Tropicana fraud trial in closing arguments

Bill Gang

Thursday, May 7, 1998 | 10:06 a.m.

Closing arguments continued today in the federal court trial of Ed and Fred Doumani and their one-time tax attorney in what prosecutors have alleged was a scam to divert millions from the sale of the Tropicana hotel-casino.

Justice Department prosecutor Lynn Panagakos told the jury that the mountain of documents presented during the month-long trial showed the alleged conspirators engaged in "lie after lie, after lie, after lie" to reach their goal.

The Doumanis, Panagakos said, "enriched themselves by millions."

But Ed Doumani's attorney, Dan Albregts, fumed during the first day of closing arguments Wednesday that prosecutors overlooked evidence showing there was no conspiracy and no bankruptcy court fraud.

Albregts said the only information the government embraced were bits supporting the story of Deil Gustafson, who became the prosecution's star witness. Gustafson was a former landlord at the Tropicana and a one-time associate of the Doumanis and tax attorney John Jagiela, the third defendant.

Albregts called Gustafson, who cooperated for leniency in his own court case, a "revisionist historian who changed history to fit his own purpose ... the version the government wanted to present."

The government's approach, Albregts told the jury, "shouldn't be tolerated from representatives of our government."

"The government has no case to show these man had larceny in their hearts."

Albregts chastised prosecutors for alleging it wasn't until 1990 that the conspiracy was hatched to divert portions of a $34 million judgment from a lawsuit over the 1979 sale of the Tropicana.

The attorney said in the courtroom of Senior U.S. District Judge Justin Quackenbush of Seattle that there were "many, many agreements" proposed by the Doumanis, Gustafson and others before the actual distribution occurred.

Jagiela, who is acting as his own attorney, also alleged during his closing argument that Gustafson "concocted the whole story" and the government lawyers embraced his "baldfaced lies."

Jagiela said the only money he received was $4,500 in fees to draft the final agreement and other documents and to provide advice to the participants -- advice he admitted may not have been the best.

"I'm not going to throw away (my career) for $4,500," he said, noting that his decisions were based on information provided to him by Gustafson.

He told the jurors to use their common sense in reaching their verdicts.

The government has contended that most of the $34 million from the breach-of-contract judgment won by the Doumanis was supposed to go to their bankrupt company, Hotel Conquistador. But millions allegedly wound up in the hands of Midwest mobsters and their associates.

The case is one of the remaining links at the federal courthouse to an era of mob influence within the casino industry.

Before the Doumanis sold the Tropicana, the resort was the target of a massive Justice Department investigation into alleged casino skimming by the Kansas City mob. Several Mafia bosses were convicted and sent to jail in the probe. The Doumanis, however, never were charged until the current case.

While the jury is expected to begin deliberations today, one defendant already is out of the case. Quackenbush dismissed charges against Nicholas Tanno, a Las Vegas businessman alleged by federal authorities to have mob ties, at the end of the prosecution's case because of a lack of evidence.