Limousine Service Was Front for Scam, Police Say; 3 Jailed

The investors were attracted by a newspaper advertisement promising large profits by leasing limousines.

Then some were offered a chance to “make the big money” by helping Las Vegas and Atlantic City casinos launder organized crime money and skim casino profits.

There was no risk, they were assured, as long as they reported their profits--promised to be 50% to 100%--as income to the Internal Revenue Service.

But it was all a scam, Newport Beach police investigators said Friday, and it was how at least five Orange County residents lost at least $350,000.

After a four-month investigation, three men were arrested Thursday night and held at Newport Beach Jail in lieu of $1 million bail each. The unusually high bail was set by a Municipal Court judge after allegations that the men made death threats against victims they feared might inform police, investigators said.

Police identified the suspects as:

- Joe Grosso, 42, of Fullerton, president of Pacific Marketing and Trading and also Diplomat Limousine Co., which share a tiny office at 3737 Birch St., Suite 226, Newport Beach. Police said the two firms had been operating since about January, 1985, and had dealt only in limousines.

- George Yudzevich, 44, a longtime friend of Grosso who lives in New York City but has commuted to Orange County. Police said Yudzevich is 6 feet, 7 inches tall, weighs 360 pounds and to victims “casts himself as a full member of an organized crime family in New York.”

- Gregory Moeller, 36, of Irvine, apparently a partner in Pacific Marketing and Trading, judging from documents found at the firm’s office, police said.

Police Sgt. Richard P. Long, of the department’s vice and intelligence unit, said the investigation began when one of the investors complained to police after losing money during the supposed money-laundering scheme.

All From Orange County

Long said the scheme seems to have sought investors only in Southern California. So far, the five known investors all are from Orange County, he said.

“They basically would get people to get involved in this joint venture (leasing limousines) and would play the role out that they were organized crime figures,” Long said.

“They would approach these individuals to ‘make the big money.’ It was nothing more than a get-rich-quick scheme. They indicated they were going to launder money in the casinos in Las Vegas.”

Long said victims were led to believe that Caesars Palace, MGM Grand Hotel, Tropicana Hotel and Country Club and Barbary Coast Hotel and Casino were involved in the laundering.

But Long said that he and two other investigators, John Klein and Jim Kaminsky, went to Las Vegas for a week, working first undercover, then with the cooperation of the Nevada Gaming Control Board and the four casinos.

‘No Casino Complicity’

He said he and his investigators now believe that “there was no casino complicity, no involvement of anyone in the hotel operation.”

Long said the investors were told that the laundering required “lay people who would not be known by certain people who might inform to the government that this was going on.” The investors were told to turn over their money, that others would gamble and lose it, but then the original amount plus the profit would be paid back at the casino cage.

“The way the scam is laid out, the individuals are told that it’s not wrong if they report (their profits) to the IRS; they’re just out there gambling,” Long said.

Instead, Long said, the investors were told afterward that the investors had done “something wrong to queer the operation and they had caused the (organized crime) ‘family’ to get upset.” The suspects hoped that the threat of organized crime retaliation would prevent victims from informing police, Long said.

He added that more arrests may follow. “There are some other people involved,” he said. “We’re continuing our investigation, but these (the arrested suspects) are the main players.”

Atlantic City Casinos

He said documents seized during Thursday’s arrests indicate that the suspects worked a similar scam using Atlantic City casinos.

Long said that in one case, an Irvine couple lost $200,000.

But investigators described the investors as working people with unspectacular incomes. “In some cases (investors) were mortgaging their property,” Long said. “In some cases they (the suspects) were taking people’s life savings. In one case they took everything they could from some individuals.

“The common denominator in it seems to be (that investors) were middle-aged and their earning potential was still there. They were willing to take a bigger risk than older people.”

Long said the limousine leasing was at least in part a legitimate operation. He said that investors leased their limousines from outside sources, then turned them plus $20,000 per investor over to the limousine service. The service guaranteed to hire out the limousines on the investors’ behalf, Long said.

But the service did not live up to its agreement, Kaminsky said. The firm, which promised to handle all aspects of renting out the limousines, including providing drivers, in fact was hiring out only one limousine, leaving the others idle, Kaminsky said. The service employed only one driver, he said.

Long urged anyone with information to contact the Newport Police Department’s vice and intelligence unit.

Long said that besides “a whole floor full of documents,” police seized about $15,000 in cash, five to six grams of cocaine and some drug paraphernalia during the arrests.