By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
Like so many mob groups before them, the Milano family allegedly saw opportunity in Las Vegas. According to the government, they made their entree through local topless bars, late-night restaurants, and a storefront social club run by Fat Tony Angioletti, a former associate of Rizzitello and an FBI informant. In the Vegas underworld, the person they absolutely had to know was Herbie Blitzstein, one of the last remnants of the wise-guy era captured in the book and movie Casino.
Blitzstein, an expert fence of stolen goods with a striking resemblance to opera star Luciano Pavarotti, had been a valued associate for Spilotro in the late 1970s and early '80s, working out of the jewelry store that was a front for the Chicago mobster's operations. "They were always together," says his attorney, John Momot. After Spilotro turned up dead in an Indiana corn field in 1986, Blitzstein was sentenced to eight years in prison for tax evasion. By the time he was paroled in 1991, diabetes had cost him several toes, and he had undergone two heart bypass operations.
Back on the Vegas streets, Blitzstein opened a business called Any Auto Repair and liked to say he had retired from the criminal life. But the feds claim the business was actually a front for an auto-insurance-fraud racket. And, says Flores, he "controlled the lending of money to gamblers."
In early 1996, Blitzstein allegedly devised a "diamond switch" scheme with his friend Dominic Spinale, Carmen Milano and reputed L.A. mob associate Peter Vincent Caruso. The fraud involved showing a "large genuine diamond" to a buyer and then secretly switching it with a similar, fake stone after taking the buyer's money. Although at least two prospective buyers were shown the diamond, no deal was concluded. According to the indictment, Milano complained to Fat Tony that "too many people were involved" to make it worthwhile.
By October 1996, Blitzstein may have become more of a target than a partner. "He was not paying tribute to any family," Flores says, "and associates of the L.A. family that were here . . . thought they could take over his business." Caruso, Cino and reputed Buffalo mobster Robert Panaro allegedly began extorting him to hand over his insurance-fraud and loan-sharking operations to them. Even though he had no one of Spilotro's fearsome stature to protect him, Fat Herbie, 63, refused to oblige. On January 7, 1997, he was found dead in his living room, a single bullet in his head.
At the time of his death, Blitzstein was battling his nomination by state gaming regulators to Nevada's "Black Book" of undesirables banned from casinos. Many in Las Vegas still find his bloody demise hard to believe. "I thought those days were over in Vegas," says Oscar Goodman, Spilotro's former attorney.
In a grand-jury indictment unsealed in April 1997, only Caruso and two other reputed L.A. mob associates - Alfred Mauriello and Antone Davi - were charged with Blitzstein's murder. The expanded, 50-count case announced in February added Cino, Panaro and Richard Friedman, the accused shooter, to that list, and alleged that Carmen Milano and others sanctioned the hit. While Milano, 67, was not charged with murder, the counts against him include the diamond fraud, racketeering and money laundering.
The Caci brothers and Rocco Zangari also surfaced in the indictment, accused of taking part in a scheme to sell counterfeit traveler's checks and U.S. currency. The defendants "account for the hierarchy of the LCN in Los Angeles as it now exists," says Flores.
Carmen Milano, who has a home in Las Vegas, in proclaiming his innocence, has accused the government of mounting a vendetta against Italian-Americans. "There's a big story that should be told," he said cryptically after a court hearing in February. But the feds have that mountain of tapes, some made in Los Angeles, and the testimony of confidential informants and undercover agents. The last mob case of comparable magnitude in Las Vegas was "when we got after Herbie," says prosecutor Kurt Schulke, head of the city's Organized Crime Strike Force.
One informant, John Branco, is a former Rizzitello crew member who allegedly acted as liaison for the L.A. mobsters in Vegas. Branco assisted authorities once before - in 1989, helping bring down a police officer who was moonlighting as a contract killer. The FBI says Branco was at a meeting where Milano and Cino hatched the plan to take over Blitzstein's rackets. He also helped distribute cash stolen from the victim's home after the killing.
Another witness is Alfred Mauriello's son Stephen, a Tourette's patient who pleaded guilty in November to extorting nearly $5,000 from the owner of a smog-check business. According to an affidavit, Stephen Mauriello told the FBI that his father hired Friedman and Davi to kill Blitzstein. "You've got guys falling over themselves" to cooperate, says Don Campbell, a former assistant U.S. attorney in Las Vegas.
Still, the government may have some explaining of its own to do at trial. For one thing, if FBI agents picked up the murder conspiracy against Blitzstein on their wiretaps, why did they not warn him that his life was in danger? Fumes Goodman: "They knew everything that was going to happen, but they didn't care." Another puzzle is how Peter Milano avoided the government's grasp. According to the indictment, a family capo met with Branco in November 1996 "and represented that Los Angeles LCN Family boss, Peter Milano, wanted to know the details" of Branco's purchases of phony traveler's checks.