1972

In the mail on Monday, April 24, each of 21 Las Vegas hotel-casinos received an identical, typewritten letter that demanded they pay a total of $2 million (about $12 million today) or get blown up, one by one, until the extortionist got the full amount. It was up to the Nevada resorts if, and how, they divvied up payment. The correspondence didn’t indicate a day, time or place for the drop.

The letters had been sent via Special Delivery, which was expedited service, from Austin, Texas. Fifteen of them were turned over to the United States Federal Bureau of Investigation (FBI).

The same 21 gaming properties received a second letter, on May 4, which contained payoff instructions. It noted the bombing would start in two weeks, on Saturday, May 13, with Circus Circus being getting hit first and the Thunderbird second.

A similar extortion case had occurred in 1970 in Northern Nevada, in which the perpetrators had instructed three casinos — the Sparks Nugget Motor Lodge in Sparks and Harolds Club and Harrah’s in Reno — to pay a total of $1 million (about $6 million today) or face multiple bombs exploding in their casinos.

Plot Foiled

In the Las Vegas case, about two weeks later, on Thursday, May 11, FBI agents arrested a suspect in a Santa Monica, California motel, on a federal warrant. He was Los Angeleno Nathan N. Marks, 28, a self-employed radio and sales promoter. On him at the time was an airline ticket to Paris, France.

The next day, Marks waived extradition to Nevada to face the charges. Instead, that would take place in San Bernardino County, California. Bail was set at $500,000 ($3 million today).

Spilled The Beans

Marks had recruited a partner, a Texas resident, to help him carry out the scheme, and that person had informed the FBI about it all. That led to federal agents listening in on a phone call between the two alleged conspirers.

During that conversation, Marks told the second man to “buy enough explosive to blow a ’50 by 50 by 50′-foot hole in the casino,” he said, referring to Circus Circus, because he wanted “‘to let the Thunderbird Hotel, which was next on the list, to know that he meant business’” (The Bakersfield Californian, May 12, 1972). Marks indicated the bombs would be dropped from the air, out of a private plane Marks would charter in Los Angeles.

Day Of Reckoning

In May 1973, a year after the criminal endeavor was set in motion, Marks appeared in court. Rather than plead guilty to the 21 counts of mailing a threatening letter against him, he was permitted to admit to just one, which he did.

The judge sentenced him to 10 years in prison, half of the maximum sentence.

Sources

Commemorative bronze statue of Binion in Las Vegas, Nevada

Today

Although Texas-born Lester B. “Benny” Binion (1904-1989) no longer is with us, he remains a legend among Las Vegas casino owners and operators — gamblers, in industry parlance.

Iconic even in his appearance — large in girth and ever clad in a cowboy hat and boots — Binion was complex. The dichotomous traits he embodied likely helped him attain success; he was charming yet cruel, a family man yet a criminal, and minimally educated (through the second grade) yet savvy in business.

“For those who understood the real game being played in Las Vegas and America, Benny was one of the most influential, and feared, men of his time; and in that enormous power, if not in his crude style, he set an example,” wrote Sally Denton and Roger Morris in The Money and The Power: The Making of Las Vegas and Its Hold on America.

Binion is remembered for owning and operating the Horseshoe Club in Southern Nevada and allowing players to place high-stakes bets on craps at a time when other gambling houses wouldn’t. He also launched the famed World Series of Poker tournament in 1970.

Down And Dirty Details

That’s the part of his story that prevails. Here are 10 lesser-known facts about Benny Binion:

1) He was an FBI informant for a time, providing the governmental agency with the inside scoop about various Las Vegas gamblers and their enterprises.

2) He murdered at least two men — Frank Bolding, a man whom he suspected of stealing liquor from him during his bootlegging days, and Ben Frieden, a competitor in the policy racket in Dallas, the latter slaying earning him the nickname “The Cowboy.” He wasn’t ever charged for the killings. Despite admitting both to Nevada gaming regulators, they granted him a gambling license.

3) His gambling start was running a lucrative numbers operation in Texas.

4) He couldn’t read, write or do basic math.

5) His father was a drunk and excessive gambler, and his brother, Jack, died in a plane crash at age 23.

6) He was openly racist toward African Americans.

7) He secretly brokered the funneling of millions of dollars from prominent Dallas bankers to Las Vegas mobsters and took a 5 percent cut for his services. One such transaction was $500,000 (about $5.1 million today) that Republic Bank provided to Moe Dalitz, the Cleveland mob’s representative in Sin City, for construction of the Desert Inn hotel-casino.

8) Following a drawn out extradition battle and legal wrangling that went to the U.S. Supreme Court, he served 3.25 years, from Dec. 1953 to March 1957, in the U.S. Penitentiary Leavenworth in Kansas on federal charges of tax evasion and state charges of illegal gambling,

9) After his release from prison, he sold the remaining, non-mob-owned interest of the Horseshoe to mobster Meyer Lansky and associates through their front man, Ed Levinson, because Binion needed money to pay past taxes (eventually, he bought back 100 percent of the casino).

10) He applied for a presidential pardon five times but wasn’t granted one.

Sources

Harrah’s Lake Tahoe, Stateline, Nevada, 1973

1972-1973

Ladies and gentlemen, the story you are about to read is true. No names have been changed, as there were no innocents.

This is the city, Stateline, Nevada. It’s the gambling mecca of Lake Tahoe. Most people visit it to recreate, but some go there to commit a crime.

It was Tuesday, September 19, 1972. It was a chilly night.

Douglas County sheriffs were working the late shift when they got the call. At 10:40 p.m., five employees at Harrah’s hotel-casino were making a routine money transfer from the basement to the casino floor when an armed man stopped them on the stairs and shouted, “Give me the money, or I’ll blow your heads off.”

The suspect was described as roughly 5 feet 8 inches tall, 170 pounds, stocky, in his 30s, long haired and wearing dark glasses, a cowboy hat pulled down over his eyes and possibly a fake beard. His weapon was a .45-caliber automatic Colt pistol.

He grabbed the two bags from the workers, ordered them to back off and fled through the casino and out the door into the dark. He purposely dropped the bag containing chips, $4,500’s worth, ran about two blocks and crossed Highway 50 and then the state line into California. 

At a nearby motel, he hopped on a motorcycle, whose rider had been waiting for him. The bike didn’t start, again and again. The two dismounted, pushed it, finally got it going, jumped on and rode off.

The thief had stolen $178,500 ($1 million today), at that time the largest robbery ever involving a Nevada casino.

Quartet Of Suspects

The crime became a Federal Bureau of Investigation (FBI) matter when the stickup man crossed state lines. Investigators had the motorcycle’s license plate, captured by a witness, to go on as well as possibly the testimony of an informant, Barbara White, who’d been in on the planning of the crime but had backed out before execution.

Agents found $125,000 of the stolen money, the wig, beard and gun buried shallowly in the backyard of the motorcycle driver. Four days after the crime, they arrested:

• Donald Leroy Rice, 35, of Stateline, Nevada, unemployed dealer, married, four-year resident
• Larry Joseph Swinberg, 36, of South Lake Tahoe, California, Harrah’s employee, married, resident of fewer than 30 days
• Jack Andrew Cozad, 37, of Stateline, Nevada, recent Harrah’s employee, separated, 12-year resident
• Thomas Richard Norman, 36, of Reno, Nevada, poker dealer in Reno’s Cal Neva Club, single, 8-year resident

The FBI tagged Rice as the stickup man; Swinburg, the getaway driver; and the other two, lookouts, one inside and one outside the casino.

The four faced federal charges of conspiracy and transporting stolen goods across state lines, and all but Rice, with aiding and abetting. State charges were conspiracy to commit armed robbery and robbery. Bail, mandated by federal and state courts, totaled $125,000 or $150,000 for each suspect.

One Turns Against Others

Legal wrangling began, with defense attorneys filing numerous motions, asking for separate trials, change of venue and more, all of which the judge denied.

Trials were held in 1972 (federal) and 1973 (state). Swinburg testified for the prosecution at both, giving up his accomplices and admitting to commandeering the motorcycle. He said that of the $178,500, he, Rice and Cozad were to get $52,000 apiece, Norman was to get $1,000 and White was to get $17,850.

The suspects were found guilty and were sentenced, in federal (1972) and state (1973) courts, respectively, to:

• Rice: 5 years’ prison, 8 years’ prison — to be served concurrently
• Cozad: 5 years’ prison, 5 years’ prison — to run concurrently
• Norman: 5 years’ probation, 3 years’ prison — the latter was suspended so he was to serve 6 months in jail then 5 years’ probation
• Swinburg: Probation (the state hadn’t charged or tried him)

An Unexpected Twist

Later in 1973, Douglas County sheriff’s deputies recovered what they believed to be the remaining $52,000 from the Harrah’s heist a year earlier.

When investigating an armed robbery of the people living in Rice’s former house in Stateline, officers zeroed in on four suspects, all South Lake Tahoe residents, and found the cash.

“Authorities did not disclose the evidence to support the statement the money might be part of the Harrah’s loot, nor would they say how much was reported taken in the Rice residence robbery,” reported the Nevada State Journal (Sept. 8, 1973).

Sources

1950s

The manufacture of slot machines, roulette wheels and other gambling equipment was big business in the United States until the mid-20th century when new federal legislation curbed it.

In 1950, the Kefauver Committee, officially the U.S. Senate Special Committee to Investigate Organized Crime in Interstate Commerce, began delving into the underworld’s involvement with gambling. The group’s findings and recommendations led to Congress passing the Transportation of Gambling Devices Act, a 1951 amendment to the Johnson Act. The law:

• Banned the transport of these devices to states where gambling was illegal

• Required manufacturers/distributors of gaming equipment for interstate commerce to register annually with the federal Department of Justice

• Mandated such paraphernalia crossing state lines be marked appropriately for shipment

The act, however, allowed interstate shipment into any state that passed a subsequent law exempting it from the federal provisions. Nevada did just that. Texas, though, on the other end of the spectrum, forbade gambling device making altogether. It was the only state to do so at the time.

Serious About Enforcement

The FBI cracked down on companies violating this act, and with the help of local police, conducted raids, seized equipment and pressed charges. A judge sentenced a Mississippi man found guilty of transporting six slot machines out of state to one year and one day in a federal penitentiary, a light sentence, he said, in that the offense occurred soon after the legislation banning it had been passed.

This law enforcement pressure caused many manufacturers to close shop and others, such as B.C. Wills & Co., to move to Nevada. Then one of the country’s two major roulette makers, it relocated from Michigan to Reno in 1954.

Sources

In 1971, various people began complaining to the local police department they’d gotten fleeced at an informal casino setup in California’s San Fernando Valley (yes, the location of, like, “valley girl” fame, a culture that developed a decade later).

The Dirty Details

Consequently, the Los Angeles Police Department (LAPD), Federal Bureau of Investigation and Department of Justice’s Organized Crime Strike Force investigated the grievances. They discovered an illegal gambling ring, one that floated, or moved to avoid detection by law enforcement. In this case, it had been held at a different, rented home each time and the venture had been run for four months.

Peter J. Milano, Los Angeles Mobster

The men behind it employed prostitutes to lure their johns into playing various dice and card games of chance, including blackjack and craps. These were/are illegal in California. Then they cheated the players out of as much money as possible during the gambling by secretly using loaded dice, marked cards and a crooked wheel, all of which they’d acquired in Las Vegas.

They netted as much as $250,000 a month (about $1.5 million today)!

In December 1972, the LAPD raided the operation, and a grand jury ruling followed in November 1973. It indicted seven men on these charges: 1) conspiring to violate gambling laws, 2) traveling between states to promote an illegal gambling business and 3) conducting an unlawful enterprise.

The alleged co-conspirators were:

• Peter John Milano, 47, a Northridge resident, a made* member of La Cosa Nostra’s Los Angeles Nick Licata Family and a bail bondsman. As the suspected kingpin of the gambling scheme, he’d provided police protection and had offered to put up bond if any of them had gotten arrested.

• Martin C. Calaway, 47, a Beverly Hills attorney who allegedly had bankrolled the scheme with $25,000, for which he was to receive 20 percent of the profits.

• Luigi Gelfuso, 48, operator of a Fresno trash collection company, who supposedly had provided protection and debt collections.

• John Joseph Vaccaro Jr., 33, an unemployed Las Vegas construction worker believed to have run the games.

• Tony Endreola, 49, and Santo Albert Manfre, 39, were said to have overseen the games to ensure Milano had gotten his fair share of the profits. What the involvement of Harry P. Coloduros, 35, had been isn’t known.

Verdict Insurance

Six days before the trial was to start, a masked person executed John L. Dubcek, 31, and his wife Francis Ann, 27 in Las Vegas at close range just before midnight as the two entered the dark hallway leading to their apartment. He first shot John in the back then hit Francis Ann in the face as she turned around.

The two had worked at the Westward Ho casino. He’d been a shift manager, which was ironic as he was an expert slot machine cheater and had gotten into trouble for illegal gambling previously. He also had been charged in 1972 with running a crooked gambling operation in Van Nuys with Vaccaro, but the case had been dropped.

John Dubcek had been scheduled to testify as a prosecution witness in the trial of the septet just as he’d done before the grand jury in the same matter. Although his and his wife’s murders never were solved, the FBI and other agencies believed that Milano, Calaway, Gelfuso and Vacarro had had him killed to silence him. In fact, the prosecutor averred he had proof the four had plotted the hit on the courthouse steps the day they’d been arraigned. Despite knowing that two contracts had been out on his life, Dubcek had refused police protection repeatedly.

“It was definitely a rubout job” by a professional hitman, a police investigator said (Press-Telegram, March 21, 1974).

Due to the murders, the judge postponed the trial for four and a half months.

Judgment Day

When it finally took place, in mid-August, one of the men involved, Coloduros, testified for the government and implicated the others in the illegal gambling ring, yet Milano and Calaway professed their innocence.

The six-man, six-woman jury, after deliberating for three days, returned a guilty verdict for the three major players — Milano, Calaway and Gelfuso. A month later, U.S. District Court Judge Jesse. W. Curtis sentenced them each to four-year terms in federal prison.

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* “Made” denotes one’s status as a fully initiated member of the Mafia, one that requires, for one, carrying out a contract killing on the organization’s behalf.

Sources