Friday, May 13, 2005 | 11:11 a.m.
SAN DIEGO -- A key government witness and informant said he ate, worked out and met frequently with a former Clark County commissioner in testimony Thursday in this city's political corruption trial.
Lance Malone, who became a lobbyist for the owner of a small empire of strip clubs after losing his commission re-election bid in 2000, is one of four men targeted in a federal prosecution charging a conspiracy to bribe or extort cash for political and law enforcement favors. Malone represented strip-club owner Michael Galardi in Las Vegas and San Diego, and his work in San Diego has led to multiple federal charges of wire fraud, extortion, and interstate travel in aid of racketeering.
Two sitting San Diego city councilmen and a San Diego council aide face similar charges. Galardi and his lieutenant, John D'Intino, have already pleaded guilty and agreed to cooperate with the government. Malone faces similar charges in Las Vegas, where two other former county commissioners also face charges in the strip-club scandal, and former commissioner Erin Kenny has also pleaded guilty and is cooperating with the federal prosecutors.
A key to both cases is a man now known as Tony Montagna, who spoke to jurors in the San Diego trial Thursday. The federal prosecutors detailed Montagna's long history of criminal behavior and his ultimate relationship with various federal law enforcement agencies in the opening of what some expect to be days or weeks of testimony by a professional paid government informant.
The bearded informant squeezed into a tight-fitting suit spoke so quietly that defense attorneys at several points complained that they could not hear the testimony, and federal Judge Jeffrey Miller asked Montagna to speak up.
Montagna, who was born with the name Richard Anthony Giannone, told the court that he moved from a U.S. Army deserter in the late 1970s to the head of security for Galardi's four strip clubs two decades later, along the way practicing check fraud, cocaine trafficking, illegal gun sales, illegal steroid trafficking, and various other misdeeds.
It was his 1993 arrest in Detroit for bringing steroids, illegal body-building boosters, from Canada that launched Montagna's career as a paid law enforcement informant, he said.
Throughout the entire period, he ultimately was found guilty for just three misdemeanors, Montagna said. In the decade from 1993 to 2003, when the Galardi strip club indictments were filed, the federal government paid him about $120,000, he said.
Assistant U.S. Attorney Robert Ciaffa prompted Montagna that maybe the government had paid a little more than that.
"I'm not certain," Montagna said.
Montagna said he still has some legal problems because he has not paid his taxes recently because of concerns that he would reveal his original name or Social Security number.
Despite Montagna's history, the government plumbed his knowledge of illegal acts committed at the Las Vegas and San Diego strip clubs. Montagna told the court that the government did not give him instruction, nor did it tell him to target particular people, but put him into the San Diego Cheetahs owned by Galardi in 1999.
He quickly observed what he called sex acts "every now and then," which if true would be against San Diego law. Montagna said he also heard Cheetahs' manager John D'Intino say that he had bribed city officials and vice squad officers.
By early in 2000, the club manager was talking about a new proposed law that would ban physical contact between dancers and customers, a law that would hit the club's profits hard.
"They were trying to stop a law being passed, what they called a 'no touch' law," Montagna said. "It was going to hurt them financially."
Montagna said it was around the same time that he saw D'Intino solicit campaign contributions for San Diego city council candidates or incumbents from dancers at the clubs, contributions that D'Intino would reimburse, which goes against San Diego ethics rules.
Montagna said he reported the reimbursement scheme to the FBI, and the investigation and ultimately the indictments rolled on from that point. Soon Montagna offered Galardi and D'Intino a new way to influence the legal storm affecting the San Diego club: an allegedly corrupt vice cop, who actually was working with the FBI, who would take thousands in bribes for tips on when raids would occur.
"I said we had, I had, a vice cop that I was training at the gym who was illegally taking steroids, who could be approached," Montagna told the Cheetahs bosses. Galardi and D'Intino began providing the police officer with steroids and cash, ultimately offering the officer $2,000 a month for his tips on upcoming police actions and, they hoped, assistance in getting the San Diego city council to throw out the no-touch rule.
It was Lance Malone, a former Metro Police motorcycle cop, Clark County commissioner and then lobbyist, that suggested using the friendly vice squad San Diego policeman for the political effort, Montagna said.
"He said he (Malone) had spoken to (San Diego councilman and alleged co-conspirator) Ralph Inzunza and we needed to use our cop friends," Montagna said.
Ciaffa asked Montagna what kind of relationship he had with Malone.
"Very good. We would train together, go out to eat together. Very nice."
Montagna said he also took cash from Galardi to Malone, who discussed San Diego politicians and corrupt police officers with him.
"He (Malone) asked me to set up a way to get the councilmen campaign contributions that didn't look like they came from the club, Michael Galardi's clubs," Montagna said.
"He asked me to send an e-mail to all the politicians from somebody who looked like a concerned citizen, I think on two occasions, to give the politicians an excuse to look into the issue (of the no-touch rule)."
Ciaffa then played several wiretaps with Montagna, Galardi and D'Intino discussing their legal woes and ways to change the San Diego situation. The tapped conversations from a wire carried on Montagna's body discussed in profane detail their efforts to win support from local politicians and end the sanctions coming from San Diego police.
Malone, at least in the recordings played so far, was not a participant in the conversations played for the jury.
Malone's attorney, Dominic Gentile, said outside court that the wiretaps and Malone's absence show a fundamental problem with the government's case. The tapes show conspiracy between Montagna, Galardi and D'Intino but not for Malone, Gentile said.
"This is a point-of-view prosecution," he said. "We're looking at the same exact evidence (the wiretaps) and we have different views. ... The defense here is that there was no crime that the defendants committed."
He said the tapes speak for themselves -- Montagna's role is to "put a gloss on the case."
"I'll rely on the tapes all day long."
Gentile sharply criticized both Montagna, who he called a "mouth breather," and the government for using the informant.
He noted that Montagna did not have a clear assignment when he started going to Cheetahs.
"It tells you a lot about how much supervision they (the FBI) gave this guy -- like none," Gentile said. "They were negligent in general with this guy. They didn't tell him who to talk to. They just put him in there."
Gentile said Montagna could stay on the witness stand for weeks as the government goes through the evidence collected through wiretaps.
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