Aladdin Hotel's Controversial Korean 'Genie' : New Owner Has Colorful Past, Passion for Gaming

Times Staff Writer

The first foreigner to own a casino on the Las Vegas Strip, the Aladdin's Ginji Yasuda, is a 55-year-old Korean-born resident of Japan who walks softly and carries a big wallet.

Yasuda has needed a healthy bankroll. He paid $54 million cash for the run-down gambling emporium, then spent an additional $30 million on an overrun-plagued remodeling job and maybe $10 million more on licensing and start-up expenses.

Not to mention his forays as a high-rolling gambler at neighboring casinos. By his own admission, he has lost $2 million playing baccarat at Caesars Palace in recent months. Ironically, the Aladdin acknowledges that, at about the same time, a high roller from South Korea was winning $1.7 million while gambling at there.

But although Yasuda has cut a highly visible swath through the Las Vegas community, even state gaming regulators worry that they know less about him than they do other casino owners. While approving his license to operate a casino last February, members of the Nevada Gaming Control Board publicly expressed concern that the state investigators were hampered by lack of access to criminal and civil records in Japan that in this country would be available to the public.

Yasuda brought the Aladdin out of bankruptcy proceedings in January, 1986, amid public fanfare. However, he couldn't operate its casino until he received a state license. He hired a politically influential Las Vegas lawyer and a chief executive to help get one.

But, instead of the projected half a year, licensing took an agonizing 13 months.

Those close to the case say the delay was due in large part to Yasuda's foot-dragging in supplying information to investigators. Yasuda, in an interview, blamed his original American aides for what he called the "mess." But casino regulators criticized him publicly for flouting their advice and instructions during the investigation.

State regulators also expressed misgivings publicly about one of Yasuda's Las Vegas associations. They brought out that Ash Resnick, who had been Aladdin casino manager under former owners, had steered him to the Aladdin. Although the regulators expressed concern at reports that Resnick was taking a behind-the-scenes casino role, Yasuda denied it.

The Aladdin's history of scandal makes licensing matters there particularly touchy in Nevada. Federal organized crime prosecutors won a conviction in 1979 of its corporate owner and several individuals for permitting underworld-related hidden interests in the casino. Subsequently, the state followed with a license revocation.

After that, state regulators rejected a series of would-be buyers, including Del Coleman of Chicago, the former head of another scandal-ridden firm, Recrion Corp.

Ultimately, they licensed entertainer Wayne Newton and his partner, Ed Torres, who aced out another bidder, night show host Johnny Carson. But Newton and Torres broke up over disagreements, and after Newton departed Torres put the Aladdin in Chapter 11 bankruptcy proceedings in February, 1984. That paved the way for the property to come up for grabs once again, its location and recognizable name as its main assets.

Enter Yasuda, whose Korean name is Sam K. Park. He was raised in Japan from early childhood but remains a South Korean citizen.

His reputation in Asia is that of the playboy-sportsman son of a multimillionaire real estate developer in Japan. Yasuda evidently has spent much of his adult life playing. According to biographical information issued by his staff, he won the European skeet-shooting championship and was on the 1964 South Korean Olympic team. He also was a race driver in Japan. In recent decades, he has been a breeder of racehorses and, by his account, a devoted plunger at gambling tables in Las Vegas.

Since 1971, he has divided his residence equally between Japan and Los Angeles. His Los Angeles home for 16 years has been in posh Holmby Hills, whose residents have included oilman Armand Hammer and Playboy founder Hugh Hefner, as well as an assortment of movie stars.

Besides his Holmby Hills house, where he and his wife raised three children, Yasuda has an expensive 12-acre ranch property in Bradbury, adjoining the San Gabriel Mountains, where he said he raises horses "five minutes from Santa Anita."

Yasuda received a real estate fortune from his father in Japan, regulators said they ascertained. The state also determined that he bought the Aladdin from proceeds of selling a downtown Tokyo property in 1984 for $120 million.

A notable coincidence related to Yasuda's residence, however, went without any mention at his public licensing hearings in Nevada.

County records in Los Angeles show that Sam K. Park (Yasuda) bought his Holmby Hills property Dec. 24, 1971, from a relative of Samuel Ray Calabrese, who has been identified by law enforcement as an associate of organized crime figures.

Group Bought Aladdin in '71

Calabrese assisted a group of individuals from St. Louis and Detroit in buying the Aladdin early in 1971. The group was eventually ousted after a hidden ownership scandal involving organized crime in 1979. Calabrese got a $500,000 share in a $1.5-million "finders' fee" that went to Dunes owner Morris Shenker on the 1971 hotel sale, Nevada authorities were told afterward.

A Calabrese family corporation, World Capital Corp., had deeded the Holmby Hills house to one of its officers, a female family member, one month before Yasuda bought it for an indicated price of about $400,000, Los Angeles County public records disclose. The relative subsequently carried a third mortgage for $140,000 of Yasuda's purchase price, and Samuel Calabrese signed one of the associated documents as "her attorney in fact."

Calabrese was indicted in June, 1975, on a charge of conspiring to impede a federal investigation of one of the key people in the group owning the Aladdin, St. Louis lawyer Sorkis J. Webbe, who later was convicted of income tax evasion related to skimming Teamster loan money from the Aladdin. Calabrese was convicted and served a federal prison term for two unrelated fraud convictions. Both Webbe and Calabrese have since died.

Tax Liens Filed

A spokesman said Yasuda bought the house through a broker and never met Calabrese. Gaming investigators had questioned Yasuda privately about the Calabrese matter but appeared satisfied with this explanation, the spokesman added. The subject was never brought up at the public licensing hearings last year.

Yasuda did not respond to requests for comment on his association with Calabrese.

Despite Yasuda's social status as a millionaire in Holmby Hills, public records show a number of federal, state and county tax liens were filed against him during the 1970s. They included liens for failure to pay state unemployment insurance in connection with his Camelot Golf Course in Mojave and racehorse taxes in Riverside County. Records also show defaults on mortgage payments on his house.

Most liens were paid off, and the mortgage defaults were cured within a month or two. However, in two cases, they were on file for more than a year. One involved a default on Yasuda's payments on the Calabrese mortgage. It was filed in November, 1975, and not canceled until January, 1977. Another was a state income tax lien for $6,383 that was filed in August, 1985, and was not released until January this year.

It has now been four months since Yasuda reopened the Aladdin's casino. Yasuda admits that the property has been losing money. He maintained recently in an interview in halting English that he was nursing hopes of reaching the break-even point in the month just ended.

That hope was viewed as not particularly realistic among close observers. Further, it undoubtedly has put more pressure on his professional casino team brought in by Chief Operating Officer Dennis Gomes, whom he hired away from a top post at Hilton's Las Vegas casinos. Ironically, it was Gomes, while a state regulator, who uncovered the Aladdin's practice of giving of free rooms, food and drinks to many known mobsters in the early 1970s.

Up and down the Strip, reports are rife that Yasuda and Gomes have frequently been at odds about major decisions. Gomes declined to comment on the situation, and Yasuda played down any friction.

It would not be the first instance of friction or disenchantment between Yasuda and Americans working for him.

Even before the casino opened, Yasuda's Las Vegas attorney, former head casino commissioner Frank Schreck, had quit and the new owner had engineered a shake-up that displaced a number of executives and employees.

Yasuda also fired a Los Angeles lawyer who had handled some of the early hiring. The casino owner has since filed a civil suit here accusing lawyer Joseph Muto and the Kelley, Drye & Warren law firm of malpractice and fraud. The suit alleges that Yasuda hired the defendants back in May, 1985, to represent him in purchasing the Aladdin. Among other things, the action alleged that the lawyers overbilled Yasuda and wasted money with unnecessary procedures, including switching insurance to "cronies," who were later fired. Muto and others at the law firm did not respond to calls about the case.

Even more recently, the new owner parted company with his initial chief executive, Richard Bunker. Bunker had been chairman of the state Gaming Control Board when it dealt with many of the Aladdin's previous troubles. He was an executive at the Dunes when he met Yasuda.

Yasuda eased Bunker out of control over the hotel and put in Gomes. Sources said Yasuda initially balked at paying off Bunker's employment contract, which Muto had arranged. A private settlement was negotiated in recent weeks.

Shifted Executives

In the interview, Yasuda said he had hired Bunker for initial political assistance then switched to an "operations man," Gomes. Asked about it, Bunker said Yasuda, as owner, is entitled to choose his own management. Schreck declined to discuss relations with his former client.

It was under the guidance of Grant Sawyer, a lawyer who is a former Nevada governor, that Yasuda finally got licensed.

In recognition of the troubles suffered on all sides in Yasuda's licensing, Sawyer told the Gaming Control Board hearing last Feb. 10: "We all understand the great difficulty that this application has encountered. The difficulties of communication have been immense."

The regulators questioned Yasuda intensely about several matters and then voted 3-0 to give him a two-year conditional license.

"We determined that you are a prolific gambler at locations other than your own establishment," Chairman Bart Jacka said.

He then asked Yasuda if he had paid off two "very major" markers (gambling credit bills), and the applicant said through an interpreter: "Yes. They are all paid and cleared up now."

Jacka moved to the topic of Ash Resnick. Yasuda explained that he knew him as a casino host at Caesars Palace and later at the Dunes.

Did he intend to hire him at the Aladdin?

"No sir," Yasuda replied, without interpreter. "I find out a few things some other of him so I don't interest anything."

His translator explained: "He is not interested in hiring Mr. Resnick because of certain reservations that he has in certain areas."

"Probably the same reservations we have, Mr. Yasuda," replied Jacka. Resnick, who at present is suing the board to stop its effort to force him to undergo licensing as a key employee at the Dunes, was convicted in 1974 of income tax evasion, but an appeals court overturned the verdict.

The board also asked about a $380,000 winning ticket Yasuda held at Hollywood Park race track two years ago and which a Resnick associate, Ralph DiDonato, cashed for him at the track here. Yasuda gave DiDonato $15,000, calling it "a reasonable tip" for the service. A board investigator said Internal Revenue Service documents at the track originally reported the $380,000 as income to DiDonato.

Yasuda's accountant then told the board that the track "incorrectly" issued W-2 tax forms to DiDonato, adding that "when we discovered this" Yasuda's people had the track correct them and the income was filed on Yasuda's U.S. tax return. He added that DiDonato paid tax on the $15,000.

Yasuda also confirmed that Resnick often would cash checks for up to several hundred thousand dollars for him, taking the cash out of a safe deposit box at the Dunes casino.

Jacka took Yasuda to task for visiting his casino safe deposit box without an accompanying state agent. Regulators had imposed that requirement on him during the licensing period. Yasuda, according to his translator, had not understood the restriction. He said he customarily kept $30,000 to $50,000 in the box and would pick up money there before going to the races.

Some Income Not Declared

The regulator, who recently resigned as chairman of the agency, also brought out that Yasuda did not declare as personal income on federal and California returns his nearly $4-million income in 1985 and 1986 from speculating in the foreign exchange market. Yasuda's American accountant said the income belonged to Yasuda's Japanese corporation, which was not taxed here.

He added that the IRS "is presently auditing Yasuda's personal returns."

Yasuda also told the hearing about several purportedly minor scrapes he had with the law in Japan, including an alleged disruption of a stockholder meeting in connection with his father's business. Yasuda claimed that the incidents were the result of prejudice against Koreans in Japan. Jacka said that because the board could not verify the information, it would have to take Yasuda's word.

Nevertheless, Jacka later assured the Nevada Gaming Commission, which made the final decision to license Yasuda on the board's recommendation, that the staff investigators had been able to acquire sufficient information on Yasuda on an "indirect basis" to license him. The chairman said he didn't want to say "just exactly how we did that, because it would place some people in jeopardy."

Board member Mike Rumbolz says the agency intends to continue to observe Yasuda during his two-year conditional licensing period and to follow up on concerns that were not dispelled.

In his interview with The Times, the courtly Yasuda talked about his Las Vegas difficulties with what seemed to be an air of serenity.

Yasuda, who apologized for his "language problem," noted that he had kept employees on the payroll operating the hotel without a casino for 13 months at an estimated loss of $800,000 per month. "So I keep losing," he said, shrugging with a smile. "But I do it that way."

He calls it a "misunderstanding" that local newspapers have recently reported that he is not satisfied with his employees. The Japanese philosophy, Yasuda explained, is never to say "My wife is beautiful" or "My business is excellent." So, when he was asked by a few people about his employees, he responded: "They are good people, but green." That comment was misconstrued as displeasure, he said.

"I'm happy," he went on. "Maybe, can't say for sure, but maybe not enough knowledge of this group (the employees)."

Perhaps they are very good, he said, "but I cannot tell in this moment." Still, he contends that he is "satisfied, but not 100%." He said that if the casino broke even soon, he would consider that "outstanding." From there, he said, "I don't look for big money." He said he would be pleased after that with modest profit.

Although his American managers have always indicated that they would aim the Aladdin toward high-roller clientele, Yasuda now talks as though he is happy to see "standard middle-class" visitors who are "very nice" and "don't gamble $1,000." Unfortunately, some observers on the Strip say, that kind of business does not bring handsome profits.

Yasuda also explained that he did not do a lot of advertising at first because he believed that employees should take the first three months for "practice" under his system.

He was enthusiastic about his new interest in a high-technology business in Japan, and particularly in his new Japanese-designed eye-in-the-sky cameras keeping surveillance over the dozens of gaming tables on the casino floor. Insiders say he spends much time watching his dealers on the cameras from his penthouse.

Yasuda says he has buried himself in details for months, and he indicates that he is determined to master everything and oversee everything at the Aladdin.

Because his limited English was blamed for much of his difficulties during the licensing investigation, casino regulators made it one of the conditions on his license that he keep a interpreter on the premises at all times. He communicates with some of his staff in English, but his personal secretary is bilingual.

Yasuda, who told regulators he wanted to try doing business from the owner side of the casino after years as a customer, claims to like it so far.

"I like many young people. I like them very much. I cannot have such beautiful people working with any other business."

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