Tapes Playing Pivotal Role in Casino Skimming Trial

In a federal court jury box here, men and women wearing bright-yellow earphones have listened intently almost daily for several weeks. What they have been hearing are clandestine recordings of rough-talking men using code names in terse conversations that vary from mysterious to banal.

But the prosecutors, contending that all these cryptic pieces add up to a garish mosaic, have previously given a verbal map to the jurors. The finished work, prosecutors say, will show a conspiracy by top Midwest organized crime figures to exert hidden control of the Stardust and Fremont casinos in Las Vegas from 1974 until late 1983, enabling the skimming of millions of untaxed gambling receipts.

And, they allege, such control was attained through gangster influence with former trustees of the Teamsters Central States Pension Fund.

The tape recordings, the heart of the government’s case, were obtained under court order in the last half of 1978 in what law enforcement officials have hailed as one of the most devastating investigative coup’s ever against organized crime.

The tapes, in turn, led to seizure of a trove of documents and other physical evidence at homes of some defendants, including what the government says is a record of about $2 million in skimming distributions to them.

Over several more months in the courtroom of U.S. District Judge Joseph E. Stevens Jr., the government will be trying to build a detailed reconstruction of what was going on behind the scenes in Las Vegas from 1974 to 1979, during the years of public wrangling involving Allen R. Glick and his Argent Corp., owners of the Stardust and Fremont.

Since 1979, Nevada, whose public officials have long maintained that the image of mob control in Las Vegas was largely outdated, has continued to be embarrassed by gradual disclosures in various court proceedings of taped conversations indicating that Midwest crime bosses have continued to run some major Las Vegas casinos.

Some past and present Nevada officials are among those who are believed to be nervously waiting to learn the extent of the disclosures at this trial.

The nine defendants currently on trial range in age from the mid-30s to the 70s.

Reputed Chieftains on Trial

The oldest is Joseph J. Aiuppa, who at 77 is reputedly the topmost Mafia leader in Chicago. Others on trial include the alleged mob kingpin of Milwaukee, Frank Balistrieri, 67, and his lawyer sons Peter and John, as well as Milton Rockman of Cleveland, and Jack Cerone and Angelo LaPietra of Chicago, reputed upper-echelon mobsters from those cities.

Several present defendants are already serving prison terms on earlier convictions. They are Frank Balistrieri, Joseph Lombardo of Chicago and Carl Angelo DeLuna of Kansas City.

One Has Heart Attack

Two major defendants not on trial now are Anthony Spilotro and Carl Thomas of Las Vegas. Thomas won a motion to be tried separately. Spilotro, described by the indictment as the Chicago crime group’s overseer in Las Vegas, reportedly had a heart attack, and his trial has been delayed.

In addition, several defendants previously pleaded guilty and have been sentenced.

More than a dozen attorneys, including the two younger Balistrieri defendants, have enlivened the trial with successive attacks on the government’s case as trivial, imaginary and serving to prove nothing.

Teamster Fund Key Issue

The government is contending that Teamster Central States Pension Fund loans to Glick are at the crux of the trial.

The public spotlight was frequently on Glick, the San Diego lawyer and developer who at 32 got his initial $62.8-million financing to buy the Stardust and Fremont from the Teamsters Central States Pension Fund and later got millions more for refurbishing from the same source.

Glick and Roy L. Williams, the convicted former Teamsters Union president, are both expected to testify as government witnesses at the trial.

Williams began cooperating recently with federal lawmen and thereby won a judicial stay of his 10-year prison term for his part in a conspiracy to bribe a U.S. senator from Nevada.

But Glick may turn out to be the most important witness against the defendants; the government’s description of his role during the alleged conspiracy has been revised considerably.

Described as ‘Victimized’

FBI affidavits in the late 1970s called Glick a front for organized crime figures in the casino ownership, but prosecutors now have told the jury that Glick was “victimized” by the defendants and certain pension fund trustees.

Glick did not understand at the time he got the initial $62.8-million loan “that the partners came with it,” Sheryle Jeans, one of the federal trial lawyers, said in her opening statement to the jury Sept. 26.

She said that he failed to pay a $1.2-million “obligation or lug” for getting the loan, which she then described as “the hidden cost of doing business, of which naive Allen Glick was not even aware.”

“What a trap this man was in,” she said.

The grand jury indictment, returned two years ago, charges, among the overt acts of the alleged conspiracy, that reputed Milwaukee mob chief Balistrieri met with Glick in April or May of 1974 to discuss Glick’s proposal to buy the casinos.

The indictment also alleges that about June 15, 1974, defendants Joseph and John Balistrieri (sons of Frank) entered an agreement with Glick that gave them an option to buy 50% of Argent from him for just $25,000.

On or before June 24, 1974, the indictment also said, Balistrieri “advised” Glick that he had an obligation to the three Balistrieris arising from the assistance in obtaining the initial $62.8-million pension fund loan.

Another overt act, the indictment charged, was that Nick Civella, the late reputed Mafia chief in Kansas City, met with Glick there “regarding Glick’s pension fund loans” in March, 1975.

Prosecutor Jeans told the jury that the evidence will show that Argent Corp. employees Frank Rosenthal and Carl Thomas “ran the casinos and everything and everyone in them, including Allen R. Glick.” Both Rosenthal and Thomas were placed in Argent’s casinos by the defendants and co-conspirators and the two were “fronts for the defendants,” Jeans said.

“They ran it not for the benefit of Allen R. Glick, but for their own benefit and for the benefit of these defendants . . . . Glick was not in control, not in the sense that a 100% owner like he should be and would be.”

Neither Glick nor Rosenthal was charged in the case or cited as co-conspirators.

‘76 Skimming Reported

Nevada’s own enforcement agents discovered an apparent multimillion-dollar skimming operation at the Glick-owned casinos as early as mid-1976, The Times disclosed at the time.

It was not until late 1979, after federal wiretaps and other evidence had been disclosed, that the Nevada Gaming Commission ordered Argent to pay a $500,000-fine and Glick to give up his casino license and sell out.

Reported Figureheads

His successors, Allan D. Sachs and Herbert L. Tobman, were quickly licensed by the state despite allegations to regulators by a witness under U.S. protection, Aladena (Jimmy) Fratianno, that Sachs had ties with organized crime. In early 1982 an FBI affidavit unsealed in federal court in Las Vegas said it was told “reliably” by a confidential source that Sachs and Tobman were figureheads for the Chicago Mafia in skimming at the Stardust and Fremont.

In December, 1983, Nevada casino regulators finally seized control of the two casinos and accused Sachs and Tobman of failing to prevent skimming. The pair subsequently agreed to give up their licenses and sell the casinos.

Pair Not Charged

Although the alleged conspiracy in the present trial covered the years of their ownership as well as Glick’s, the indictment did not charge or even mention Sachs or Tobman. The latest of 54 overt acts listed by the indictment in alleging the conspiracy was April 14, 1980, not long after Sachs and Tobman took over. This last alleged overt act was said to be a meeting of Frank and John Balistrieri “to discuss the means of concealing their hidden interest in the gaming interests of Allen R. Glick.”

Fratianno, a confessed killer for the mob whose book, “The Last Mafioso,” created a sensation several years ago for its allegations about public figures, is on the government witness list.

So are several persons now serving major prison terms in other cases, including Deil Gustafson, a Minneapolis banker who received national press attention as an owner of the Tropicana hotel-casino in Las Vegas during the 1970s.

Gustafson, sentenced two years ago to 10 years for a check-kiting scheme involving the Tropicana, is appearing for the first time as a government witness. He told the jury that he agreed as part of a plea bargain to cooperate with the government in hopes of winning a reduction in his sentence.

Case in Seven Stages

Prosecutors are laying out their case in seven stages, and Gustafson has testified already about the identity of persons referred to by code names in tapes and papers introduced by the government.

He testified, for instance, that Las Vegas attorney Jay Brown, who represented the Tropicana, was referred to as “Channel One” by Agosto in a conversation with DeLuna because Brown “had a relationship with the casinos and the regulators.”

Lawmaker’s Alleged Link

Gustafson added that Brown had an “especially close” relationship with Harry Reid, who was chairman of the Nevada Gaming Commission and now is a Democratic congressman from Las Vegas.

Agosto referred to Reid as “Mr. Cleanface” and “Mr. Gillette” in talks with the Kansas City mobster DeLuna because of his light hair and general appearance, Gustafson testified.

Other code names put into the court record include “Genius” and “Baldy” (Glick), “Caesar” (Agosto), “Arabiani” (Ed and Fred Doumani, former part owners of the Tropicana and unsuccessful competitors to succeed Glick at the Stardust and Fremont), “Pitsacuni,” a Sicilian word for “big fish” (defendant Angelo LaPietra), “Fox” (former Dunes casino owner Morris Shenker), “Zio,” (Nick Civella) and “monkeys” (certain Teamsters pension fund trustees).

Recently retired FBI agent William Ouseley, established as an expert witness for the trial, told the jury that code names have two purposes, “security of operations and deception.”