Santa Ana Man, Ex-Mayor Cited in Bingo Inquiry

The director of a Santa Ana alcoholism rehabilitation center who runs a charity bingo operation in Hawaiian Gardens has been arrested on suspicion of illegally paying wages to himself and other employees.

Jack Blackburn of Santa Ana, founder and executive director of Cooper Fellowship Inc., was arrested Sept. 18 by agents from the Los Angeles district attorney’s office, which has been investigating the bingo operation for more than a year.

On Wednesday, the district attorney’s office also filed misdemeanor complaints against former Anaheim Mayor W.J. (Bill) Thom and four other men associated with the bingo operation. Thom, who served two terms on the City Council, retiring in 1978, is suspected of illegally receiving a salary from the bingo operation.

Four Others Named

The other four named in the complaints were Santa Ana real estate agent Tom D’Alessandro; John Zeolla, owner of North Hollywood Marble Co., and Robert Ellis and Larry Hayden, two employees of Cooper Fellowship. The complaints allege that the four illegally received salaries and held financial interests in the club.

Cooper Fellowship’s charity bingo operation in Hawaiian Gardens is believed to be the most profitable bingo game in California, with gross revenues exceeding those of many large poker clubs in the state, law enforcement officials said.

Funds from the bingo games are used to subsidize Cooper Fellowship, a Santa Ana-based center that houses about 100 recovering alcoholics in several family-style houses in the 400 block of North Cooper Street, a quiet residential neighborhood.

Declined to Comment

Blackburn could not be reached for comment. His attorney, Ronald Davis, said he wanted to withhold any response to the arrest until he has seen police reports and has had a chance to study the specific charges.

In the past, Davis has said he felt that law enforcement officials were misinterpreting state laws and had singled out Cooper Fellowship’s bingo operation simply because it has been so successful.

Of the others, only Hayden was available for comment, saying he did not know that a complaint had been filed against him.

“This is the first I heard anything about it,” Hayden said during a brief telephone interview. “I have nothing to say.”

Law enforcement officials contend that state law prohibits charities such as Cooper Fellowship from paying their employees with bingo proceeds, although the profits can go toward other operating expenses. Blackburn was arrested last week by district attorney’s investigators, who pulled him over as he was driving in Santa Ana. He was booked at Orange County Jail, then released early the next morning when he posted $1,500 bail, Deputy Dist. Atty. James Koller said.

The other men were not arrested but will be required to surrender to authorities when they, along with Blackburn, are arraigned Oct. 10 at Los Cerritos Municipal Court in Bellflower, officials said.

Other Allegations

Besides the wage allegation, officials said, Blackburn is suspected of commingling profits from the bingo operation with other funds used to run Cooper Fellowship. According to the state Penal Code, bingo profits must be kept in a special account and used only for charity.

Officials of the district attorney’s office said that Blackburn is also suspected of staffing the bingo operation with people who do not work with the charity, a practice prohibited by state law.

If convicted of the wage allegations, Blackburn and Thom could each face a fine of up to $10,000 and six months in jail. The other counts against the men carry a maximum sentence of six months in jail and a $1,000 fine.

Blackburn has been arrested on bingo-related offenses before. While operating an Anaheim bingo game in 1980, he pleaded guilty to charges of laundering campaign contributions going to a group trying to recall two Anaheim City Council members who favored limits on bingo. That same year, Blackburn was acquitted on charges involving alleged illegal operations of a Fontana bingo game that he helped run.

Koller said an audit conducted by the state attorney general’s office in January was being used as “the backbone” of the current case against Blackburn. The audit covered a 20-month period beginning in January, 1983.

A salary sheet in the report indicated that Blackburn paid himself $700 a week from proceeds of the bingo operation, which is run out of a small commercial shopping center near Pioneer Boulevard and Carson Street. Larry Davis, Cooper’s business manager, received $750 a week and 22 others were paid weekly salaries ranging from $100 to $500, according to the salary sheet.

In addition, the audit report said Cooper Fellowship paid $10,400 to Thom for “community and public and professional services.” Thom represented Cooper Fellowship when the group applied for a business license in late 1983 to begin operating the bingo hall in Hawaiian Gardens.

Allegations against D’Alessandro, Zeolla, Ellis and Hayden stem from the nearly $200,000 in loans the four men gave Cooper Fellowship to start the bingo operation. Law enforcement officials contend that the loans, which in some cases were repaid at a 15% annual interest rate, gave the lenders a financial interest in the games, something that is prohibited by state law.

The bingo parlor, which opened its doors in February, 1984, grossed more than $11 million last year, according to city officials. Recently, officials said, the operation has been even more profitable, grossing about $1.7 million a month. As many as 600 people fill the Hawaiian Gardens bingo hall each night, with a $250 prize awarded the winner of each game.

Bingo has been an economic bonanza as well for Hawaiian Gardens, a tiny city at the northwest tip of Long Beach. The city’s 1% take of the bingo parlor’s gross receipts amounted to about $117,000 last year, one-tenth of the city’s general operating fund.

While the city has the power to revoke the bingo parlor’s business license and shut down the games, Councilman Jack Myers said it is too early to determine if city leaders will take action against Cooper Fellowship.

“It would be very premature to comment on it,” Myers said. “There’s still too many ifs, ands or buts.”