The Battle for Las Vegas: The Law vs. The Mob Read online

  “As a long-time Las Vegas resident and retired Senior Agent of the Nevada Gaming Control Board, I can state that Dennis Griffin has put together the real story of the Spilotro years in Vegas.”

  —Jack Miller

  “Wow ... Dennis Griffin has really captured the Las Vegas I knew; it’s an amazing book. If you want to know about Las Vegas in the mob days, this book says it all. It’s a great read.”

  —Tru Hawkins

  Long-time Las Vegan and host of the “Tru Hawkins Show” on KDWN Radio

  “There has been a lot written and filmed about the days when the mob reigned in Las Vegas, mostly from the point of view of the mobsters and their attorneys. In The Battle for Las Vegas, Dennis Griffin has added balance by including the law-enforcement side of things. If you want to know the true story of what it was really like back then, you need to read this book.”

  —Lt. Gene Smith (retired)

  Las Vegas Metropolitan Police Department

  “Finally, a book about the mob in Las Vegas from the law-enforcement perspective. Dennis Griffin has thoroughly researched and accurately written the story about how law enforcement fought and won the battle to rid Las Vegas of the influence and control of organized crime. It was a pleasure to live through those times again in the pages of this book.”

  —Dennis Arnoldy (retired)

  FBI case agent for the Spilotro investigations in Las Vegas

  The Battle for

  Las Vegas

  Other Books by Dennis N. Griffin

  The Morgue

  Red Gold

  Blood Money

  Killer In Pair-A-Dice

  One-Armed Bandit

  Pension

  Policing Las Vegas

  Cullotta

  The Battle for

  Las Vegas

  The Law vs. The Mob

  Dennis N. Griffin

  Huntington Press

  Las Vegas, Nevada

  The Battle for Las Vegas

  The Law vs. The Mob

  Published by

  Huntington Press

  3665 Procyon Ave.

  Las Vegas, NV 89103

  Phone (702) 252-0655

  e-mail:[email protected]

  Copyright ©2006, Dennis N. Griffin

  ISBN: 978-0-929712-82-X

  Cover Design: Laurie Shaw

  Interior Design & Production: Laurie Shaw

  Photo credits: Dennis Arnoldy, Mike Bunker, Kent Clifford, Jim Erbeck, Lynn Ferrin, Dennis N. Griffin, Tru Hawkins, Gary Magnesen, John McCarthy, Gene Smith, Illinois Department of Corrections, Las Vegas Review-Journal, Las Vegas Metropolitian Police Department, Office of Mayor Goodman, UNLV Special Collections

  All rights reserved. No part of this publication may be translated, reproduced, or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage and retrieval system, without the express written permission of the copyright owner.

  Dedication

  This book is dedicated to the men and women of law enforcement, sworn and civilian, whose diligence and professionalism make us all more safe and secure. The battles they fight on our behalf—often at great personal risk—warrant our sincerest gratitude.

  Acknowledgments

  I want to express my heartfelt gratitude to all those current and former law-enforcement personnel who shared their experiences, insights, photos, and time in helping me write this book. They include, but are not limited to, former Clark County Sheriff John McCarthy, Commander Kent Clifford, Detective David Groover and Lt. Gene Smith, former Deputy District Attorney Jim Erbeck, former Strike Force Special Attorney Stanley Hunterton, and former FBI agents Joe Yablonsky, Charlie Parsons, Emmett Michaels, Dennis Arnoldy, Lynn Ferrin, and Gary Magnesen.

  The newspaper archives of the Las Vegas-Clark County Library District held stories from the Las Vegas Sun, The Valley Times, and Las Vegas Review-Journal that provided key information regarding events and incidents of the era I was researching. A series of 1983 articles by Michael Goodman of the Los Angeles Times proved to be equally beneficial.

  The well-researched books The Green Felt Jungle (Reid and Demaris), Of Rats and Men (John L. Smith), and The First 100 (A.D. Hopkins and K.J. Evans) provided crucial background information into the history of organized crime’s influence in Las Vegas. I also watched the movie Casino—in which actors Joe Pesci and Robert De Niro portrayed characters based on Tony Spilotro and Frank “Lefty” Rosenthal—numerous times.

  Three former casino insiders, whom I call Sammy, Mario, and Mickey, gave me a feel for what it was like in the gaming establishments and on the Strip during the Spilotro years. A woman, “Connie,” who was employed by the Argent Corporation at that time and worked directly for Frank Rosenthal, shared her memories with me. Tru Hawkins of KDWN Radio and a life-long resident of Las Vegas offered his perceptions of those days, as well.

  A bartender, “Joe,” who worked in several Las Vegas clubs and casinos during Spilotro’s reign, offered further insights into the atmosphere of Las Vegas during the days of mob control. “Harry,” a veteran Sin City bail bondsman, provided ideas of how information of law-enforcement activities made its way to the bad guys.

  Veteran newsman Bob Stoldal of KLAS-TV, Gwen Castaldi, former KLAS reporter, Andrea Boggs, former KVBC-TV anchor and reporter, and Jane Ann Morrison of the Las Vegas Review-Journal provided a look at the Spilotro years from the media perspective.

  I also extend my thanks to Nancy and Vincent Spilotro, Tony’s widow and son, for helping out with personal insights about their husband and father.

  There are many others who deserve mention, but for various legitimate reasons desire to be anonymous. Respecting their wishes, they will remain nameless, but not unappreciated.

  Contents

  Introduction

  1 The Early Years

  2 Chicago

  3 Lefty and Tony

  4 Mob-Run Las Vegas

  5 The Spilotro Era Begins

  6 The Law

  7 1979

  8 1980

  9 1981

  10 1982

  11 Indictment in Chicago

  12 The Skim

  13 Time Running Out

  14 Update

  15 Loose Ends

  Index

  Introduction

  Las Vegas and its ties to organized crime are well-known, the subject of many books, TV documentaries, and movies. In my previous book, Policing Las Vegas—A History of Law Enforcement in Southern Nevada, I wrote a section called “The Mob’s Man,” concerning the Las Vegas reign of Tony Spilotro, a made man of the Chicago crime family.

  Tony and his wife Nancy, both 33 years old at the time, and their five-year-old son Vincent moved to Las Vegas in 1971. Known as a tough and ruthless gangland enforcer, Spilotro allegedly used intimidation, and sometimes murder, to protect Chicago’s criminal interests in Vegas until his own death in 1986. When he wasn’t acting directly on the Chicago family’s behalf, law enforcement believed that Tony ran a gang that committed lucrative street crimes, including loan sharking, robbery, burglary, and fencing stolen goods. Eventually his status required that he be paid a “street tax”—a kickback—from other criminal groups wanting to operate their own illegal enterprises. The word was that nothing happened in Vegas—from loan sharking to contract killings—without Tony’s knowledge and blessing.

  The deeper I dug, the more intrigued I became with Tony Spilotro and the battle the law waged against him and his gang. It was a fight with tough men on both sides. I gathered enough information to complete that section of the book, but knew I’d only scratched t
he surface of the story.

  Another area that captured my attention while writing Policing Las Vegas was the term of Sheriff John McCarthy. He won election as a reform candidate in 1978, defeating 17-year incumbent Ralph Lamb. However, his term in office was controversial and chaotic. Even before assuming office in January 1979, Sheriff McCarthy was sued by a group of Metro officers for announcing the promotions of several detectives and patrolmen to upper-management positions, over others with more rank, service time, and experience. That rocky start set the stage for what were the most divisive four years in Metro’s brief history.

  A review of newspaper articles, records, and interviews with those who knew and worked for McCarthy revealed to me the almost daily turmoil that dogged his term. There were major problems with the jail, an attempt to deconsolidate Metro, and allegations of discrimination, abuse of power by his officers, and corruption within the department. All this was followed by a nasty election campaign in which the incumbent was challenged by his former undersheriff, whom he’d once fired. For Sheriff McCarthy and Metro, these were indeed turbulent times.

  What particularly intrigued me about those four years, however, was the juxtaposition of the McCarthy era and the Spilotro reign. One of the first things McCarthy did after being sworn in was to declare war on organized crime. He wanted Tony Spilotro and his kind run out of town, making it one of his priorities. At the same time, the FBI and a Department of Justice Strike Force were increasing the pressure on Spilotro and his men. The battle was joined; the law was after the bad guys.

  It was a tale I wanted to tell. But would I be able to make it interesting and informative, rather than simply regurgitate the same stories written over the years? I decided that if I could locate the local and federal lawmen who had actually fought the battles, as well as others in the know, and get them to participate, I’d be able to produce a book that would be satisfying to the reader, perhaps plowing some new ground in the process.

  After a few initial disappointments in my search for sources, my luck changed. The list of those willing to cooperate began to grow. In a relatively short time, I was satisfied that I’d find sufficient material to move forward with the project.

  I decided early on to concentrate on Spilotro’s alleged street-crime activities, with the well-publicized casino skimming operations receiving somewhat less attention. Then, near the beginning of my research, I learned that Tony had no direct involvement in the skim—except in enforcement matters—and probably didn’t even know the identities of the couriers who delivered the purloined cash to Chicago. Therefore, the discussion of those financial crimes is primarily limited to one section of this book.

  The secondary focus of this endeavor is on the term of Sheriff McCarthy and the many wars he fought in addition to the one against organized crime. It’s my hope that the stories go hand in hand and meld together well.

  Our journey starts with a brief history of Las Vegas. We then explore organized-crime’s early involvement there, starting with Ben “Bugsy” Siegel and the Flamingo Hotel and Casino. After that is some background on the key figures of the Chicago La Cosa Nostra (LCN) of Tony’s days, the men who sent him to Las Vegas. Next I look at the early lives of Spilotro and his erstwhile pal, Frank “Lefty” Rosenthal. From there we move on to Tony’s era in Las Vegas and the law’s efforts to remove him.

  Denny Griffin

  1

  The Early Years

  In 1829, an 18-year-old Mexican scout for the Antonio Armijo Trading Caravan was tasked with finding a new trade route from Santa Fe, New Mexico, to Los Angeles. In his search he came upon an oasis in the desert. With abundant wild grasses and an ample water supply, it was a perfect place for the traders to stop and rest during their arduous journey. His discovery was named Las Vegas, which means The Meadows, but knowledge of its existence remained primarily limited to the Mexicans and the indigenous Paiute population until explorer John Frémont put it on the map in 1844.

  In 1855, Brigham Young ordered 30 missionaries to Las Vegas Valley to build a fort and teach the Paiutes farming techniques. The Paiutes rejected the Mormon’s offerings and the fort was abandoned in 1858. The area remained sparsely settled until the arrival of the railroad.

  In the summer of 1904, work on the first railroad grade into Las Vegas began. Thanks to the water supply, a town sprouted, consisting of saloons, stores, and boarding houses to accommodate the railroad workers. On May 15, 1905, the railroad auctioned off 1,200 lots in a 40-block area surrounding downtown and Las Vegas was established as an unincorporated city. In 1909, it became the county seat for the new Clark County.

  Railroaders were a hard drinking rough-and-tumble lot. The main problem the lawmen in those early days had to confront was dealing with the drunks and their drinking-related fights.

  In 1910, Nevada passed an anti-gambling law so strict that it was illegal to even follow the western custom of flipping a coin for the price of a drink. Within weeks, however, underground gambling began to flourish.

  On March 16, 1911, Las Vegas incorporated, covering an area of approximately twenty square miles. The city’s population was about 800. At the same time, Clark County had 3,321 residents.

  By 1930, the population of Las Vegas had reached 5,165. Shortly thereafter, three events occurred that permanently altered the face of Las Vegas, Clark County, and Nevada. As a side effect, they also led to the initiation of Las Vegas Valley as a cash cow for organized-crime families across the country.

  First, on March 19, 1931, gambling was legalized in Nevada. A month later, six gaming licenses were issued in Las Vegas, the first going to Stocker’s Northern Club on Fremont Street.

  Second, state divorce laws were liberalized. With easier residency requirements, “quickie” divorces could be attained in only six weeks. Short-term residents flocked to Nevada. In Las Vegas, many of them stayed at dude ranches, the forerunners of the sprawling Strip hotels of today.

  And third, construction began on Hoover Dam, generating a population boom and boosting the Valley’s economy, which was in the grip of the Great Depression.

  Small-town Las Vegas would soon be on its way to becoming the entertainment and gambling capital of the world. But the influx of people and money would later earn Vegas another name: Sin City.

  Benjamin Siegel

  Ten years later, the first Strip casino appeared when the El Rancho Vegas opened on April 3, 1941. The Last Frontier followed on October 30, 1942. The next Strip property to arrive on the scene, in 1946, was the one that is acknowledged as the first of those backed substantially by mob money: Bugsy Siegel’s Flamingo.

  Benjamin Siegel was born in Brooklyn in 1905. While growing up he developed a reputation for having a vicious temper, which earned him the nickname of “Bugsy.” As a teenager in New York, Siegel befriended Meyer Lansky and, with a group of other young tough guys, operated the Bug and Meyer Mob. Eventually, they teamed up with future New York City crime boss Charlie “Lucky” Luciano. In spite of alleged involvement in crimes ranging from bootlegging to murder, Siegel was able to avoid being convicted of any serious charges.

  Bugsy had the looks of a Hollywood leading man and made frequent trips from New York to Los Angeles. He enjoyed the company of famous entertainers, many of whom liked the idea of socializing with the increasingly powerful gangster. His infatuation with Hollywood led him to move west to help establish the mob-controlled Trans-America wire service to compete with the Continental Press Service, which provided bookmakers with the results of horse races from across the country.

  In pursuit of this objective, Siegel made an appearance in Las Vegas in 1942. His enterprise was legal in Nevada, where all potential clients held county licenses. He signed up a number of subscribers to the service, each paying a hefty fee. It’s estimated that Siege1’s income from the Las Vegas bookies was about $25,000 per month. During this brief visit, Siegel came to appreciate the tremendous earning potential of the Las Vegas casinos.

  In early 1946 Siegel saw an
opportunity to establish himself in the Las Vegas gambling business. A Hollywood nightclub owner named Billy Wilkerson had attempted to build a casino in Vegas called the Flamingo. The effort faltered and the partially completed resort was sitting idle. Bugsy packed his clothes and money and headed back to Vegas to take over the Flamingo project. He was confident that if his personal finances weren’t enough to finish the job, his hoodlum friends could be convinced to invest in his dream: building the first truly posh hotel and casino in the Las Vegas desert.

  Bugsy hired the Del Webb Construction Company of Phoenix to complete the Flamingo. According to the book The Green Felt Jungle, the cost, initially estimated at $1.5 million, ballooned to $6 million. The many reasons cited for the huge cost overrun included Siegel’s insistence that the Flamingo be built like a fortress, constructed of steel and concrete where less expensive materials would have sufficed. He also wanted the best in furnishings, importing wood and marble at exorbitant costs. Each guest room even had its own sewer line, adding $1 million to the bill.

  So soon after the end of World War II, not all of the supplies Siegel ordered Webb to use were readily available; such circumstances proved to be only minor annoyances to Bugsy, who simply turned to the black market for his needs. He got whatever he wanted, but had to pay outrageous prices. To make matters worse, the illegal suppliers sometimes delivered a load of expensive merchandise during the day, then returned at night to steal it back. Finally, they showed up at the site the next morning to sell Siegel the same items all over again.