It was shortly after dawn on Jan. 24, 1988, Jamie Ortiz testified, when he realized that something odd was going on at the California Bell Casino.
Ortiz, the night janitor at the 560-seat card club in Bell, began gathering the dirty sandwich plates and bar glasses that had collected during the all-night poker games in the 5-card stud room.
Then he noticed assistant manager John S. Vukasian wandering around the empty room carrying a newspaper in one hand and two racks of chips in the other, Ortiz continued.
The club official occasionally walked up to an empty card table and appeared to drop some of the chips into the collection slot next to the dealer's seat, Ortiz said through an interpeter during a preliminary hearing last week in Los Angeles Municipal Court for Vukasian, 49, and three others who have been accused of stealing up to $70,000 from the club.
Also facing charges are L. Donald Speer, 40, and Michael E. Riordan, 41, both of Las Vegas, and James M. Salerno, 51, of Rancho Palos Verdes.
Attorneys for the defendants denied the charges, saying that the prosecution lacks sufficient evidence.
But after a preliminary hearing that ended Friday, Judge Karl W. Jaeger ordered the defendants to appear in Superior Court for arraignment today on a variety of charges of charges including grand theft and conspiracy. The judge dismissed a charge of attempted grand theft against the defendants.
Club Raided in 1988
The five-day preliminary hearing before Jaeger, which ended Friday, came almost 18 months after law enforcement officials opened their investigation into alleged illegal activities--including skimming of profits--at the financially ailing card club. As part of the investigation, law enforcement authorities on May 5, 1988, raided the club, the homes of the club's general partners, and the office of the Las Vegas-based consulting firm, Southwest Gaming Corp.
The hearing marked the first time that officials from the Sheriff's Department and the district attorney's office have provided details about the scope of the case.
Deputy Dist. Atty. Antoinette Brown described how officers of Southwest Gaming, in an effort to purchase the California Bell club, allegedly worked out an illegal method to bolster the club's monthly revenues.
The plan--which made the club look more profitable than it really was--ensured that the consulting firm collected thousands of dollars in monthly fees, and made Southwest Gaming appear to be an effective management group to both the club owners and Bell city officials, who had to approve Southwest's takeover, Brown said.
Southwest Gaming officials signed a contract in June, 1987, to manage several betting games at the California Bell Casino. The agreement expired in March, 1988.
Brown accused Southwest Gaming executives Speer and Riordan of devising a the scheme to drop poker chips into the tables they were managing whenever it appeared that the club's gross monthly income would fall below expectations.
Sought to Show Profits
"They (Southwest Gaming) wanted to buy the club," Brown said. "They not only wanted to impress the California Bell club, but they wanted to impress the city of Bell" by showing high monthly profits.
Vukasian, who was recommended for the California Bell assistant manager position by Southwest Gaming executives, would have become the manager of the club under Southwest's ownership, according to testimony.
But Speer and Riordan had another motive for wanting to raise the monthly gross revenues, Brown argued. Under terms of the consulting contract, Speer and Riordan would receive consulting fees only if the club's monthly gross exceeded $200,000, she said.
So the two executives allegedly directed Vukasian and Salerno to draw as much as $20,000 per month in poker chips, which were charged to the consulting firm's promotional accounts at the casino, and drop them into the 5-card and "Texas Hold em" collection boxes, Brown charged Both Vukasian and Salerno were authorized to draw money from Southwest Gaming's promotional accounts, according to Joe Lagerbauer, a former Southwest Gaming financial officer.
Salerno, who had frequented the card club since its opening, had introduced Southwest Gaming officials to the club's general partners, who wanted to sell their shares when the business began to fail, said Samuel Torosian, a general partner who also is general manager of the casino.
In fact, business became so poor that Bell city officials began eminent domain proceedings later in 1987 to take over the club and regain back taxes and fees owed to the city. City officials at one time had considered hiring Southwest Gaming to run the day-to-day operation of the club.
'I Would Have Screamed'
The table stuffing had been going on successfully since October, 1987, said Lagerbauer, who added that he did not feel that the practice was illegal.
"If I did, I would have notified everyone," Lagerbauer said under cross-examination by defense attorney Jerold Newton. "I would have screamed."
The consulting firm's monthly profits by the end of 1987 were as high as $39,000, and the group had begun to count on the monthly income derived from the table stuffing, Lagerbauer said. Brown charged that the firm collected as much as $70,000 in fees as a result of the alleged scheme.
But on Jan. 24, Ortiz reported Vukasian's early morning activities to the security officer on duty, Albert Madrid, according to testimony. A videotape from two of the club's security cameras was made of Vukasian and turned over to sheriff's investigators.
The 16-minute videotape, in which Vukasian repeatedly places a newspaper over the collection slots and appears to drop in chips, was introduced by the prosecution at the preliminary hearing.
Brown also introduced financial documents that show when Salerno and Vukasian withdrew money from the promotional accounts. The withdrawal dates appeared to coincide with dates that show large daily revenues, Brown said.
Almost a year after club security officers handed investigators the videotape, Speer, Riordan, Vukasian and Salerno were arrested and charged with grand theft and conspiring to commit grand theft.
Part of Continuing Probe
Deputy Dist. Atty. Robert Kuhnert, head of the prosecutor's organized crime and anti-terrorist division, said the legal proceedings against the four defendants are only part of an ongoing investigation.
Reams of financial records were seized during the May 5, 1988, raids, and investigators are still sifting through the documents, Kuhnert said.
"This is a massive amount of records to work through," said Kuhnert, who estimated that up to 300 cubic feet of records were seized. "We're trying to attack this, so to speak, one crime at a time."
Last month, one of the club's four general partners, Wing Lou, was charged with grand theft for allegedly skimming $162,000 by writing club checks to himself. He faces a preliminary Municipal Court hearing on Aug. 23. Lou could not be reached for comment.
"There is, in short and sum, no evidence that (the four defendants) violated any law whatsoever," defense attorney Scott Furstman said. "This case does not belong in the criminal courts."
Defense attorneys declined to comment on the videotape of Vukasian. Defense attorneys argued in court that "stuffing tables" with poker chips was allowed under the consulting agreement.
In his closing statements, attorney Furstman insisted that since there was no specific provision in the consulting contract that prohibited stuffing the tables, the practice was legal.
"What is the worst thing they did?" Furstman said. "If anything it was a tasteless act. The crux of this complaint involves nothing more than a contract dispute."
The videotape and tips from anonymous sources spurred the investigation of the club, which had already weathered a scandal in 1985, when two city officials pleaded guilty to conspiring to form a secret partnership with poker club investors.
Since 1987, Bell city officials have been struggling to take over ownership of the embattled club because of the continuing legal and financial problems. The club owes the city close to $1 million in unpaid taxes and fees, city officials have estimated, and does a fraction of the business that it enjoyed four years ago.
Meanwhile, the eminent domain action, which would have made Bell the first city in the country to own a gambling institution, may be dropped in the near future, city officials said.
"It doesn't look like it will happen," City Councilman George Cole said recently.