Columnist Jeff German: Panaro question mark in mob case

Saturday, May 3, 1997 | 11:59 a.m.

FALLOUT from the government's latest assault on the mob is as high as ever.

Rumors are focusing on Robert Panaro, one of nine defendants in a federal racketeering indictment returned last month, as the investigation steps up.

Panaro, a reputed made member of the Buffalo mob, pleaded innocent to the charges Thursday in federal court.

But that's not what has other defendants in the case talking.

Some are wondering how a suspected member of a violent crime syndicate can remain free on his own recognizance while facing the charges.

Though most don't believe it, speculation is that Panaro secretly has been cooperating with the government.

Kurt Schulke, chief of the U.S. attorney's Organized Crime Strike Force, won't comment.

But Panaro's lawyer, Steve Stein, says that's just not the case.

Stein's says he's "1,000 percent sure" Panaro is not a witness in the probe.

It's also "absurd," Stein adds, for the government to call Panaro a member of the Buffalo mob.

Stein insists that Panaro was given his freedom because he has no criminal record and the government knows it has a weak case against him.

Panaro, he adds, also has real (not crime) family ties here.

Still, word on the street is Panaro may have had more knowledge of the scheme to kill Herbie Blitzstein than he's led some to believe.

Blitzstein, once the right-hand man of the late Chicago mobster Anthony Spilotro, was shot to death execution style in his home Jan. 6.

Stein denies Panaro knew about the plot, saying his client considered Blitzstein a good friend.

"He liked Herbie," Stein says. "Herbie would have given him the shirt off his back."

Several of the defendants in this case, you'll recall, were Blitzstein's friends. It didn't stop them from muscling in on his loan-sharking and insurance fraud operations.

Two of those indicted -- reputed Los Angeles Mafia member Peter Vincent Caruso and an associate, Alfred Mauriello -- were accused of planning Blitzstein's murder.

Stein, meanwhile, says he'll be helping Panaro fight the charges against his client in court.

That's the kind of news the other defendants in this case want to hear.

Meanwhile, it turns out, that a key witness in the probe, businessman Steve Weiss, has cooperated with the government before.

On May, 6, 1993, Weiss testified before a federal grand jury investigating the badges-for-cash scandal that led to the indictment and resignation of former Las Vegas Constable Don Charleboix.

Weiss, grand jury transcripts show, testified against Charleboix.

But today, he insists Charleboix "took a bad hit" in the probe.

Weiss, who runs a smog check business, says he can't talk about his role in the latest mob investigation because it's ongoing.

In the 13-count indictment, however, Weiss is alleged to have been a victim of extortion by the two men accused of plotting Blitzstein's murder.

Elsewhere, the fallout continues to touch suspended Horseshoe Club executive Ted Binion, once a friend of Blitzstein's.

Binion is facing more questions about his ties to Blitzstein and at least one of those named in the mob indictment, auto repairman Joseph DeLuca, who worked on Binion's cars.

Blitzstein allegedly had a hidden interest in DeLuca's auto repair shop, which the government contends fronted for Blitzstein's insurance fraud business.

DeLuca, though he's not charged with Blitzstein's murder, remains in jail without bail.

Last Thursday, Binion was summoned to meet secretly with state gaming agents wanting additional explanations about his dealings with Blitzstein and DeLuca.

Binion and his battery of lawyers are set to appear at a public hearing Thursday before the State Gaming Control Board in his bid to get his license back.

The Nevada Gaming Commission suspended him a year ago amid questions about drug use and his unsavory associations.

Binion is said to have been free of drugs the past year, meeting all of the stringent testing procedures imposed by the commission.

And his lead attorney, Richard Wright, is confident the commission will reinstate Binion later this month.

But there are some who believe Binion's ties to the Blitzstein gang might cause him more grief.

The timing of the federal mob indictment isn't helping him.

Nolen, a politically connected former city councilman, unleashed attorney John Moran, Jr. on the media last week in the hopes of turning the tables on the sometimes-maligned commission.

Silver-tongued Moran burned up the phone lines trying to win over reporters with the argument the commission was picking on Nolen.

The commission's reputation gave Moran all the ammunition he needed.

In the past, it has been regarded as a do-nothing agency, primarily because state lawmakers have refused to give it the tools to do a proper job.

This time, the commission pored over evidence in the case, in which Nolen was accused of spending little hours on the job, using office resources on political campaigns and spending time in topless bars during the day.

So what happens when the panel finally gets brave and takes an elected official to task for abusing his office?

It gets rapped again.

The criticism, however, is coming from those trying to deflect attention away from Nolen and protect their investment in his good-old-boy brand of politics.

In calling for Nolen's ouster, the Ethics Commission took up sides with the little guys -- the deputies who exposed Nolen's indiscretions and stood up to his battery of lawyers during the proceedings.

If you listen to Nolen and his cronies, everybody, from the whistleblowers to the ethics panel, are at fault for Nolen's troubles. Everybody but Nolen.

It's the kind of defense an embattled politician uses when he has no defense.