A Nevada gaming agent testified Thursday he has since learned that entertainer Wayne Newton was "not being truthful" about his relationship with two crime figures when he was licensed to purchase the Aladdin Hotel in 1980.
Fred Balmer testified he had been "perfectly satisfied with the investigation of Newton and statements he'd made to us" in the 1980 probe. "I felt that he was candid.
"Subsequent to that time, after hearing of the testimony before the Connecticut Grand Jury . . . it was apparent to me that he was not being truthful in regard to his relationship with Mr. (Guido) Penosi and, in part, with Mr. Frank Piccolo," Balmer testified.
"I assume when I interviewed him he didn't tell the entire truth," Balmer said of Newton.
The testimony came in Newton's multimillion-dollar defamation lawsuit against the NBC television network, which aired four broadcasts in 1980 and 1981 linking the entertainer to organized crime figures.
NBC attorneys have argued that the broadcasts were accurate when they said Newton wasn't telling gaming investigators the whole truth about his relationship with Penosi and Piccolo.
Balmer testified he wrote a report to his superiors that expressed "an area of concern" over Newton's contacts with Penosi. He said the superiors were not happy with the first report and it was "kicked back and the area of concern was taken out."
Balmer said the hotel had been closed 18 months and state officials were eager to get it reopened. And he said Newton's funding of the purchase was checked out thoroughly and came from legitimate banking sources. One NBC promotion of the broadcast raised the question of whether Newton's purchase of the hotel had been financed by the mob.
Balmer said he always felt that the Newton contacts with Penosi should have been explored more fully. He said agents were not given enough time to investigate the contacts thoroughly.
"I felt confident the investigation we did on Wayne Newton was thorough," Balmer testified. "But I felt there was more we could have done. The investigation was pushed on rather rapidly."
Balmer, who is no longer with the Gaming Commission, said Newton never pressured anyone to shorten the investigative process.
Newton testified last week that he turned to Penosi in February, 1980, to halt death threats against his family. He said he had known Penosi as a fan since he met him while playing the Copacabana nightclub in New York City in 1963. But he has testified he did not know Penosi was linked to organized crime and did not even know his last name until told by gaming authorities in 1980.
Penosi backed up most of Newton's testimony in a five-hour deposition played in court Wednesday. Penosi took the Fifth Amendment several times during the deposition when asked if he was linked to organized crime.
Penosi, of Beverly Hills, said he contacted his cousin, East Coast mob figure Frank Piccolo, and after a series of phone calls, the threats against Newton and his family stopped. He said he had not talked to Newton since the 1980 incident.
The government later accused Penosi and Piccolo of conspiring to extort money from Newton, entertainer Lola Falana and their manager, Mark Moreno.
Piccolo was slain in 1981 before he went to trial. Penosi was acquitted of the extortion charges in two separate trials in 1982.
Newton testified before the Connecticut Grand Jury that indicted Penosi and Piccolo, and also at Penosi's trial.