Stardust Casino Skim

Angelo Lonardo, described by the FBI as the highest-ranking Mafia member to become a government witness, testified Friday that crime families from Chicago, Milwaukee, Cleveland and Kansas City all shared in money skimmed from the Stardust Casino in Las Vegas.

Lonardo`s testimony in U.S. District Court was the first insider`s disclosure of organized crime`s deep-rooted involvement in casino skimming in Nevada.

Lonardo testified that he received as much as $10,000 a month as his share of the skim proceeds while he was boss of the Cleveland mob before he was sentenced in 1983 to 103 years in prison on a narcotics conviction.

  • Eight reputed organized crime figures on trial in federal court are accused of maintaining illegal hidden control of Argent Corp. And skimming $2 million from its casinos. Argent owned the Stardust and Fremont casinos. McBride said he became involved with Thomas in 1969 while working at Circus Circus Casino.
  • 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.
  • In 1977, the Stardust Casino in Las Vegas was caught skimming fifteen million dollars as a result of short counts. This gives you an idea of how lucrative casinos were for the mafia in those days. Those Skimming Days Are Over.

The eight are charged with conspiring to skim $2 million from the Stardust Hotel Casino between 1974 and October, 1983. Lonardo`s testimony is considered crucial to the government`s contention that. 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.

Lonardo, 74, appearing nervous during his testimony, only recently agreed to testify against eight reputed crime-syndicate bosses and their associates in the hope of reducing his prison sentence. He has been in protective custody since August.

The eight are charged with conspiring to skim $2 million from the Stardust Hotel Casino between 1974 and October, 1983.

Lonardo`s testimony is considered crucial to the government`s contention that a conspiracy was hatched by the underworld bosses so they could benefit on a regular basis from the casino skimming.

Among the eight defendants is Milton Rockman, 72, Lonardo`s brother-in-law by his marriage to the daughter of the late Cleveland crime chief John Scalish. Rockman glared at Lonardo as he testified that the two had been friends for more than 50 years.

Earlier, Lonardo described Rockman as the Cleveland mob`s man who handled labor matters and finances.

According to Lonardo, the skimming profits for each family averaged $40,000 a month. But sometimes the take was $65,000 a month for each, and on some occasions it reached $100,000, he said.

Lonardo said the late William Presser, a Cleveland Teamster boss and a trustee of the union`s pension fund, received $1,500 a month. Former Teamsters President Roy Williams testified earlier this month that he also got $1,500 a month for seven years.

The Teamsters officials` share came as a result of their votes approving a $62.7 million union loan to San Diego businessman Allen Glick so he could buy the Stardust Hotel in 1974, according to government lawyers.

Lonardo related how he rose through the ranks of the Cleveland mob, being initiated in the late 1940s, then becoming underboss in 1976 and later the boss.

It was Rockman, Lonardo said, who told him that mob bosses in Milwaukee and Kansas City had used their influence with Teamster Union Pension Fund trustees for the Glick loan.

Glick testified a week ago that he sought help from Frank Balestrieri, reputed Milwaukee crime boss and one of the defendants, in obtaining the loan. Glick claimed he was unaware of Balestrieri`s reputation as a crime boss.

When the skimming began in late 1974, only the crime families from Kansas City, Milwaukee and Cleveland shared in the benefits, according to testimony. But a dispute arose over proper distribution of the proceeds by the late Nick Civella, boss of the Kansas City mob.

Stardust Casino Sign

The Chicago crime family, allegedly headed by Joseph Aiuppa and John Cerone, both defendants here, were called to mediate. The result was that the Chicago mob was cut in for a share of the skim money.

Its the twentieth anniversary of Casino, the seminal mob movie that starred Joe Pesci and Robert DeNiro as high profile mob players who ruled the roost in Las Vegas at the height of the casino skim, which was making the midwest Mafia families rich. To celebrate the anniversary of the movie and get the scoop on the real story Gorilla Convict contacted retired FBI agent William Ouseley, who has penned a book on the case, Mobsters in our Midst, which chronicles the true story behind the Casino movie. William Ouseley was the head FBI agent on the case, titled Operation Strawman, that brought down the Mafia structure that was running the casino skim depicted in the movie.

Stardust Casino Skim

My Role When I was assigned to the organized crime squad of the KC Field Office, the O.C. program was still relatively young. I would spend the rest of my career, some 20 plus years, working against the Civella crime family. So by 1978, when the Strawman case broke, I was one of the most experienced, knowledgeable, agents on the squad, and was handling some important productive informants. As such, I was intimately involved in the preparation of the affidavits supporting requests for electronic surveillance, and thereafter in reviewing and analyzing the overhears, and various other investigative tasks. Then in about 1980 I was promoted to supervisor of the o.c. squad. By this time the case had been brought down and the arduous task of putting it all together for prosecution followed, which I oversaw. Of many highlights of my participation, was to intercept the skim courier on the day the case was brought down, and search warrants executed. With my team we stopped the subject at the airport as he arrived from Las Vegas, and seized $80,000 in skim funds destined to the Civella organization. Seizing this stolen money was a first.

Casino movie Having been involved in the FBI investigation code named Strawman, and knowing the case inside out, I did not think too much of the movie. Now for the general public, not aware of the real investigation on which the movie was based, it may have been an enjoyable film. Unlike the Godfather I don’t see Casino as having any great lasting impact. I didn’t think much of the movie for a number of reasons, the main being it never captured the essence of the conspiracy – the mob doing business. The movie goes would never have an inkling of the unholy alliance between Cosa Nostra families, corrupt Teamster officials, and their allies and facilitators in the Nevada gaming industry.


The Real Characters Frank “Lefty” Rosenthal, the mob connected casino executive, and mobster Tony Spilotro, portrayed by DeNiro and Pesci, operated in Las Vegas and their activities were investigated by the Las Vegas FBI. I had no opportunity to have personal contact with either. However, from my involvement in the Strawman case I am very familiar with their backgrounds. In that the movie left no lasting impression on me, I really don’t recall the performances of the two actors. Both DeNiro and Pesci are talented actors. From what I do recall, DeNiro, I believe played Rosenthal, and I didn’t feel he captured the essence of the man. Rosenthal was one of those larger than life characters – flashy, arrogant, self centered, loud and a bully.

Movie Portrayal of KC mob figures Again, I really don’t recall details of the movie and which KC mob guys were portrayed and by whom. I do recall at the time being amazed at the way they were portrayed, almost comical in nature, as far removed from reality as you could get. I remember thinking if Civella and his men saw this movie they would be mad as helpl.

The Skim Each Crime Family that exerted influence over trustees of the Teamster Pension Fund who voted to approve loans used to gain hidden ownership of Las Vegas properties, shared in the skim. In our “Strawman” investigation it turned out the Chicago “Family” controlled the flow of skim coming from the 4 Argent (Allen Glick owned) Casinos – Stardust, Freemont, Marina, Hacienda. Chicago had a foothold at the Stardust for years prior to Glick buying it so they continued to control that skim. They then shared the skim, portioning out a cut to the Kansas City, Milwaukee and Cleveland crime families. Since Nick Civella had gained control at the Tropicana Hotel/Casino without the benefit of a Teamster loan, he did not have to share any of that skim. However, since the Chicago family was the major force in the midwest, Civella opted, on his own, to share a portion of the Tropicana skim with Chicago as a show of respect, foster good will and further cement his strong relationship with Chicago.

Mobsters in Our Midst Due to the interested generated from my first book, Open City tracing the history of the Kansas City Crime Family from its start to the 1950s, I was encouraged to write a continuation of the story encompassing the Nick Civella era, which I was personally involved in as an FBI Agent. Mobster’s in Our Midst picks up the story of the KC mob at a time when Nick Civella became the Boss of the family. It also is a story of the FBI’s organized crime program, how it progressed and prospered as new a more effective laws and tools were forthcoming. Civella’s reign was the longest in the history of the local mob here, some 30 years, and ended up being one of the more violent periods in mob history in KC. The book covers various mob activities, political corruption, labor racketeering, murders and the attempt to control an entire entertainment district of the city. The story ends with the Strawman investigation that decimated the “family”, a blow they never recovered from.

Uncovering the Casino Skim The fact mobsters were skimming monies from Vegas casinos was known to the FBI as far back as the 1960s. It was no a well kept secret. Knowing it and proving were two far different things, a situation that continued on as the years passed.Fortunately it was in Kansas City that the break long hoped for came. In 1978 we were actively seeking evidence of a string of mob acts of violence, including murder, as a undermanned rival faction challenged the Civella crime family. An authorized hidden microphone was placed in a mob frequented restaurant, On a June night the Acting crime family boss and the street boss were intercepted discussing their interest in ongoing events at Vegas casinos. Follow up on this intercepted conversation led to a bank of pay phones utilized by the street boss to stay in touch with their man in Las Vegas. Wiretaps on these phones was extraordinarily productive and led to expanded electronic surveillance in Kansas City, Las Vegas, Milwaukee and Chicago. Kansas City was designated the lead FBI office in this case, code named Strawman.

The result was finally establishing evidence of what had been going on for years. That is, midwest mob families exerted illegal control of the Teamsters Pension Fund directing what loans were made to applicants seeking to purchase Vegas hotel/casinos. In return for getting the loan approved there normally was a kickback and management of the casino had to be turned over to people working for the mob so that the millions could be skimmed from the casino’s. The skim proceeds were then shared among 4 crime families and Teamsters figures.Besides controlling a vote on the Fund it turned out Nick Civella played a very prominent role in the conspiracy. He was well respected by the Chicago crime family who had the final say, and also was highly respected by organized crime elements operating in Vegas. The Strawman case revolved around the Stardust, Freemont, Hacienda and Marina hotel/casino’s owned by a San Diego businessman Allen Glick, and the Tropicana Hotel/Casino.

Stardust Casino Shirt

Working the Case As with any major undertaking, the Strawman case entailed intensive investigative activity, on a non stop basis. The mechanics involved in court authorized electronic surveillance are labor intensive, and at times we had multiple installations to contend with, each creating new leads demanding follow up investigation, deadlines to be met, and problems to be solved. In addition, with multiple FBI Offices involved coordination was a constant issue, and the volume of information being developed was substantial. Once the investigation was surfaced, the next phase was working toward indictments. This was a massive effort in light of the amount of evidence and background that had been developed. Hours of intercepted conversations had to be reviewed, along with evidence from search warrants executed, physical surveillances, etc. The results were two separate major trials held in Kansas City involving numerous defendants. Also, I am confident the level of results achieved would not have happened were it not for the attorneys assigned to the Kansas City Organized Crime Strike Force. The hours worked were long, and time off was short. However, knowing we were on to something monumental made it easier to endure.

Stardust

Stardust Casino Slots

What the electronic surveillance produced From the very first wiretap placed on pay phones at a local hotel utilized by the Kansas City street boss talking to their mole at the Tropicana, we were getting a blow by blow account of mob interests in Las Vegas. As our electronic coverage expanded from there to cover various local mob figures we continued to gain intelligence and evidence of the widespread conspiracy, the interaction among the crime families in other cities, the role played by the Teamsters, and the fact skimming was ongoing. In one extraordinary meeting at a local residence we intercepted a day long, conversation between Nick Civella, his brother Carl, and street boss Carl DeLuna, with two Las Vegas allies. The meeting covered, among other topics of interest to Civella, the mechanics of skimming, and how to best go about stealing money from the Tropicana Hotel. The evidence developed from these electronic intercepts, supported by other investigations, and seizures resulting from search warrants made possible the indictment and conviction of Cosa Nostra Bosses, their top aides, and other facilitators. It not only effectively decimated the Civella organization, but for all intents purposes ended mob rule in Las Vegas, and furthered the cleanup of the corrupt Teamster Pension Fund, What these overhears and two major trials exposed to the public generally had a profound impact on the Nevada Gaming industry.

Stardust Casino Skimming

Nick Civella Civella was a cunning, intelligent, capable Boss, astute enough to rule with an even hand, and sought to maintain a low profile. He was not reluctant to use violence when it was called for. He kept the “made” members of the family small not one to seek expansion, probably because it was not necessary for him to achieve his goals. He was extremely well respected by the members of his “outfit”. He understood the power of politics, and was active in cultivating and influencing office holders and politicians. Although not well known nationally, it turned out that he exerted great influence, especially with midwest cosa nostra families. His organization was tight knit, experienced, disciplined and controlled numerous associates and fellow travelers.Indicative of the mind set and loyalty of the members, none ever became turn coats, even those facing long prison sentences.

Stardust Casino Skim

Choice of FBI Career My father was a claims investigator for the Prudential Insurance Company in an era when large scale insurance frauds were common. So he worked on real criminal type investigations, had police Detectives he knew, etc. He would tell me stories of his cases, and took me to meet one of his Detective contacts. Also in that era there was a radio show, The FBI In Peace & War, I listened to regularly. Apparently a seed was planted that stayed with me as I grew up, and when the time came, my interest intact, I applied to the best investigative agency in the world, and became an FBI Agent.

You can order William Ouseley’s books on the Kansas City mob here.