Both sides happy with Blitzstein verdict

Monday, May 24, 1999 | 11:36 a.m.

Both sides came away smiling after Friday's split verdict in the trial of two reputed Mafia members charged in the plot to murder Chicago underworld figure Herbie Blitzstein.

Robert Panaro, 57, an alleged soldier in the Buffalo mob, and Stephen Cino, 62, a suspected member of the Los Angeles mob, both were acquitted of all charges related to Blitzstein's Jan. 6, 1997, slaying.

But a 12-member jury found the two men guilty of an extortion scheme to take over Blitzstein's loan-sharking and insurance fraud operations. Blitzstein once was the top lieutenant of slain Chicago mob kingpin Anthony Spilotro, who controlled Las Vegas street rackets in the 1970s and early 1980s.

Cino also was convicted of 12 other federal charges, mostly related to a conspiracy to counterfeit travelers checks.

"We're happy with the verdict," said, Assistant U.S. Attorney Eric Johnson, of the Organized Crime Strike Force. "We felt the case was there for murder, but we recognize it was a tough case."

The extortion conviction of both reputed mob members gave credibility to the FBI's two-year undercover investigation into the campaign by the Los Angeles and Buffalo crime families to muscle in on street rackets here.

"We achieved what we hoped to achieve," Johnson said. "We proved there was a conspiracy to move Blitzstein out of the way and take over his assets."

John Plunkett, the supervisor of the Las Vegas FBI's Organized Crime Squad added: "We were doing exactly what we were supposed to do, and the jury agreed with us."

Prosecutors also for the first time obtained a conviction of Panaro, who was overheard on one FBI tape during the trial bragging that he had never been arrested.

But Panaro and Cino, though they each now face prison time, also had reason to celebrate following the verdicts.

Both escaped liability in the most serious racketeering and murder for hire charges that would have brought about stiff prison sentences. Prosecutors last year sought the death penalty against Panaro and Cino and four others charged in the Blitzstein killing. But Attorney General Janet Reno declined to pursue it.

"This proves that the murder charge was phony from the very beginning, and the jury saw through it," Panaro's lawyer, John Fadgen said.

Prosecutors played plenty of secretly recorded tapes during the trial, but none of them showed Panaro and Cino expressing an interest in wanting to harm Blitzstein.

The murder acquittals also cast doubt on the credibility of the government's chief witness against the two defendants, ex-Blitzstein friend Joe DeLuca, who had pleaded guilty to his role in the slaying and agreed to cooperate in return for a dramatically reduced prison term.

Panaro's younger brother, Larry Panaro, called DeLuca, now under federal protection, "probably one of the biggest scumbags on Earth."

Cino's 33-year-old son, Stephen Cino Jr., meanwhile, said he was "relieved" that his father was acquitted in Blitzstein's death.

"I'm happy that those big charges, those false charges, that the government made up about my father did not hold up," he said. "And I know he's happy too."

Cino praised the job of his father's lawyer, Louis Palazzo, during the month-long trial.

Panaro's wife, Kathy, who sat through most of the trial, sobbed uncontrollably Friday, as the not guilty verdicts in the Blitzstein murder were read in court. She declined comment afterwards.

But Larry Panaro lashed out at the government.

"This proves once again that our system does work," Panaro said.

"Of all the people on trial, the government and the FBI should have been on trial in this case because they definitely knew 100 percent that this murder was coming down."

Plunkett, however, insisted the FBI did not know ahead of time that Blitzstein was to be killed.

Less than two hours before the slaying, Plunkett wired up and sent the FBI's chief informer in the case, John Branco, to talk to the late Peter Caruso, the Los Angeles mob associate who had hatched the plan to murder Blitzstein.

At that meeting, Caruso again assured Branco that Blitzstein would not be harmed.

The FBI, Plunkett said, was just as shocked as anyone, when it learned of Blitzstein's death.

Panaro, meanwhile, is hoping to be sprung from federal custody while he awaits his Aug. 27 sentencing. U.S. District Judge Philip Pro has scheduled a hearing on his release at 9 a.m. Tuesday.

The murder portion of the racketeering case will come to a conclusion following next week's trial of alleged shooter Richard Friedman.

The other hit man, Antone Davi, and the man who hired the shooters on behalf of Caruso, Alfred Mauriello, both have pleaded guilty. Caruso died earlier this year of heart failure without having a chance to stand trial.