17 Arrested in Probe of Mob Ties to Louisiana Poker Machines

Months before the first coins fell into a Louisiana video poker machine two years ago, federal and state investigators already were checking organized crime figures.

Their probe resulted in the arrests Tuesday of 17 people accused of using a video poker company to skim profits for the Marcello, Genovese and Gambino crime families in Louisiana and New York.

“Will organized crime attempt to infiltrate legal gaming in the United States? The answer, according to this indictment, unfortunately, is yes,” said Neil Gallagher, FBI special agent in charge of Louisiana.

Authorities would not estimate how much money the alleged scheme netted. About 14,000 video poker machines are operating in Louisiana bars, restaurants, truck stops, racetracks and off-track betting parlors.

Authorities said the investigation was continuing. They would not say if it is crossing over into an investigation of Louisiana’s new casino gambling industry. Five riverboat casinos are in operation, with 10 more planned. The world’s largest casino is expected to open in late 1995 in New Orleans.

Tuesday’s arrests were made in Louisiana, New York and Florida on the basis of a sealed indictment handed up Friday following a 2 1/2-year investigation by the FBI and Louisiana State Police.

Among those arrested were Anthony Carollo, identified by the indictment as current boss of the Marcello crime family.

The racketeering charges allege that the Genovese and Gambino families aided the Marcello family in establishing and controlling Worldwide Gaming of Louisiana and its subsidiary, Louisiana Route Operators Inc., which distributed video gaming machines.

According to the indictment, Worldwide Gaming secured the sole rights in Louisiana to video poker machines made by industry giant Bally Gaming Inc.

U.S. Atty. Robert Boitmann said Bally Gaming was the victim of the scheme and cooperated with investigators.

Bally agreed to furnish Worldwide Gaming about $20 million worth of credit, cash and machines, the indictment said. Money from the machines, which could have been used to repay Bally, was diverted illegally to the crime families, the grand jury alleged.