Mob bosses could not "legally" attach their names to the casinos that they had interests in. So a skim system was used to pay them their profits. If a casino skimmed $400,000 per month, that's $4.8 million dollars in Unclaimed profits in a year, and from one casino! This method of skimming allowed the bosses to collect their payments unattached to the casinos and tax free!

The Teamster made loans for the bulding of the casinos for several reasons. Those who ran the pension fund had an obligation to "invest" the money from the funds to make a profit for thier members. Now if a casino was to be built, obviously money is needed for building. A bank may want 10% interest on the loan plus 2% in points up front for loan approval. More improtantly an application needed to be scrutinized with background checks, crossing of all the t's and dotting of the i's before a loan approval would be made. Time consuming and somewhat risky.

If the mobsters went to the Teamsters for a loan, that loan application was almost guarenteed to be approved quickly and with less scrutiny. The interest to be paid would be significantly less than what the bank would charge. A 1% point value of the loan would be paid to the pension fund managers. If extensions were needed on paying back those loans there was no problem in granting them.

So the casinos saved a significant amount of money, scrutinization and time in getting loans from the Teamsters.

In return the pension fund managers were making money for themselves in the form of being paid points for approving the loans, and at the same time they were doing there "jobs" in "investing" the pension fund monies to make profits for their members retirements.

Difference between the banks and the Teamsters Loan officers? Nothing. Except that a bank can LEGALLY charge a loan applicant points for granting a loan. The Teamsters did the same but only they were taking those payments in points under the table in cash or in the form of various gifts.

Here's an excerp from one of the stories that are included in the book "When The Mob Ran Las Vegas" :

This is such a wonderful American success story. In 1976 the president of the Stardust Hotel was 34-year-old Allan Glick. Seemingly out of nowhere, this nice clean-cut young man and head of the Argent Corporation secured a Teamsters' loan for about $146 million that enabled him to take over the Stardust Hotel and Casino. (The Argent name was an abbreviation of Allan R. Glick Enterprises.)The timing on this loan was very important. By 1976, many of the Las Vegas casino "cash cows" the Mob depended on were beginning to dry up. Between the federal government and the state of Nevada, it was becoming more and more difficult for a Mobster to make a decent living. The Chicago Outfit still had control over the Stardust, Fremont, and Hacienda, but it became necessary to increase the size of the skim to make up for other lost business.

Let's take a moment to discuss the meaning of the word skim. It isn't stealing in the usual sense. It isn't taking money that belongs to someone else. Skimming is hiding money from Uncle Sam. Every time a dollar would come into the casino, it had to be reported to the government. So at the end of the year, when the Stardust would do its 1040-EZ or whichever form they used, they would have to pay income tax on every penny the casino took in.

How much more profitable would it be if the US government and Nevada state revenue people just didn't know how much money the Stardust and the other hotels had actually made? ("Wow! What a good idea! That way, we could get to keep a lot more of the money, right boss?")

In the old days in Las Vegas this was easy to do. A casino owner could wander into the "soft count" room where the bills were counted, take a few handfuls of the big ones, put them in his pocket and then go have a cup of coffee and a Danish. Who was going to stop him? He owned the place. This was his money. He wasn't stealing. He just wanted to take a few thousand bucks as "walking around money." What Uncle Sam doesn't know ain't gonna' hurt him, right?

Then the hotel owner could find a nice corner on a hot-looking craps table, call Tony D., the pit boss there at craps pit 3, have Tony D. bring him a marker for "10 large," and get $10,000 in chips. He'd play a few minutes, lose a couple of thousand, scoop up the remaining 8 G's in chips, take them over to the cashier and cash out.

When his signed marker arrived in the accounting department, his girlfriend, Lola, would take the $10,000 marker and put it in her pocket. ("Honest, she's not my girlfriend, sweetheart, I hardly know the woman.") And that was that. No marker means no money owed the casino, right? It's his money anyway, right? Who is he stealing from – himself?

Believe it or not, this very simple method of taking a few million dollars out of the Las Vegas hotels worked – year after year after year..........



Don Cardi