Reno Gazette-Journal from Reno, Nevada on July 18, 1985 · Page 22
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Reno Gazette-Journal from Reno, Nevada · Page 22

Reno, Nevada
Issue Date:
Thursday, July 18, 1985
Page 22
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Reno Gazette-Journal Thursday, July 18, 1985 21A Skimming a part of life at Stardust from beginning From page 1A as the Stardust. Steeped in controversy since the day it limped to an opening 27 years ago, the Stardust has never been able to shed its image as a mint for organized crime. Despite the money that has been taken out illegally skimmed the Stardust has the potential to be an immensely profitable resort. Perhaps the most popular "grind joint" in town, it thrives on medium and low-rollers. The Stardust could be a money factory; its $200 million-plus asking price attests to that. But incessant legal problems have taken their toll. Those connected with the Stardust Allen Glick, Frank "Lefty" Rosenthal, Allan Sachs, Herbert Tobman and several others have either lost their gaming licenses or have been forced to sell. They gave handsomely to the campaigns of Nevada politicians. Some politicians refused the largess. Others, such as former Gov. Robert List, accepted the cash, gifts and comps complimentary rooms or services despite allegations, which List said hadn't been proven, that the donors had untoward alliances with known organized crime figures. From the day the Stardust was conceived by Long Beach gambling boat operator Tony Cornero, it has been a regulatory nightmare for state gaming officials. Cornero died before his dream came to fruition, and the casino opened under the wings of cosmetic king Max Factor's sister-in-law. Howard Hughes lusted after it unsuccessfully before it fell into the hands of men such as Moe Dalitz and Delbert Coleman. For its first 20 years, the Stardust was carving out its special niche in Nevada. And then Allen Robert Glick, a squeaky clean, 32-year-old Californian, walked on stage in 1974. Glick, a 1964 Ohio State University graduate in political science and a former U.S. Army captain, became associated with a Southern California real estate firm, Saratoga Development Corp. By 1972, he controlled Saratoga and moved in as the major stockholder of the Hacienda Hotel on the Las Vegas Strip. IN MARCH 1974, Glick's Saratoga bought the controlling block of Recrion Corp., successor of the Parvin-Dohrman firm and owner of the Stardust and Fre mont, from Coleman. That gave the young businessman three casinos, and the Marina would soon be added to his portfolio. To finance the purchases, Glick secured an incredible $62.75 million loan from the Teamsters Pension Fund, making him one of the largest borrowers ever and, after the death of Howard Hughes, the biggest casino owner in Vegas. Because he was so inexperienced and inexplicably obtained such a huge loan, Glick's position was a mystery, and remained so until mob informant Aladena "Jimmy the Weasel" Fratianno shed some light on the situation. According to FBI court affidavits, Fratianno claims the Chicago La Cosa Nostra arranged Glick's loans through the Teamsters Central States Pension Fund, which the mob controlled. Glick had been an associate and classmate of Joseph Balistrieri, whose father Frank was the La Cosa Nostra boss in Milwaukee. Balistrieri, also with a de facto seat on the Teamsters Pension Fund, arranged for the huge loan and installed Glick in the Stardust. Meanwhile, the Chicago LCN installed Frank "Lefty" Rosenthal to run the casino. Federal affidavits on file in Kansas City and based on wiretaps show reputed Kansas City underworld figure Carl DeLuna and his boss, the late Kansas City crime chief Nick Civella, met with Frank Balistrieri in March 1974 to discuss Glick's $62.75 million Teamster loan for the Stardust. (When the FBI raided Frank Balis-trieri's offices, one of the items seized was a document, "Exclusive Option to Purchase Shares of Argent Corporation.") Almost immediately after acquiring his first casinos, Glick began surrounding himself with men who were strongly suspected of having organized crime ties. Rosenthal was soon elevated to supervise all of Argent's Nevada operations. Glick brought in Frank Mooney as treasurer. And in a shocking move, he brought in Jay Vandermark as the Stardust slot manager. Vandermark, a known casino cheater who once told state gaming officials, "I've been a slot cheat, I was a good one," was hired because, Rosenthal reasoned, "It's better to have him on our side." Between October 1974 and May 1976, the Argent casinos were looted as follows: $3.2 million skimmed from the Stardust from 1974 to 1976. $2.17 million skimmed from the Fremont in 1975 and 1976. $1.26 million skimmed from the Hacienda in 1975 and 1976. $551,000 skimmed from the Marina in 1975 and 1976. AMAZINGLY, slot-cheater Vandermark was promoted to run all Argent slot departments. He slashed security staff, kicked out employees while slot receipts were counted down, and supervised the entire Argent slot-skimming scheme. Argent casino executives, watching their clubs bleed to death, pleaded with Glick to harness Vandermark. Said one, "It's gotta stop." It didn't. Vandermark's power remained uncontrolled until May 16, 1976, 'rXir, 8 -.--mrn- -- - The Stardust Hotel-Casino in Las Vegas. when investigators found an auxiliary bank on the casino floor with a secret drop box. Most of the more than $7 million skimmed from Glick's casinos went into that box and on to the Chicago Outfit. The date is Nov. 13, 1978, and DeLuna gets Nick Civella on the phone in Kansas City. He asks Nick whether he had seen a copy of a Las Vegas newspaper he gave to Nick's brother, Carl Civella. Nick Civella: "What did it relate to, Carl?" DeLuna: "To, ah, Lefty (Rosenthal) trying to blackmail List." "Yeah, the extortion." The two men were concerned that Rosenthal, faced with losing his license, was about to hold a news conference at which he planned to reveal that List had been comped at the Stardust, and even furnished prostitutes. The conversation shifts to a plan to have Las Vegas attorney Oscar Goodman help get Glick sell off his casinos. Civella: "What the f--'s this guy we call 'Senior' (the Kansas City underworld's nickname for Goodman)?" DeLuna: "Oscar." Civella: "Oscar, there's a date set for the 17th for Lefty's hearing, which had been postponed from the 2nd by the government. I thought the (Gaming Control) board did that because they didn't want Lefty to have a podium to speak from DeLuna: "Lefty wants to use that petuna (Sicilian word for "whore") who signed the affidavit against List, you know, that List was actually on a whore 31 times and got, uh, comped, you know, and then he used the per diem to pay the bill anyway, but actually he was comped and this is the stuff he (Rosenthal) got on this guy (List). That he's gonna threaten to use before the election." DeLuna then informs Civella that List denied receiving comps from the Stardust while attorney general. "It sounds like he (Rosenthal) is gonna have this press conference and that's what Joe's (the late Joe Agosto, who orchestrated a skimming operation at the Tropicana and who died of natural causes while a government informant) scared of. Goddamn, he's (Rosenthal) gonna create a war with this guy, List, and he ain't even governor yet." DeLuna went to Goodman (also known as "Senior Partner" and avocatto, Sicilian for lawyer), to tell "Genius" (the mob's nickname for Glick) to "make a public announcement" and "get out" of the Stardust. A few days later, Glick announced his sale of his gaming properties. IN A RECENT interview, List said Rosenthal likely secured a bogus affidavit to use as leverage to get List's support for Rosenthal's licensing. "He tried to do an extortion on me," List said. "Somehow in the political environment, the real facts became obscured." List said Rosenthal's friend, the late Valley Times Publisher Bob Brown, approached List, asking, "If you're elected, how would you feel about Frank Rosenthal being licensed?" "I told him he would have to take his license to the board like anybody else. Frankly, there was a world of pretty well-known detrimental information about him, but as attorney general I wasn't about to say don't apply; that's prejudicial as hell." List said Brown made it clear that if the gubernatorial candidate promised to grease Kosentnai s license, uie iimes would endorse him. "I said, 'Look, I'm not going to make any commitments of that nature,' and at that point, he told me Rosenthal had politically damaging stuff that he was prepared to use against me . . . that it showed you did something wrong at the Stardust Hotel, the comps. I said I haven't done anything wrong, I haven't compromised myself or my integrity. He said it might not seem that way if we printed it." List said he reported the incident to the FBI, but because he was told to help the investigation by wearing body microphones and playing along with Brown, and because of the pressing election, "I didn't feel that was the appropriate way to approach it." "Not only did I refuse to knuckle under, but in fact over the years I haven't done a damn thing to show any favoritism to the Stardust. I stopped Rosenthal from getting a license." List acknowledged taking the comps, and while he said it isn't unusual for Nevada politicians to accept such free-bies, he admitted it was politically damaging. That issue will be discussed in a subsequent story. In 1979, Argent, Glick and Mooney lost their gaming licenses, and Rosenthal, who never held that news conference, became useless after he was told he would not be approved by the Gaming Control Board. Vandermark disappeared the day after the secret drop box was discovered. He reportedly fled to Mexico and then Costa Rica after his son was killed in Las Vegas. Lawmen assume he has since been silenced by the mob. Before dying of a heart attack in 1983, Agosto would tell lawmen that the Chicago Outfit had targeted Rosenthal and Glick for death. DeLuna would be overheard by eavesdropping FBI agents as saying Rosenthal's chances for survival were finitu Sicilian for finished. Rosenthal has since moved to Southern California. Rosenthal, whose nickname among his associates was Potzo Sicilian for crazy, deranged, was fortunate to survive an attempt on his life when his car blew up. He was asked if he knew who was responsible: "It wasn't the Boy Scouts of America." FOUR YEARS later, a federal grand jury in Kansas City returned an indictment that made allegations Nevada officials never could. Fifteen men in four states, including top mob bosses in Chicago, Kansas City and Milwaukee, were charged with strangling the four casinos. Operation Strawman was the most important indictment in organized crime's long history in Las Vegas, and it included: Joey "Doves" Aiuppa, aging mob chief who still has final say on most important decisions but who has yielded the Outfit's day-to-day tasks to Jack Cerone, who was also indicted in the Argent case. Joseph "Joey the Clown" Lombardo, the Outfit's vanquished Teamsters "juice" man and gambling chief. Retired Chicago policeman Anthony Chiavola Sr., already convicted in a skimming operation at the Tropicana, and his son, Anthony Jr. Carl Civella, who rose to the top of the Kansas City mob after his brother, Nick, died of a heart attack, and his top aide Carl "Tuffy" DeLuna, also convicted in the Tropicana skim. Frank Balistrieri, Milwaukee mob boss, and his lawyer sons, Joseph and John. Anthony Spilotro of Las Vegas and Carl Thomas of Las Vegas. Spilotro's legal problems are legendary, and Thomas was another Tropicana skim man. The indictment also included four dead men: former Kansas City boss Nick Civella, the mob's Teamster puppet Allen Dorfman, James Torrello and mob informant Joe Agosto. Glick noted he wasn't implicated in the scheme, and said that proved his innocence. He has never been charged. Shocked by the Argent revelations, but not yet knowing the extent of the above indictment, the state vowed to clean up the Stardust. The solution: Al Sachs. The following is a transcript of a closed-door deposition from Fratianno. He had been discussing with attorney Norman Grutman organized crime's infiltration of casinos and the use of "fronts" to hold licenses: Q. "Take the Stardust. That was one of the Las Vegas gambling casinos, was it not?" A. "Yes, sir." "Who ran that?" "Well . . ." "Who was the front man?" "Well, they have had two or three of them. Yale Cohen was one of them." "How about Al Sachs?" "Al Sachs." "Who did those men front for?" "Well, Al Sachs was for the Chicago family." While approving Sachs was designed to restore integrity to the Stardust, Fremont, Marina and Hacienda, things only got worse. Now known as the most embarrassing license approval in the history of Nevada gaming, Sachs and his partner Herb Tobman have since lost their licenses and were ordered to sell the Stardust. As was the case with Glick, neither man has been implicated in the scam. As under Glick's ownership, the Stardust was milked of millions during the Sachs-Tobman era. The style was different, but the skimming was there: The Nevada Gaming Commission approved Sachs' Trans-Sterling to run the Stardust in 1979 despite allegations that Sachs associated with organized crime figures. Former Gaming Control Board Chairman Roger Trounday complained the Sachs application was rammed through without an adequate investigation, and sought a condition on the license that would have given the state more control over the Stardust. TROUNDAY, WHO quit partly over the Sachs licensing, said he was under pressure from then-Gov. List and former Control Board member Richard Bunker to act quickly on the application, although List and Bunker deny applying pressure on behalf of Sachs and Tobman. "There was some lobbying done," Trounday said later. At the time, Bunker strongly supported Sachs. And at the time, the FBI was so concerned about Bunker's relationship with Sachs and Tobman that the federal agents withheld details of their Stardust investigation from Bunker and the Control Board. Bunker declined to comment for this story. Also at the time, List had taken large campaign contributions from Sachs and Tobman, insisting there was no "hard evidence" to suggest either man was tied to organized crime interests. While he was investigating suspected Stardust mob figure Rosenthal as Nevada attorney general, List also took comps from the Stardust. In 1978, List returned a $15,000 gift from Glick's Argent, saying there was "undisputed" proof of mob involvement at the Stardust then. Also at the time of the Stardust approval, the audit report of a fired Control Board agent detailing alleged wrongdoing at the Stardust was in the hands of the Gaming Commission. That administrative report, authored by Dick Law, was disputed by then-Assistant Attorney General Ray Pike (now a vice president at International Game Technology in Reno), and by Bunker, who ordered the drafts rounded up and destroyed. The report was critical of Sachs and Tobman and Law was fired for allegedly abusing "comp" time accrued during his Argent investigation. As it turned out, Law's report had merit in that it suggested Sachs "should not have been the individual to inherit Glick's gaming properties." Law sued the Control Board, claiming he was fired for submitting an unfavorable report on Sachs and that the "comp time" issue was a ruse to get rid of him. The Nevada Supreme Court ruled partially in his favor, ordering a Las Vegas court to determine how much comp pay he should be awarded. Besides detailing the Argent skimming operation, Law's report noted that Sachs worked from 1946 to 1952 at the Jockey Club in Chicago, a reputed mob establishment. His boss was mobster Johnny Drew, an associate of the Chicago LCN's elder statesman, Anthony "Big Tuna" Accardo. Sachs and Tobman won their license not on a conditional basis as Trounday suggested, but permanent and even after the FBI unsealed documents alleging skimming while Sachs ran the casino, List was defending Sachs. "There's no evidence they've uncovered anything," the former governor said. "They've got a lot of people running around whispering in their ears." WHILE LIST said the FBI should turn its findings over to the state, former Agent-in-charge Joe Yablonsky refused because he didn't trust Bunker. It wasn't long after Sachs' Trans-Sterling moved into the Stardust that unsettling reports began to trickle in. There were FBI affidavits, filed as a prerequisite to search warrants. There were court documents recounting taped conversations. And there were former organized crime figures who turned state's evidence, regaling investigators with the shocking news that once again there were problems inside the Stardust. Fratianno recounted a meeting in 1970 when Sachs worked at the Stardust in which the late Chicago boss Sam Gian-cana met at the Stardust with Sachs and known mobster Bobby Stella Sr., then casino manager. Fratianno told of how Stella and Sachs battled with Nick Civella and how Stella flew repeatedly to Chicago to plead his case to the Outfit's top brass. But Stella's adversary, Rosenthal, walked away as undisputed casino boss, leaving Stella's ally, Sachs, in a precarious position. Sachs would eventually bow out until his return as Trans-Sterling boss in 1979. Fratianno told how Johnny Roselli, who sponsored Fratianno as a "made member" in La Cosa Nostra, frequented Las Vegas in the 1960s, and how Sachs was "his (Roselli's) man." (Roselli, Giancana's West Coast lieutenant, was found in an oil drum in 1975 floating off southern Florida. His bullet-riddled body was chopped up because rigormortis prevented its being stuffed into the drum in one piece. The execution came shortly after Roselli testified before a Senate subcommittee about the CIA's dealings with mob boss Giancana in arranging to assassinate Cuba's Fidel Castro.) Fratianno told federal investigators that the mob placed Rosenthal in the Glick-run Stardust in 1974, after Rosenthal won against the Sachs-Stella team, although Sachs had been in the casino for years before 1974. As an epilogue, Nevada gaming agents stormed the Stardust again in late 1983, armed with evidence of the phony fill-slip skimming operation. One executive, Assistant Casino Manager Freddie Pandolfo, had already been banished from the property by gaming officials earlier that year. After lengthy negotiations, Sachs and Tobman agreed to sell their interests in the resort, avoiding a lengthy revocation hearing before the Nevada Gaming Commission. Earlier this year, Tobman announced plans to run for governor in 1986. In February, the Gaming Commission unanimously approved the purchase of the Stardust and Fremont by the Boyd family's California Hotel-Casino for $185 million after the deal stalled for several weeks due to financial complications. "I look forward to removing a dark cloud from those two fine properties and the state," Gaming Control Board Chairman Bart Jacka said. The Boyd group, which had been running the Stardust under a court-approved supervisor arrangement, moved into the Stardust March 1. California Hotel assumed from Trans-Sterling, Inc., a $34 million debt owed to Glick and a $3 million debt to International Gaming Technology. Trans-Sterling will be responsible for a $21.5 million third mortgage and $58.6 million to Golden Nugget, Inc., which purchased a $74 million note from the Teamsters Central States Pension fund. The state also collected $3 million in fines leveled against Trans-Sterling as part of a deal with Sachs and Tobman that was cut to avoid a license revocation hearing. "This is the end to a real sad story," said Control Board member Guy Hillyer. ' At least it's almost the end. Attorneys for former Stardust owner Trans-Sterling have now filed a $9.1 million suit against the manager of the Teamsters Central States Pension Fund, Palmieri Co., claiming an agreement involving the sale of the Stardust and Fremont to the Boyd group contained a promise from Palmieri that the $74 million would be dropped to $64.5 million at the time of escrow. Trans-Sterling claims Palmieri backed off the promise and forced the company to pay the $74 million balance. That suit, filed in April, is pending in Las Vegas. Del Webb Management Corp. has been running the Fremont. The closing of the Stardust deal has elated Nevada gaming authorities, who after years of trying, have finally scratched the name of the Stardust off the mob's ledgers. ON FRIDAY: A look at why the Western Mafia doesn't stack up in power compared to the East, and how federal investigators cope with organized crime's creative ways. No. Nevada Cancer Council Win a 1985 Jeep Wagoneer 2nd Prize - A Trip to Waikiki '7500 donation (tax deductible) For more information call: 784-4954 l."jilill,l,jTiiiHi"mi'nini mr.Mr.aar..xiannt.iitia BRA SALE! 50 OFF On Selected Styles Warners i. Fine Lingerie Old Town Mall 826-2436 4$ XZrjkkieks FUR COLD STORAGE '20" NO CHARGE FOR MINOR REPAIRS STORAGE ON PREMISES RESTYLING CLEANING MOANA WEST SHOPPING CENTER 8250667 Topsoil & Planter Mix Special Receive a $2500 Discount Certificate For Nursery Stock with 10 yd. 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