Supermob

by Gus Russo

  Korshak's control of the Riv's credit lines was also observed by the FBI, which noted in his file that on November 13, 1962, Korshak berated Riviera host and co-owner of Chicago's Chez Paree Dave Halper in front of the cashier's cage for approving credit to some unknown person. The FBI also observed that Korshak extended $350,000 in casino credit to Debbie Reynolds; the credit was held by Al Hart at his City National Bank of Beverly Hills.54 For gamblers not in Korshak's favor, running up a casino debt was known to be a dangerous game. One FBI informant overheard Riviera executives discussing a bettor who owed the casino $205,000, prompting one to remark, "There is one guy who is not going to lose out on money owed by [DELETED], and that's Sidney Korshak. [DELETED] had better pay the club or he'll be swimming in Lake Mead.55

  A Chicago-based police intelligence officer who watched Korshak for years remembered following him out to Vegas on occasion, where he learned that Korshak was comping old Chicago friends, such as former law partner Ed King, at the Riv. "You could see him in the coffee shop of the Riviera," said the officer, who wished to remain anonymous. "Supplicants would line up waiting for Sidney to nod for them to step forward. Once I went to the Riviera when Barry Manilow was singing. This was about "77 or '78. I was in my own private business at that time, and I went to see who was ostensibly the PR man for the Riviera, Tony Zoppi. I went in, sat down, and we started to talk. I don't know how it came up, but I said something about Sidney. Suddenly he leapt up from his desk and ran over and drew the blinds and lowered the window and he said, 'Don't talk so loud.' God, I wouldn't have thought . . . I mean I was retired and I had no antagonisms toward Sidney, but just to mention his name . . .56

  The seemingly melodramatic sentiment is echoed by many, including Dean Shendal, a former debt collector for the casino owners. "When Kor­shak entered the room in Vegas, everything stopped," Shendal recently said. "You'd hear people saying, 'Korshak is here!' "57

  Private-investigator-turned-author Ed Becker, who, for a time, was the Riv's director of publicity, was still another professional crime watcher with vivid memories of Korshak's swagger. "I didn't really get to know about him until 1955," said Becker. "I was in Las Vegas at that time and I heard that he was the 'big guy'—that he was one of the powers behind the Riviera, behind everything. Anywhere the money went, he was a part of it, especially the Teamster money."58 After Becker left the Riv, Korshak hired Richard Gully to replace him in the publicist post, as Gully has readily admitted.59 Years later, Benny Binion, owner of "Glitter Gulch's" (downtown) Horseshoe Casino, told an FBI source that he was interested in buying Korshak's interest in the Riviera, while another source reported that Korshak fired Riviera president Ben Goffstein for "dishonesty and incompetence."60

  In 1955, the FBI was informed that Korshak and Jake Guzik were silent partners in many other Vegas casinos, and it concluded that Korshak's role involved watching out for Guzik's and the Outfit's interests.61 Korshak told the FBI of his friendship with Guzik and admitted that, as a favor to Guzik, he hired his son-in-law, Billy Garret, to work in a law firm with which Kor­shak had an affiliation.62 A 1963 FBI summary of Justice Department records on Korshak stated that he "primarily represented a group in Las Vegas which might be loosely termed the 'Chicago Group,' who were in the opinion of this source the biggest single factor on the Las Vegas scene."

  When the IRS commissioned a special study two decades later to determine the truth of the long-rumored "silent" owners of Vegas casinos, they made the same conclusion as the FBI and others. The IRS investigation, known as Strike Force 18, headed by Robert Campbell, concluded that Korshak was one of three behind-the-scenes directors of organized crime's investments in Las Vegas.63

  Of course, the primary purpose for the Riv, like the very reason for Vegas itself, was to skim the casino count room for the Chicago Outfit and its various partners. And this prime directive, according to the FBI, appeared to be one of the key responsibilities of Sid Korshak. One FBI memo that noted Korshak's "hidden ownership" of the Riv's casino also advised that a source within the Chicago organization informed, "Sidney Korshak maneuvers the skim money back to Gus Alex in Chicago, who in turn distributes [it] to other Chicago organized crime people, Joe Aiuppa and Tony Accardo among them."64 Another Bureau document referred to Korshak as "a courier for the Chicago LCN [La Cosa Nostra] of Las Vegas skim monies. Korshak reportedly travels to Chicago once a month to deliver or make arrangements for delivery of Las Vegas casino proceeds.65

  The Riv's Miami-oriented front operators were unaccustomed to gaming while being simultaneously skimmed and ran into trouble immediately, with the casino sustaining such large losses that the resort went bankrupt in July of 1955, just three months after it opened. As a result, Gensbro Hotel Co., the Riviera's landlord, assumed control and immediately began a search for new operators. The Chicago mob made the call and decided to turn to an old friend with a proven track record, Gus Greenbaum, the man who turned around the Flamingo after Bugsy's untimely demise. As Chicago boss "Joe Batters" Accardo had been advised, Greenbaum, in failing health, had recently stepped down from the ownership of the Flamingo, taking with him the casino's ledgers, which held the identities of the Flamingo's Gold Club high rollers. After burying the valuable dockets in the Nevada desert, Green­baum retired to Phoenix, Arizona, where he struck up his friendship with Vegas swinger Senator Barry Goldwater.

  Greenbaum had scant time to settle into his new life, since Accardo needed a good man at the helm of the Riviera. Accordingly, Accardo and Jake Guzik (mentor of Sid Korshak) visited Greenbaum in Phoenix and ordered him out of retirement. Greenbaum initially refused the edict, but events yet to occur would change his mind. A few nights after Accardo and Guzik took their leave, Greenbaum learned that his sister-in-law, Leone, had received a telephone threat. " 'They' were going to teach Gus a lesson," she told her husband. In a few days, Leone herself was found dead, apparently smothered in her bed. And Gus Greenbaum packed for Vegas to manage the Riviera.

  Most likely ordered by Accardo, Greenbaum drove back out into the desert, where he dug up and dusted off the ledgers containing the priceless list of Flamingo Gold Club members, the screed he had buried just months earlier. With the Flamingo list as a foundation, Greenbaum's secretaries were soon busied with mailing out new memberships for the exclusive, well-comped high-rollers' club at the Riviera.

  As previously noted, Greenbaum's fatal decision to hire his and Goldwa-ter's Phoenix pal "Willie Nelson" Bioff as entertainment director was the beginning of his undoing* Bioff's November 4, 1955, murder for testifying in the movie extortion case stunned Gus Greenbaum, whose personal demons now grew to include heroin addiction. Greenbaum's "horse" problem only exacerbated his health woes, poor gambling abilities, and his growing infatuation with prostitutes. When these distractions began to affect the Riv's profit margins, Greenbaum's days were numbered.

  In the late morning of December 3, 1958, Gus Greenbaum's housekeeper happened upon a grisly scene in the Greenbaum bedroom. Still in silk pajamas, Gus Greenbaum's corpse lay across his bed, his head nearly severed by a vicious swipe from a butcher knife. On a sofa in the den fifty feet away was found the body of Gus's wife, Bess, also the victim of a slashed throat. Although no one was ever charged in the murders, it was widely believed that the killings represented a Bugsy redux, i.e., the fastest way to effect a managerial change in Sin City. Barry Goldwater and three hundred others attended the Greenbaums' funeral in Phoenix.

  By 1959, the Riviera was sold to a group headed by Ed Levinson of the Fremont Hotel, and Carl Cohen and Jack Entratter of the Sands Hotel, although Korshak and the boys from Chicago were still understood to be in control. The Riviera was financially solvent from then on.

  The Vegas expansion was now growing exponentially. The same year the Riv debuted, the Dalitz-fronted mob consortium moved in on another local operation. From the Chicago Outfit's perspective, the idea started out as another substandard partnership with Dalitz, but soon tilted in Chicago's favor with the introducti
on of a new co-owner who owed the Outfit a huge favor. His name was Jake "the Barber" Factor. As a way of paying back the Outfit for rescuing him from a certain life sentence in a British jail, Factor accepted his new job as front for the Stardust Hotel.

  The Stardust

  Three months after the first die was thrown in the Riv's casino, Tony Cor­nero made his second grab at Vegas' brass ring, with decidedly mixed results for him personally. Taking his California gambling-ship fortune to Vegas, Cornero announced that he was finally going to build his dream hotel in the heart of the Strip. The result was the 1,032-room Stardust Hotel and Casino.

  Jake Factor's Stardust today (author photo)

  Cornero's concept for the Stardust once again displayed his visionary genius. He rightly concluded that elegant joints like Moe Dalitz's Desert Inn had a finite clientele, whereas a casino designed for the low-roller masses would attract gamblers by the busload. Although the hotel's frontage would boast the Strip's largest (216 feet long) and most garish lighted sign (7,100 feet of neon tubing and over 11,000 bulbs), the hotel itself would be little more than a warehouse, where guests could stay for a mere $5 per night. The Stardust's all-you-can-eat buffets and practically free lodging would become a Sin City staple.

  A variety of factors caused Cornero's Stardust dream to go bust. Complicating the typical Las Vegas cost overruns was Cornero's own gambling addiction, which quickly depleted his bank account. Just weeks before the scheduled August 1955 opening of the hotel, Cornero learned he was out of money, unable to pay staff or purchase furnishings and gambling instruments. On July 31, Cornero paid a morning visit to Dalitz's Desert Inn, where it is believed Cornero hoped Dalitz would make him an emergency loan. According to one telling, Dalitz met with Cornero for several hours; however, Dalitz ultimately declined to get involved. On his way out of the Desert Inn, Cornero could not fight the temptation to hit the craps tables, where he went quickly into the hole for $10,000. When Dalitz's crew not only refused to extend his marker, but had the audacity to charge him for his drinks (a monumental affront in the pits), Cornero went ballistic. Within minutes, sixty-year-old Tony Cornero was clutching his chest with one hand even as he clutched the dice with the other. He was dead of a heart attack, with less than $800 to show for the estimated $25 million he had made in his lifetime.

  The Outfit's traveling emissary, Johnny Rosselli, promptly reported the new vacancy back to his Chicago bosses. According to the files of the LAPD's intelligence unit, which had been tailing Rosselli for years, Rosselli had been making the trek to Sin City regularly, cutting deals, and brokering complex intergang partnerships. George Bland, a retired Las Vegas-based FBI man, disclosed that one of the Bureau's illegally placed bugs revealed that one major casino had the skim divided twelve different ways. One partner later called Johnny "the Henry Kissinger of the mob," and Rosselli's business card from the period said it all, and simply: "Johnny Rosselli, Strategist." Rosselli's biographers described his role in Las Vegas as "nebulous, but crucial . . . He maintained open channels to all the different out-of-town factions, as well as to the California-based operators downtown, and served as a conduit to political fixers like Bill Graham in Reno, and Artie Samish, known in California political circles as "the Governor of the Legislature."66

  Rosselli was soon living full-time in Vegas, dividing his time between his suites at Dalitz's Desert Inn and the Outfit's Riviera. Armed with the news of Cornero's cardiac, Rosselli flew to Chicago, where he met with Accardo, Humphreys, and Guzik at Meo's Restaurant. It was decided that the gang would finish construction and assume the debt of the Stardust in a partnership with Moe Dalitz. However, this time the Outfit would run the operation, with the Supermob's Jake Factor at the helm. Five years later, Johnny Rosselli described the arrangement to longtime friend, and L.A. mafioso, Jimmy Fratianno. "Jake Factor, an old friend of Capone . . . shit, I used to see him when he came to the Lexington to see Al," Rosselli recalled. "So I went to Sam [Giancana] and told him we could move into this joint. Listen, Jake owed Chicago a big one. Moe Dalitz wanted in on it and so it's a fifty-fifty deal."67

  Over the next two years, Factor and the Outfit poured money into the Stardust operation, while Jake continually lobbied the newly formed Gaming Control Board for a casino license, where he was consistently rebuffed. Consequently, Humphreys recruited an already licensed Outfit ally from Reno, Johnny Drew, to run the casino temporarily. Eventually, paperwork was filed that showed Factor leasing the Stardust casino to Dalitz's gang for $100,000 per month. 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."68 Coming from a man who lived though the phenomenal profits of the bootlegging era, this speaks volumes about the lure of Las Vegas. Carl Thomas, an expert on the skim, estimated that the Stardust was contributing $400,000 per month to the Outfit's coffers. Rosselli would rightfully brag for years, "I got the Stardust for Chicago," and for his role in setting up this windfall for the Outfit, Johnny was also well compensated. "I'm pulling fifteen, twenty grand under the table every month," Rosselli said.

  Whereas Korshak was allowed to own a piece of the Riv and Desert Inn with the Dalitz group, this was forbidden at the Stardust, as the Chicago gang tried to keep their connection to Korshak as secret as possible. An FBI informant reported that Curly Humphreys told him that because Humphreys had an interest in the hotel, "therefore, Korshak was not allowed to have any interest therein."69

  Since their earliest association, the Outfit had strived to give Korshak, whom Irv Kupcinet called their "fair-haired boy," a layer of deniability. Years later, boss Joey "Doves" Aiuppa upbraided Jimmy Fratianno for making direct contact with Korshak.

  "Look, Jimmy, do me a favor," Aiuppa instructed. "If you ever need anything from Sid, come to us. Let us do it. You know, the less you see of him the better. We don't want to put heat on the guy . . . Let me explain something, Jimmy. Sid's a traveling man. He's in everybody's country but he's our man, been our man his whole life. So, you know, it makes no difference where he hangs his hat. Get my meaning? . . . He's got a permit. We gave him one, understand? . . . Don't put any heat on Sid. We've spent a lot of time keeping this guy clean. He can't be seen in public with guys like us. We have our own ways of contacting him and it's worked pretty good for a long time."70

  The success of the DI, Riv, and Stardust paved the way to still more acquisitions. In a feat of ambassadorial legerdemain that rivaled the latter-day shuttle-diplomacy efforts of President Jimmy Carter, Rosselli brokered a complex partnership in the $50 million Tropicana, designed to be the most luxurious facility on the Strip. And once again, the talents of Sidney Kor­shak appear to have been involved. The intricate ownership trust of the Tropicana, which opened for business on April 3, 1957, included the Chicago Outfit, Frank Costello of New York, Meyer Lansky of Miami, and Carlos Marcello and Frank Costello's slot machine and jukebox partner "Dandy" Phil Kastel of New Orleans. Recall that just after Christmas, 1954, Jake Arvey flew to New Orleans to meet Kastel at Kastel's palatial Louisiana estate. In noting "unimpeachable sources," Virgil Peterson reported that Sid Korshak, who, according to the sources, drove Costello to the house, made Arvey's travel arrangements.71 Peterson and others concluded that these were in fact the preliminary meetings that resulted in the "Trop" partnership.72

  In 1958, the Chicago Tribune reported that Korshak hosted the fifty-first birthday bash for Chicago Ford dealer Charles "Babe" Baron at the Tropicana. Associated Booking, which Korshak co-owned wi
th Joe Glaser, furnished entertainers such as Dinah Shore and Sammy Davis Jr.73 What the Trib failed to mention was that Babe Baron, a Trop stockholder, had ties to the Capone gang and was included on an IRS list of forty-two powerful mobsters.74 In his early Chicago days, Baron was not only a confidant of Jake Arvey's, but also a violent credit enforcer, and the primary suspect in two murders.75 For a time, Baron managed Lansky's Riviera Hotel in Havana, and the FBI reported that he met regularly with Curly Humphreys and Sam "Mooney" Giancana. The Bureau's source added, "Giancana advised Baron that he was to consider himself as Giancana's representative in Las Vegas, Nevada . . . not only Giancana's representative, but Humphreys' representative as well and if any matters were to arise in that area which could not personally be handled by Baron, he was to immediately report to Humphreys and/or Giancana pertaining to the situation."76 On one occasion when Johnny Rosselli was acting up, Baron informed him that he (Baron) "had an obligation to the Chicago people, and that he would discuss the incident with them. According to Baron, Rosselli turned white and attempted to smooth the situation over.77

  Another curious partner in the Trop deal was Irish tenor Morton Downey, the best friend and business partner of Kennedy family patriarch Joseph P. Kennedy. In 1997, Morton Downey Jr. said that the Trop investment, as well as numerous others made by his father, was conceivably a hidden investment of Joe Kennedy's, with Downey acting as the front. "Joe was my dad's dearest friend," Downey Jr. said. "My father owned ten percent of the Tropicana. I wouldn't be at all surprised if he was fronting it for Joe. That's how they worked. My father often had someone 'beard' for him also. I remember when he would jump up screaming at the dinner table when his name surfaced in the newspaper regarding some deal or other. 'They weren't supposed to find out about that!' he'd yell."78