Monday, November 28, 2011

Skimming the Las Vegas Casinos - Part I




By Dennis Griffin


This is the first of a three-part series explaining how organized crime families skimmed money from several Las Vegas casinos in the 1970s and '80s, and how the law eventually brought them down.


Much has been written and there have been several documentaries about various organized-crime families taking cash — “skimming” — from Las Vegas casinos. The skim money was removed from the casino prior to it officially being entered into the books as revenue. Taxes weren’t paid on this unreported income, a fact on which the Internal Revenue Service frowned. The casinos involved in these illegal operations became the equivalent of piggy banks for the Midwest crime bosses.

The feds launched two major investigations of the skim, called Strawman 1 and 2. They focused on the properties owned by the Argent Corporation and the Tropicana Hotel and Casino. Many of the same players were involved with both, but the courts ruled that these were separate conspiracies. There were separate indictments, trials, and convictions. Some of the participants entered into plea deals and testified against their colleagues. Others gave testimony as unindicted co-conspirators. Several top mobsters from the Midwest went to prison.

A continuation of the Strawman investigations was called Strawman-Trans Sterling. This operation zeroed in on the Trans Sterling Corporation, another mob-controlled company that purchased Argent’s casino holdings and resulted in more gangsters going to prison.

From a law enforcement standpoint, these investigations and subsequent convictions marked the end of organized crime’s influence over the Las Vegas casinos.

The Families


Four Midwest organized-crime families were involved in the hidden ownership and skimming of the Argent-controlled casinos and the Tropicana: Chicago, Kansas City, Milwaukee, and Cleveland. They each had ownership and control and/or participated in the illegal removal of cash from the involved gaming establishments. Although all four shared in the money taken from the Tropicana, the courts ruled that it was a Kansas City operation and that the other three families weren’t involved in the covert ownership of that casino.

Allen Glick’s Argent Corporation was a different story than the Tropicana. Glick had a clean criminal record and could withstand the background check conducted by Nevada gaming regulators. So being the owner of record of multiple casinos wouldn’t be a problem. But he needed a large amount of money in order to purchase the Stardust, Fremont, Hacienda, and Marina. And at a time when not many reputable financial institutions were willing to invest in Vegas, the best source of that funding was the Teamster Central States Pension Fund (CSPF). Three of the four families — Milwaukee, Kansas City, and Cleveland — held influence over one or more of the CSPF trustees or union officials. Since any one trustee could veto the loans, cooperation among the families was necessary to assure the trustees and officials were all on board and that Glick got the money he needed. In return for their assistance in obtaining the funding, the families had effective control of Argent, with Glick serving as their front man. Shortly after the skim began a dispute developed between Kansa City and Milwaukee. Chicago intervened and resolved the matter, then joined the conspiracy, taking a 25% cut of the action.

For the mobsters, it began as a marriage made in heaven. For gaming authorities and law enforcement, it was a nightmare. The lawmen came to realize that like a malignant tumor, the influence of organized crime in the Las Vegas casinos had to be cut out and destroyed. However, once the malignancy had taken root, removing it was easier said than done.

The Main Mob Players


The Chicago Outfit was the dominant family operating in Las Vegas. The two most powerful mobsters in Chicago at that time were Joe Aiuppa and Tony Accardo, the same men who had sent Tony Spilotro to Vegas. In addition, other members involved in the family’s Las Vegas business dealings were underboss John Cerone, West Side boss Joseph “Joey the Clown” Lombardo, Angelo LaPietra, and Allen Dorfman.

Kansas City, under the leadership of Nick Civella and his brother Carl, contributed underboss Carl “Tuffy” DeLuna, Anthony Chiavola, Sr., and Joe Agosto to the conspiracies. Although Chiavola resided in Chicago, he was a nephew of the Civella brothers and was more closely associated with their group.

Nick Civella was born Guiseppe Civello in Kansas City in 1927. At the age of 10 he was brought before juvenile authorities for “incorrigibility.” By the time he was 20, Nick had dropped out of school and had a lengthy arrest record for crimes such as car theft, gambling, and robbery. In 1957 he attended the infamous “gangland convention” in Apalachin, New York.

Due to his criminal history, Nick Civella was among the first people to be placed in Nevada’s “black book,” barring him from entering Nevada’s casinos. Undeterred by his exclusion, Civella frequently visited Las Vegas wearing wigs and fake beards to fool state gaming officials. During these forays, he usually stayed at the Tropicana or Dunes.

In Milwaukee, boss Frank “Frankie Bal” Balistrieri was the first mobster to be contacted by Allen Glick regarding the Teamster loans for Argent. Balistrieri’s mob had control of the loan sharking, bookmaking, and vending-machine businesses in their city. Balistrieri himself had been convicted of income-tax evasion in 1967 and served two years in federal prison. During Frank’s absence, Peter Balistrieri, his brother and underboss, ran the show.

Milton Rockman represented Cleveland. He served as a bagman for the delivery of the purloined money, and as a liaison person for Kansas City’s Carl DeLuna.

These talented criminals and their minions put together a plan that took millions of dollars from Las Vegas and put them into their own pockets.

Nick and Roy



In addition to his clout in Kansas City and with other mobsters around the country, Nick Civella had something else working for him: He was able to influence the decisions of the Teamster Central States Pension Fund through his control of Roy Williams, a Teamster official and its eventual president.

Williams, a decorated World War II combat veteran, returned to Kansas City after the war and resumed his job as a truck driver. He also became heavily involved in the Teamsters and rose through the leadership ranks with the backing of another rising star, Jimmy Hoffa.

Hoffa picked Williams to take over a troubled local in Wichita, and later Kansas City’s Local 41. It was then that he met Nick Civella and they became close personal friends. In 1952, Williams attended a secret meeting of Midwest mob leaders in Chicago, where Williams agreed to run the Kansas City Teamsters and in turn cooperate with his organized-crime friends. Williams discussed all major union problems with Civella before making a decision. If the two men couldn’t agree on a subject, Hoffa ordered Williams to “do what Nick wants.”

Hoffa was pleased with the way Williams worked with Civella and followed instructions. He rewarded his underling by appointing him as a trustee of the Central States Pension Fund. It was a powerful position, and Nick Civella certainly approved of his lackey occupying it.

When Frank Balistrieri needed help in assuring Argent got the Teamster money it needed, he knew Nick Civella would be able to deliver.

Argent


Allen R. Glick was born in Pittsburgh, Pennsylvania in 1942. He served in the military as a helicopter pilot during the war in Vietnam and later turned up in the San Diego area as a land developer. In early 1974, Glick contacted Frank Balistieri in Milwaukee, seeking assistance in obtaining loans from the Central States Pension Fund to finance Argent’s purchase of several Las Vegas casinos. Balistrieri brought Kansas City and Cleveland into the deal, with Chicago joining a short time later, in order to assure that the CSPF trustees whom they controlled would vote the right way. The loan was approved. Between the initial loan of $62 million and subsequent loans, Argent received approximately $146 million in Teamster money.

The financing came with strings attached, of course. After Glick purchased the casinos, he was required to install Frank “Lefty” Rosenthal in a management position at Argent. From that post Rosenthal ran casino operations and facilitated the skim. The Stardust and Fremont were the casinos from which the thefts took place.

Carl DeLuna (Kansas City), an efficient overseer, was assigned to monitor the Vegas action and make sure each family received its fair share of the proceeds. In that role, he was one of the most trusted men in American organized crime. He also maintained regular contact with the other groups through Angelo LaPietra (Chicago) and Milton Rockman (Cleveland). To assure everything was done on the up and up, at least as far as the gangsters were concerned, DeLuna kept records — detailed written records.

The skimmed cash was removed from casino count rooms by couriers with full access to those sensitive areas. These men weren’t challenged, or even acknowledged, by other employees as they entered, made their withdrawals, and departed. The currency they took was never logged in and there was no official record of it. For all practical purposes, it was as though the money never existed. The loot was then delivered to LaPietra in Chicago. He kept a portion for the Outfit and passed the balance along to Anthony Chiavola, Sr. and Milton Rockman for delivery to their respective families.

The scheme was relatively simple and went smoothly, at least at the start. But after a while it became apparent that Allen Glick didn’t completely realize that he was only a powerless figurehead. He actually believed he could make major decisions regarding casino operations. He tried, and when he and Rosenthal clashed, Glick attempted to fire him. Lefty responded with a threat, prompting the na├»ve tycoon to complain to Frank Balistrieri. Bad move.

In March 1975, Glick was summoned to Kansas City to meet with Nick Civella. There, the boss explained the facts of life to him. The two men met in a hotel room where Civella announced that Glick owed the Kansas City family $1.2 million for its assistance in getting the CSPF loan approved. If Glick didn’t know it before, he quickly became aware that the mobsters considered the pension fund to be their private bank.

Glick later recalled what Civella told him. “Cling to every word I say … if it would be my choice you wouldn’t leave this room alive. You owe us $1.2 million. I want that paid. In addition, we own part of your corporation and you are not to interfere with it. We will let Mr. Rosenthal continue with the casinos and you are not to interfere.” Welcome to the real world, Mr. Glick.

The following year, Rosenthal started causing problems. His battles with Nevada gaming regulators were not only problematic, they were high-profile. The bosses had a good thing going in Vegas and wanted to stay below the radar screen. The unwanted publicity made some of the higher-ups nervous.

But as the months passed, Lefty’s difficulties and the related media coverage only intensified. The bosses held conversations to discuss whether Rosenthal should be replaced and, if so, should the removal be on a permanent basis. Although some favored that resolution, Lefty was allowed to stay on and continue his struggle with the licensing officials.

By March 1978, Allen Glick was getting on everyone’s nerves. He was particularly unpopular with Nick Civella. The Kansas City chief decided that Glick needed to go, but was willing to let him get out while still breathing. A buyout proposal in the amount of $10 million was delivered to Glick through Frank Rosenthal. Glick turned down the offer, another ill-advised decision.

On April 25, Carl DeLuna flew to Las Vegas to give Glick a message from Nick Civella. The Civella family frequently used its attorney’s office in Kansas City — without the lawyer himself present — to hold sensitive meetings. They knew there was little chance that the locale would be bugged and they could talk freely. Following that practice, DeLuna, Glick, and Rosenthal got together in Oscar Goodman’s office, sans Goodman. Allen Glick later testified about that meeting.

“I entered Mr. Goodman’s office and behind Mr. Goodman’s desk with his feet up was Mr. DeLuna. Mr. DeLuna, in a gruff voice, using graphic terms, told me to sit down. With that he pulled out a piece of paper from his pocket … and he looked down at the paper for a few seconds. Then he informed me he was sent to deliver one final message from his partners. And then he began reading the paper. He said he and his partners were finally sick of having to deal with me and having me around and that I could no longer be tolerated. He informed me it was their desire to have me sell Argent Corporation immediately and I was to announce that sale as soon as I left Mr. Goodman’s office that day. He said he realized that the threats I received perhaps may not have been taken by me as serious as they were given to me. And he said that since perhaps I find my life expendable, he was certain I wouldn’t find my children’s lives expendable. With that he looked down on his paper and gave me the names and ages of each of my sons.”

Less than two months after that meeting, Glick publicly announced his intention to sell Argent. In December 1979, the corporation was sold to the Trans Sterling Corporation, another company with mob ties. Although Argent was no longer the licensee, it did remain an entity, thanks to the mortgage it held on the casinos. Kansas City continued to share in the skimmed proceeds without interference from the new owners. This arrangement continued until around 1983, when indictments were issued against the Argent conspirators. Allen Glick was out of the gambling business, but he and his sons were still alive.

* * *

Around the same time in 1978 that Glick was initially approached about selling Argent, the feds launched a major investigation into organized-crime’s influence in Las Vegas. A large part of that effort consisted of court authorized electronic surveillance of telephones and locations in Kansas City, Las Vegas, Chicago, and Milwaukee. The residences of Carl DeLuna, Anthony Civella, and Anthony Chiavola, Sr., were being monitored. The business offices of Allen Dorfman, Joe Lombardo, Milton Rockman, and Angelo LaPietra, were being listened in on. Frank Balistrieri’s office and a restaurant he owned were also bugged. The investigators learned a lot and conducted several court-authorized raids based on that information.

Agent Gary Magnesen was working in Milwaukee then and recalled the information that was obtained on Frank Balistrieri.

“We’d been running the taps on Frank [Balistrieri] for close to a year. In one of the calls Frank made from his office he mentioned that it was almost time for his ‘transfusion.’ We didn’t know what that meant at the time, but later on, when we compared notes with our Kansas City office, it was determined that ‘transfusion’ referred to the money coming in from the Las Vegas casino skim.

“In March 1978, we had enough probable cause to get a search warrant and went to Balistrieri’s house to execute it. We had to break the door down with a sledgehammer to get in. Once we were inside, I told Frank that there wouldn’t be any more ‘transfusions.’ He looked at me and realized that we knew about the skim. I could see the confidence drain out of him. He knew it was over.”

The search that was perhaps most devastating to the criminals occurred on February 14, 1979, Valentine’s Day. Federal investigators entered the home of Carl DeLuna and seized addresses, phone books, papers, and other documents. Among them were DeLuna’s detailed records of the skim. They included the dates and nature of meetings and conversations among the conspirators, telephone numbers, and the disbursement of funds from the skimming operations. The evidence gathered represented a bonanza for law enforcement — and doom for the mobsters.

The records available to investigators placed the estimate of the money taken from the Stardust and Fremont casinos at well over $2 million. Former Cleveland underboss Angelo Lonardo testified before the Senate Committee on Government Affairs on April 4, 1988. At that time he was serving a prison sentence of life without parole, plus 103 years, for his role in operating the family’s drug ring. He began his statement by highlighting his long criminal history, including a couple of murders he had committed. He later explained how the Las Vegas casino skim operated after his family became involved.

“The skim of the Las Vegas casinos started in the early 1970s. Starting in 1974 I began receiving $1,000 to $1,500 a month from the family through Maishe [Milton] Rockman. I did not know where the money was coming from, but I suspected that it was from the Las Vegas casinos. I learned this from various conversations I had with Rockman.

“Lefty Rosenthal ran the skim operation in Las Vegas. Rockman would travel to Chicago or Kansas City to get Cleveland’s share. Bill Presser [a Teamster power broker and father if future Teamster president Jackie Presser] and Roy Williams received about $1,500 a month for their role in the skim. The Cleveland family received a total of about $40,000 a month.”

By 1983, the government’s case against the gangsters was ready to move from the investigative to the prosecutorial stage. On September 30, a federal grand jury in Kansas City returned an eight-count indictment against 15 defendants in the Argent case. Five of them eventually stood trial, starting in late 1985: Chicago boss Joe Aiuppa, underboss John Cerone, Westside honcho Joe Lombardo, Milton Rockman, and Angelo LaPietra. Four of the accused, Carl Civella, Peter Tamburello, Anthony Chiavola, Sr., and Anthony Chiavola, Jr., entered guilty pleas prior to trial. Carl DeLuna and Frank Balistrieri pled guilty during the trial. Two others, John and Joseph Balistrieri, were acquitted. One, Carl Thomas, had his indictment dismissed during the trial and became a witness against the other defendants. And one, Tony Spilotro, had his case severed from the others prior to trial.

Other key players in the scam also testified during the trial. Allen Glick, Angelo Lonardo, and Roy Williams provided crucial evidence that resulted in guilty verdicts against Aiuppa, Cerone, Lombardo, LaPietra, and Rockman in January 1986.

Aiuppa and Cerone each received sentences totaling 28-1/2 years. Lombardo and LaPietra drew 16 years in prison. Rockman got 24 years behind bars. In addition, each man was fined $80,000.

NEXT: The Tropicana



Dennis Griffin is a True Crime Author, Co-Host of Crime Wire and MOB Talk.  He has written several books concentrating on the mob presence in Las Vegas.  www.dennisngriffin.com

1 comment:

  1. Denny: Very well written piece. IF I were a professor, I would consider it the "Cliff Notes" version...as one certainly needs a good road map to keep all of these characters straight... or should I say crooked! Ready the children's names and ages from a piece of paper is oh so creepy! They meant business! Can't wait to read installment #2!

    Donna - "Ladyjustice"

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