Bell Says Investors Are Unable to...

A deal to reopen Bell’s dormant card club has fallen through because investors are unable to front the $1.35 million in good-faith money that the city requires, Councilman George Cole said Wednesday.

However, the city will continue to retain Pete Werrlein Jr., the casino’s former general manager who was convicted of mail fraud and owning an illegal gambling business, as a general counsel on casino-related matters, Cole said.

“The partners started falling out with one another months ago,” Cole said. The two investor groups, California Bell Casino of Los Angeles and Worldwide Entertainment Centers of Carlsbad, have asked the city to return a $500,000 deposit, city officials said.

California Bell Casino is made up of partners Russell Armstrong, 29, and Randy Haag, 34, who are stockbrokers.

Thomas C. K. Yuen, founder of Irvine-based AST Research Inc., who Armstrong said would provide the club’s $5-million start-up funds, said he is not involved in the deal.

“I never expressed the desire to be part of this group,” Yuen said. “I am in the high-tech area, and this is not a deal that suits my background.”

Worldwide President Hugh Lyttleton said his organization has ended its partnership with California Bell Casino and is unsure what his company’s next move will be. Lyttleton said Worldwide considered itself the operator rather than an investor.

Casino owner Jim Knapp did not return phone calls made to his Orange County office.

According to a 38-page city ordinance tightening card club operations, the partnership must pay rent to Knapp before it files an application with the city. The city must receive a gambling license application along with a $500 fee to begin paperwork to reopen the casino, Werrlein said. The city has never received an application from California Bell Casino, Cole said.

California Bell Casino signed a lease agreement in October with Bell Associates to run the 75-table casino, located in a warehouse district off the Long Beach Freeway. Once the state’s largest poker parlor, it has been closed for more than a year and a half. California Department of Justice officials have expressed concern about Werrlein’s deal with the city. His company, Western Gaming Associates, was to receive 15% of the city’s revenues from the club during its first year of operation and 10% in the following years. Werrlein managed the once-thriving California Bell Club until he pleaded guilty in 1984 to the mail fraud and gambling charges. He served 10 months in prison.

Robert Rizzo, the city’s chief administrative officer, had hoped the casino, which once brought the city $2 million a year, would boost the city’s sagging finances. Rizzo said he is optimistic about finding additional investors to take over the casino.