Joseph Aiuppa and the Vegas Skim That Went Too Far
By the middle of the 1970s, the Chicago outfit was pulling millions of dollars a year out of Las Vegas casinos, and almost nobody in law enforcement knew how. The money never appeared on any ledger. It never crossed a bank counter. It moved in paper bags and briefcases from the Nevada desert to the Midwest, handto hand, boss to boss, year after year.
And the men who ran the operation were so careful, so disciplined that for nearly a decade, they made the federal government look completely blind. This is the story of Joey Ayupa, the man who ran that operation and the skim that finally went too far. The man they called doves. Most people who have seen the movie Casino remember the character Remo Gaggy, the quiet, careful boss in Chicago who never raises his voice and never gets his hands dirty.
the man who makes decisions over dinner and lets other people deal with the consequences. That character was based at least in part on a real person. His name was Joseph John Ayupa. And in the history of the Chicago outfit, he may be the most consequential boss most people have never heard of. Aayupa was born in 1907 in Melrose Park, Illinois, the kind of tight-knit Italian neighborhood west of Chicago, where the outfit had deep roots going back to Al Capone’s era.
He grew up in that world. He did not stumble into it or get recruited. It was simply the fabric of the community he came from. By the time he was a young man, he was already connected, already earning, already demonstrating the kind of patient, calculating temperament that bosses noticed and rewarded. His nickname was doves, not because he was peaceful, because he once got pinched by federal authorities for illegally transporting morning doves across state lines.
That is the kind of thing that happens when you are a career criminal and the federal authorities cannot make anything else stick. [music] They got Al Capone on taxes. They got Joey Aayupa on birds. Through the 1940s and the 1950s, Ayupa built his reputation as a reliable earner and enforcer in the western suburbs. He ran gambling operations.
He managed the outfit’s interests in Cicero, the same territory that Capone had used as his base 30 years earlier. He was not flashy. He did not give interviews. He did not show up at nightclub openings or get his picture taken with politicians. He was a professional and in the outfit, professionalism was everything.
By the time the 1960s arrived, Ayupa was a capo, one of the most trusted lieutenants in the organization. And by 1971, after the death of boss Felix Aldericio and the imprisonment of others above him, Joey Aayupa found himself elevated to the top. He became the boss of the Chicago outfit at a moment when the organization was about to attempt something it had never quite pulled off before.
something that would require coordination across multiple crime families, years of careful planning and a level of financial sophistication that went well beyond anything the old neighborhood bookmakers had ever imagined. He was the right man for it. Doves was patient. He was disciplined. And he understood better than almost anyone in organized crime at the time that the real money wasn’t on the streets anymore.
[music] It was in the desert. Las Vegas was never really Vegas. Here is something that gets lost in all the Hollywood glamour. Las Vegas in the 1970s was not a corporate town. It was not a theme park. It was not a family destination. It was a city that had been built in large part with money borrowed from the Teamsters Union Pension Fund lent out to men who had connections to organized crime families across the country.
The casinos that lined the strip and Fremont Street were not just gambling halls. They were [snorts] in a very real and very profitable sense mobed businesses operating in plain sight. [music] The mechanism that made it work was deceptively simple. [music] The teamster’s central state’s pension fund controlled for years by figures close to the Chicago outfit became [music] the bank of Las Vegas.
A developer who needed $50 million to build a casino did not have to go to Wall Street or convince a board of directors. He went to the pension fund, got his [music] loan, built his property, and then operated it in whatever way his silent partners required. The pension fund got its interest payments. The mob got something far more valuable. Control.
[music] The key figure in what eventually became the IUPA operation was a young San Diego real estate developer named Allan Glick. Glick was in his early 30s, ambitious and largely unknown in the gambling world. What he had was access through a chain of connections to Teamstster’s pension fund [music] money.
In 1974, with pension fund loans totaling around $160 million, Allan Glick’s company, the Argent Corporation, acquired four Las Vegas casinos, the Stardust, the Fremont, the Hienda, and the Marina. On paper, Glick was the owner. In reality, he was a front. He understood [music] this. He was not naive.
When Nick Sevela of the Kansas City mob and figures connected to Chicago sat down with him and explained how the arrangement would work, Glick listened and he agreed. He would run the operations on the surface. He would be the name on the license and the people above him would take their money out from underneath before the government ever got a look at it.
What the mob had just acquired through Glick and the Teamsters Fund was not just for casinos. It was a printing press. The only question now was how to move the money. The skim, how it actually worked. The word skim sounds almost gentle, like something you do to milk, like a minor adjustment. It was not a minor adjustment.
What the Chicago outfit and its partners built inside those four Las Vegas casinos was one of the most sophisticated and longrunning financial crimes in American history. At its peak, it pulled between2 to4 million a year out of Nevada and distributed it to organized crime families across the Midwest. And it worked because it was built on a single elegant insight.
If you take the money before it is counted, it does not exist. Here is how the countroom works in a casino. At the end of each shift, the money from the tables and the slot machines gets gathered up and brought to the countroom where it is tallied by employees and recorded. That recorded number is what the casino reports to the Nevada Gaming Control Board.
That recorded number is what goes on the tax return. That recorded number is the legal reality of how much money the casino made. But what if the number that got recorded was smaller than the number that actually came off the floor? The skim happened before the count. [music] Trusted casino employees, people who had been carefully placed inside the countrooms, would remove cash from the drop boxes before the official tally began.
Not every night, not in amounts that would create a pattern too obvious to miss. carefully, methodically over time. The money that was removed never entered the official books. It simply disappeared from the casino floor and reappeared weeks later in envelopes and paper bags in Chicago, in Kansas City, in Milwaukee.
The Stardust was the crown jewel of the operation and it was the highest volume casino in the Argent group and it generated the most skimable cash. Employees who participated were well compensated. They understood the stakes. They kept their mouths shut. The whole arrangement depended on silence, on loyalty, and on the understanding that the people running this operation did not forgive mistakes.
The money moved in stages. Casino employees passed it to intermediaries. Intermediaries passed it to couriers. Couriers drove it or flew it to the Midwest where it was divided according to a pre-arranged formula among the families who had a stake in the operation. Chicago took its share. Kansas City took its share. Milwaukee took its share.
Joey Aayupa, sitting in his house in Elmwood Park, Illinois, collected his portion of a criminal enterprise operating nearly 2,000 m away, and never had to set foot in Nevada to do it. For years, this worked exactly as designed. The casinos remained profitable on paper. The gaming regulators saw numbers that looked plausible.
The families got their money and the federal government for all its resources and all its attention to organized crime in this period largely missed what was happening right in front of them. Not because they were not looking because the men running the skim were extraordinarily good at what they did.
Frank Rosenthal and the man running the floor. If Alan Glick was the face of the Argent Corporation and Joey Aupa was the power behind it, then the man who actually made the machinery run on a day-to-day basis was Frank Lawrence Rosenthal. You probably know him as Ace Rothstein, the character Robert Dairo played in Casino.
The real man was in many ways more complicated and more interesting than the movie version. Rosenthal was from Chicago. He was not a made member of the outfit, not Italian by heritage, which meant he could never be formally inducted into the organization. But he was one of the most talented gambling men in the country, a genuine expert on sports wagering with a mind that could process odds and probabilities the way other people process conversation.
The outfit had known him since he was a young man running betting operations in Chicago. And when the Las Vegas opportunity came together, it was clear that Rosenthal was the right person to run the floor. He became the executive in charge of casino operations for the Stardust and the Fremont. He created entertainment programs, managed personnel, oversaw the casino operations, and served as the essential link between what was happening inside the casinos and what Aayupa and the other bosses needed to know. He was meticulous, he was
controlling, and he was remarkably effective at his job, which made him both valuable and eventually visible. The problem with Rosenthal was that he was also ambitious and at times reckless in his visibility. He hosted a local television program. He cultivated a public profile. He fought publicly and bitterly with Nevada gaming regulators when they moved to deny him a formal [music] license.
He made himself into a known quantity which was exactly the opposite of what a man in his position should have been. The bosses in Chicago tolerated it because the money kept coming. [music] But it was the kind of profile that eventually attracted exactly the kind of scrutiny that could unravel an operation. His personal life made things worse.
His relationship with a woman named Jerry McGee, who was connected to Tony Spilotro created tensions that eventually became dangerous. The combination of Rosenthal’s visibility and the chaos that surrounded his personal world was [music] a liability. The outfit had not fully accounted for when they put him in place. But by the time anyone understood [music] that liability clearly, the skim was already too big to quietly dismantle.
The partners, Kansas City, Milwaukee, and the Split. The Vegas Skim was not a Chicago operation exclusively. It was a consortium, a partnership of organized crime families who had each contributed to making the Teamsters’s loan happen and who each expected their return on that [music] investment. Understanding who was at the table tells you a great deal about how the American mob operated at its peak.
Nick TLA ran the Kansas City family. He was shrewd, experienced, and deeply connected to the Teamsters [music] pension fund apparatus that had made the whole Vegas arrangement possible. Kansas City had historically [music] been a conduit between the Chicago outfit and the Western mob, a kind of bridge operation, and Sevela had leveraged that position brilliantly.
His family’s cut of the skim came through a complicated chain of intermediaries and couriers, but it came reliably month after month for years. In Milwaukee, Frank Ballastrieri ran the local family with an iron hand. Ballastrieri had his own connections to Las Vegas going back years and he negotiated his way into the skim arrangement as a junior partner.
His share was smaller than Chicago’s or Kansas cities, but in absolute terms, it was still a significant amount of cash flowing into Wisconsin from Nevada casinos. The arrangement required a kind of coordination that organized crime families were not by nature accustomed to. These were proud territorial organizations that had spent decades protecting their turf and their income streams from precisely the kind of outside interference that a multif family arrangement represented.
The fact that the skim worked for as long as it did is actually a testament to the discipline that Illa imposed on the operation. There were rules. There were agreed upon percentages. There were couriers who knew only their piece of the chain and nothing more. There was a man in Kansas City named Carl Duna who became one of the most important [music] figures in moving the skim money.
A meticulous recordkeeper, almost obsessively so, whose notebooks [music] would eventually become among the most damaging pieces of evidence in the government’s case. He wrote things down, amounts, names, dates. He thought he was being careful. He was being catastrophic. The multif family nature of the skim was its greatest strength and its greatest weakness.
Its strength was that no single [music] family bore all the risk. Its weakness was that every additional set of hands on the money was another potential leak, another potential informant, another potential unraveling. The FBI wakes up. Operation Strawman. The federal investigation that would eventually destroy the skim began not with a dramatic breakthrough, but with the kind of patient, grinding intelligence work that does not make for exciting television, but makes for devastating prosecutions.
By the late 1970s, the FBI had been aware for some time that something was wrong in Las Vegas. There were too many rumors, too many inconsistencies, too [music] many people connected to organized crime appearing in and around the Argent casinos. The Nevada Gaming Control Board had its own concerns. But awareness and evidence are two very different things, and for years, the government had one without the other.
The investigation that became known as Operation Strawman began to take shape in the early 1980s. Federal agents in Kansas City, Chicago, and Las Vegas began to coordinate their surveillance efforts in ways that had not happened before. They shared information. They compared notes. They began to see the outline of the same operation from three different directions. Wire taps were crucial.
Kansas City became the weak point in the operation’s security, partly because of Carl Duna’s recordkeeping and partly because the FBI managed to place listening devices in locations where key [music] conversations were happening. What they heard was remarkable. specific discussions of the skim, amounts, names, the mechanics of how the money moved, conversations that would have been impossible to explain away in a courtroom.
Duna’s notebooks, when agents eventually obtained them, were essentially a ledger of the skim operation. He had recorded transactions, names of participants, amounts paid out, dates, all of it in his own handwriting. It was the kind of evidence that prosecutors dream about and defense attorneys have nightmares about. Meanwhile, in Nevada, regulators and federal agents were building a parallel case based on casino records, the testimony of former employees, and the surveillance that had been tracking the Argent operation for years. Alan Glick,
[music] who had by this point grown deeply uncomfortable with his role in the arrangement, eventually began cooperating with investigators. He was, in the end, not a mobster. [music] He was a businessman who had made a catastrophic decision and was now looking at a way out. Frank Rosenthal was forced out of his Nevada casino positions by regulators in 1980.
Tony Spelotro’s increasingly erratic and violent behavior in Las Vegas was drawing the kind of heat that the operation absolutely could not afford. The carefully constructed architecture of the skim was beginning to show serious cracks. [music] In Chicago, Joey Aayupa, the man who had overseen the whole enterprise, was watching his most valuable operation start to come apart.
The trial that shook the outfit. The indictments came down in 1983 when federal prosecutors announced charges against a group [music] of defendants that included not just mid-level figures, but sitting bosses and top leadership from three [music] separate crime families. It was immediately clear that this was something different from the usual organized crime prosecution.
Joey Aayupa was indicted. So was Jackie Cerrone, [music] his underboss. So was Joseph Lombardo, the outfit capo, who had overseen [music] the street level operations of the skim. From Kansas City, Nick Sevela’s brother Carl and key Lieutenant Carl Duna were charged. From Milwaukee, Frank Ballastrieri and two of his sons faced indictment.
>> [music] >> The government had assembled a case that cut across family lines and implicated the leadership of multiple organizations simultaneously. The trial was held in Kansas City, which was in some ways the logical choice given that much of the most damaging wiretap evidence had been gathered there. It began in 1985.
The prosecution’s case was by any measure overwhelming. They had the wiretaps. They had Duna’s notebooks. They had Alan Glick’s cooperation and testimony. They had former casino employees who could describe in precise detail how the money had been removed from the countrooms. They had a paper trail that ran from the Stardust casino floor all the way to kitchen tables in Chicago and Kansas City.
The defense tried what defenses in mob cases always try. They attacked the witnesses. They questioned the credibility of cooperating informants. They argued that the recordings were ambiguous, that the notebooks proved nothing, that their clients were being prosecuted on the basis of association rather than evidence. It didn’t work. The evidence was too specific, too corroborated, too detailed.
Joey Ayupa was convicted. Jackie Cerrone was convicted. Joe Lombardo was convicted. The Kansas City and Milwaukee defendants [music] were convicted. It was in the history of organized crime prosecutions up to that point, one of the most thorough dismantlings of a criminal enterprise that the federal government had ever achieved in a single trial.
IUPA’s sentencing hearing was a quiet affair given the magnitude of what had preceded it. He was 78 years old. He had spent his entire adult life in and around the outfit, moving carefully, surviving everything, building an empire that stretched from the western suburbs of Chicago to the casino floors of Las Vegas.
He was sentenced to 28 and 1/2 years in federal prison. [music] He was never going home. Everyone in the courtroom understood what that meant. The fall of Joey [music] Aayupa. There is a certain kind of organized crime figure who goes to prison and continues to operate, who conducts business through lawyers and visitors and coded messages, who never really stops being what he is, even from behind a cell door.
Joey Aayupa was not that kind of man. He was too old, too ill, and the organization he had led [music] was too damaged by the trial to sustain that kind of continued operation. The Chicago outfit that Aayupa left behind in 1986 [music] was a fundamentally different organization from the one he had taken over in 1971. [music] The Las Vegas money was gone.
The Teamsters pension fund connection had been severed. A generation [music] of leadership had been convicted or was under indictment. The organization was still alive, but it was diminished, contracting, operating in a [music] world that had shifted dramatically under its feet. The men who had made the skim work were scattered.
Rosenthal had left Las Vegas under a cloud and would survive a car bombing in 1982. The kind of message that suggested even his protectors were running out of patience. Tony Spelotro, the outfits enforcer in Las Vegas throughout the skim years, was murdered in 1986, beaten to death in a basement in Bensonville, Illinois.
His body buried in an Indiana cornfield, as these transcripts have already described in detail. The machinery of the operation had not just stopped, it had been destroyed. Alan Glick sold the Argent Casinos in 1983 before the indictments came down and walked away with enough money to rebuild his life. He cooperated with the government, testified against the men who had used [music] him as their front and eventually disappeared into private life.
He had been a vehicle for the mob’s ambitions. And when those ambitions collapsed, he was one of the few people connected to the operation who emerged intact. [music] Joey Aayupa died in prison in 1997. He was 89 years old. He had outlived many of the men who had worked for him, and he had outlived the criminal enterprise that had defined his life.
He never publicly admitted to any of it. He maintained to the end the code that the outfit had always demanded of its men. A silence. Absolute total unwavering silence. What the skim left behind. When Martin Scorsesei made casino in 1995, he and Nicholas Pelgi were telling a story that was already 9 years in the past.
The mob had been out of the major Las Vegas casinos for nearly a decade. [music] By the time Dairo was walking across those casino floors in his pastel suits, by the time Peshy was burying people in cornfields and screaming at casino managers in the back offices of the Tangiers. But the movie did something important that the court documents [music] and the newspaper coverage and the federal press releases had never quite managed to do.
It made the skim visible. It put a human face on a financial crime so abstract, so carefully constructed [music] that most Americans had never understood what it actually was. And in doing that, it also obscured something because the real story was colder than the movie, more methodical, less about individual personalities, [music] and more about a system that had been running like a machine for nearly a decade before anyone in law enforcement could prove it.
what [music] the skim actually represented, stripped of all the cinematic drama, was one of the most sophisticated [music] financial crimes of the 20th century. It wasn’t robbery. It wasn’t extortion in the traditional street sense, the kind of thing where a man walks into a business and makes a [music] threat that everyone understands.
It was something more ambitious and more dangerous than that. >> [music] >> It was the long-term capture of legitimate business infrastructure by criminal organizations. The outfit didn’t rob the Stardust. They owned it. They built it through the Teamsters pension fund and through Allen Glick and through a chain of arrangements that kept their names off every document that mattered.
They ran it and they just made sure that a significant portion of what it earned never appeared on any ledger that the government could read. Think about that for a moment. Four casinos operating legally, licensed by the state of Nevada, audited, regulated, watched. And underneath all of that official architecture year after year, a river of cash moving east before it was ever counted, before it ever became a number, before it ever became real in any legal sense.
The countroom was the choke point. and they [music] controlled the countroom and that was all they needed. Everything else was paperwork. The lesson that federal prosecutors took from the AUPA case and from the parallel prosecutions that followed it was a lesson that reshaped how the government approached organized crime for the next generation.
[music] You were not going to win this fight one street crime at a time. You were not going to put the outfit [music] out of business by prosecuting individual bookmakers or individual lone sharks or individual acts of violence, however brutal. You had to go after the money. You had to follow the financial architecture of the organization the way you would follow a river back to its source.
And you had to dismantle it at the structural level, not the surface level. The RICO statute, the Racketeer Influenced and Corrupt Organizations Act that had been sitting on the books [music] since 1970, became the weapon of choice precisely because it allowed prosecutors to charge the organization itself as a criminal enterprise, not just the individuals who had committed specific acts within [music] it.
The IUPA prosecution was one of the cases that proved RICO worked. That you could stand up in a courtroom with wire taps and notebooks and a cooperating witness and make a jury understand that [music] what they were looking at was not a collection of unrelated crimes, but a single coordinated ongoing criminal business.
The Las Vegas that exists today, [music] the corporate publicly traded, heavily regulated glass [music] and steel city of mega resorts and institutional money and loyalty programs and quarterly earnings calls is in many ways a direct consequence of what happened to Joey Aayupa and the men who sat around that table with him.
the regulatory tightening that followed the Argent scandal, the federal oversight that came out of the Straw Man prosecutions, the scrutiny that now surrounds every gaming license application, every major financial transaction, every ownership change in the Nevada casino industry. All of it traces back in a straight and unbroken line to the years when the outfit was quietly pulling millions of dollars out of the desert and the government was only beginning to understand what it was seeing.
They figured it out. It just took them a while. In that time, the operation ran $2 million a year, maybe 3 million, maybe more. Money moved west to east in paper bags and envelopes while tourists lined up on the strip, dropped quarters in the slots, and [music] took pictures in front of the fountains. They had absolutely no idea that the casino they were standing in was being systematically [music] hollowed out by men in Chicago who had never once set foot on the floor.
The house was winning twice, once for the books [music] and once for the bosses. And for a long time, nobody was counting the second time.