FROM BELLBOY TO GAMBLING TYCOON: HOW FRANK JUNIOR BUILT THE FERTITTA EMPIRE IN LAS VEGAS

Posted on | December 6, 2008 | 4 Comments

CHAPTER TWO IN A FOUR-PART FERTITTA FAMILY HISTORY

By: Rich Bergeron

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When Frank Fertitta, Jr. came to Las Vegas from Galveston, Texas in 1960, he quickly found work as a bellboy at the Tropicana. Fertitta’s Texas-bred “family” history included decades of successful casino operations in Las Vegas ( see part one of this report) that some experts say was the original model for Vegas. Fertitta—just a 20-something visionary at the time with both smart business sense and shady, underworld connections—fit right into the landscape. Frank’s rise to owning his own casino would only take him 16 years.

Fertitta graduated through the ranks quickly and gained respect from the Kansas City Civella crime family. Fertitta ascended to a position as a blackjack dealer and worked up to management while making friendships with very influential Vegas movers and shakers.

In 1969, Nick Civella was identified by a Senate committee as being a principal member of the Kansas City Crime Family. During a 10-day period in mid-January 1970, the FBI picked up information through listening devices to indict Civella and several others on gambling conspiracy charges involving the recent Super Bowl between Kansas City and Minnesota. The Civellas were caught up in a criminal probe in 1970 after Civella was taped discussing that year’s impending Super Bowl between the Kansas City Chiefs and Minnesota Vikings.

Eventually the Super Bowl tapes would convict Civella of gambling charges, which resulted in a 20-month imprisonment that he began serving in 1977. Though Civella would only do short time and get out early for cancer surgery, the informant who testified to send him to the Big House ended up suffering a far worse fate. Sol Landie was viciously murdered by four black men who first took turns sexually abusing his wife while he was forced to watch. Though he was never convicted for ordering the hit, the Karma for that killing caught up with Civella a few years later when he wound up spending most of the last days of his life behind bars.

In February 1983, Civella, who had been at the federal medical facility in Springfield, was transferred back to Leavenworth so he could be closer to his attorneys. Four days after the transfer he was returned to Springfield for treatment. Federal authorities released him to his family on March 1 and Civella was quickly admitted to the Menorah Medical Center in Kansas City where he died on March 12, 1983.

These were the kinds of associates Frank Fertitta, Jr. would find himself haunted by over the next few decades as he built his “family” interest in Vegas. Still, he and his sons transformed his original stake in “The Casino” in Vegas from virtually nothing into one of the largest gaming empires on the planet. Though he eventually had to cede the control of the business to his sons, his fatherly guidance behind-the-scenes has no doubt helped shape the business through its most tumultuous times.

The following video clips explain a bit about general Vegas history and the evolution of the early “skim.” Though I doubt anyone in Vegas truly believes organized crime no longer exists there, the acceptance and open reign of known Mobsters in Vegas was once accepted and understood as the way things were. People always seemed willing to look the other way when it was convenient and everyone was getting a bonus for it. Over the last few decades as Vegas became a boom town people flocked to in droves, the Mafia influence has been pushed further and further underground. As reporter George Knapp explains in one of these clips, the concern in more recent years is that organized crime’s tendrils have become more sophisticated, much less obvious, and more focused on so-called “clean money.” Ruthless business deals in Vegas now may be metaphorically cut-throat, but they don’t usually involve so much actual murder and mayhem anymore. A look back at the city’s rocky history and corrupt underbelly reveals a great deal about why it seems to stand so hopelessly idle today. Greed kills:

Watch Mafia and Las Vegas at EncycloMedia.com

 

The Las Vegas I recently visited is in a seemingly perpetual state of construction, and ravaged real estate markets there from the boom gone bust have left the area wanting and needing more and more tourist dollars every year just to keep afloat. Call it Karma, call it divine providence, but it certainly appears as if the appeal and allure of “Glitter Gulch” may have run its course with an American population that is finding it harder and harder to generate enough expendable income to make the pilgrimage to Sin City. It is a far cry from the Las Vegas Frank Fertitta, Jr. once knew.

Frank Junior got his big break in 1976 when he bought a place aptly named “The Casino” (quickly re-named Bingo Palace) with a partner, Carl Thomas. The Bingo Palace later became known as Palace Station. Thomas was at that time already the chief executive officer of four casinos owned by the Argent Corporation. The movie “Casino” starring Joe Pesci (playing Tony “The Ant” Spilotro) and Robert Deniro (playing Frank “Lefty” Rosenthal) is one of the best illustrations of the skimming operation Thomas masterminded for the Mafia:

More COUNT ROOM VIDEOS:

http://www.youtube.com/watch?v=yjrf6agy1do

http://www.youtube.com/watch?v=u0pnJ75Qrmw

Rosenthal would later report, “Carl [Thomas] introduced me to Frank Fertitta, as ‘my main guy,’ and his right-hand man. Frank became the President of Allen Glick’s Fremont Hotel Casino at the recommendation of Carl Thomas during my temporary absence from the industry while I was awaiting the outcome my appeal versus the Nevada Gaming Commission. When I regained my former position as the CEO of all properties under the “Argent” (Allen R. Glick Enterprises) umbrella, Frank and I became more interactive. Frank had gained a solid reputation as a top-notch casino executive who understood the games with a high degree of professionalism. After several private meetings and close personal observation I too agreed that Frank was well suited to operate the second largest Casino in the downtown area.”

Carl Thomas’ criminal coming out party took place in Chicago in 1963 while Thomas was celebrating at friend Allen Dorfman’s 40th birthday bash. Thomas had already learned the ropes of skimming in his early days at the still-standing Circus Circus Casino in Las Vegas:

 

Thomas, also a former blackjack dealer like Frank Junior, was the general manager of the Circus Circus when he came to the Dorfman birthday party, and he’d impressed the guest of honor enough to warrant an introduction to another party guest: Kansas City Crime Boss Nick Civella. That connection would pave the way for Thomas to become the ultimate Las Vegas skimming mastermind. He would help reap millions upon millions of illegitimate income for organized crime interests, choking it all out of the desert with expert ease and relying on a “connected” network of loyal associates to get the job done and keep quiet about it.

Carl Thomas brought Frank Fertitta, Jr. in to be general manager of the Argent-owned Fremont. Frank Junior’s gaming career would forever have a dark cloud hanging over it after federal agents finally sniffed out the massive skimming enterprise. However, even before the FBI fully infiltrated Vegas’ best kept secret in the mid-80s, the Allen Glick-run Argent had some sketchy dealings related to a slot machine scam.

Allen R. Glick was what is most often referred to in real estate as a “straw man.” Famous and/or privacy minded folks, and especially criminal folks like Mafioso often resort to having lesser known and more inconspicuous individuals buy their businesses and other property to avoid investigation of their assets or to avoid the prying eyes of the press and/or Papa Razzi. Glick was just one of many in a long line of Mafia straw men who populated Vegas in the pioneering days when the Mafia’s Teamster connections gave the country’s organized crime families a virtual monopoly in town.

According to Glick, he was told by Civella after getting the Teamster loan that gave him his Vegas start, “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 to do nothing to interfere with it … We will let Mr. Rosenthal continue with the casinos, and you are not to interfere.”

Thomas had much more sinister partners than Frank Fertitta, Jr. during the Argent days, and they’d already managed to get themselves black booked in town as charter members of the infamous list of Vegas outcasts. Thomas, Rosenthal and Glick were subordinate to Giuseppe Nicoli “Mr. Nick” Civella and Carl “the Cork” Civella, brothers and bosses of the La Cosa Nostra chapter in Kansas City at the time. After the Texas boom busted for the Fertitta family, Kansas City quickly became Grand Central for Vegas Mafia interests. The key was the Teamster loans Mafioso so easily influenced. Moe Dalitz got one to build Vegas’ first ever Casino: The Desert Inn, but that was back in the heady Maceo era, and Sam Maceo himself reportedly pulled all the right Strings to get Dalitz his first Vegas loans.

The Fertitta and Thomas partnership was later detailed by Nicholas Pileggi, who authored the book “Casino.” The movie of the same name is based on Pileggi’s book. Here is an excerpt from the book regarding a Nov. 28, 1978 FBI recording in which Frank Junior’s name surfaced in relation to his role in the skim:

“Carl Thomas: … Me and Frank (Fertitta) and (Don) Shepard and my bookkeeper, my comptroller, who is one thousand percent, they’re with me for fifteen years, have sat around in my kitchen thinking. For six hours, thinking of ways to beat these joints `cause (I or I’d) like to take money out of them. …”

Federal agents launched operations called Strawman I and Strawman II to attack organized crime interests in Vegas in the late 70s and early 80s and figured out that Thomas, the Civellas and others conspired to conduct the skim at all the Argent casinos for the benefit of several Mafia families. A dozen associates were eventually convicted in Kansas City in a 1985 trial that resulted from the federal probes. Thomas—already stewing in jail on a 15-year sentence for a skimming conviction—gave up the ghost. He testified against his former partners in return for immunity from prosecution and somehow miraculously avoided the same agonizing fate of Sol Landie.

Thomas never did implicate Frank Fertitta. Instead, Frank bought out Carl’s interest in the Bingo Palace when the skimming charges first surfaced. The asking price was more fitting for a bid on The Price is Right game show than it was for an established Vegas Casino. Legend has it that Frank Junior acquired full ownership and control over the Bingo Palace for just one dollar.

Fertitta has consistently denied any involvement, and he never was indicted or charged in the Argent skimming. He would not fully shake the charges against him in his adopted home state until 1989 when he was cleared in a Nevada Gaming Control Board probe. The investigation centered on whether or not Frank Junior lied about his role in the Argent skimming when he received his Nevada gaming license. To nab him, the board would have to rely on damning testimony from one of Carl Thomas’ former skimming security agents: Harry McBride.

Cold feet fueled by fears that his account of the skimming days would never trump Fertitta’s political connections in Nevada led McBride to tank his own testimony before the Gaming Control Board. McBride previously testified in court that he ran counter-surveillance against law enforcement for Thomas at the Argent properties. McBride had already detailed under oath how “Frank” ran the skimming operation in the Fremont Casino’s count room, yet it was apparently not enough for Nevada gaming officials to act on without McBride actually appearing before the commission and telling his full story. The four-year probe by the commission ended with a 2-1 decision to take no action taken against Frank Junior.

 

Frank Fertitta, Jr. was recorded in a 1979 FBI wiretap as part of the Strawman probes as he spoke with Carl Thomas and Tropicana Hotel Manager Don Shepard about one particular scheme to alter the weighing of the take to facilitate more skimming. Casino managers altered the scales so they read only a third of the actual weight of the coins. Even with what seem like extremely incriminating statements made on tape and McBride’s on-the-record court testimony about Frank’s part in the skim, Fertitta somehow escaped indictment:

FBI Wiretap of the Bingo Palace Casino, Las Vegas, Nev. Feb 7, 1979.
9.00pm outgoing call:

Frank Fertitta Jr, Carl Thomas voices heard, inaudible conversation takes place between them as the number 9739-2222 is dialed from The Bingo Palace.

FEMALE OPERATOR: Tropicana
FERTITTA: Don Shepard, please (casino manager)
FERTITTA: Hello Shep.
SHEPARD: Yeah.
FERTITTA: Frank.
SHEPARD: What are you doing?
FERTITTA: I’m sitting here having a glass of wine with Mr. Thomas.
SHEPARD: Oh, good.
FERTITTA: He’s telling me how smart he is and, I’m sitting here listening to him like an idiot.
SHEPARD: Yeah.
FERTITTA: Yeah.
SHEPARD: If you need anybody to tell you how dumb you are come on over, I’m pretty good at that.
FERTITTA: (Laugh)
SHEPARD: Ah, this, listen this conversation isn’t being recorded is it?
FERTITTA: I, I really couldn’t tell ya.
SHEPARD: Yeah. Ask, ask, a ask Carl if anybody’s going to go boogie-ing tonight. I’m ready to boogie, do a little YMCA number.
FERTITTA: You’re ready?
SHEPARD: Oh, yeah, shit, yeah.
FERTITTA: Jesus Christ, I don’t believe this.
SHEPARD: I’m just sitting here, my legs are twitching. I can hardly wait to dance.
FERTITTA: We, were just talking about going out of town or something.
SHEPARD: Oh, yeah, well actually I should go out of town to dance.
INTERUPTION OF RECORDING
SHEPARD: Did you see me?
FERTITTA: I didn’t see you.
SHEPARD: Oh?
FERTITTA: No.
SHEPARD: A quarter of it whatever.
FERTITTA: Right, so if these coins cost us say $20,000, we got $150,000 on, you know, we’re going to have like $130,000 in excess cash.
SHEPARD: Yeah.
FERTITTA: You know.
SHEPARD: Yeah. We don’t have that problem over here.
FERTITTA: Well, yea, you…well I don’t mean excess cash, but I mean more cash than they have so, I don’t think its funny here.
SHEPARD: We’ve got. I’ve got about like $80,000 stock piled.
FERTITTA: Yeah.
SHEPARD: You know or something, we, we haven’t felt any crunch or anything I was just curious if you’re, you know.
FERTITTA: Well we had $50,000 see, but I didn’t want to make the change over here until we got them all cause $50,000 wouldn’t, you know, we couldn’t make the change with 50, so, ah, we need like 150.
SHEPARD: When are you going to switch your tokens?
FERTITTA: As soon as I get them all.
SHEPARD: Yeah.
FERTITTA: I’ll switch in fact I think we’re supposed to have them all. Oh, Jimmy gave me a date today, but I’ve forgot what it was. Ah, now maybe next week or something, then I’ll probably just go ahead and switch over.
SHEPARD: Okay, well listen I’ll talk to you.
FERTITTA: OK

Fertitta’s good fortune would not last, and the skimming suspicions would resurface later on. Yet, with the statute of limitations up on potential criminal charges and the 4-year gaming control board probe dead in the water Frank Junior was free to begin setting the stage for the Fertitta Family empire in Vegas. By then, the old Bingo Palace had made its transformation into Palace Station and Frank Junior hired son Frank Fertitta III to be the General Manager in 1985.

 

Both of Frank Junior’s sons were well educated and groomed to operate successful businesses from a very young age. Dinner table conversation often revolved around business in their younger days, and the brothers proved to be excellent students who heeded their father’s lessons. They had plenty of business to discuss as the 80s saw 13 expansion projects for the original Fertitta property.

Frank Fertitta III and Lorenzo Fertitta would not completely take over the reigns of the family casino business until 1993 when Frank Junior officially retired, relegating himself to more of an observer and advisor role and elevating Frank III to the official owner title. Looking back, it seems to have been more of a symbolic move on the elder Fertitta’s part designed to appease the Nevada Gaming Control Board. A 90s boom period under the official supervision of the sons saw 8 different casino interests added to the Vegas family empire between 1994 and 2001. That same kind of acquisition rate might have been impossible as long as Frank Jr.’s past could be brought up to shed a bad light on future gaming license applications.

It appears that a 1992 foray for the family into Missouri may have been what finally forced the father’s hand to sign Station Casinos over to his son Frank III. State gaming regulators swooped in and demanded answers to the skimming allegations against the father, and the Fertitta family would find almost nothing but misery in Missouri until an old associate’s untimely death in late 1993 cleared the way for their casinos to come to town.

Frank Junior’s influence and his intricate history of Mob ties have remained hidden and unexplored of late. Maybe because of the new “clean money” mantra the sons maintain in the public eye today. Maybe because not enough people care to look deep enough or far enough back to understand it all. Whatever the reason, by shedding the weight of their father’s tainted reputation and scratching his name from the company’s deeds, the sons blazed a new era that eventually landed the brothers on the Forbes 500 list.

PART THREE OF THIS SERIES: “7 Years of Bad Luck” chronicles the Fertitta Family’s unsuccessful attempts to branch out and solidify casino interests in Missouri.

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