http://johngrant.wordpress.com/2008/08/18/skimming-the-las-vegas-casinos-%e2%80%94-part-i/

Much has been written and there have been several documentaries about various organized-crime families taking cash — “skimming” — from Las Vegas casinos. The skim money was removed from the casino prior to it officially being entered into the books as revenue. Taxes weren’t paid on this unreported income, a fact on which the Internal Revenue Service frowned. The casinos involved in these illegal operations became the equivalent of piggy banks for the Midwest crime bosses.



Prior to delving into the skim while writing The Battle for Las Vegas, I considered it as being relatively dry and boring financial crimes. I didn’t realize the amount of violence and intimidation involved to launch and maintain the scams. And I had no idea of the immense investigative effort it took to bring the perpetrators before the bar of justice. However, it wasn’t long before I understood that if it weren’t for the mob’s hidden ownership of and control over the casinos, and the need to protect the status quo, there may never have been a Tony Spilotro and his gang in Las Vegas. So, although Tony wasn’t one of the inside men in the casinos, the skim operations were part and parcel of the Spilotro era.



My research focused on the skims run in the casinos owned by the Argent Corporation and the Tropicana. These facilities were the subject of two major investigations, called Strawman 1 and 2. Many of the same players were involved with skimming from both the Argent properties and the Trop, but the courts ruled that these were separate conspiracies. There were separate indictments, trials, and convictions. Some of the participants entered into plea deals and testified against their colleagues. Others gave testimony as unindicted co-conspirators. Several top mobsters from the Midwest went to prison.



A continuation of the Strawman investigations was called Strawman-Trans Sterling. This operation zeroed in on the Trans Sterling Corporation, another mob-controlled company that purchased Argent’s casino holdings, and resulted in more gangsters going to prison.



From a law enforcement standpoint, these investigations and subsequent convictions marked the end of organized crime’s influence over the Las Vegas casinos.



I believe you will find the story of the Vegas skim to be as interesting as I did. However, due to the volume of information it’s necessary that I break my presentation into three segments. I’ll begin by explaining how the skim was structured and why it was necessary for multiple crime families to work together to loot the casinos. I’ll also introduce the main criminal players and explaining the involvement of the Teamster Central States Pension Fund. In the subsequent articles I’ll address the specific method of skimming the Trop and the FBI’s investigative efforts, both nationally and by the Las Vegas field office.



The Families



Four Midwest organized-crime families were involved in the hidden ownership and skimming of the Argent-controlled casinos and the Tropicana: Chicago, Kansas City, Milwaukee, and Cleveland. They each had ownership and control of, and/or participated in the illegal removal of cash from, the involved gaming establishments. Although all four shared in the money taken from the Tropicana, the courts ruled that it was a Kansas City operation and that the other three families weren’t involved in the covert ownership of that casino.



Allen Glick’s Argent Corporation was a different story than the Tropicana. Glick had a clean criminal record and could withstand the background check conducted by Nevada gaming regulators. So being the owner of record of multiple casinos wouldn’t be a problem. But he needed a large amount of money in order to purchase the Stardust, Fremont, Hacienda, and Marina. And at a time when not many reputable financial institutions were willing to invest in Vegas, the best source of that funding was the Teamster Central States Pension Fund (CSPF). Three of the four families — Milwaukee, Kansas City, and Cleveland — held influence over one or more of the CSPF trustees or union officials. Since any one trustee could veto the loans, cooperation among the families was necessary to assure the trustees and officials were all on board and that Glick got the money he needed. In return for their assistance in obtaining the funding, the families had effective control of Argent, with Glick serving as their front man. Shortly after the skim began a dispute developed between Kansa City and Milwaukee. Chicago intervened and resolved the matter, then joined the conspiracy, taking a 25% cut of the action.



For the mobsters, it began as a marriage made in heaven. For gaming authorities and law enforcement, it was a nightmare. The lawmen came to realize that like a malignant tumor, the influence of organized crime in the Las Vegas casinos had to be cut out and destroyed. However, once the malignancy had taken root, removing it was easier said than done.





The Main Mob Players



The Chicago Outfit was the dominant family operating in Las Vegas. The two most powerful mobsters in Chicago at that time were Joe Aiuppa and Tony Accardo, the same men who had sent Tony Spilotro to Vegas. In addition, other members involved in the family’s Las Vegas business dealings were underboss John Cerone, West Side boss Joseph “Joey the Clown” Lombardo, Angelo LaPietra, and Allen Dorfman.



Kansas City, under the leadership of Nick Civella and his brother Carl, contributed underboss Carl “Tuffy” DeLuna, Anthony Chiavola, Sr., and Joe Agosto to the conspiracies. Although Chiavola resided in Chicago, he was a nephew of the Civella brothers and was more closely associated with their group.



Nick Civella was born Guiseppe Civello in Kansas City in 1927. At the age of 10 he was brought before juvenile authorities for “incorrigibility.” By the time he was 20, Nick had dropped out of school and had a lengthy arrest record for crimes such as car theft, gambling, and robbery. In 1957 he attended the infamous “gangland convention” in Apalachin, New York.



Due to his criminal history, Nick Civella was among the first people to be placed in Nevada’s “black book,” barring him from entering Nevada’s casinos. Undeterred by his exclusion, Civella frequently visited Las Vegas wearing wigs and fake beards to fool state gaming officials. During these forays, he usually stayed at the Tropicana or Dunes.



In Milwaukee, boss Frank “Frankie Bal” Balistrieri was the first mobster to be contacted by Allen Glick regarding the Teamster loans for Argent. Balistrieri’s mob had control of the loan sharking, bookmaking, and vending-machine businesses in their city. Balistrieri himself had been convicted of income-tax evasion in 1967 and served two years in federal prison. During Frank’s absence, Peter Balistrieri, his brother and underboss, ran the show.



Milton Rockman represented Cleveland. He served as a bagman for the delivery of the purloined money, and as a liaison person for Kansas City’s Carl DeLuna.



These talented criminals and their minions put together a plan that took millions of dollars from Las Vegas and put the money into their own pockets.





Nick and Roy



In addition to his clout in Kansas City and with other mobsters around the country, Nick Civella had something else working for him: He was able to influence the decisions of the Teamster Central States Pension Fund through his control of Roy Williams, a Teamster official and its eventual president.



Williams, a decorated World War II combat veteran, returned to Kansas City after the war and resumed his job as a truck driver. He also became heavily involved in the Teamsters and rose through the leadership ranks with the backing of another rising star, Jimmy Hoffa.



Hoffa picked Williams to take over a troubled local in Wichita, and later Kansas City’s Local 41. It was then that he met Nick Civella and they became close personal friends. In 1952, Williams attended a secret meeting of Midwest mob leaders in Chicago, where Williams agreed to run the Kansas City Teamsters and in turn cooperate with his organized-crime friends. Williams discussed all major union problems with Civella before making a decision. If the two men couldn’t agree on a subject, Hoffa ordered Williams to “do what Nick wants.”



Hoffa was pleased with the way Williams worked with Civella and followed instructions. He rewarded his underling by appointing him as a trustee of the Central States Pension Fund. It was a powerful position, and Nick Civella certainly approved of his lackey occupying it.



When Frank Balistrieri needed help in assuring Argent got the Teamster money it needed, he knew Nick Civella would be able to deliver.





Argent



Allen R. Glick was born in Pittsburgh, Pennsylvania in 1942. He served in the military as a helicopter pilot during the war in Vietnam and later turned up in the San Diego area as a land developer. In early 1974, Glick contacted Frank Balistrieri in Milwaukee, seeking assistance in obtaining loans from the Central States Pension Fund to finance Argent’s purchase of several Las Vegas casinos. Balistrieri brought Kansas City and Cleveland into the deal, with Chicago joining a short time later, in order to assure that the CSPF trustees whom they controlled would vote the right way. The loan was approved. Between the initial loan of $62 million and subsequent loans, Argent received approximately $146 million in Teamster money.



The financing came with strings attached, of course. After Glick purchased the casinos, he was required to install Frank “Lefty” Rosenthal in a management position at Argent. From that post Rosenthal ran casino operations and facilitated the skim. The Stardust and Fremont were the casinos from which the thefts took place.



Carl DeLuna (Kansas City), an efficient overseer, was assigned to monitor the Vegas action and make sure each family received its fair share of the proceeds. In that role, he was one of the most trusted men in American organized crime. He also maintained regular contact with the other groups through Angelo LaPietra (Chicago) and Milton Rockman (Cleveland). To assure everything was done on the up and up, at least as far as the gangsters were concerned, DeLuna kept records — detailed written records.



The skimmed cash was removed from casino count rooms by couriers with full access to those sensitive areas. These men weren’t challenged, or even acknowledged, by other employees as they entered, made their withdrawals, and departed. The currency they took was never logged in and there was no official record of it. For all practical purposes, it was as though the money never existed. The loot was then delivered to LaPietra in Chicago. He kept a portion for the Outfit and passed the balance along to Anthony Chiavola, Sr. and Milton Rockman for delivery to their respective families.



The scheme was relatively simple and went smoothly, at least at the start. But after a while it became apparent that Allen Glick didn’t completely realize that he was only a powerless figurehead. He actually believed he could make major decisions regarding casino operations. He tried, and when he and Rosenthal clashed, Glick attempted to fire him. Lefty responded with a threat, prompting the naïve tycoon to complain to Frank Balistrieri. Bad move.



In March 1975, Glick was summoned to Kansas City to meet with Nick Civella. There, the boss explained the facts of life to him. The two men met in a hotel room where Civella announced that Glick owed the Kansas City family $1.2 million for its assistance in getting the CSPF loan approved. If Glick didn’t know it before, he quickly became aware that the mobsters considered the pension fund to be their private bank.



Glick later recalled what Civella told him. “Cling to every word I say … if it would be my choice you wouldn’t leave this room alive. You owe us $1.2 million. I want that paid. In addition, we own part of your corporation and you are not to interfere with it. We will let Mr. Rosenthal continue with the casinos and you are not to interfere.”



The following year, Rosenthal started causing problems. His battles with Nevada gaming regulators were not only problematic, they were high-profile. The bosses had a good thing going in Vegas and wanted to stay below the radar screen. The unwanted publicity made some of the higher-ups nervous.



But as the months passed, Lefty’s difficulties and the related media coverage only intensified. The bosses held conversations to discuss whether Rosenthal should be replaced and, if so, should the removal be on a permanent basis. Although some favored that resolution, Lefty was allowed to stay on and continue his struggle with the licensing officials.



By March 1978, Allen Glick was getting on everyone’s nerves. He was particularly unpopular with Nick Civella. The Kansas City chief decided that Glick needed to go, but was willing to let him get out while still breathing. A buyout proposal in the amount of $10 million was delivered to Glick through Frank Rosenthal. Glick turned down the offer, another ill-advised decision.



On April 25, Carl DeLuna flew to Las Vegas to give Glick a message from Nick Civella. The Civella family frequently used its attorney’s office in Kansas City — without the lawyer himself present — to hold sensitive meetings. They knew there was little chance that the locale would be bugged and they could talk freely. Following that practice, DeLuna, Glick, and Rosenthal got together in Oscar Goodman’s office, sans Goodman. Allen Glick later testified about that meeting.



“I entered Mr. Goodman’s office and behind Mr. Goodman’s desk with his feet up was Mr. DeLuna. Mr. DeLuna, in a gruff voice, using graphic terms, told me to sit down. With that he pulled out a piece of paper from his pocket … and he looked down at the paper for a few seconds. Then he informed me he was sent to deliver one final message from his partners. And then he began reading the paper. He said he and his partners were finally sick of having to deal with me and having me around and that I could no longer be tolerated. He informed me it was their desire to have me sell Argent Corporation immediately and I was to announce that sale as soon as I left Mr. Goodman’s office that day. He said he realized that the threats I received perhaps may not have been taken by me as serious as they were given to me. And he said that since perhaps I find my life expendable, he was certain I wouldn’t find my children’s lives expendable. With that he looked down on his paper and gave me the names and ages of each of my sons.”



Less than two months after that meeting, Glick publicly announced his intention to sell Argent. In December 1979, the corporation was sold to the Trans Sterling Corporation, another company with mob ties. Although Argent was no longer the licensee, it did remain an entity, thanks to the mortgage it held on the casinos. Kansas City continued to share in the skimmed proceeds without interference from the new owners. This arrangement continued until around 1983, when indictments were issued against the Argent conspirators. Allen Glick was out of the gambling business, but he and his sons were still alive.

Around the same time in 1978 that Allen Glick was ordered by the Kansas City mob to sell his Argent-owned casinos, the feds launched a major investigation into organized-crime’s influence in Las Vegas. A large part of that effort consisted of court authorized electronic surveillance of telephones and locations in Kansas City, Las Vegas, Chicago, and Milwaukee. The residences of Carl DeLuna, Anthony Civella, and Anthony Chiavola, Sr., were being monitored. The business offices of Allen Dorfman, Joe Lombardo, Milton Rockman, and Angelo LaPietra, were being listened in on. Frank Balistrieri’s office and a restaurant he owned were also bugged. The investigators learned a lot and conducted several court-authorized raids based on that information.



FBI agent Gary Magnesen was working in Milwaukee then and recalled the information that was obtained on Frank Balistrieri.



“We’d been running the taps on Frank [Balistrieri] for close to a year. In one of the calls Frank made from his office he mentioned that it was almost time for his ‘transfusion.’ We didn’t know what that meant at the time, but later on, when we compared notes with our Kansas City office, it was determined that ‘transfusion’ referred to the money coming in from the Las Vegas casino skim.



“In March 1978, we had enough probable cause to get a search warrant and went to Balistrieri’s house to execute it. We had to break the door down with a sledgehammer to get in. Once we were inside, I told Frank that there wouldn’t be any more ‘transfusions.’ He looked at me and realized that we knew about the skim. I could see the confidence drain out of him. He knew it was over.”





The search that was perhaps most devastating to the criminals occurred on February 14, 1979, Valentine’s Day. Federal investigators entered the home of Carl DeLuna and seized addresses, phone books, papers, and other documents. Among them were DeLuna’s detailed records of the skim. They included the dates and nature of meetings and conversations among the conspirators, telephone numbers, and the disbursement of funds from the skimming operations. The evidence gathered represented a bonanza for law enforcement — and doom for the mobsters.



The records available to investigators placed the estimate of the money taken from the Stardust and Fremont casinos at well over $2 million. Former Cleveland underboss Angelo Lonardo testified before the Senate Committee on Government Affairs on April 4, 1988. At that time he was serving a prison sentence of life without parole, plus 103 years, for his role in operating the family’s drug ring. He began his statement by highlighting his long criminal history, including a couple of murders he had committed. He later explained how the Las Vegas casino skim operated after his family became involved.



“The skim of the Las Vegas casinos started in the early 1970s. Starting in 1974 I began receiving $1,000 to $1,500 a month from the family through Maishe [Milton] Rockman. I did not know where the money was coming from, but I suspected that it was from the Las Vegas casinos. I learned this from various conversations I had with Rockman.



“Lefty Rosenthal ran the skim operation in Las Vegas. Rockman would travel to Chicago or Kansas City to get Cleveland’s share. Bill Presser [a Teamster power broker and father if future Teamster president Jackie Presser] and Roy Williams received about $1,500 a month for their role in the skim. The Cleveland family received a total of about $40,000 a month.”



By 1983, the government’s case against the gangsters was ready to move from the investigative to the prosecutorial stage. On September 30, a federal grand jury in Kansas City returned an eight-count indictment against 15 defendants in the Argent case. Five of them eventually stood trial, starting in late 1985: Chicago boss Joe Aiuppa, underboss John Cerone, West Side honcho Joe Lombardo, Milton Rockman, and Angelo LaPietra. Four of the accused, Carl Civella, Peter Tamburello, Anthony Chiavola, Sr., and Anthony Chiavola, Jr., entered guilty pleas prior to trial. Carl DeLuna and Frank Balistrieri pled guilty during the trial. Two others, John and Joseph Balistrieri, were acquitted. One, Carl Thomas, had his indictment dismissed during the trial and became a witness against the other defendants. And one, Tony Spilotro, had his case severed from the others prior to trial.



Other key players in the scam also testified during the trial. Allen Glick, Angelo Lonardo, and Roy Williams provided crucial evidence that resulted in guilty verdicts against Aiuppa, Cerone, Lombardo, LaPietra, and Rockman in January 1986.



Aiuppa and Cerone each received sentences totaling 28-1/2 years. Lombardo and LaPietra drew 16 years in prison. Rockman got 24 years behind bars. In addition, each man was fined $80,000.





The Tropicana



This case also involves the Teamster pension fund. But unlike Argent, it was a loan not granted that paved the way for Kansas City to take control of the casino and launch another skimming operation. It began in 1975 when Joe Agosto, an affiliate of Nick Civella’s Kansas City family, made a move to gain influence at the Tropicana.



Agosto was born Vincenzo Pianetti in 1927. Information on his early years is vague. There are even conflicting reports as to exactly where he was born, whether in Italy or Cleveland. Whichever the case, Agosto ended up in Seattle and eventually Las Vegas. He got his foot in the door at the Trop by assuming the title of manager of the Follies Bergėre show. The hotel didn’t employ him, however; he was an employee of the production company.



That April, the U.S. Immigration Service arrested Agosto as an illegal alien. He quickly obtained the services of Oscar Goodman and beat the immigration charge. Clear of that, he began conspiring with Nick Civella on how he could best infiltrate the financially troubled casino and protect himself from outside interference. Agosto, with Civella’s backing and support, proceeded with his plans to gain influence over the Doumani brothers, owners of the Tropicana. In conjunction with that goal, a loan application by the Tropicana pending before the Teamster Central States Pension Fund was denied, easily delivered by Civella’s friend Roy Williams. With their financial lifeline off the table, the Doumanis were susceptible to Agosto’s overtures, and he soon had a voice in the Trop’s management and operations.



Agosto maintained regular contact with Carl DeLuna in order to provide reports on his progress and receive guidance. Kansas City, meanwhile, had a man they felt was able to set up and operate the skim. Carl Thomas was already licensed through his operation of the Bingo Palace and Slots-A-Fun casino, and was trusted by the Civella family. Following instructions, Agosto brought Thomas on board.



But late that year before the skim got off the ground, a snag developed that stalled the gangster’s plans for over two years. The cash-strapped hotel came under the control of a new majority owner when chemical heiress Mitzi Stauffer Briggs purchased 51% of the Trop’s stock. And right off the bat, Mitzi didn’t trust Agosto and curtailed his role in running the casino. That prompted an all-out effort by Agosto to gain her confidence. By 1977, he had succeeded and was effectively running the hotel and casino. Carl Thomas did his duty and designed the skim. At his suggestion, Agosto hired Donald Shepard as casino manager and Billy Caldwell as assistant manager.



In March 1978, Agosto and Thomas spoke with Nick Civella in Los Angeles. They announced that with their plans and personnel in place, they were ready to go. Civella gave his approval. The first $1,500 dollars was skimmed in April by Shepard and transported to Kansas City by Carl DeLuna. In May, Shepard hired Jay Gould as cashier to steal money directly from the cashier’s cage and falsify fill slips to account for the missing money. From June through October, Shepard, Caldwell, and Gould stole $40,000 per month and gave it to Agosto. The money was then passed on to a courier named Carl Caruso for transport to Kansas City. Caruso turned the loot over to Civella’s man, Charles Moretina.



Caruso made at least 18 trips between Las Vegas and Kansas City and was paid $1,000 after each delivery. Anthony Chiavola, Sr., Civella’s nephew and a Chicago police officer, assisted in the operation by getting Chicago’s share of the skim to Joe Aiuppa and underboss John Cerone.



The operation seemed to be perking right along, but in late September another potential problem arose. Agosto and the Civellas became suspicious that Shepard or his subordinates might be doing some unauthorized skimming. At Agosto’s suggestion, Nick Civella ordered the skimming suspended in November and December so that Carl Thomas could find out if someone was skimming the skim. Unfortunately for Agosto, Civella authorized a temporary halt in the stealing, but not in the payments to Kansas City. Since the problems had arisen on his watch, Agosto had to send the family $50,000 and $60,000 of his own money during the two months of downtime. But it wasn’t a total loss for Joe. He was later reimbursed $30,000, which Shepard pilfered from the Tropicana.



On November 26, Agosto and Thomas flew to Kansas City to meet with the Civellas and DeLuna. They explained that Thomas’ survey had been inconclusive, but they did have some ideas on improving the efficiency of the operation. Civella agreed that the skimming would resume in January.



The conspirators were unaware at the time that their homes and businesses were the subject of electronic and visual surveillance by the government. On February 14, 1979 — the same day Carl DeLuna’s home was raided — the FBI nabbed Caruso with $80,000 in skim money. The skimming of the Tropicana was over. Although the actual skim only occurred over a period of 11 months, during two of which the operation was suspended, the overall conspiracy to steal from the casino covered four years, 1975 to 1979.



Nick Civella had an even more serious problem than the Tropicana investigation. The Kansas City boss had been convicted in 1975 on gambling charges unrelated to Las Vegas. After exhausting his appeals, he went to prison in 1977. He was given an early release 20 months later due to health problems: He had cancer. Shortly after getting out, he was indicted again for attempting to bribe a prison official in an effort to get favorable treatment for his nephew, who was incarcerated. Convicted in July 1980, he was sentenced to a four-year stretch. So Nick was already behind bars in November 1981 when he and ten others were indicted in the Tropicana case. His lawyer in that matter — Oscar Goodman — successfully got the charges against Nick severed from the other defendants on the basis of his client’s poor health. On March 1, 1983, with his physical condition rapidly deteriorating, Civella was released to his family so he could spend his final days at home. He died on March 12, having never faced justice in either the Tropicana or Argent cases.



The 10 remaining defendants stood trial in 1983. Three of them, Donald Shepard, Billy Caldwell, and Joe Agosto, entered guilty pleas prior to trial. As a part of his plea arrangement, Agosto became the government’s key witness. Carl Caruso pled guilty during the trial. And Peter Tamburello was acquitted. Carl Civella, Carl DeLuna (represented by Oscar Goodman), Charles Moretina, Anthony Chiavola, Sr., and Carl Thomas were all convicted.



In a memorandum to the judge regarding the case, prosecutors wrote, “These defendants have dealt a severe blow to the state and the industry and have made a mockery of the Nevada regulatory procedures.” At sentencing the judge dealt a severe blow to the defendants.



DeLuna was sentenced to 30 years, Civella got 35 years, Moretina was ordered to serve 20 years of incarceration followed by five years of probation, and Chiavola drew 15 years. Carl Thomas was initially sentenced to 15 years. That term was later reduced to two years when he agreed to be a cooperative government witness at the Argent trial.



Joe Agosto died shortly afterward of natural causes. As far as is known, neither the Doumani brothers nor Mitzi Briggs were aware of the skimming operation. Mitzi Briggs later went bankrupt.



The ensuing appeals filed by those convicted in both the Tropicana and Argent cases were unsuccessful.



*Note: Carl DeLuna passed away from natural causes on July 21, 2008.




While FBI agents and prosecutors from several offices participated in the investigations that brought down the mobsters and ended organized-crime’s hidden control over the Las Vegas casinos, personnel assigned to Sin City itself played a major role, albeit with one rather embarrassing moment.



The agents were confident that casino money was leaving Vegas illegally and ending up in Chicago, but they needed to prove it. The feds placed the Stardust and certain employees under physical surveillance. After months of investigation, they identified a pattern for one method of the skim involving Allen Glick’s Stardust and Fremont casinos. Their big break came in May 1981.



“One of the people we were watching was a guy named Bobby Stella,” former agent Emmett Michaels remembers. “One Tuesday afternoon my partner and I saw Stella leave the casino carrying a brown paper bag. We followed him to the parking lot of a hardware store on Maryland Parkway. This particular business had several locations in Las Vegas. A man identified as Phil Ponto, who was also employed by the Stardust, met Stella there. We found out later that Ponto was a ‘made man,’ affiliated with the Chicago Outfit. The two talked for a few minutes, then Stella passed the bag to Ponto and drove away. We stayed with Ponto and the bag.”



Ponto left the hardware store and drove to his home, located off Paradise Road near the Las Vegas Hilton. He went into his house, but emerged a few minutes later to retrieve the bag from his car. The surveillance continued, but there was no activity of importance the rest of the week. Things changed on Sunday, though.



“Ponto left his house around 7:30 that morning and placed the brown bag in the trunk of his car. For some reason he then moved the car across the street, and then went back inside,” Michaels continued. “He came back out a few minutes later and drove to church. After mass he drove around town for two hours with no apparent destination or purpose. He drove in and out of shopping malls and parking lots, but made no stops. Eventually, he pulled into another one of the hardware store locations; this one was on Tropicana. There he made contact with another man we weren’t familiar with. The new guy was wearing a suit and driving a rental car. They talked for a few minutes, and then Ponto handed the bag over to the new guy. We dropped Ponto and followed the stranger as he headed toward California on Interstate 15.”



With the agents watching, the guy in the rental car pulled into the second rest area outside of Las Vegas. There, he emptied bundles of money from the paper bag and placed them in special pockets sewn into the inside of his suit coat. When all the money had been transferred, the courier continued on to the Los Angeles airport where he caught a flight to Chicago. Agents from southern Nevada contacted the Chicago FBI office, asking agents there to pick up the surveillance of the subject when his flight arrived. After reaching Chicago, the man paid a visit to Outfit boss Joe Aiuppa, presumably to deliver the money. The courier was subsequently identified as Joseph Talerico, a Teamster official.



The agents had validated their theory of the skim, but they were a long way from having proof that would stand up in a court of law. Additional investigation indicated that money was also being skimmed from the Glick-controlled Fremont. The G-men believed the cash was taken from there on a monthly basis and delivered to Chicago. They developed a plan that called for the lawmen to get marked money into the skim pipeline. That meant agents would have to visit the Fremont the evening before a suspected shipment and do some gambling at the tables. Emmett Michaels, Charlie Parsons, and Michael Glass were tasked with getting the marked money into the system. In order to get a sufficient number of $100 bills into the drop boxes, they had to lose.



“I always had trouble losing when I was playing with government money,” Emmett Michaels recalled with a grin. “I played blackjack and often had some incredible runs of good luck. Sometimes I’d be so desperate to lose so that I’d have to buy more chips, that I’d play very recklessly. I’d throw even the most basic strategy out the window and call for a hit on a hand of nineteen. The dealer and the other players would look at me like I was crazy. But when I was on one of those streaks, I’d draw a damn deuce.”



Sometimes that kind of luck drew attention that wasn’t necessarily wanted. “There were times when I’d have stacks of chips piled up in front of me and the pit boss would come over and invite me to get some of the perks reserved for high rollers. It was usually a different story when I was spending a night out somewhere else and playing with my own money.”



In spite of his undesired prowess at the table, Michaels and his colleagues were able to drop enough money to accomplish what they wanted to do. Now that they knew their plan would work, the next step was to choose a time when the courier would be picked up and nabbed with the proof of the skim in his possession.





The Cookie Caper



In order to conduct electronic surveillance and searches and to make arrests, a judge had to approve and sign warrants. Some of the lawmen involved suspected that a certain judge might not be keeping the FBI’s operations a secret. They found it hard to believe, for example, that after bugging a table in a Stardust restaurant where the casino manager and assistant manager ate their meals every day, the only thing the men seemed to talk about was golf and women. But the government was required to follow the law and obtain the appropriate warrants and authorizations regardless of their suspicions.



“Harry,” a bail bondsman who came to Las Vegas in 1958, thinks he knows another method by which the bad guys found out about whose phones were being tapped. “I had a lot of juice with the phone company then. I know for a fact that a phone company employee regularly provided a list of numbers that were going to be tapped. I know because I received a copy of those lists myself. There were a lot of people who were very glad to get that kind of information.”



In addition to the phone company employee, Harry alleges there was an even better source for leaks. “There was a concern at the phone company that a phone might be tapped without having full legal authorization. So the company hired a lawyer to review all the paperwork for each tap. It turns out that the lawyer they retained worked out of Oscar Goodman’s office. Did you ever hear of anything so outrageous?”



Whether leaks resulted as Harry contends, were the work of an unscrupulous judge, or a combination of both, the bottom line is that the targets frequently knew ahead of time what the lawmen were planning.



Stan Hunterton, the former Strike Force attorney, was involved in preparing and submitting warrant applications to the court and helping plan some of the law enforcement activities, including when arrest warrants would be served.



“Joseph Talerico was always the courier for the skim money from the Argent casinos,” Hunterton recalled. “The routine was for him to come to Vegas and get the money. His contact here was Phil Ponto. This Ponto was what we called a sleeper. That’s someone with no criminal record, but Ponto was actually a ‘made man’ out of Chicago. One of the agents thought he recognized Ponto’s name from a book written by mobster-turned-informant Jimmy Fratiano. It turned out the agent was right, only in the book the name had been misspelled as Ponti.



“On January 3, 1982, not long after the indictments in the Tropicana case, the FBI was ready to arrest Talerico and Ponto when they exchanged the skim money. The day started off with a variation on the part of Ponto; he was carrying a box instead of a paper bag. I guess everybody assumed they’d decided to put the money in a box that day and didn’t think too much of it. But when the arrests were made, there was no money. The box contained cookies and wine.



“It was obvious that the bad guys had become aware of what was coming down. They had set us up, no doubt about it. I can smile about it all these years later, but I can assure you there was nothing funny about it at the time. An awful lot of time and effort had been spent getting to that point, and then it all went down the toilet. Needless to say, we were the butt of a lot of jokes in what became known as the cookie caper.”



Hunterton hauled Talerico and Ponto before a grand jury in 1983. Their first effort to avoid talking was to exercise their Fifth Amendment rights against self-incrimination. Hunterton countered that by granting both men immunity. Even with no legal reason to remain silent, the pair still refused to testify. They were each sent to jail for contempt, but their lips remained sealed. They never did answer the government’s questions.





Strawman case agent Lynn Ferrin remembers the skimming investigations very well. “They were exciting times,” he said.



“When we were watching Ponto and Talerico, we made high-quality films of their meetings. On one occasion we brought in three lip readers to try to figure out what their conversations had been. One of the experts came very close to what we believed had been said; we would have loved to be able to use his interpretation in an affidavit. But the other two had differing opinions. With that lack of agreement, we ended up disregarding all of their versions. I even rented an apartment next to Ponto’s residence for a while during the surveillance. I spoke with him occasionally. He was very quiet … a real sleeper.”



Regarding the cookie caper, “It was a real bad day for us and me personally. If I’d been living in feudal Japan I’d have been required to fall on my sword. We’d been doing these Sunday surveillances on those guys for several months and everything had always gone like clockwork. But on that day the crooks were so confident and comfortable; we’d never seen anything like that before. We didn’t know for sure who, how, or why, but someone had obviously ratted us out to the mob. We were highly confident that the leak wasn’t from any of our people. Many of us believed that the federal judge who signed the order authorizing the electronic surveillance at the Stardust was the culprit. That was only speculation, but after that it seemed like the bad guys were aware of what we were doing. We had to call Washington and tell them what happened and that we couldn’t say for certain why it had gone wrong.



“Prior to that day I had been in favor of simply stopping Ponto one of those mornings and grabbing the bag from him. He certainly couldn’t have complained to the police and it would have given us the probable cause we were looking for. But headquarters and DOJ [Department of Justice] were afraid something would go wrong and never approved the snatch. If they had, it would have caused a lot of ripples in the various crime families. They may have even taken action against some of their own if they suspected them of being involved in stealing the skim.”



Another incident that Ferrin described as “sensitive” involved aerial surveillance. “Our plane developed some problems and was forced to land on the golf course at the Las Vegas Country Club. It turned out to not be a very discreet surveillance.” This scene was depicted in the movie Casino.



But other covert operations went very well. “Our guys did a tremendous job. Agents posing as maintenance men bugged a table in a restaurant at the Stardust in front of a room full of guests and casino employees. It was a good placement.”



After the cookie caper, the FBI changed tactics from covert to overt and went after the Stardust’s new owners, the Trans Sterling Corporation, openly. “We had enough information to start going over their records,” Ferrin said. “The Carl Thomas method of the skim primarily involved stealing from the count room. We found that another method of theft was also going on at the Stardust. This one involved the cashier’s cage.



“We looked at thousands of fill slips from the Stardust for the years that we knew the skim was going on. The fill slips were used when chips were removed from the cage to replenish the supplies at the gaming tables when they ran low on chips. The slips were required to have the signatures of four different casino employees. The money involved was about $20,000 per slip, and was presumed to reflect [casino] losses at the tables. We eventually discovered a pattern of forged signatures on the fill slips. That discovery led to the next step. We took handwriting samples from over two hundred Stardust employees and sent them to the FBI lab in Washington. Analysis revealed that the casino manager, Lou Salerno, was responsible for most of the forgeries.



“We got some good convictions in this phase. More important, though, through our investigation we were able to help the Nevada Gaming Control Board seize the Stardust. They revoked the licenses of the Trans Sterling people and fined them $1 million. The Stardust was eventually purchased by the Boyd Group, ending over a decade of mob control.”



That wasn’t the entire story for Lynn Ferrin, though. “The cage manager was a guy named Larry Carpenter. During the course of the investigation, he came to hate my guts. We lived in the same neighborhood and some mornings I’d come out to go to work and find that somebody had spit all over my car. I’d have to clean the car off before heading for the office. I suspected that Carpenter was responsible.



“Carpenter was gay and had full-blown AIDS. I thought maybe he was trying to infect me by having me come in contact with his body fluid and absorb it through my skin. Anyway, I stayed up all night to see if I could find out who was sliming my car. Around 5 a.m. I caught Carpenter coming around the corner on his bike. I could tell by the look on his face that he was the one. It never happened again after that morning. Carpenter later committed suicide, hanging himself when he went to jail.”



But there was more. “Lou DiMartini was a floorman at the Stardust. He claimed that during the investigation I caused him to suffer irreparable harm by asking his employer questions about him. He filed a $1 million civil suit against the government and me individually. It took seven years and the case went all the way to the U.S. Supreme Court where it was decided in the government’s and my favor.”



How does Ferrin sum up the results of the Strawman investigations?



“I think that our investigation basically broke the back of the mob’s efforts to control the casinos in Las Vegas.”



That last statement seems to say it all.

Rather than start a new topic, I thought I'd add some photos I found to this existing one. They are of convictions relating to the skimming conspiracy in 1986.

Joey Aiuppa

Anthony Spilotro

Carl Civello & Sal Manza (1983)

Frank Balistrieri and Sons (1983)

Carl De Luna and Carl Thomas

I really have no incit on this but wasn't the skim from the slot machine take only or mostly? They did not need an enforcer to do that action.

I think its funny that Kansas City and Milwaukee had a dispute over the skim so they went to Aiuppa in Chicago to resolve it. Aiuppa's solution? Give Chicago 25 percent. What a diplomat!

Cleveland was knee deep in the skim as well through Bill Presser and Jackie Presser, two heavyweights with the Teamsters. Milton "Maishe" Rockman, known as the Meyer Lansky of Cleveland and brother in law to John Scalish was Cleveland's point man to Allan Dorfman and the Pension Fund. Licavoli, Rockman, Lonardo & Liberatore got the bulk of the envelopes.

James Licavoli



Angelo Lonardo



Maishe Rockman



Anthony Liberatore

https://www.youtube.com/watch?v=x9rhDsKXwyU

very good doc,