FBI tapes ‘serious blow’ to L.A. mob

Tuesday, Feb. 10, 1998 | 10:07 a.m.

The FBI literally was wired into the Los Angeles mob during its sweeping investigation of Las Vegas street rackets, a federal prosecutor disclosed in court on Monday.

At the arraignments of nine of the 16 defendants charged last week in a 50-count indictment, Kurt Schulke, chief of the U.S. attorney's Organized Crime Strike Force, said the government will turn over as many as 1,700 secretly recorded audio and video tapes to the defendants.

About 1,000 of the tapes, Schulke said, were made by cooperating witnesses and undercover FBI agents. The tapes include recorded phone conversations and face-to-face meetings picked up by hidden body wires.

Another 300 recordings from court-approved wiretaps, and as many as 400 video tapes made in Las Vegas and Los Angeles also will be handed over, Schulke said.

Most of the tapes were produced from September 1995 through April 1997 during the course of the two-year FBI probe, Schulke said afterward.

Schulke broke the news of the extensive recordings to nine of the defendants Monday, as they pleaded innocent to racketeering and conspiracy charges in the courtroom of U.S. Magistrate Robert Johnston.

Among those declaring their innocence were Carmen Milano, the reputed underboss of the Los Angeles mob, alleged Los Angeles "capo" Louis Caruso and suspected Buffalo mobster Robert Panaro.

In interviews last week, Milano denied being the underboss of the Los Angeles mob, and he accused the FBI of manufacturing the crimes against the defendants.

Bobby Siller, special agent in charge of the Las Vegas FBI office, said last week the investigation has dealt a "serious blow" to the Los Angeles mob.

In all, a half-dozen ranking members of the crime family were ensnared in the probe. More indictments are expected soon.

After court Monday, Las Vegas attorney Oscar Goodman, who has represented underworld figures here for nearly three decades, said the massive evidence in the case will be a burden on the defendants and their lawyers as they prepare for trial in the coming months.

Goodman, who is defending reputed New England underworld associate Dominic Spinale, suggested that most lawyers in the case were seeking to be appointed by the court to make sure they get paid for their work. Legal fees for court-appointed lawyers come from a special fund created by Congress.

"No human being can afford to pay what a lawyer would charge to listen to all of these tapes and sit through a lengthy trial," Goodman said. "You have to be IBM (a large multi-national corporation) to do that. I saw the FBI in court today, but I didn't see IBM."

The FBI investigation, part of a nationwide crackdown on the mob, dubbed "Operation Button-down," uncovered a scheme by the Los Angeles and Buffalo crime families to muscle in on street rackets here.

Underworld figure Herbie Blitzstein, once a top lieutenant of the late Chicago mob kingpin Anthony Spilotro, was murdered during the scheme allegedly to allow Los Angeles and Buffalo mobsters to take over his loan-sharking, diamond swindling and insurance fraud operations.

All six of the defendants charged in Blitzstein's Jan. 6, 1997, murder -- Panaro, Peter Vincent Caruso, Stephen Cino, Richard Friedman, Alfred Mauriello and Antone Davi -- now have pleaded innocent. The six could face the death penalty if convicted.

U.S. District Judge Phil Pro will preside over the trial, which has been set for May 18.