Singer Seeks Millions Over Reported Links to Mob : Newton’s Suit Against NBC Going to Jury

Six years ago Wayne Newton ruled this entertainment capital, earning $6 million annually from sellout crowds and winning ownership of the Aladdin Hotel in a bitter battle with Tonight Show host Johnny Carson.

Today Newton is engulfed in his acrimonious fight with the NBC television network over broadcast reports linking him to organized crime figures, and is headlining a fraction of the time he used to.

Newton, who has hosted President Reagan and Vice President George Bush at his plush Las Vegas ranch and was once considered a rising star in Nevada politics, says an NBC broadcast Oct. 6, 1980, has left a black cloud over his life.

Network attorneys say Newton’s problems are of his own doing. They say they were merely reporting what they were told by federal authorities, who stumbled onto Newton’s name in 1980 while wiretapping East Coast mob figure Frank Piccolo on an unrelated matter.

Defamation Suit

Newton filed a multimillion-dollar defamation suit against the network in April, 1981. After years of legal maneuvering and millions of dollars in attorneys’ fees, the case made it to a makeshift courtroom at a convention center near downtown Oct. 15. A federal court jury of six men and four women, after listening to the saga in excruciating detail, should get the case in early December.

The matter will hardly be resolved at that point, with the losing side expected to appeal the jury’s decision.

Newton, 44, a native of Roanoke, Va., was raised in Phoenix and moved to Las Vegas in 1959 near the end of his junior year in high school. He and brother Jerry sang in the lounge at the Fremont Hotel, six shows a night, six nights a week.

A performance for comedian Jackie Gleason two years later won the brothers a ticket to New York City, a job in the lounge at the fabled Copacabana nightclub--and a chance encounter with a crime figure that would haunt Newton 20 years later.

Newton testified early in the trial that Guido Penosi waved a $100 bill at him at one of their Copa performances, requesting a song. He declined the money, drawing Penosi’s wrath and that of his band “because we were living in a place where no self-respecting cockroach would live.”

Favors Recounted

In subsequent years, Newton says, he once went to Penosi’s home for a family dinner, helped his son by appearing on a TV show and got him a room once at a Strip resort.

Newton testified he didn’t know Penosi’s last name until told by Nevada gaming authorities when he sought licensing for the Aladdin Hotel in 1980.

“He was a fan type of friend,” Newton testified.

By the late 1970s Newton was entrenched as the premier performer in Las Vegas, hob-nobbed with political elite, raised Arabian horses and dabbled in other investments. One venture, a show business tabloid, backfired on him.

An irate partner, upset by Newton’s refusal to put more money into the failing publication, made threats against the singer in a dressing room encounter.

Daughter Threatened

Death threats followed from a man identified only as “Dapper,” an East Coast crime figure described in court as “a piece of human garbage.” The threats included warnings that Newton’s daughter Erin, then 4 years old, would be cut up and parts of her body sent back in a box to Newton’s ranch.

Newton said he turned to Penosi in early 1980 in an effort to have the threats halted “because I knew he had been in jail and might know who I could contact to get the threats halted.”

Penosi said in a deposition that he contacted his cousin, Piccolo, for help in solving the problem. The threats stopped and Piccolo began bragging to associates that Newton owed him. When Piccolo was approached about investing in Atlantic City he declined, according to trial testimony, telling associates he would be involved in Newton’s purchase of the Aladdin.

FBI agents wiretapping Piccolo’s phone on another case stumbled onto the references to Newton. The information was leaked by federal authorities to NBC producer Ira Silverman and NBC reporter Brian Ross, who are defendants in the current suit along with the network.

Aladdin Purchased

The death threats solved, Newton moved ahead with plans to purchase the Aladdin, out-jockeying Carson for the property.

The 1980 move left Carson fuming, according to court testimony. A frequent performer at Strip resorts and owner of a local television station, Carson said he was through with Las Vegas.

“You can take the whole city and drop it in Lake Mead,” Ross quoted Carson as saying.

While Newton sought licensing for the Aladdin, federal authorities say Penosi and Piccolo were planning to extort money from Newton, singer Lola Falana and her business manager, Mark Moreno.

Wiretaps played in the trial disclose Piccolo and Moreno discussing an insurance policy on Miss Falana. Ross testified he was unsure whether there was a plan to share in commissions from the sale of the insurance “or even to have Miss Falana killed and collect on the insurance.”

Linked to Mob

The first NBC broadcast linking Newton to the crime figures came a week after he was licensed to purchase the Aladdin. Network promos of the broadcast asked the question “Wayne Newton: Did the mob help him buy the Aladdin Hotel?”

Valley Bank of Nevada financed the purchase, according to testimony in the current trial.

Piccolo was gunned down gangland style before he could go to trial on the extortion charges and Penosi was acquitted twice by juries hearing the case.

Federal authorities say Newton was the target of renewed death threats in the fall of 1981. The entertainer blamed those threats on NBC reports that he would be a witness against Penosi and Piccolo in a federal trial in Connecticut.

Newton said his earnings now exceed $8 million annually, but his net is less because a drop in Las Vegas bookings has meant more expensive road trips.