Petti Is Denied Release to Prepare for Money-Laundering Trial : Courts: In another aspect of the case, attorneys challenge the use of a criminal to entrap co-defendant Richard T. Silberman.

Reputed underworld figure Chris Petti on Monday was denied an early release from federal prison in order to confer with his attorney and prepare for his upcoming money-laundering trial in U.S. District Court here.

In another development on Monday in the complex case, legal papers filed by attorneys for co-defendant Richard T. Silberman contended that federal investigators improperly used an eight-time convicted criminal to entrap the former state Democratic Party fund-raiser, despite his “outstanding” work in the community.

The legal briefs for the first time describe the details of Silberman’s arrest last April and contend that agents coerced him into making a statement in the case and barred him from calling his wife or an attorney.

In a short hearing before U.S. Dist. Judge Leland C. Nielsen, Petti’s attorney, Oscar Goodman of Las Vegas, asked Monday that his client be released from Terminal Island, where he is serving 18 months for violating his probation in a bookmaking case.

The attorney argued that he needs Petti in San Diego to help him go through the reams of legal papers and many wiretap tapes connected to the money-laundering case scheduled for trial in three months.

Nielsen denied the request, saying he did not think there were “sufficient grounds” to release Petti.

After the hearing, Goodman said the decision will make it difficult to defend his client.

“I’m at a tremendous disadvantage,” Goodman said. “I’m disappointed. I was of the mind that, out of just basic fairness, he would be given a very limited break. But I guess the system doesn’t give anyone a break.”

Assistant U.S. Atty. Charles Gorder said he believes Petti should serve at least two-thirds of the 18-month sentence, which would make him eligible for release in April, in time for the trial.

He said it is not right to release someone from prison just because he is worried about the outcome of another pending criminal case. “It’s not fair to society that you should be able to avoid punishment for one crime by committing another,” Gorder said.

The 62-year-old Petti, who has been linked to organized crime in Chicago and Las Vegas, was convicted in 1984 of bookmaking and sentenced to five years’ probation.

In April, he and Silberman, along with several other men, were charged in an FBI sting arrest. Prosecutors allege that they were laundering money they believed to be illegal cocaine profits, but which actually came from an undercover FBI agent.

All of the defendants have pleaded not guilty, and all but Petti were released on bail. He was held because of his probation status, and court testimony later showed that he never paid any of the $250,000 in fines levied in the bookmaking conviction.

In May, he was convicted of violating probation and sentenced to 18 months in prison.

Goodman said Petti is unable to pay for the mounting costs related to the money-laundering case. He said that, because Petti is broke, he is not charging him for his legal services.

“He treated me in the old days, when I didn’t have it, so I’m working for free right now,” Goodman said. But, he added, “it always works out somehow in the end.”

In the papers filed on behalf of Silberman, once a top aide to former Gov. Edmund G. Brown Jr., his attorneys contended that the federal government entrapped their client.

The court papers stated that Silberman lives in La Jolla and is married to Susan Golding, a member of the San Diego County Board of Supervisors. The records discussed his past, including his honor as valedictorian of his high school class, his work on state projects during the Brown Administration, and his “efforts to improve San Diego’s school, stadium, downtown and transit systems.”

“In short,” the papers said, the FBI “would have found that Mr. Silberman’s record of public service and private success was outstanding.”

The papers also described Robert Benjamin, the government’s key informant in the allegations of money laundering. They noted that Benjamin has been arrested over the years for bookmaking, auto theft, burglary, forgery, grand theft, armed robbery, making fraudulent applications and perjury.

“He has been convicted of eight felonies, among them crimes of moral turpitude, between 1951 and 1977,” the papers said.

In another legal brief, the Silberman defense attorneys described their client’s arrest April 7 in a Hyatt Islandia room, contending that he was coerced into making a statement to FBI agents and deprived of some of his constitutional rights.

Silberman asked the agents if the arrest could be delayed until he could notify his wife, who was on the East Coast attending her mother’s funeral. His request was denied.

The papers then gave this lengthy description of what followed:

“Mr. Silberman then requested permission to call his attorney. He was told that he would not be allowed to talk to his attorney until he was booked. It was very clear that, if he talked to a lawyer, it would be after the publicity.”

FBI Agent Charles “Walker told him that if he would supply them with information, the agents would not have to take him downtown to have him booked right away, and that his arrest could be put off, perhaps indefinitely,” the papers state. “The agent requested that he sign a waiver of his rights, telling him, ‘If you don’t sign this document, we can’t talk. If you don’t sign, you’re going to jail.’

“The negotiating continued over whether Mr. Silberman would sign the Miranda waiver and provide information to the FBI. One of the agents alternated negotiating with Mr. Silberman and walking into the other room in the suite. He indicated as he did so that the United States attorney was running out of patience.

“Finally, after coming back from the room, Agent Walker stated, ‘The United States attorney says there is no more time, sign or we are taking you downtown.’

“By this time, nearly one half hour had passed since he had been taken into custody. Mr. Silberman signed the proffered waiver and began to answer questions from the agents. After the questioning began, Mr. Silberman was permitted to call his wife. He was not permitted to call his attorney, and had to ask his wife to do so.

“After questioning him at length, the agents took him to the FBI office downtown, where he was booked.”