Southland Gambling Raids Net 79 Video Slot Machines

In a drive to crush a Southland gambling operation, police raided 37 homes and businesses in Orange and Los Angeles counties Tuesday, arresting five people and confiscating 79 illegal video slot machines.

Authorities said the ringleaders, based in southern Orange County, had grossed up to $400,000 last month alone from the illicit machines, and appeared to be funneling at least part of their profits to New York and Chicago.

The rigged video machines were placed in Vietnamese-owned video arcades, cafes, billiard halls and beauty parlors in Asian neighborhoods of Westminster, Garden Grove, El Monte and Rosemead, police said.

“Obviously there’s cultural ignorance about the gambling laws,” said Garden Grove Police Detective Bill Johnson. “They’re getting sold a bill of goods by the crooks, the Caucasians.”

But other police officers said many businesses in the Little Saigon district did indeed know the gambling machines were illegal, and refused them.

Businesses that installed the machines at times drew customers who stood seven deep in line to play, police said.

“It’s not unusual for a guy to make $2,000 a week on a machine,” one of the suspects, identified as Michael Spain, boasted to an undercover Garden Grove police officer in February. “I got one guy making $8,000 a week, four machines.”

During the conversation, which was videotaped by police, Spain explained that the ring and the business owner would split the profits from the machines evenly. He also promised to be on call 24 hours a day to service the machines.

“We’ve got them all over the United States,” Spain said on the videotape. “Big, big, big business. We’re out of (Las) Vegas.”

The investigation began in October, when police in Westminster and Garden Grove first received reports of illegal gambling machines. Suspecting that the machines might be coming from Los Angeles, local police asked Los Angeles Police Department Detective Carl Olson--who broke up a similar gambling ring in 1983--to help investigate.

Ultimately, the trail led south into Orange County and back to the East Coast, where some of the machines were manufactured by Greyhound Electronics Inc. of Toms River, N.J., police said.

Tuesday’s raids involved officers from the Orange County and Los Angeles County Sheriff’s Departments, Garden Grove police and Westminster police, as well as an undercover Internal Revenue Service agent.

Spain was arrested at his San Clemente home early Tuesday. Two other suspects, William Lee, 40, of Los Angeles and Dallas, and Gerald Brim, 36, of the San Diego area were arrested at a Costa Mesa apartment at which police also found at least 15 loaded firearms, including assault rifles and automatic shotguns, police said.

Two other suspects, who identified themselves as Michael A. Dicenzo, 26, of San Clemente, and Jay D. Gardner of the Toms River area of New Jersey were arrested at a Laguna Hills warehouse where video machines were being repaired.

Gardner surrendered $4,000 in $20 bills, and Orange County sheriff’s deputies seized about 20 machines. Along with electronic circuit boards, video terminals, boxes of quarters and the paraphernalia of any electronic repair shop was a note that read, “Board pays out way too much! Check out.”

The five suspects were booked on suspicion of conspiring to distribute and maintain slot machines, a felony. Police said they are still seeking four other suspects and hunting for more evidence that might connect the suspected ring to other East Coast crime organizations. Authorities believe some of the suspects are using multiple aliases and said it may take some time before their true identities are determined.

At first glance, the gambling machines seized Tuesday look like the video poker and slot games found in many arcades.

However, they had been altered to accept not only quarters but $1, $5 and $20 bills. In addition, they contained a remote control and an internal computer to keep track of the winnings.

When a player hits a jackpot, the machine displays his “credits” on the screen, and the business owner pays him from the cash register accordingly, police explained. Then the owner uses a remote control device resembling a garage door opener to “zero” the counter. The computer keeps track of how much was paid out.

When the gamblers arrived to service the machines, they first checked the computer to find out how much the owner had paid out. They reimbursed the owner, and then divided the rest of the money, police said.

All told, 67 machines were confiscated in Orange County and 12 in South El Monte and Rosemead, police said.

Investigators said it cost about $2,000 to ship each machine from the East Coast, but the ring was apparently trying to cut costs by producing the units in San Clemente.

Greyhound advertises electronic “kits” for machines such as the “Deluxe 8” video slot, and, according to investigators, the ring planned to order only the electronic “brain” of the game from New Jersey.

Video screens can be easily purchased, and cabinets to house the machines were allegedly to be built at a San Clemente woodcraft shop, which was also raided Tuesday. Such a California-built unit would cost only about $1,300, investigators said.

A typical machine might collect $1,500 a week and pay out 20% of the time, police said. That would mean $600 each for the ring and the owner.

And apparently such profits have already attracted competitors in crime, police said.

Garden Grove Detective Johnson said three men posing as FBI agents managed to make off with three of the alleged ring’s gambling machines from a billiard hall last Saturday.

According to Johnson, the three showed the owners of the Thanh Tam billiard hall a gun--but no FBI identification--and told them they were confiscating three machines that had been installed by the San Clemente ring. The purported agents loaded the machines on a truck, drove away and have not been heard from since.

“I think it was some other guys who just ripped them off,” Johnson said, noting that each machine could contain several thousand dollars.

In fact, Johnson refused to say where the confiscated machines would be stored, and planned to assign an officer to guard them until they can be emptied. The money seized will be returned to the general funds of each city, he said.

Eight business owners in El Monte and two in Garden Grove were cited for permitting the machines to be installed, a misdemeanor charge, Los Angeles County deputies and Garden Grove officers said. All of the owners were cited and released Tuesday.

Several shop owners protested as their machines were hauled away.

The owner of one Garden Grove video rental shop watched in obvious distress while a crew of detectives loaded his four machines onto a flatbed truck. Trac Pham, who was not cited, said he had no idea the devices were illegal.

Pham said he used to have four Pac-Man machines at his Kim Do Video-Music Center on Brookhurst Street. Each earned him about $150 a month, and when a man came to the door promising his machine would be more profitable, Pham said he thought nothing was amiss.

“The guy was an American man, he must know better than me,” Pham said in broken English. “I didn’t know there was anything wrong.”

Police said the two Orange County shopowners were arrested only after they actually paid off undercover police officers who played their machines. Authorities said they expected that word of the raids would quickly spread through the Asian community and keep gambling rings from getting a foothold in the future.