legalcasinos_125x75_ani.gif (8157 bytes)

e-betting_468x60_ani.gif (9811 bytes)

home.gif (772 bytes)

gamblingmagazinelogo.gif (4915 bytes)

1spacebarleft.gif (823 bytes) 1spacebarright.gif (843 bytes)

Black List

Casino of the Day

Casino of the Month

Conferences & Tradeshows

Consumer Advice

Corporate Profiles

Credit Card Frauds

Editor's Choice

Entertainment

Executive Profiles

Free Speech

From the Editor-in-Chief

Gambling Books and Gift Shop

Gambling Directory

Gambling Links

Gambling News

Game News

Game Tips

Gaming Companies - gaming stocks

Gaming Investor - financial news

Gaming Stock Quotes

Good News!

Helping Hand

Hot Topics

Inside Story

Internet News

Internet Technology

Interviews

Issues & Ideas

Jokes

Land-based Casinos

Las Vegas Spotlight

Legal

Link of the Day

Megaluck and Megabucks

Need we say more?

News in Brief

Not Recommended

Online Casinos

Online Events

Online Gambling

Recommended

Reviews

Sports Betting

Stories

Today's Headlines

Trends

Try these Casinos

Vacations - casino resorts

What's Cool

Winners & Losers - companies

mobstories.jpg (6466 bytes)

 

Jake The Barber, Innkeeper

By John Tuohy

53-184-1.jpg (5457 bytes)"I got the Stardust for Chicago," Johnny Roselli bragged and for once, he may have been near the truth.

After the Stardust's original owner Tony Cornero, either died of a heart attack or was poisoned, Tony Accardo called Johnny Roselli back to Chicago for a meeting at Moe's Restaurant with Murray Humpreys and Jake Guzak.

Always the hustler, Roselli knew that the bosses back in Chicago were worried because they were losing what little presence they had in Vegas, and as the power west of New York, they felt, as a matter of mob pride, that they should have a major presence on the Strip.

Roselli filled them in on the situation at the Stardust. It was, as Roselli called it, a "grind joint," a paradise for the low rollers located right in the heart of the Strip.

It was agreed immediately that Chicago would take the Stardust for themselves. Eventually Kansas and Milwaukee had a piece of the Stardust, but all activity in the Stardust was overseen by the Chicago family, they got paid for babysitting the action in Las Vegas but they also took a bigger cut because of it.

Fronting the entire operation would be the mob's favorite and most successful con man, John Factor, brother to cosmetic king Max Factor. John Factor, AKA "Jake the Barber" went way back with the Chicago outfit, back to the days when Johnny Torrio was running things.

Humpreys either put up Chicago's money for the purchase and used Factor as its front man, or had Factor put up the purchasing money he got from Humpreys. One way or the other two things were certain. From that point on, Jake the Barber was Chicago's front man in Vegas and Chicago had the Stardust, lock, stock and barrel.

And it was a mob gold mine. The Stardust boasted 1,032 rooms, and, when it opened for business in 1955, with Lyndon Baines Johnson and Bobby Baker as the guests of honor, the Stardust had one of the biggest casinos in the world. There were some luxury suites but mainly the Stardust was for low rollers. To stress that, in the back parking lot there were the cheap one-room cabins and spaces for RV units.

It was Dalitz's idea to set up the Stardust as a place for "low rollers" and the Desert Inn for "high rollers."

But first they would have to spruce up the Stardust in the fabled Las Vegas tradition of tacky splendor for the masses, and Murray Humpreys arranged for a million dollar loan from the Teamsters Welfare Fund by way of Red Dorfman via Jimmy Hoffa.

At first, the outfit was excited at the prospect of having Jake the Barber as their front man. Jake was, if nothing else, trustworthy.

And the reason he was trustworthy was that he was smart enough to know the outfit would kill him in a heartbeat if he tried anything slick with them. The way the boys saw things running was that they would steal the place blind and if anything went wrong, Factor could take the fall for them.

"But," wrote Hank Messeck, "he couldn't get a license either, much to the disgust of the Chicago boys. The Barber tried everything he could to get a license but there was no way it was going to happen. He finally bowed to reality and announced he would lease the Desert Inn Group."

Factor said he wanted six and a half million a year for the rent but Dalitz was not about to pay that since he held all the aces in the deal including heavy clout with the Nevada state government.

"It took," wrote Hank Messeck, "a western Apalachin to solve the matter."

Meeting in Sidney Korshak's Beverly Hills office were Meyer Lansky, Longy Zwillman, and Doc Stacher who represented their syndicate and Moe Dalitz and Morris Klienman who represented the Desert Inn. Representing Chicago was Johnny Roselli's replacement by order of Momo Giancana, Marshal Caifano and John Bats Battaglia.

It was decided that the lease on the Stardust would be $100,000 a month, a low figure for the second largest moneymaker in Las Vegas.

In the end, the true owners of the Stardust were Moe Dalitz and his partners, Paul Ricca, Tony Accardo, Sam Giancana and Murray Humpreys. Other smaller point holders included Wilbur Clark and Yale Cohen.

Large or small point holders, everybody was making money off the Stardust.

Carl Thomas, the master of the Las Vegas Skim, estimated that the Chicago mob was skimming $400,000.00 a month from the Stardust in the early sixties, and that was only for the one arm bandits in the casino, the blackjack game, keno and roulette and poker yielded a different and higher skim.

"Everybody," Thomas said, "played with cash. You couldn't get the paddle into the slot at the craps table, there were so many hundred dollar bills crammed into the drop boxes. That's why the front men who were the big shots in town, got laws passed that kept the wise guys who were the real owners, out of town."

As a rule, cash from the skims were paid out to each member of the Chicago operation in accordance with the number or percentage of points each person held in the casinos.

Normally, only a few thousand dollars per point or percentage were paid out on a regular basis, with the bigger lump sum payments coming in March after the accountants were finished with their end-of-year figures.

Then, hidden investors flew into Vegas with their girlfriends and wives to pick up their cash payments in person staying as "comped" guests all over town. Free women, free hotel suites, free gambling, and free money, free everything. For wise guys there was no place in the world like Vegas.

Ida Devine, the wife of Irving "Niggy" Devine who owned the New York Meat Company, which supplied the Las Vegas casinos, was the prime courier for the skim money out of Vegas to Chicago.

She replaced Virginia Hill as Chicago deep cover operative in Vegas and chief exporter for the skimmed cash out of Vegas.

Ida would take the train out of Vegas to Chicago's union station where she was normally met by one of Humpreys' people, Gus Alex or George Bieber, law partner to Mike Brodkin.

From there, she was escorted to the Ambassador East Hotel on Goethe Street, not far from where Humpreys and Gus Alex lived. They would check into a room there for several hours, Chicago would receive its share of the skim money and then Ida was brought back to Union Station and placed safely on a train out of town.

By 1958, Accardo and Sam Giancana were taking $300,000.00 a month each out of Las Vegas. After a while, Giancana didn't trust anybody to bring in his share of the skim, so he went to Vegas and got it himself.

Least of all, Giancana didn't trust Jake Factor and eventually assigned the Chicago outfit's "Outside man" in Vegas to follow Factor around Vegas and Beverly Hills and report his every move back to Chicago.

Murray Humpreys also stayed very close to Factor during his entire involvement in the Stardust and influenced Factor to follow through with his lease of the Stardust to Moe Dalitz's United Hotels Corporation.

Sidney Korshak acted as the "go-between" for Factor and the Desert Inn Group, which was made up of Moe Dalitz and Allard Roen.

The entire deal was so convoluted that the Nevada State Gaming Commission called a special meeting to look into the purchase and called Allen Roen, the Stardust representative, to answer a few questions.

Moe Dalitz closed the Stardust deal in Chicago on November 5 and 6, 1960. He met with Accardo, Humpreys and Giancana and worked a deal, which would give Chicago a greater interest in the Stardust as well as the Desert Inn, the Riviera, and the Freemont.

The remarkable sale of the Stardust Casino by Factor and his group to Moe Dalitz and his United Hotels happened in August of 1962 for $14,000,000.00, a relatively small amount for such a large enterprise.

Eugene "Jimmy" James acted as his go between to the Teamsters fund.

James was the former secretary-treasurer of the Laundry Cleaning and Dye House Workers International Union as well as the President of Local 46 of the same union. However, he was caught stealing union funds on November 17, 1960 and he was going to jail as a result. So when Humpreys approached him to act as a go for one point in the Stardust, paid to his family directly while he was in jail, James readily agreed.

Tony Accardo, Paul Ricca and Murray Humpreys took at least five points each, a point being valued at $125,000.00. Another mobster named Nick Civella, got $6,000.00 a month out of the deal, paid by the casino, as a broker's fee.

When news of the transaction hit the media, that John Factor had sold out what was then one of the largest and most profitable casinos in the world for the paltry sum of $15,000,000.00, Robert Kennedy, then the Attorney General of the States, thought it was a ridiculously small sales figure and ordered an investigation to find out who really owned the Stardust and why the sale price was so small.

At the same time Kennedy's Justice Department and the Nevada state gaming commission began scrutinizing the stockholding in the Stardust, they opened this investigation in search of hidden assets by Momo and other hoods. Had those investigations not been halted on the President's orders, it would have revealed hat Factor was a pawn in a much larger game as well as uncovering the Teamsters enormous funds buried in the casinos by mob accountants.

In September of 1962, the Federal Government decided that it wanted to talk to John Factor about his incredibly profitable deals at the Stardust Casino. They had lots of questions for Jake the Barber.

Two months later, in November of 1962, Factor gave deposition in Chicago about his dealing in Las Vegas and explained that although he was the owner of record of the Stardust, and was still making money off the place, $110,000.00 a month in fact, he had leased the casino portion of the club to the Dalitz group and said that he was shocked when he found out that Moe Dalitz may have been involved with gangsters. Asked about the reported $500,000.00 finder's fee paid out by Moe Dalitz to Chicago's mob lawyer Sidney Korshak, Factor said he knew nothing about Korshak, a finder's fee or the workings of the Parvin-Dohrmann Company, the company Dalitz set up to purchase the casino from Factor. But before the Justice department/Nevada investigation could call Factor in to answer any questions the Immigration and Naturalization Service decided that Jake the Barber was an undesirable alien and made moves to deport him back to England where Jake was still wanted for his part in the stock swindles there.

At seventy years of age, John Factor, who had lived in America since at least 1919, was being booted out of the country.

It was in this atmosphere that the Los Angeles office of the INS decided to deport the seventy-year old Factor to his native England based on the 1943 conviction because it involved "moral turpitude."

George K. Rosenberg, the District Director of the INS was aware that Factor was seeking a pardon. "But because no action had been taken on Factor's pardon application, we figured that he was deportable and we moved to deport him."

On December 3, 1962, the Department of Justice requested that the Immigration and Naturalization begin proceedings to deport John Factor from the United States to England where he was a wanted felon.

Unable to show due cause why he should not be deported, Factor was ordered to surrender to the Los Angeles office of the INS on December 21, 1962, at which point he would be arrested and deported out of the country.

Adding to Factor's woes was the ongoing IRS investigation into his back taxes for the years 1935 through 1939. The government wanted Factor to explain where he received $479,093.27 in income, and Factor couldn't remember. If he were deported, the Government would impound his holdings until the matter was settled.

On November 26, 1962, Attorney General Robert Kennedy did something unusual; he changed the laws that govern Presidential pardons. From 1946 through 1997, those rules had only been tampered with twice. There were fourteen sets of rules governing presidential pardons, which were laid down in 1893. Harry Truman changed those rules in 1946 after his fingers were caught in the early release of Paul Ricca and the other hoods caught up in the Bioff scandal.

Bobby Kennedy changed the rules a month after Factor's pardon so that all pardon requests went directly to the White House and then to the Justice Department, not the other way around which is how it was before Factor's pardon was granted.

The rules that govern presidential pardons are "advisory in nature," meaning that the President is not bound by any rules in deciding who he will grant a pardon and John Kennedy granted a lot of pardons during his short stint in the White House, 472 of them in all. The rules of Presidential pardon state that the Attorney General, whom it was assumed by the writers of the constitution would be a lawyer, should recommend the pardons to the president.

One day a very drunken Chuckie English, a former 42 member and sometime driver to Sam Giancana, strolled out of the Amory Lounge and leaned up against the FBI observation car parked just across the street from the tavern. The agents reported, "English is bemoaning the fact that the federal government is closing in on the organization and nothing can be done about it. He made several bad remarks about the Kennedy administration and pointed out that the Attorney General raising money for the Cuba invaders makes Chicago's syndicate look like amateurs."

What English was talking about in front of a bar on a cold Chicago afternoon was the same thing business executives across the country were whispering about in their boardrooms. Many of the nations leading CEOs had taken phone calls and were amazed to find themselves on the other end of a phone line with the Attorney General of the United States of America. They were even more amazed at what they heard.

Kennedy wanted money for the Bay of Pigs program.

He reminded the executives that they had either pending contracts before the government or criminal cases pending brought by the Justice department. Before they could respond, Kennedy once again mentioned the fund to free the Cubans and hung up.

Jake Factor threw $25,000.00 cash into the project and explained to a curious press that James Roosevelt, the problem child of the clan, had approached him about the donation.

Then it fell from the skies like a bolt of lightning. On December 24, 1962, from his father's estate in Palm Beach, Florida, President John F. Kennedy signed a Presidential Pardon for Jake the Barber for the mail fraud charges.

Pardons are normally granted on a master warrant and several sentence reductions were given that day on a master pardon but Factor's was the only single pardon granted.

The deportation proceedings against Jake the Barber were dismissed on December 26, 1962.

Factor filed a pardon application on August 6, 1956, but on October 18, 1956, there was adverse action on the application and he filed a second time. This petition was also denied.

Factor's pardon, backed by California Democratic Governor Pat Brown and Republican Senator Thomas Kuchel, came in the middle of a joint United States Department of Justice and Nevada State Gaming Commission investigation into the Stardust Casino-hotel's ownership and the remarkable sale of the place by Factor and his group in August of 1962 for $14,000,000.00.

It was never made clear if Kennedy's actions also killed the investigation of Factor's dealing in the Stardust but one way or the other, the investigation into the dealings over at the Stardust were closed.

A Presidential pardon was golden but just to be sure, on July 16, 1963, in Los Angeles John Factor, the poor kid from the ghettos of Chicago, raised a slightly shaking hand and along with other more recent arrivals, took the oath of citizenship of the United States of America. "I'm the luckiest man alive," he said and he was probably right.

Factor always denied that the mob used pressure with the White House to win him his pardon but in mid 1963, while Factor was trying to gain control of the National Life Insurance company of America and was buying up the company's shares at $125.00 each, he then sold 400 shares of his $125.00 a share stock to Murray Humpreys at $20.00 each. A loss of $105.00 per share to Factor.

Humpreys then sold the shares back to Factor for $125.00 a share making Humpreys $42,000.00 richer in one day. As far as the Hump's unusual and creative stock transaction with Jake the Barber was concerned, the government decided that it was a taxable exchange "for services rendered" and sent tax gain bills to both them.

Mr. Tuohy can be contacted by writing to MobStudy@aol.com

Article # 53/184

 

spacer.gif (807 bytes)

spacer.gif (807 bytes)

Editor: Editor@GamblingMagazine.com

arrowup.gif (574 bytes)

spacer.gif (807 bytes) Publisher: Publisher@GamblingMagazine.com
spacer.gif (807 bytes) spacer.gif (807 bytes) Telephone: U.S.A.  (212) 208-4414

Copyright © 1999 Gambling Magazine