord, although she planned to have the Desert Inn run the casino. While Jake Factor at one time held some 70 percent of the Stardust stock, he has never been tied to organized crime. A former Prohibition bootlegger, Factor turned to a quiet life in Beverly Hills, where he made a fortune in real estate and regularly gave to philanthropic causes. He was pardoned of his only felony conviction, mail fraud in 1943, by President Kennedy in 1962, a move that prevented threatened deportation by federal immigration authorities. The Stardust opened in July 1958 at a heavy toll to all involved. Expected to cost $6 million, Cornero's death and y legal delays shoved the opening cost to $11 million. It was July 2, to be exact, and the opening was extravagant. With searchlights scanning the black desert skies, the likes of Bob Hope, Ethel Merman, Marie McDonald and Polly Bergen rolled into the Strip's most luxurious gambling palace. The Stardust trademark, the Lido show from Paris, was there, as were England's Bluebell Girls. "This is the end," said a paradoxically prophetic Hope as he looked at the swimming pool below the stage and ice rink above it. Never in Vegas history had" so many bare-busted women been summoned to a single stage. ( WHILE FACTOR'S group maintained control of the 2-year-old hotel and coffee shop, actual management of the casino, restaurantand bar came under United Hotels Corp., made up of the same group that ran. the nearby Desert Inn. Principals with interests in the Desert Inn and Stardust in 1965 included Allard Roen, Morris Kleinman and Samuel Tucker. By then there were so many fingers in the Stardust pie there was scarcely room for the filling. In his book, Mafia informant Jimmy Fratianno recalls a conversation with longtime friend Johnny Roselli, who was then a Chicago operative in Las Vegas: "After I transferred to Chicago, (they) asked me to concentrate on Vegas. They had plenty of cash to invest and they wanted to get into some of these gambling joints," Fratianno recalls Roselli as saying. "I'm now the man in Vegas. I got the Stardust for Chicago. ' ' "I'd heard something about you being the man, you know, but I didn't know you had a piece of the Stardust. I hear it's the biggest money-maker in Vegas." ''It sure is, Jimmy. I'm pulling 15, 20 grand under the table every month. They're skimming the out of that joint. You have no idea how much cash goes through that counting room every day. You, your family, your uncles and cousins, all your relatives could live the rest of their lives in luxury with just what they pull out of there in a month. Jimmy, I've nver seen so much money." "So who's watching the store for Chicago in the Stardust?" "Sam (Giancana, former Chicago Outfit boss) has got Johnny Drew, moved him in from Bill Graham's Bank Club in Reno and he sent Al Sachs and Bobby Stella to help him. Dalitz's got Yale Cohen to watch his end. But Sam's got a sleeper in there, Phil Ponti, a made guy from Chicago. A real sharp operator." THAT CONVERSATION, which Fratianno says took place in 1960, was pro- Ehetic. Moe Dalitz eventually would ecome a dominant force at the Stardust. Sachs, brought in more than 20 years ago, eventually would be squeezed out and then return to own it until being forced by Nevada gaming officials to sell it in 1984 under the weight of a 222-count skimming complaint. Ponti, known for his role as the only "made" Mafia member to become a casino executive, was implicated in a subsequent skimming operation when the Stardust was owned by former Argent chief Allen Glick. Stella also was involved in the Argent case. With the 1960s came a whole new batch of problems. ' In June 1960, six men were indicted by a Carson City federal grand jury on swindling charges relating to the original 1954 Stardust stock sale. The men were accused of selling hundreds of thousands of shares of unregistered stock and keeping phony records about the sale. They were also accused of misappropriating huge sums of investors' money. v One of those men, Jack DeLuca of Santa Monica, Calif., once ran the bar and restaurant on Cornero's gambling boat, the Rex, before it was grounded. By 1962, the Rella Factor group had repaid most of the Stardust's $3.5 million in debts, getting the plush resort back on its feet for the first time. Six months later, in January 1963, the Teamsters Central States Southeast and Southwest Pension Fund got its foot in the Stardust's door for the first time. The loan was a $1.2 million mortgage on the club's golf course. THE PENSION fund, which would later mushroom into a lucrative bank for organized crime, would get a bigger chunk of the Stardust action in 1964, when James Hoffa's union, by then infested with greedy mob interests, loaned $7 million to the Stardust. There was no explanation given for the loan, but it was believed at the time it would finance a high-rise addition. By 1964, the Teamsters were heavily involved in many Nevada casinos and the Mafiosi who controlled those loans were having a field day. It was also in 1964 when Las Vegas gambler, Stardust stockholder and Al Capone protege John Drew came under investigation by Nevada officials for his alleged ties to Chicago hood Johnny Marshall. Marshall, also known as Marshall Caifano, was an early inductee into Nevada's Black Book of excluded persons, and was on trial for extortion in Chicago when Drew was called to testify. He merely invoked his Fifth Amendment rights against self-incrimination. Drew, who held 5 percent of the Stardust, was involved in Bill Graham's old Bank Club in Reno in 1950. THEN CAME THE tumultuous years of the late '60s. Howard Hughes, who already had gobbled up four Strip casinos, including the Desert Inn (his first acquisition, in 1966) and the Frontier, announced he wanted to buy the Stardust from Dalitz for $40 million. That purchase offer left then-Gov. Paul Laxalt and others in a tough spot. There were concerns that Hughes' ownership of five Strip casinos, coupled with Del Webb's ownership of three more in Las Vegas, would give the two men a potentially dangerous stranglehold over Nevada gaming. And perhaps most troublesome: They could monopolize political contributions from casinos, which meant undue pressure on elected officials, their policies and staffs. Laxalt said he also was concerned about then-Stardust owner Dalitz, and increasing reports of his organized, crime ties. By then, reports of skimming at the Stardust were mounting. The hotel-casino turnover business in Las Vegas at the time was substantial. Before taking over the Desert Inn from the Dalitz group, the Hughes Empire had already moved into the hotel's high-roller suites and Hughes was preparing for the kill. The mob, at first troubled by the eccentricities accompanying Hughes and his entourage, soon wel-comed-the billionaire as a source for badly needed legitimacy for Las Vegas. Hughes' former right-hand man, former FBI agent Robert Maheu, was feeding Laxalt's office rosy predictions of Hughes building a medical school at the University of Nevada. Las Vegas Sun Publisher Hank Greenspun, who profited handsomely from Hughes as well, was writing glowing editorials and news stories about Hughes. THE $30.5 million deal eventually was approved, 3-2, by state gaming regulators, but Hughes was told by the U.S. Justice Department to delay his takeover of the Stardust pending an antitrust investigation. The Stardust purchase, which would put the billionaire industrialist a notch ahead of the late Bill Harrah as the state's biggest casino owner, was opposed by then Gaming Commission Chairman George Dickerson as "a dangerous economic concentration." The Hughes deal fell through, and Dalitz remained in the picture. Six months later, the Dalitz group unloaded the Stardust to the Parvin-Dohrman Co. at the bargain-basement price of $15 million.

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