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.
Over the past few months the economic crisis gripping our nation hit with full fury and is promising to only get worse. From corporate giants to Casino barons, everyone is feeling the pinch. The Fight Industry and Sports in general will no doubt be a hard hit sector of the economy as we lapse into 2009, even if Barack Obama turns out to be a miracle worker.
Lately, some of the main culprits and corporate crooks behind the economic collapse have reared their ugly heads. As these individuals and business enterprises emerge as the forces behind the culture of corruption, they always seem to have the same strategy. They grease the wheels, they make powerful friends, and they step on the toes of everyone they can to make themselves a buck. The recent revelation that Bernie Madoff bilked tens of billions from investors and financial institutions around the world should be no surprise in this vulture capitalist economy. Guys like Madoff should have been busted years ago but managed to breeze through previous investigations on cruise control.
And should we really be so shocked that a governor would resort to selling a senate seat? We live in a nation built by pork barrel projects and fat cat capitalists, and influence peddling is the number one sport of those who want to shape their position in the scheme of things.
The worst aspects of the Bush Administration nation have ultimately resulted in the bailouts of gargantuan investment firms, banks, and foreclosure-strapped mortgage brokers. Business as usual in Washington quickly tried to show it was fixing the problem but only scratched the surface of the massive fraud that made it all happen.
In the throes of this economic landslide, it is important to look at some of the characters the major news networks don't normally focus on but perhaps should. The collapse of global gambling and casino interests ranks among the most intriguing untold stories of the financial crisis we face right now. Hundreds of billions change hands in casino deals, and it's not just Mobsters behind the glitz and glamor anymore. Gaming interests and income can be so substantial that they have the power and juice to fuel massive money laundering efforts, counterfeiting, and even terrorism.
Gambling in Macau has a rich history, but it only recently became wide open to outside investors, and those wanting to branch out beyond Vegas came with their billions to develop the next big boom town:
Still, Macau is an imposing and formidable force in the worldwide casino picture. There are more than just a handful of casinos there, and not just one or two are owned by American casino corporations. Vegas East will no doubt continue to see declining numbers as the worldwide gaming sector suffers, and the original article City of Sin may be in for an even more profound fall from grace.
Las Vegas, Nevada is one of the hardest hit cities in the nation due to the ongoing housing crisis. While banks and big businesses get the bailout money first, there's still a long delay getting relief to cash-strapped homeowners who can no longer afford their overblown mortgages. Las Vegas, which had experienced an overwhelming influx of new citizens in the last two decades, is now reeling as real estate prices plummet. So many property-owners there are either upside-down and stagnated by debt or on their way out, abandoning the dusty desert for other locales where the crisis isn't so pronounced.
Packer's lost nearly a billion dollars in net worth in these lean times for gambling. Like the Fertitta Family in Vegas who partially owns Station Casinos and represents the managing partner of the Casino chain, Packer has friends in the media. The Fertittas are partners on some of their developments with the Greenspun family, which operates much of the local Vegas media scene from newspapers to television stations. Packer cut out the middle man in Australia by having a direct ownership position over much of the country's media industry. Packer's approach seems aimed at acquiring as much control as he can over his country's media landscape.
James Packer's had an incredibly rough year. His international gaming enterprise Crown Limited has been his albatross as the world's financial picture transitions from bad to worse. Packer's only big break of late was when his 25% interest in PBL Media was saved by a last minute rescue package, which was just announced overnight. Packer's luck may not be as good as Station Casinos' in their recently failed attempts to recapitalize. Hover, it seems that Packer's personal fortune is not just tied to Vegas and Australia. Packer also coincidentally has interests in Macau that are also suffering:
One of Packer's biggest competitors in Macau is Dorchester, Massachusetts Native Sheldon Adelson, chief executive of Las Vegas Sands. It is certainly a small world, as Dorchester is where I also spent my younger years growing up in Massachusetts. At any rate, Adelson's ventures in Macau are still in motion and bolstered by the grand pomp and circumstance that surrounded the opening of the $2.4 billion Venetian Macau.
Perhaps in the long run if the casinos continue to suffer and the housing crisis continues to worsen along with the global economic picture, a perfect world scenario could emerge. The reeling casino hotels could be mandated to provide their rooms as affordable housing to all those put out by the mortgage mess. That would be fitting of course, but don't bet on it.
What's more likely is that there will be some real financial casualties, jobs will be lost, and people will lose their personal fortunes. The corrupt will survive somehow and go right on corrupting. But, unless enough Americans start to realize that the late local news isn't covering all the bases and the 24-hour news networks are dropping the ball on all the stories behind the crisis, there is no end in sight to this "recession" that is looking more and more like it could become a depression each day.
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.
