Sports Figure Is Indicted--4 Days After Death

Four days after his death, millionaire contractor Sam Gilbert, a controversial sports figure once known as the “godfather” of UCLA’s basketball program, was charged in a federal indictment Wednesday with racketeering and money laundering in connection with a Florida marijuana smuggling ring.

The indictment of Gilbert and one of his three children, Michael, 46, charged with conspiring to defraud the Internal Revenue Service, was announced by federal officials in Miami.

Unaware of Gilbert’s death, they said they had sought to arrest him at his Pacific Palisades home Tuesday night.

The 44-count indictment seeks the return of an estimated $11.5 million in illegal drug profits allegedly invested in the Bicycle Club, a Bell Gardens gambling club that was built in 1984 by Gilbert’s construction firm, Sam Gilbert and Associates.

According to Assistant U.S. Atty. Daniel Cassidy of Miami, Gilbert, who was 74 when he died Saturday after a two-year battle with cancer and heart disease, was involved in actively laundering the drug profits of an alleged Florida marijuana smuggler named Benjamin Barry Kramer, 34, who currently is U.S. open class offshore power boat champion.

Gilbert, who financially helped many UCLA basketball players, was a benefactor of such stars as Kareem Abdul Jabbar, Bill Walton and Sidney Wicks. He also served as an advisor and agent to UCLA players.

In 1981, when the UCLA basketball program was placed on two years’ probation, the National Collegiate Athletic Assn. ordered the university to disassociate Gilbert from the school’s recruiting efforts. The hot-tempered Gilbert, who frequently threatened to have sports writers killed for writing articles that offended him, denied any wrongdoing.

The Miami indictment, which caught federal prosecutors in Los Angeles off guard, said the drug smuggling and money laundering scheme began in 1975 and involved the wire transfer of funds from Florida to companies in the British Virgin Islands, the Netherlands Antilles and Liechtenstein. The money was then transferred back to the United States with Gilbert’s help, according to Cassidy.

The indictment charges:

“Samuel Gilbert knowingly assisted in the investment of the illicit profits of the enterprise by assisting in the acquisition and maintenance of assets through foreign and domestic corporations established for the purpose of concealing the identity of the defendant Benjamin Barry Kramer. . . . Gilbert further assisted in the movement of large sums of cash which represented the illicit profits of the enterprise.”

While federal officials in Los Angeles would not discuss the indictment, Cassidy said in Miami that roughly 70% of the money that went to pay for construction and land costs of the Bicycle Club--about $11.5 million--was drug money put up by Kramer. He said the government is seeking the forfeiture of that amount.

“Gilbert wasn’t involved in the marijuana smuggling, but he was involved in the money laundering,” Cassidy said. “In addition to the Bicycle Club, he and his son, Michael, controlled a company called the Marina Bay Associates, which owned another of Kramer’s assets in Florida, which we intend to seize.”

Cassidy said Sam Gilbert was charged with five counts of racketeering and money laundering in connection with the drug scheme, while his son was charged with one count of conspiring to help Kramer defraud the Internal Revenue Service.

$50,000 Bail

Michael Gilbert appeared before a U.S. magistrate in Los Angeles on Wednesday. He was later freed on $50,000 bond and ordered to report for formal arraignment in Miami on Dec. 3.

While Michael Gilbert was listed as a limited partner in the Bicycle Club, officials there said Sam Gilbert had no actual interest in the gambling club.

George Graham Hardie, a general partner in the club, said he knew nothing about the indictment or allegations that drug money was used in the construction of the casino.

“The club is definitely not involved in any money laundering, whatever that means,” Hardie said. “We have too much at stake to get involved in something illegal. The whole thing is ridiculous.”

The Gilberts and Kramer were among six defendants charged in the Miami indictment. Also named were Kramer’s father, Jack Jerome Kramer; a Fort Lauderdale man identified as Charles Victor Podesta, and a Miami criminal attorney, Melvyn Kessler.

According to Cassidy, the Gilberts became involved with Kramer through Kessler.

Marijuana Conviction

“Kramer was in jail on a marijuana conviction in 1981 and when he got out, Sam Gilbert helped him by arranging for somebody else to pretend that he had hired him,” Cassidy said. “The person who was supposed to be Kramer’s boss never even met him. But Kramer was paid. By the time of his arrest in this case, we estimate he was worth $30 million.”

Cassidy said Michael Gilbert was apparently a friend of Kramer. He said that at the time of his arrest Tuesday, Kramer was driving a new Porsche that was registered to the younger Gilbert, as was an 18-wheel truck used by Kramer.

Michael Gilbert’s lawyer, Max Gillam, had no comment Wednesday on the charges against his client.

Times staff writers Rita Pyrillis and Tracy Dodds contributed to this article.