From Left to Right: Teresa Fertitta, Lorenzo Fertitta, Anne Stella White and Dana White
"Aren't you afraid you're gonna get whacked?"
This is a question I used to get asked all the time. Most people who found out what I was doing with this site thought that prospect was a natural occupational hazard of covering the Fertittas and their involvement in intentionally bankrupting Xyience.
The reality was I never got a single threatening phone call and never felt like there was a real target on my back. However, I did always take precautions to make sure the Fertittas would never find out where I lived when I was stuck in Las Vegas for two years fighting their attempts to profit off their destruction of Xyience. This involved some creative evasive measures. Exiting the courthouse and getting home without a tail each time I appeared against them was an adventure in itself.
Why was I so confident nothing horrible would happen to me? The regulated nature of the casino industry requires near spotless records to be maintained by all license applicants and license holders. The Fertittas would not risk injuring me or killing me and having it even appear to be linked to them. Their empire would be at stake if they gave my reports credence by making me disappear. If they maintained any obvious illicit relationships with anyone connected to organized crime, they could lose their casino licenses. So, even the most inconsequential ties to "the Mob" would have to be kept very close to their vests and top secret to avoid the appearance of impropriety.
So, what does any of this have to do with Dana White and his wife getting in a slap fighting spat in Mexico while drunk and emotional? Bear with me. It's a fairly long story that starts with a yearbook photo I acquired of Anne Stella from when she was at Bishop Gorman High School in Las Vegas:
The photo above links to my Pinterest account where I also have pictures of Dana White and Lorenzo Fertitta from their common years at Bishop Gorman. All these years after I connected with a Bishop Gorman classmate who sent me these pictures, the story has finally come full circle.
The Bishop Gorman nexus perhaps explains everything about the way the UFC operates as a business today. It is so much more relevant now than it was back then, because I have made a new discovery from a 7-year-old interview I conducted with June White, Dana White's mother (Starting at the 1:11 mark). June and I covered a very wide range of topics, but a recent review of that audio (start at the 1 hour and 50 minute mark) uncovered a crucial detail I neglected to follow up on until this past week. It relates directly to who Anne Stella White really is and reveals a perfectly good reason why all the alleged affairs Dana White's been implicated in never resulted in a divorce. It's not just because they've known each other since they were 12.
June White (L) and her son Dana White (R)
The Real Anne Stella White Story and Why We Don't Know It Already
I specifically discussed the concept of "UFC nut-huggers" with Dana White's mother. If you're not familiar with the term, it refers to people who will never utter a bad word about the premiere MMA organization. On top of that, some of them are actually paid to post all kinds of complimentary stuff on social media about Dana, UFC business, UFC fighters and UFC events. I'm not talking about just publicists, either. Some paid posters are even encouraged to verbally squabble with doubters and detractors of the organization. I saw it firsthand while posting links to content here at Sherdog and on other mixed martial arts forums. June White successfully sued over one particular woman linked to her son who trolled her viciously online after June's book went public. June even informed me that my book on representing yourself in court helped her out in some key areas.
So it did not surprise me one bit when Dana White's most recent scandal had more people defending him than demanding his resignation. He even had loyal UFC fighters standing up for their boss.
"She hit him first" was the most common refrain. She threatened the reign of their king, so the spin had to be that this was all her fault. It's as if these fighters, fans and devoted UFC media only watched the first part of the video where Anne slapped Dana and Dana slapped her back once. I don't think most of these "nut-huggers" bothered to acknowledge the second and third slap from Dana. It appeared something was thrown at Dana's head to ultimately stop his continued assault after that. Much of the final moments were blurred by darkness and the entire violent scene blending into the crowd.
You know what else is in the dark? Anne Stella's background. Here are a couple of articles that claim to tell you everything you might want to know about the wife of "The Baldfather:"
It appears that there are a lot of unknowns about Anne and her family. She's kept her past top secret and avoids the public eye like the plague. June White knew the real reason why she had to do that. She told me 7 years ago that Dana's father-in-law was connected to the Chicago mob. For some reason I never followed up on that tip until a week ago when the Mexican slap-off became a viral story.
This passage from a lengthy article explains the Stardust skim from an insider perspective:
"Johnny Rosselli later named other Stardust “supervisors” brought in for good measure: “[Sam Giancana] sent Al Sachs and Bobby Stella to help [Drew]. Dalitz’s got Yale Cohen to watch his end. But Sam’s got a sleeper in there, Phil Ponti, a made guy from Chicago. A real sharp operator.”
When the Stardust finally opened for business on July 2, 1958, it proved well worth the effort. After the grand opening, attended by guests of honor then senator and future president Lyndon Baines Johnson and his trusty sidekick Bobby Baker, the money began arriving in Chicago almost faster than it could be counted. “They’re skimming the shit out of that joint,” Rosselli later told Fratianno. “You have no idea how much cash goes through that counting room every day. You, your family, your uncles and cousins, all your relatives could live the rest of their lives in luxury with just what they pull out of there in a month. Jimmy, I’ve never seen so much money.” Coming from a man who had lived through the phenomenal profits of the bootlegging era, this speaks volumes about the lure of Las Vegas.
The last part of that snippet above is ironic considering the fact that the Fertitta brothers lived their entire lives in luxury thanks to their father's casino industry legacy. It's certain that Frank Fertitta Junior did not just cross paths a few times over the years with Bobby Stella. Fertitta and Stella were intimately involved in the casino skimming efforts popularized in the movie "Casino" starring Robert Deniro and Joe Pesci. Fertitta's Wikipedia page explains:
"...he [Fertitta] worked as a dealer, pit boss, baccarat manager and general manager at properties including the Stardust; Tropicana, Circus Circus, Sahara and the Fremont in downtown Las Vegas."
Again, an obituary tells the hidden story behind the very close relationship between the Stella and Fertitta families. The "Memories and Condolences" section of Frank Junior's "Legacy" page contains the following entry left by Robert and Roberta Stella:
"Our thoughts and prayers are with Mrs. Fertitta and her devoted family always. You are all very special to us."
Mafia Mentality Permeates Dana White's UFC Management Style
Restrictive contracts, rewarding extreme employee loyalty and routine intimidation tactics utilized by Dana White over the years in his role as UFC President now make so much more sense. They call him "the boss" for a reason. You have to "put on a show" to make it in the UFC long term. In other words, as a mob boss would say, "You've gotta be a good earner." You have to be the kind of fighter that puts eyeballs on the brand and asses in the seats if you want to get Dana's admiration and a good return on your investment in training.
Organized crime has always been hovering in the background for the entirety of White's reign over what is widely considered the most powerful mixed martial arts league on the planet. It makes the James Krause betting scandal seem tame now in comparison. I interviewed Krause in 2016 for a now-defunct podcast. He was one of the few outspoken fighters involved in the UFC, but only because he always knew he had to diversify his income.
Another fighter who graced the Octagon more than a few times joined our podcast back in 2010. It was just before what turned out to be his last fight in the UFC, which he lost by knockout to Brad Tavares. "The New York Badass" Phil Baroni was involved in an even more horrific domestic violence incident in Mexico recently. Baroni allegedly murdered his girlfriend after she confessed to cheating on him with another man.
Baroni, known for his abrasive attitude and balls to the wall fighting style, was on his absolute best behavior during our chat. I asked him one last question about Dana White's rule over the UFC when we talked back then." It's his money, it's his show and he's the boss," Baroni said.
Listen to his answers to my last two questions for Baroni by following the link below.
We also can't neglect to mention the double standard involved in the "slap heard around the world." The "do as I say not as I do" mantra fits the scenario perfectly. White has thrown people out of the UFC for getting wrapped up in incidents of domestic violence. Yet, his own example of the same behavior is treated much differently. There has been no formal punishment at all despite White admitting publicly he has no excuse for his actions.
There's no doubt in my mind that this debacle is something Dana White will effortlessly bounce back from. The organizational underboss has all the job security a guy could want due to his popularity and pull. However, things might have been drastically different if his father-in-law was still alive when Dana slapped Bobby Stella's beloved daughter down in a drunken rage. Who knows what Anne's dear old dad would have done in this situation if he was still walking among us. I imagine the penance Dana would have to pay in that case would have been much harsher. Instead, look for this news story to drop off the radar and fade into oblivion while Dana continues with "business as usual."
This Saturday Nevada will caucus to determine how many delegates will go to which candidates running as Democrats in the 2020 race for the White House. The most significant political force to weigh in on who should get the ultimate nod on this special day for national politics will be Local 226, The Culinary Union.
This reality is much to the chagrin of a common enemy I share with this particular union, Billionaire Brothers and Sophisticated Scam Artists Lorenzo Fertitta and Frank Fertitta III. Suddenly the blackjack tables are turned in Las Vegas. It used to be the Fertittas wielding power over the union, refusing to acknowledge stringent efforts to unionize their casino chain. Station Casinos, AKA Red Rock Resorts is now losing the fight. The Culinary crew is infiltrating one Station establishment after another.
This is a nasty fight, one that countless union dues have gone toward waging relentlessly over the years since I began investigating the Fertittas for their shady involvement in the Xyience scandal. I've actually personally been interviewed at length by Culinary Union researchers on multiple occasions. Much of the information they put on their anti-Fertitta Web-sites originated with my reporting here and simply expanded on that work. At one point this fight was so fierce that the union resorted to what I saw as a sick and twisted campaign to make fighters in the UFC (also owned by the Fertittas at the time) believe that this same union would step up and stand up for their rights to fair treatment, too. The culinary union put up a Web-site pointing to a potential effort to organize fighters but never really bothered to make any legitimate foray into that realm. It was a bluff I personally blasted in an article on Rant Sports.
Now that the Fertittas are out of the fighting business altogether, I can look at this union a bit more objectively and perhaps forgive them for biting off more than they could chew years ago. After all, their people definitely picked up where I left off with exposing these spoon-fed crooks moonlighting as successful self-made men.
If you wonder just how much this feud is hurting the brothers and their casino investors, consider the moves they've made recently to pump up the stock with personal investments from family trusts and the suggested selling of senior notes to raise $750 million. They are even shopping around property they own to pay down some of the massive debt they've incurred. The fact that this company once again left the veil of private ownership and became a public entity did not stop the managing interests from tainting the brand with their financial tricks.
The Palms project alone comes in at an expense of nearly $1 billion if the cost of the purchase is included. This gamble will really have to pay off, and they will have to pinch every penny moving forward to survive an ongoing battle like this with the likes of the Culinary Union. Only the infusion of their own personal capital staved off a completely negative trend in the Red Rock Resorts stock that saw more investors losing shares than acquiring them last year. That money was not even really all that important to the Fertitta brothers themselves. It was more like a raiding of the piggy bank where they keep the future inheritance their children will enjoy someday. All of the funds came from trusts, not really out of the personal coffers they covet and hide in multiple business entities like "Fertitta Capital" and "Fertitta Enterprises."
The Culinary Union is in this for keeps, and now they are clearly at a tipping point ahead of this caucus. There is no doubt the Fertittas and their friends will be flooding Donald Trump and the rest of his party representatives with donations to stave off a Democrat takeover after the 2020 general election. If the United States decides to elect a Democrat as president, the Fertittas will likely get out of the casino business as fast as they possibly can. The union takeover will be all but inevitable.
Already the pressure is becoming unbearable as there is no stone left unturned in the fight to expose the Fertittas as frauds. At one point Station Casinos was voted by workers as one of the best places to work in Nevada, but these days Culinary folks are alleging that the chain is an unsafe working environment that OSHA should investigate. It's hard not to look back at this very moment on the tumultuous bankruptcy the chain escaped virtually unscathed. Billions of dollars in debt were erased. The amount of money spent on "going big" with The Palms may come back to haunt the company. This is especially true since there is such a focus on art involved in the $690 million overhaul. The Fertittas have not had the best luck in the art world. Frank Fertitta III once bought what was later determined to be a fake Mark Rothko painting. He paid a whopping $7.2 million for the con in the classic case of a swindler who got a taste of his own medicine. Lawsuits helped him recover the money he lost, but it was still an indicator of how the brothers often spend their income recklessly and don't use the best judgment in business decisions.
There is also still tremendous buzz about the Fertitta brothers being interested in owning an NFL team, which would likely depend on a major sale like what I described above. Still, I would not offer any odds on that prospect unless they ingratiate themselves with a more wholesome group of partners to make the deal. As is, they are barely suitable to be given a gaming license in any state. Their connection to various cases of corruption, scandal, fraud and abuse of the bankruptcy laws is telling. They cannot run from their history, as this recent Chicago Tribune article explains. The National Football League would be wise to keep them far away from any team ownership position.
As for this weekend's caucus efforts, look for the Culinary Union to take advantage of the spotlight that will be on Las Vegas and Station Casinos on Saturday. Regardless of whether or not the Democrats have any chance to unseat Trump, the Culinary Union will continue to fight for better treatment of their workers. Their momentum is palpable, and their influencing power is potent. For once in their lives, it may actually be time for the Fertitta brothers to play nice and surrender in this war of attrition. They will only hurt themselves and their investors in the long run if they keep butting heads with this growing political force. Financial losses can be recovered, but reputational damage is typically more permanent.
CLICK ON THE PICTURE BELOW TO READ THE "BEHIND THE MUSIC" OF THE UFC'S FERTITTA FAMILY DATING BACK TO THE FAMILY'S MAFIA ROOTS IN TEXAS. Help us get to 3,000 reads!!!
Taking A Moment To Look Back In Order To Prepare For The Road Ahead.
By: Rich Bergeron
Recent developments in the Xyience, Incorporated scandal triggered a renewed interest in the above-linked story that I posted on The Bleacher Report Web-site. A commenter on This Story at FightOpinion.Com about the recent Xyience scandal's resurgence says it all about the public's ignorance of the semi-secret Fertitta Family history:
"If Zuffa got caught as a shadow organization for the Gambino family or something, the press would be running each other off roads trying to be the first to make it to ambush Dana and the Fertitas for interviews. But a company doing simple corporate shadiness is boring."
Another commenter pointed the above user to my story about the real "family" history.
The fact is, all of these back room business deals surrounding Xyience and Station Casinos are so complicated and convoluted that nobody really wants to examine them under a microscope but the real legal experts. I had to examine these deals out of sheer necessity after I was wrongfully sued by Xyience for writing the truth about the shady activities going on there when my reports began. Fortunately for the shareholders of the company, I never gave up. Now the estate's liquidation trustee has a legal team working on dozens of complaints to return millions to the estate that was stolen through multiple streams of abuse and financial fraud. Fertitta Enterprises is tied to much of the alleged tampering with the bankruptcy. Based on what I know, these civil allegations could be only the beginning.
Eventually the whole MMA fan base that follows the UFC will be the ones looking back at these deals out of necessity to find out what went wrong and when. This is not the kind of ho-hum news that fades away with time. It only gets increasingly worse, and one day it will be time for the Fertittas to pay the piper. How much the UFC suffers as a result is up for debate, but the argument that it won't suffer is far-fetched.
The mainstream media will eventually take notice, and the Fertitta family piggy bank will eventually be drained by voluminous legal fees as they fight banks and Boyd Casinos in Vegas to retain a hold on the Station Casinos empire Frank Jr. built on a dollar and a dream. Fertitta Enterprises will take a big hit on Xyience if the trustee's case is successful in pinning the blame on that entity for initiating the BK on false pretenses and screwing the shareholders and creditors in the process.
Vegas itself appears to be under extreme stress lately due to the financial mess created by overzealous casino barons who outspent themselves and left unfinished projects languishing as a result. It is one of the worst areas hit by the housing market slump, and it is one of the most troublesome areas of the country when it comes to the homeless population. Recent media reports out of Vegas included an armored car robbery at Station Casinos and a shooting at the same federal courthouse where the Xyience bankruptcy is going on (that happened today). This is a distressed community, and it's starting to show. People are starting to become more brazen and unpredictable in their desperation.
These are the negative forces and issues brought to light by financial fraud and abuse of power. Much like the Bernie Madoff scenario had been handed to the SEC on a silver platter ten years before it really went up in smoke, the Vegas landscape also includes culprits who should have been caught a long time ago. Instead, the wheels they greased protected them from all harm. People develop feelings of being powerless because the upper crust continues to steal and get away with it and destroy lives in the process. Eventually their rage will boil over, and they will eventually be inspired to fight back. They will steal themselves, like the Station robbers. They will destroy lives themselves out of frustration, like the courthouse shooter. Those who take such measures may be few and far between at first, but as the crisis worsens and widens the population of people wandering off the reservation will grow.
The latest generation unfortunately seems to care more about what their favorite Hollywood star is writing on Twitter these days than they do about these deep, mysterious scandals in sports. The Call of Duty used to be more than a popular video game to the youth in this country. We've eroded into a do-nothing society when it comes to really trying to join together to fix the most egregious evils we see all around us. Most of us stand still and devote our lives to meaningless tasks and our jobs as cogs in the machine. Few step up and try to challenge the status quo. When people do fight back and get shut down, others cower behind them with no reason to try for a different result. We become sheeple, and the government officials (with the help of all the Capitalist fat cats who feed them) can shove whatever they want down our throats with the same old-fashioned pomp and circumstance as they've always operated with.
I was always taught to look deeper. Ask questions. Search for the truth. I'm glad I chose a battle such as the Xyience situation to get entrenched in, though the process has been painful and stressful to no end. I have no regrets, and I'm confident everything will work out in my favor when this case is in the history books. The dramatic effect this case has had in my life will translate beautifully to a book on the whole fiasco from start to finish. The legal victory in the long run will allow me a real-life model to show others how to embrace their own cases as their own attorneys and possibly win their own fights by following my example. That's all I really hope for.
It might not happen overnight, but the people's revolution is afoot and building momentum. If we don't stop cowering in the face of conglomerate corporate evil and face down our fears now, we'll simply be overtaken by the great wave of corruption that's destroyed this country.
$900 an hour lawyers should know better than to come into a casino bankruptcy without an open dialogue going with state gaming regulators. Yet, Station Casinos attorneys were caught with their pants down by the Reno, Nevada judge handling the case recently. It seems there has been no effort to even contact state regulators yet, though the company is already deep into bankruptcy. This Las Vegas Review Journal Article Says it All:
Dana White Twitters with the best of them. Why can't the Fertittas or their attorneys follow his outspoken lead and pick up a phone and talk to some regulators? Probably because they are worried and leery of regulators finding out what's been going on there since the privatization of Station Casinos. That leveraged buyout is now being shrouded in conspiracy theories, and high-caliber lawyers are just now starting to dig into how that deal was done and who benefited most. We reported here on the suspicious lending anomalies regarding Station Casinos long before the bankruptcy was even looming. Frank Fertitta III had his signature on a few senior secured credit facilities for Station Casinos that are eerily similar to the one illustrated here (from a few years ago).
Another player, Vulture Capitalist Tom Barrack (His Colony Capital is part owner of Station Casinos and financed much of the buyout) is also raising eyebrows with billion dollar deals like this one. If the SEC slept on Bernie Madoff, they are in a coma in regards to this case and the tiers of corrupt players. From Xyience to Station Casinos, from Arc Investments to Zuffa this whole web of corruption is astounding in its scope and structure. This web is Global (Global Cash Access), National, and Local, and the longer it goes on unchecked the bigger the risk that MMA will end up with the black eye as a sport because of a few misguided people at the top levels of the sport. It is going to come crashing down at some point as all great schemes do. The Fertittas have made their money by borrowing upon borrowing and taking "dividends" from the company proceeds. They found a way to legally rape and pillage their own company with promises of a better tomorrow that turned out to be untrue.
Today, one can only hope the bankruptcy court and the regulators (whenever they do get involved) will find all the red flags and figure out what's really been going on all these years. The brothers Fertitta will have to eventually face the music. It's an open question as to how that will affect the UFC. If they have to shell out hundreds of millions of dollars in considerations and potential settlements with Station creditors, the family fortune may be so dwindled that they are forced to sell a large piece of the UFC organization to a friendly player. Mark Cuban or Vince Jr. (Shane McMahon) could be potential future insiders who wind up with controlling interests in the UFC if the Fertittas' funding sources run out and their credit dries up. Whatever happens, keep your eye on this Station situation and watch for the ripple effect.
When it rains, it pours for the Fertitta family. Last Friday the patriarch Frank Fertitta, Jr. died while undergoing treatment for heart disease in a California hospital. The death comes at the tail end of a long and painful campaign of pending bankruptcy that finally ended in the Chapter 11 proceedings that are now ongoing for Station Casinos. Services for the founding father of Station Casinos have been set for this Friday and Saturday. Yet, amidst all the major media reporting of this tragedy, only the Los Angeles Times piece on the subject has so far included the truth about the skimming investigation Frank was suspected in. Even then it was too little, too late.
The fact that Frank had been suspected of and investigated for skimming during his early career was much more important to the downfall of Station Casinos than many might think. It is this bare fact and the stigma that Frank never quite shook which kept him from being in charge of the company until his death. Instead, he was CEO of Fertitta Enterprises for a time, working on investments and land deals since he couldn't get involved in running the casinos. He left that job to his sons, with Frank III taking the reigns first in 1993. It just might be this early mantle laid upon Frank's oldest son that created the conditions which now exist today. The billionaire Fertitta brothers have shown over the years that they were never quite prepared to run the family business, unless the goal was to run it into the ground.
Perhaps the fatal blow to the family business and maybe even the father himself was the potential loss of Palace Station to Boyd gaming, a long-standing opponent and major competitor in the locals Vegas gaming market. Frank Junior reportedly spent every lunch hour he could at Palace Station, which was his true pride and joy and a place he might have loved even more than his own sons. This was the place that made the pauper into a prince. It all began with a little place called simply "The Casino." The name changed almost overnight after Frank Junior bought the shabby property and turned it into The Bingo Palace:
Knowing that Palace Station might be snatched away from the family by a well-placed bid in bankruptcy court must have been hard for Frank Junior to deal with. His sons must have been equally disturbed by the fact that their poor financial management of the company and over extending of company debt could ultimately lead to them losing their father's prized property to the highest bidder. Despite early rejections of Boyd's offers to purchase a group of core, less debt-laden properties during the days before bankruptcy set in, the competitor is now more intent than ever on acquiring whatever it can from its ailing enemy. If they get what they're looking for, it might even come at a lower price than they initially offered.
THE UFC IMPACT COULD BE SEVERE IN TIME
Dana White's attitude about Station Casinos falling on hard times was glib at first, and he insisted the casino troubles wouldn't translate into bad times ahead for the UFC. Yet, there is now talk of consolidating the WEC and UFC operations in what would ultimately be a cost-saving measure. The Fertittas seem to be showing signs of financial stress and things continue to get worse for the casino environment. There seems to be no bottom to the depression the company is experiencing with a reported $65.3 million loss posted by Station Casinos in the second quarter of this year.
Now that the company is in bankruptcy, the $244 million pre-packaged bankruptcy solution proposed by the Fertittas is out of the question.The company already reportedly has legal bills in excess of $16.2 million for the months leading up to the actual BK filing. The Fertittas themselves will also have to retain their own lawyers along with the rest of the company's directors. The road ahead is sure to be filled with turmoil as the finger of blame will likely be pointed squarely at the Fertitta brothers due to their ultimate oversight of the company during its fall from grace. More litigation will compound the bankruptcy as lenders and bondholders will try to exact revenge by trying to bust the big Fertitta piggy bank with the aid of high powered lawyers and law firms.
The uglier the Station Casinos bankruptcy case gets, the more chances that the debacle will impact the UFC's operations in a negative manner. The so-called "experts" in the fight industry will claim that the two companies are wholly separate and unrelated. As such, they will further try to justify that the UFC is safe and secure no matter what happens to Station Casinos. At the same time these "experts" will harp on the bogus $1 billion price tag bestowed on the UFC by a Forbes magazine writer who seemingly never took into account the fact that there is a heavy debt load associated with the fight league that few talk about when a possible sale is discussed. My Enron of MMA page outlines all the details of the $350 million senior-secured credit facility that will make the UFC difficult to sell for a high profit margin. Even if the UFC's growth and success is perpetual, that loan will still have to be paid off in full before any sale would be worthwhile for all the players involved.
The vast wealth of the Fertitta family may actually be a barrier to the success of the UFC rather than a benefit considering the fact that the deepest pockets make the best targets when it comes to litigation. It doesn't take a rocket scientist to analyze the moves made by Station Casinos over the years and conclude that while the company itself suffered, the Fertitta family cashed in hand over fist. The litigation buck doesn't stop with Station Casinos, either. Though it's been a case that's been flying under the radar in recent months, the lawyers for the former PRIDE organization are still pursuing legal action against the Fertittas, Dana White, and Zuffa over allegedly false promises made that were supposed to guarantee PRIDE would continue as an active organization as part of the sale agreement. I have spoken personally with some of the lawyers on the case who are leaving no stone unturned and not giving up anytime soon.
While Frank Fertitta Jr.'s recent death may mean the brothers inherit some of their father's leftover fortune, even that influx of cash may not be enough to weather the storms to come. Of course, there are plenty of scenarios that could play out that might keep the Fertittas in great financial standing through all of this. Yet, to say that they are guaranteed to get through this with no real impact on the UFC is to neglect to consider the true facts at hand. Those facts point to the very real possibility that the Fertittas could exhaust their existing cash reserves while Station Casinos languishes in bankruptcy. If that happens, you might see the Fertittas seek another big loan package for the UFC putting that outfit in further debt. After all, the last UFC loan came only after the Fertittas overextended their credit with similar instruments they secured for Station Casinos. Those huge loans and an overzealous expansion of the company's gaming interests and land holdings have resulted in the current Station Casinos bankruptcy situation, and if something that big can fail so miserably, so can the UFC.
The bottom line here is that while the UFC brass and the associated spin machine will try to convince the fans that everything is on the up and up, behind the scenes times are very tough. The UFC continues to find success and expand its fan base in a manner that makes it appear ironclad and in no danger, but behind the smoke and mirrors there's a real possibility that things could soon start to go downhill fast. It all depends on what kind of impact the impending litigation and bankruptcy of Station Casinos has on the Fertitta family war chest. This is a family used to spending money at a rapid rate, and Frank III's $28 million home purchase during the toughest time Station Casinos has ever faced is a clear indicator of that. Those who might argue that it would be impossible for this family to lose everything over this might be the same folks who once thought Station Casinos would never go bankrupt.
As a huge fan of the UFC myself, I would never want to see the organization as a whole suffer over issues at a company that is supposed to be unrelated. At the same time, I have to wonder why the Fertittas would promise up to $244 million to keep Station Casinos out of a nasty bankruptcy. The only answer to that question is my mind is that they must have known if they couldn't make that deal things would get very ugly very fast. That's exactly what's happening. The only folks who will truly capitalize here are the bankruptcy lawyers, and there are already reports of huge legal fees accruing (as much as $995 per hour for some of these top-tier hot-shot attorneys).
As long as Station Casinos continues to lose revenue due to the poor economy and a prolonged bankruptcy, the Fertitta Brothers will have less money to invest in the UFC. If a complete catastrophe drains the Fertitta family coffers, they may very well try to leverage Zuffa's assets somehow. If at that point they are shafted by potential creditors and/or lenders, the real troubled waters for the company will start churning. A sale of the company might never take place as some have reported, but the lack of cash reserves could result in the UFC becoming a much more streamlined organization. Whether or not that streamlining negatively impacts the business remains to be seen, but those who tell you there will be no impact whatsoever are wishful thinkers. It all depends on how bad things get in the days to come.
SAINTS OR SINNERS? WILL THE FERTITTA REPUTATION RECOVER?
"A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was."Joseph Hall
The Fertitta family still has a rock-solid reputation in Las Vegas. Numerous reports of Frank Fertitta, Jr.'s death in the Vegas media have made no mention of the family patriarch's troubles or tribulations. The most familiar refrain in these Vegas reports reflects the fact that Station Casinos has been repeatedly represented as one of the best companies to work for in Las Vegas. These articles also laud Frank Junior for virtually inventing the locals casino market. As far as Station Casinos bankruptcy news, I've yet to find an article that even suggests that anyone in the Fertitta family was reckless or irresponsible in the business practices that led to the bankruptcy.
Only a nasty and contentious bankruptcy process, which seems inevitable, will tarnish the Fertitta image in Sin City and beyond. Local reporters will have no choice but to explain what's happening when things get truly ugly. The cracks in the facade of the once untouchable family reputation will only then become fully visible.
As the truth emerges as to just how irresponsible the Fertittas have been leading up to this bankruptcy, it will become increasingly harder for the Fertitta Brothers to do business elsewhere. The way Fertitta Enterprises handled the Xyience bankruptcy is a perfect example of how powerful people can get away with impropriety with little consequence, but that was really small potatoes compared to the current situation with Station Casinos. I truly believe the Xyience debacle was a practice run for the bigger and bolder Station Bankruptcy. Though the Xyience situation was a much less sordid and scandalous affair than the Station Casinos bankruptcy process promises to be, there are some common threads. Unlike Xyience, though, the Fertittas have much more to lose when it comes to the casino business. I wouldn't be surprised if the Fertitta brothers completely sell off the business and confine themselves to either just a few properties or the consulting business alone.
Whatever happens, it will expose the true nature of just how ruthless billionaire business tycoons can be and what lengths they will go to in order to keep the money coming in. Those who think the Fertittas are saints and can do no wrong will ultimately have to accept that the sinner label is more appropriate. Just think about how much these guys are worth, what kind of money they're spending, and then look at what their fighters in the UFC get paid. No matter how successful the UFC becomes, it seems the league's top fighters will never get the kind of paydays that the best boxers get. This reality seems lost on most fans, and any fighter who speaks up about it knows there's a strong possibility of being blacklisted at best or thrown out of the league at worst.
For those few folks out there who know the real truth about how the Fertittas operate and the "family" history that put them where they are today, their comeuppance can't arrive too soon. Karma is a bitch.
Station Casinos has filed for bankruptcy after negotiations with creditors failed to produce a workable solution. While the bankruptcy filing only affects a portion of the vast business and its many arms, it could be a very long fight. The company, laden with an estimated $5.7 billion in debt, is playing off the move as nothing to get alarmed about in recent press reports:
...after Carl Thomas dies in a mysterious single car accident, everything still goes bad for Frank Jr. and his heir Frank III.
Part Three in a Four-Part Fertitta Family History.
By: Rich Bergeron
Lorenzo and Frank Fertitta III, with father Frank Jr.’s help and counsel, built Station Casinos up from a single off the strip hotspot in Las Vegas into an economic empire other casino barons envied. The empire went public and back to private in the blink of an eye and now stands to face bankruptcy if something drastic doesn’t happen soon.
To help myself understand the current scene a little better, I had to look back to when the oldest brother first put his name on the dotted line. It was Frank III who did the deed, literally. He did it to help the family business get into the hotbed state at the center of Frank Junior’s Mafia connections: Missouri. Home of the Kansas City Civellas for some of Frank’s best early days at the Fremont in Vegas.
The transition to power for the eldest son would not come easy. Frank Junior’s old demons plagued the company yet again during early attempts to expand into Missouri in 1992-1993. Again, another star witness’s testimony before a gaming commission had the potential to cause Frank Junior bigger problems than he could afford. This time it was old friend and business partner Carl Thomas himself who was asked to offer on-the-record insight into the elder Fertitta’s past transgressions. He would never get the chance.
Carl Thomas’ agreement to attend an inquiry with the Missouri Gaming Commission may have been the worst—and last—decision he ever made in his life. The mystery begins with Thomas travelling to Vegas from his home in Oregon to meet with Station executives and discuss his pending testimony. If Frank Junior himself attended the November, 1993 meeting it was the last time he saw his old friend Carl.
Thomas left Vegas alone to return to Oregon before heading to Missouri. Strangely enough, Thomas never made it to Missouri. Instead he died in a still unexplained single car accident.
Stelzer adds: "At the time of his death, Thomas was driving a 1992 Chevrolet Suburban. Because he wasn't wearing a seat belt Thomas was ejected from the vehicle and apparently crushed when it rolled over. Approximately a half-ounce of cocaine was found in Thomas' jacket pocket, according to the report."
Due to the master skimmer’s untimely death, the Missouri Gaming Commission couldn’t complete their inquiry into Frank Junior and they granted licenses to Station Casinos. Even without Carl Thomas telling his story, the Missouri licenses in St. Charles and Kansas City came only with the understanding that Frank Fertitta Jr. would have absolutely no role in the company's operations.
It seemed that even the dawning of a new millenium didn’t prevent the father’s sins and bad Karma from catching up with his sons.
St. Louis Attorney Michael Lazaroff helped the Fertittas break into the Missouri market, but his crude, sloppy methods were later exposed and resulted in more heat than the Fertittas could withstand. According to another C.d Stelzer report Lazaroff later pled guilty in federal court to defrauding his law firm by going off the reservation and taking $500,000 in bonuses from Station. He also pled guilty to defrauding clients, including Station, by padding his expenses.
Stelzer's reports also revealed the following:
Investigators found Lazaroff made 205 private phone calls to former Missouri Gaming Commission Chairman Robert Wolfson on behalf of Station Casinos, which was against state law.
Testifying before the commission in August of 2000, Lazaroff said he used his personal relationship with Wolfson to increase Station's chances of getting their Kansas City gaming licenses. Lazaroff also testified that Station officials knew exactly what he was doing.
"They from time to time would ask me to run things by Chairman Wolfson and see what he knew about it," Lazaroff testified.
David Helfrey (pictured), Station's outside counsel in Missouri, had an interesting background. Perfectly suited for the occasion, Helfrey was a federal prosecutor in Kansas City before deciding to turn to a career as a criminal defense attorney. Exactly what led him to make such a drastic career move is unknown, but my instincts tell me it might have had something to do with the government paychecks not being big enough for busting open the Mob's Vegas piggy bank. Helfrey must have been pretty hard up to do such a complete 180, easily assuming a role as the unofficial Fertitta Family consigliere in Missouri after years of prosecuting so many of Frank Junior’s old associates.
Helfrey definitely knew all about the Fertitta family's background. While working as a prosecutor, he would have had to review and be familiar with FBI transcripts that recorded Frank Junior in conversations related to casino skimming operations orchestrated by Carl Thomas. FBI tapes of Thomas himself mention Fertitta repeatedly as being a part of his crew, a crew that bilked the Argent casinos out of millions and funneled much of their Vegas proceeds to Mafia families in Kansas City, Milwaukee, Cleveland and Chicago. Helfrey worked on those cases and knew all the usual suspects well. Looking back, Helfrey’s interaction to help Frank Junior’s family business in Missouri is not only ironic but also extremely telling of something bigger going on behind the scenes.
Even before I found this information about Helfrey on Stelzer's blog I had long suspected that Frank Fertitta, Jr. and Carl Thomas both cooperated with the government to save their skins. If that is true, of course it would be essential to keep the whole matter an untold secret forever. The Mafia’s “Oath of Omerta” places made men in the organization in a position that forbids them from revealing any family secrets. The “rat” is the most unforgivable scum on the face of the earth in Mafia tradition, and all rats are punishable by death.
Yet, if it wasn’t for the rat’s existence, the worldwide power of La Cosa Nostra would be inconceivably and exponentially stronger than it is today. With the help of the Federal Witness Protection Program, even a "made" turncoat like Sammy "The Bull" Gravano bucked the rat rubout trend and moved on relatively unscathed after corroborating with the government against his high level Mafia associates. More than ever in this day and age the organized families have had to burrow their operations further and further underground, cut out the swaggering old-school bravado, and crack down on risky behavior that leads to government investigations. Those investigations typically start small, with a “little fish” being hooked as a primary low-level informant to take out all the bigger fish, exactly like a rat infected with Bubonic Plague biting everyone it can before it goes down itself.
As I know all too well now from my own family’s law enforcement history, the government has also experimented with recruiting big fish informants in the hope that they will be able to devour all the little fish criminals beneath them and around them. The theory must be: if the process works one way it could work the opposite way, too. This means that our own government sometimes works directly in coordination with known mass murderers, drug kingpins, master extortionists and leg breakers. A few casino skimmers cooperating with the government doesn’t seem too far fetched in that context. I'm not sure if any "big fish" operations were hugely successful, but 20/20 hindsight in some of the government's most high-profile interaction with "big fish" reveal that the technique was often a miserable failure (see Osama Bin Laden and James Whitey Bulger).
Next time you go fishing, I wouldn't recommend throwing a giant fish on a rope into the depths hoping it will eventually swallow a smaller one. Even if that angling technique were to miraculously work for you, it's certainly not practical. Eventually the fish either escapes or stops working for you. As an avid fisherman myself, I recommend sticking to the bait bucket full of shiners. You'll catch much more prey in the long run by putting small guys out there for the big guys to eat up with your hook.
If Frank Junior did inform on his associates secretly, David Helfrey’s coming to the aid of Station Casinos is likely not a mere coincidence.
Helfrey’s transition to a criminal defense lawyer from a federal prosecutor obviously rises to the level of curiosity, but it’s not unheard of by any means. I’m sure it’s not at all that uncommon for state and federal prosecutors to get burnt out and grow tired of government service. The private sector can be lucrative as an attorney, and some hardened prosecutors maybe even develop a soft spot eventually for the innocent guys they sometimes have to go after, the folks who get convicted before the right evidence is revealed to show they didn’t do it.
So, the fact that Helfrey changed careers is not the real surprise. What is really amazing is how Helfrey so zealously went from going after the old Vegas skimming operations to trying to cover them up as far as Frank Junior’s involvement. It doesn’t compute when you try to reconcile the fact that Helfrey heard all the evidence incriminating Fertitta for his role in the Argent skimming but then went to bat for the same guy to help get him another casino license he could potentially utilize to skim again for the same Kansas City organization. It all makes a heck of a lot more sense to surmise that Helfrey didn’t help Frank Fertitta, Jr. in Missouri for nothing. Maybe Helfrey instead acted out of a sense of loyalty to Fertitta for Frank’s help in bringing down his former KC Mob associates, which paved the way for Helfrey to start his own successful law practice. Helfrey had been the lead prosecutor in the mob trial in which Frank Junior was revealed to be an associate of organized crime, and the lead investigator in the case was then-FBI agent Gary Hart, who was also Helfrey's law partner in 2000 and still works at Helfrey’s firm today. Both just might have worked in concert under the auspices of their firm to return the favor Fertitta may have done for them in the 80s by turning State’s evidence on the sly.
Fertitta and Thomas were friendly enough to buy their own casino together, but did they sing together as well? It would certainly explain the balls to the wall approach Helfrey took in support of the Fertitta family. Though, corruption, greed, and a complete lack of a moral backbone could also explain Helfrey's huge change of heart. Nobody really knows the real answer at the moment, but it certainly begs further examination in light of Lefty's post-mortem revelation.
At one of the Missouri hearings regarding Station Casinos, as described by Stelzer, retired FBI agent and former Gaming Commissioner William Quinn testified. Quinn detailed three meetings he had with Helfrey when the former federal prosecutor was acting as Station's lawyer. The two already knew each other because they both worked together on the Strawman cases. The overall FBI operation the two men helped build resulted in the conviction of 19 Mafia members in the Midwest, including the Civellas brothers of Kansas City. The investigations and prosecutions shattered skimming operations at the Hacienda, Fremont, Stardust and Tropicana casinos in Vegas.
Quinn testified that, on one occasion, Helfrey asked him to meet with him and a Station's representative. Quinn also revealed that Helfrey came to Station’s rescue in Missouri only after the Lazaroff scandal broke. However, Quinn discovered that Helfrey was already representing Station in a legal capacity in other matters before Lazaroff went completely off the reservation in Missouri.
To make matters worse for Helfrey, if the attorney did obtain a meeting with Quinn including a Station’s representative, such a meeting would have been in violation of the Commission's "ex parte" rule. The “ex parte” rule was set up in 1994 to make sure that state gaming commissioners did not fall under the influence of the casinos that they were supposed to be regulating. Quinn said he was concerned about his former colleague's suggestion and he refused to meet with Helfrey and the Station's representative.
On behalf of Station Casinos, Helfrey went after Lazaroff with particular intensity, and the crooked, influence-peddling lawyer was an easily intimidated target. He reportedly attempted to take his own life after being caught up in the Station scandal in Missouri, and he told anyone who would listen that he feared the possibility of being rubbed out. Lazaroff retained state police protection during and after the Missouri Gaming Commission hearings that were held in Jefferson City in the summer of 2000 as a result. The embattled lawyer even claimed that Helfrey personally delivered a veiled death threat. Helfrey could be a very imposing person, and Lazaroff himself testified as much:
QUESTION:
“Okay. Did you have any further meetings with -- with Mr. Nielson while he was in the area?”
LAZAROFF’S ANSWER:
“Yeah. Monday, December the 6th we met at the law office of Arthur Margulis, and it was Mr. Margulis and myself, Rich Haskins, Scott Nielson and David Helfrey. And during that meeting Mr. Helfrey said words to the effect of, we don't think that the Commission has anything. We have your sworn testimony that you did not have ex parte conversations. And there will -- there will undoubtedly come a time where you'll be tempted to lie in order to save yourself because of all of these other problems that you have, but we know that you'll do the right thing. Okay? And that was repeated. And I remember walking out of that meeting and turning to Scott and said, I don't want to meet with that guy ever again. He scares the Hell out of me. And Scott said -- said to me, he scares the Hell out of me too.”
Lazaroff was eventually prosecuted for his multiple crimes, and he even pleaded guilty, but not before he rolled over on many of those he had bilked money from in the first place, including Station Casinos executives. In return, U.S. District Court Judge Charles Shaw gave him the country-club treatment. Lazaroff was sentenced to 30 days in jail, 90 days' house arrest in his Town & Country manse, 120 days' community service and restitution.
Station Casinos was finally forced to pull up stakes and leave Missouri like a dog with its tail between its legs in the closing days of 2000. A November 29, 2000 Las Vegas Review Journal article reported: “Station Casinos' Missouri license renewals were rendered unlikely by a disciplinary cloud hanging over the company. Six company officials refused to obey subpoenas to appear at an August meeting of the commission."
Carl Thomas died in early November of 1993, and exactly 7 years later Station Casinos found itself embroiled in hearings and investigations that would lead to their ouster from Missouri on bad terms. The state gaming commission eventually voted unanimously to strip Station and its top executives of their Missouri licenses. Station also agreed to pay a $1 million fine in November of 2000. A voluntarily surrender of its licenses precluded Station’s departure from the state for good late that year.
During his hiatus from holding the full official, financial and managerial reigns of Station Casinos Frank Fertitta Junior has maintained his land buying and trading ways, given a great deal of cash to charities and civic interests, and laid relatively low other than his various publicly reported Republican Campaign contributions.
Frank Junior himself gave Gillespie $5,000, each of his sons gave $10,000, Wife Victoria Fertitta gave $5,000, and Fertitta Enterprises gave yet another $5,000:
As for the guy Gillespie replaced, the retiring Sheriff Bill Young found fast work. A 2007 Las Vegas Review Journal report explained:
Station Casinos even put out campaign flyers for currently-sitting Clark County District Court Judge Timothy Williams’ successful campaign for the bench. The company publicly endorsed him for his judge’s seat. Williams was the first judge to oversee my existing case against Xyience. When I raised the issue that the judge’s own Web-site showed the Station Casinos endorsement letter, Williams did not recuse himself, although he did rule in my favor in the first hearing I was actually able to appear at.
I have even heard that Frank Junior still does butt into some Fertitta Enterprises company business, and some inside sources have told me Frank Junior put some of his very own money behind the $12 million Xyience bailout. Perhaps the most interesting aspect of Frank Junior’s life that I’ve discovered in my investigations is that I’m told he goes to church services every single day. I’m sure the question’s been asked a billion times or more, but yet again it reveals itself here: can one be loyal to God and Mob at the same time?
Looking back it's easy to see how Frank Junior’s blacklisted enterprise could only expand itself for so long in the same place. It's easy to imagine the pressure he must have felt to get out of the town that wouldn’t let him take an inch of new gaming territory without a fight. Yet, he could not escape his reputation by crossing state lines. His organized crime history still impacted the Missouri situation heavily. The state only opened up for the Fertitta family because of the tragic and suspicious death of someone who could have stopped the whole operation cold just by telling the truth about what he knew about Frank Junior's past. Whatever happened on that stretch of farm road in Oregon in November of ‘93 is only known by one entity who’s willing to protest, and it seems that entity is the curse of Carl Thomas.
In our next installment we’ll explore the current Fertitta Empire, including the Zuffa purchase. We’ll focus on the folks I call “The Brothers Fertitta” and their billionaire boom days. We’ll also lay out exactly why Station Casinos now faces a flat out financial bust due to overbuying land and gambling on better days for the Vegas suburbs hit hardest by the housing crisis.
CHAPTER TWO IN A FOUR-PART FERTITTA FAMILY HISTORY
By: Rich Bergeron
CLICK ON THE THUMBNAILS TO SEE FULL SIZE PICTURES
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:
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.
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.
$900 an hour lawyers should know better than to come into a casino bankruptcy without an open dialogue going with state gaming regulators. Yet, Station Casinos attorneys were caught with their pants down by the Reno, Nevada judge handling the case recently. It seems there has been no effort to even contact state regulators yet, though the company is already deep into bankruptcy. This Las Vegas Review Journal Article Says it All: 
