Man Says He Defrauded 2 County Banks as Guilty Pleas End Mafia Prosecution

The reputed “street boss” of the West Coast Mafia and two other alleged mob associates pleaded guilty Wednesday to a variety of conspiracy charges, concluding a major federal prosecution that authorities said has “crippled” organized crime in Southern California.

Luigi Gelfuso Jr., who allegedly oversaw day-to-day operations for the Mafia in Los Angeles; John Vaccaro, a Las Vegas construction executive identified as a member of the Southern California “family,” and John DeMattia, a former Sherman Oaks bookmaker who on Wednesday admitted to defrauding two Orange County banks, were the last of 14 defendants to plead guilty in a case that authorities said targeted the entire hierarchy of the Los Angeles crime family.

“I’m tired. I could’ve beat the charges. But I’m tired,” DeMattia, 51, said after the hearing before U.S. District Judge Ferdinand F. Fernandez.

Pleads Guilty

Gelfuso, 63, who prosecutors said directed a wide variety of extortion and drug-dealing activities for the mob, pleaded guilty to extortion conspiracy, narcotics conspiracy and a labor conspiracy involving payoffs to a local Teamsters Union official for guaranteeing labor peace on a Hollywood film production.

He faces 10 years in prison under a plea agreement with the government.

Vaccaro, 48, who is already serving a nine-year sentence in a Reno slot machine-rigging case, faces an additional 2 1/2 years for his plea Wednesday to charges of conspiring to extort payment from two men who were behind on their gambling debts.

DeMattia pleaded guilty to a separate charge of extortion conspiracy in what prosecutors said was an attempt by the Los Angeles “family” to collect more than $480,000 invested by former U.S. Senate candidate Roy Elson with a San Fernando Valley loan shark.

In a new development, DeMattia also admitted his role in influencing officials at two Orange County banks for favorable treatment on loans and credit lines totaling well over $100,000.

In one case, DeMattia pleaded guilty to paying a $1,000 bribe and buying a videocassette recorder for an unnamed official at Sunwest Bank in Newport Beach in exchange for the official’s help in arranging a $20,044 loan.

Richard Stavin, a prosecutor for the Justice Department’s Strike Force on Organized Crime in Los Angeles, said the investigation had uncovered at least $100,000 loaned to nearly 10 co-conspirators through Sunwest, with DeMattia acting as an intermediary.

DeMattia pleaded guilty to a second count of wire fraud in a scheme to arrange for gambling credit at Las Vegas casinos by inflating bank account records at Far Western Bank in Tustin with the help of an unnamed bank official.

No bank officials were named in the charges, filed by federal prosecutors in Los Angeles. But the investigation in both cases is continuing, Stavin said.

In the Far Western case, Stavin said DeMattia, working with an unnamed bank employee, arranged for lines of credit whereby money and gambling chips were obtained in Las Vegas casinos. The bank provided financial references for unnamed clients of several casinos, including the Las Vegas Hilton, the MGM Grand and the Desert Inn and Country Club, Stavin said.

DeMattia’s confederate provided records of accounts that were “temporarily inflated by an officer” of Far Western Bank, Stavin said.

Asked if DeMattia was paying off a Far Western official, Stavin said, “You could infer that they did have somebody who was cooperating.”

Officials of Far Western declined comment.

Sunwest Bank President William Mylymok said: “We know that there was some problem. John DeMattia was named as having gotten loans before at Sunwest.”

But Mylymok said he joined the bank when new owners bought it in June, 1985. He said the questionable loans “go back a long way.”

“From what I know, there doesn’t seem to be anybody here who was involved with the loans who are still with the banks,” Mylymok said.

DeMattia is considered a minor player in the mob trial, in which reputed mob boss Peter J. Milano and six others pleaded guilty last week. Authorities said DeMattia was an associate of organized crime figures but was not a Mafia member. He was convicted of bookmaking in 1980.

DeMattia faces a three-year prison term in connection with his guilty plea.

“The case is effectively over,” James Henderson, a former Strike Force chief, said of a trial that had originally been expected to run up to six months in Los Angeles federal court.

Milano, the alleged boss of the Los Angeles “family,” his brother Carmen and four other purported “family” members and associates face sentences ranging from probation to 10 years in prison.

Stronger Case

The 10-year sentence Gelfuso faces under his plea agreement is stiffer than the six years offered to Milano, Henderson said, because the government’s case against him was stronger.

“In terms of the evidence, it was considerably greater against Mr. Gelfuso than against anyone else in the case,” Henderson said.

In a series of secretly recorded meetings with two key government informants who were attempting to penetrate the mob, Gelfuso could be heard directing attempted shakedowns of Los Angeles area bookmakers and loan sharks, and the two informants were expected to testify that Gelfuso also plotted the murder of two men they suspected of informing on the mob, one of them DeMattia.

Gelfuso has denied those charges, and DeMattia has said he does not believe he was ever the target of a Mafia hit.

Gelfuso and Vaccaro were convicted with Milano and others in 1974 on charges involving a floating gambling operation in the San Fernando Valley in which the key witness in the case, John Ludlow DuBeck, was murdered before trial.

Was to Tell of Rigging

DuBeck, who allegedly helped operate the rigged crap table used in the operation, had been expected to testify about the manner in which the games were rigged and how he and Vaccaro would deliver the nightly receipts to Milano. He was also expected to testify that Gelfuso provided protection for the game and made collections on bad debts for the operation.

The trial had been set to begin on March 26, 1974, but a week earlier, DuBeck and his wife, Frances, were killed by two shotgun blasts outside their Las Vegas apartment. The murders were never solved, but the government claimed in court documents that Gelfuso and Vaccaro arranged the murder. No charges were ever filed.

Most of the key defendants in the latest case are to be sentenced May 16. Judge Fernandez set sentencing for Gelfuso, Vaccaro and DeMattia for May 23.