Elliot Paul Price

1970-1973

When federal agents arrested Elliot Paul Price, 51, during a massive multi-city raid in 1970 and charged him with illegally transmitting race wire information across state lines via telephone, two dominos fell:

• He lost his job as a casino host at Caesars Palace in Las Vegas.

• The Clark County Sheriff’s Office pulled his work card, which is required for casino employment.

In April 1971, however, the sheriff’s department issued him a temporary permit to work in a similar position at Circus Circus. Within the week, though, the Nevada Gaming Commission (NGC) voted to pull it due to his being under federal indictment and allegedly having an unsavory background. On the NGC’s orders, the sheriff’s office revoked his card, leaving Price again unemployed.

Price Won’t Take No

Unable to obtain a casino job, he filed a lawsuit, but it went nowhere because, according to the judge, he hadn’t pursued all possible avenues for re-obtaining his employment permit.

Price asked the NGC and the Nevada Gaming Control Board (NGCB) to reinstate it, but they didn’t. This was because, in a hearing on the issue, he refused to answer questions about his suspected association with underworld individuals. Price hailed from Boston and gambling regulators believed he was entrenched in the Mafia there.

Lawsuit, Take Two

At the start of 1972, with Oscar Goodman as his attorney, Price sued Nevada Governor Mike O’Callaghan and the NGC, claiming the latter had rescinded his work card arbitrarily. The suit purported the agency’s decision hadn’t been based on established guidelines but, rather, on unrelated “charts of the Mafia, ancient newspaper articles, dime store novels, and secret and confidential information” (Nevada State Journal, June 13, 1972). It also asserted the NGCB hearings had violated his freedom of association right and forced him to be a witness against himself.

Goodman requested the withdrawal of Price’s work card be deemed unconstitutional and a temporary restraining order (TRO) be placed against the gambling regulating agencies, preventing them from interfering with his obtaining a new one.

The state, on the other hand, argued that were the court to afford the TRO until the issue got resolved legally, it would be substituting its judgment for that of Nevada in a state administrative matter. Also, were Price to prevail, it “could well emasculate the total regulatory concept of gaming” (Reno Evening Gazette, June 13, 1972).

District Court Judge Howard Babcock granted Price the TRO.

Nevada Fights Back

The NGCB responded with a suit of its own to overturn Babcock’s action on the grounds that the local court lacked jurisdiction in the matter. The NGC and NGCB conceded Price could work in a non-casino job at Las Vegas’ Riviera hotel.

District Court Judge Carl Christensen denied the State of Nevada’s motion to dissolve the TRO. This meant Price could return to his casino host post at Circus Circus until the high court weighed in.

Off To Higher Court Land

Next, Goodman took the case to the Nevada Supreme Court, asking it to allow Price to regain his work card, thereby protecting his constitutional right to due process.

Deputy Attorney General David Polley, for the state, argued that upholding Babcock’s ruling would “set a dangerous precedent which would be detrimental to the inhabitants of Nevada and their major industry” (Nevada State Journal, June 13, 1972).

Resolution Three Years Later

In 1973 the Nevada Supreme Court delivered the opinion that, yes, the lower, or district, court had jurisdiction to rule upon the validity of Price’s right to work in gaming.

In other words, Goodman and Price* won the legal fight. Their doing so established that Nevada couldn’t deprive someone of their work card without due process. Subsequently, Clark County instituted processes for suspending or revoking a work identification card and for an appeal by the card holder.

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* In 1979, Price would be indicted for multistate race fixing along with other members of Boston’s Winter Hill Gang, James “Whitey” Bulger’s associates, for which he would serve two months. Subsequently, he would disappear, never to be heard from again.

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1948-1950

In between dispatch orders, a Las Vegas, Nevada taxi driver fleetingly picked up the announcement of horse racing information on his cab radio one day in mid-October, 1948.

He informed Clark County Sheriff Glen Jones, who contacted the Federal Communications Commission (FCC) in Los Angeles. The agency immediately sent to Sin City two radio engineers — Robert Stratton and Raymond Day — to investigate.

Illegal Activity Uncovered

Their testing revealed that the broadcasts had taken place between 10:30 a.m. and 6:30 p.m. daily and had originated from equipment in Room 228 of Vegas’ Apache Hotel on Fremont Street.

The guest register showed a Charles Stauffer, 28, residing there.

Stratton, Day and Jones raided the space, discovering a rigged system for hijacking horse racing information — odds, entries, results and parimutuel payoffs.  Through a hole cut in the Apache room’s floor, which opened into an air duct that traversed the El Dorado Club’s ceiling, a microphone picked up the race details announced via loud speakers at that casino.

It fed the sound into a transmitter which then sent it to a receiver in the Santa Anita Turf Club, 60 yards away, across the street.

The stolen data originated from Chicago-based Continental Press Service, which collected them from the horse racing tracks and distributed them nationally via leased Western Union facilities. However, three men controlled distribution of that information in Las Vegas — Moe Sedway, Morris Rosen and Cornelius Hurley.

(Sedway owned the El Dorado Club. He and Morris Rosen owned the Golden Nugget horse race wire service. Both were mobsters associated with Meyer Lansky and Benjamin “Bugsy” Siegel. Hurley was Continental’s Las Vegas manager.)

Hurley provided exclusive access to the race wire to Sedway and Rosen, who in turn sold the service only to select casinos in town. The Turf Club wasn’t one of them. In, fact, for unknown reasons, they’d turned down the owners — Ed Margolis and Sam and Dave Stearns — when they’d applied previously, leading to them tapping the wire.

Five suspects were arrested for the crime: The three Turf Club owners along with the man they hired to install the equipment at the Apache, John Melvin Cole, 26, and Stauffer, 28.

Attempted Double-Double Cross

Stauffer, who was in Nevada for a divorce, had been offered a fully comped room if he’d turn a transmitter on and off at two designated times per day. He’d agreed.

However, he’d figured out what was transpiring and tried to capitalize on that knowledge for added benefit. He’d told Hurley that for $6,000 he’d disclose where the “bootleg” transmitter was located.

Hurley had negotiated the price down to $4,000, but no deal had been finalized when the cab driver set the subsequent events in motion.

Wire Tapping Consequences

A federal grand jury indicted Cole, Margolis and the Stearnses in mid-1949 for violating the Communications Act of 1934, a felony. They were released on $1,000 bond apiece.

In federal court in February 1950, the men’s defense attorney asked for suppression of the evidence against them for two reasons:

The search warrant that law enforcement had used to get into the Apache Hotel room was illegal as it hadn’t been directed at any one person and that a deputy sheriff, rather than a requisite U.S. marshal, had served the warrant.

• Because Cole was illiterate, he couldn’t have written the confession presented.

• The judge granted both motions and dismissed the grand jury indictments against all four.

Cole was released, but the Stearnses and Margolis were charged with violating FCC regulations governing low-power radio stations, a misdemeanor. They all pled guilty and, ultimately, paid $1,200 apiece in fines.

As for Stauffer, he was charged with operating a radio station without a license, a felony with a maximum penalty of $10,000 and two years in federal prison. It’s unknown what sentence he received, if any.

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