Witness Tells of His Role as ‘Front Man’ in Casino Dealings

Horace Kelly Towner, an executive with the Broadway department store chain, testified Wednesday about his role as a “front man” for four City of Commerce officials who had hidden interests in a poker casino they licensed two years ago.

Towner was the second prosecution witness called in the racketeering trial of Orange County businessman W. Patrick Moriarty, 53, and Las Vegas gambling figure Frank J. Sansone.

Sansone headed the Nevada group that offered the Commerce officials secret shares of the California Commerce Club in return for being granted the license to open the gambling establishment. Moriarty subsequently went into the deal to provide financing to Sansone and allegedly also agreed to the secret shares being granted to Councilmen Robert Eula, Arthur Loya and Ricardo Vasquez.

Towner was preceded to the witness stand by Phil C. Jacks, former economic development director for the City of Commerce and the fourth official to have a hidden interest in the club. All four officials have pleaded guilty to bribery-related charges in connection with licensing the card club.

It was Jacks who enlisted Towner’s assistance as a go-between to introduce Moriarty to Sansone when the Las Vegas group lost its initial financing, even before the license was granted in March, 1982.

Jacks testified that he went to Towner, a longtime friend, because the city officials thought that it would be best to have an outside party bring Moriarty and Sansone together instead of the city officials who already were involved in the scheme to rig the licensing procedure.

Towner, giving barely audible answers during much of his testimony, told the jury that he had known Jacks for 40 years but had not met either Moriarty or Sansone at the time he was called upon to introduce them.

Under questioning by federal prosecutor Richard Drooyan, Towner said he initially agreed to take part in the dealings “as a personal favor” to Jacks.

Towner testified that he and Moriarty flew together from Orange County Airport to Las Vegas on March 22, 1982, and met Sansone at the MGM Grand, where he worked as card room manager. Towner said he was told at this meeting that he would received 10 of the 100 points in the Commerce Club as a finder’s fee for his part in bringing the parties together.

According to Towner’s testimony, this offer was made by Morris Jaeger, who as MGM Grand vice president and casino manager was Sansone’s boss. Towner also testified that Jaeger told him at the meeting that he had planned to join Sansone as a partner in the Commerce Club but was barred from doing so by the Nevada Gaming Commission.

Towner said Jacks told him shortly after the Las Vegas meeting that the 10-point finder’s fee included two points each for Jacks and three other parties. Both Towner and Jacks told the jury that Towner did not know at the outset that he was holding the secret shares of councilmen Eula, Loya and Vasquez but that he later found out.

Apparently concerned that his “front man” role would be detected, Towner said he twice refused to sign documents showing that he owned 10% of the club “because I had not invested anything and could not justify having that kind of share.

“One day in October of 1983,” Towner said, “the shares of stock arrived in the mail,” representing his two points and the two points granted to Jacks. Jacks testified that Moriarty was holding the secret shares for the councilmen at that point.

Stunned by Report

Towner said that on May 28, 1984, he was stunned to see his name in a Times story about Moriarty’s role in the card club scheme and immediately made arrangements to turn in the Commerce Club stock, which had a value of $400,000 at the time. Towner said he surrendered it without payment. All he asked was a release from liability from the club management.

Asked by Drooyan why he gave up the stock without compensation, Towner replied: “I wanted to retain my job . . . and I was afraid of the exposure.” He said he was only three years from retirement from his job as the supervisor of new construction for the Broadway organization.