Las Vegas’ Moe Dalitz Dies at 89 : Civic Leader, Philanthropist Was Also Alleged Underworld Boss

Morris Barney (Moe) Dalitz, a Cleveland rum runner who figured prominently in the early success of the Las Vegas Strip and was dogged by charges of organized crime connections despite his philanthropic good deeds, died Thursday in his Las Vegas home after a long illness. He was 89.

Dalitz was a man of gargantuan contrasts.

He was a builder, civic leader and kindly philanthropist who won the 1976 Humanitarian Award from the American Cancer Research Center and Hospital.

Accused of Threat

And he was the crude underworld kingpin who, according to court documents based on Los Angeles Police Department intelligence reports, threatened world heavyweight boxing champion Sonny Liston in 1964 at the Beverly Rodeo Hotel:

“If you hit me . . . you’d better kill me, because if you don’t, I’ll make just one telephone call and you’ll be dead in 24 hours.”

Dalitz steadfastly insisted that, although he knew many underworld figures, he had no connection with organized crime, and he boasted that he had never been convicted of any illegal act.

Yet he was identified by the congressional crime committee of the late Sen. Estes Kefauver (D-Tenn.) three decades ago as a Prohibition-era bootlegger and a Cleveland gambling boss with crime syndicate connections.

Indictment Dropped

He was indicted in 1965 by a Los Angeles federal grand jury on income tax evasion charges, but they were dropped.

In 1978, the state’s Organized Crime Control Commission identified Dalitz as one of the top “organized crime figures in California.”

In the 1983 book, “The Mob,” by former Chicago Crime Commission director Virgil W. Peterson, Dalitz was identified as one of the “Big Four” in the Cleveland Syndicate, named for its city of origin.

Peterson said he found no evidence showing that the “predominantly Jewish underworld organization” known as the Cleveland Syndicate was ever controlled by the Italian Cosa Nostra, but wrote that “few racket groups in America have had a greater permanency of form or achieved a stronger organization.”

Born near Boston on Christmas Eve, 1899, Dalitz established himself in Detroit and Cleveland as an owner of a string of laundries.

Moved to Las Vegas

He moved to Las Vegas in 1949 when he was asked to help finance completion of the Desert Inn hotel and casino.

“All in all, the opportunity in Las Vegas seemed too good for me and my associates to pass up,” he once said. “I was 50 years old then and I could breathe easier in this climate.”

In the early 1950s, Dalitz formed Paradise Development Co., which built Las Vegas’ Sunrise Hospital, Boulevard Mall, Country Club, convention center, residential tracts and several buildings at the University of Nevada Las Vegas.

Peterson did not view Dalitz’s move to Las Vegas as that of a would-be real estate developer.

“The Cleveland Syndicate got a foothold in Las Vegas in 1950 when it began operating the Desert Inn,” he wrote. “Before long it gained control of other casinos, and for many years dominated the Las Vegas gambling industry.”

The man of contrasts won praise as well as criticism for his involvement in Las Vegas’ legal casinos.

“Moe Dalitz was probably as responsible for the successful gaming economy in southern Nevada as any one person,” Grant Sawyer, who served as governor of Nevada from 1959 to 1966, said after Dalitz’s death. “In my opinion, he was a good citizen in every way.”

In 1962, Dalitz joined his Las Vegas partner, Allard Roen, and Irwin Molasky and Merv Adelson to create the La Costa residential, sports and recreation spa in San Diego County, built at a cost of $100 million.

Dalitz and other La Costa founders filed a $522-million libel suit against Penthouse magazine over a 1975 article headlined “La Costa: The Hundred-Million-Dollar Resort With Criminal Clientele.” The article claimed that the resort was founded, financed and frequented by organized crime figures, and described Dalitz as “a senior mentor of the criminal aristocracy.”

Under cross-examination in 1982, Dalitz--who had sold his interest in La Costa in 1981--conceded that for 25 years his Ohio operations had also included illegal bootlegging, liquor smuggling and gambling house operations.

But he denied that he had “opened the door” for loans from the Teamsters Union Central States Pension Fund to build the 5,600-acre resort. He claimed that the complex was built with money from the sale of a Las Vegas shopping mall, his sale of the Desert Inn to the late Howard Hughes, and his sale of the Stardust, another Las Vegas hotel.

A jury absolved Penthouse of libel, at a time when Dalitz had been dropped from the case.

After that decision was overturned and Dalitz reinstated as a plaintiff, the case was settled out of court in 1985 in something of a draw: Each side apologized weakly and paid its own legal costs, estimated at more than $20 million each.

Funeral services are planned for Tuesday in the Congregation Ner Tamid in Las Vegas.