Allan May, Crime Historian
Allan May is an organized crime historian, writer and lecturer. He also writes a monthly column for the Cleveland Plain Dealer. Contact him at AllanMay@AmericanMafia.com.
Greed in the Desert
The Herbie Blitzstein Murder Trial
By Allan May
When Chicago mobster Anthony “Tony the Ant” Spilotro was sent to Las Vegas to oversee the Chicago Outfit’s interests, he brought along some people from Chicago to provide muscle for him. One of them was Herbert Blitzstein. A mountain of a man at six foot, 300 pounds, he was known as “Fat Herbie,” or the “Fat Hebe.”
In William Roemer’s “The Enforcer,” he states Blitzstein was one of the mobsters the FBI tested during the early days of the FBI’s Top Hoodlum Program. At the time Blitzstein lived on the far northwest side of town with his third wife. He was a flamboyant dresser and drove around town in a 1973 white Cadillac Eldorado. Blitzstein’s early rise in Chicago came at the expense of others. In 1967, Arthur “Boodie” Cowan, a bookmaker, and an associate of Blitzstein was found in the trunk of his car with a bullet in his head. It was believed Spilotro had put it there because Cowan had been withholding “street tax." When Henry Kushner, another bookie, was sent to prison by the FBI, Blitzstein took over his customers, as well as Cowan's.
Blitzstein left Chicago after a gambling conviction and went to Las Vegas where he and Tony’s brother, John Spilotro, ran the Gold Rush, LTD, a combination jewelry store and “electronics factory.” Here he gained his expertise in fencing stolen goods. The building, opened in 1976, was one block off the strip. Spilotro hired an electronics expert to install not only security for the place, but also scanners to allow him to monitor law enforcement transmissions. According to the late Bill Roemer, “most of the top thieves in the country, especially in the western part of the country, fenced their jewels and furs at Gold Rush.”
Blitzstein was a monster of a man and, due to his ominous presence, Spilotro was rarely seen without him, however, few in Las Vegas can testify that he was a brutal man. Instead many saw him as a “warm, stand-up guy,” who shunned the strong-armed image. Blitzstein became a member of Spilotro’s “Hole in the Wall” gang. The gang was a burglary ring that operated with help from corrupt members of the Clark County Sheriff’s Organized Crime Unit. The FBI captured gang members in action on July 4, 1981. Although not a participant in the robbery, Blitzstein was indicted along with Spilotro on federal racketeering charges. Prior to this, he had spent several months in jail on contempt of court charges for failing to provide handwriting samples to a federal grand jury that was investigating Spilotro.
The trial, which took place in early 1986, was declared a mistrial when one of the jurors informed the judge that she heard two other jurors discussing a bribe. Before the second trial could begin in mid-June, Spilotro was murdered.
In 1987, Blitzstein pleaded guilty to four separate federal indictments, including using counterfeit credit cards, receiving stolen government postage stamps, and income tax evasion. He received an eight-year sentence. In prison, Blitzstein’s health deteriorated due to weight and dietary problems. The 300-pound mobster suffered from diabetes and heart problems. In addition to two heart bypass surgeries, doctors were forced to remove several toes on his right foot.
Blitzstein returned to Las Vegas after leaving prison in 1991. By this time new gaming laws and the work of government agencies had diminished the Chicago mob’s control in the city. Blitzstein, always a number two type of character, became associated with Ted Binion, who at the time had been suspended by the Nevada State Gaming Commission. In December 1996, the State Gaming Control Board recommended that Blitzstein’s name be added to the infamous “Black Book,” the state’s list of “unsavory people” who are banned from the casinos.
He soon re-established his loan-shark business and got involved in auto insurance fraud operations working out of Any Auto Repair, an automobile repair shop, he co-owned with Joseph DeLuca. By the mid-1990s his operations were earning good money. However, Blitzstein was on thin ice due to the fact the protection that he once enjoyed under Spilotro was non-existent. Newly transplanted members of both the Milano Crime Family of Los Angeles and the Buffalo Crime Family were eyeing his street interests with envy.
On January 6, 1997, DeLuca purportedly went to Blitzstein’s home after he failed to show up at work for a business appointment. Finding him slumped in a chair, DeLuca called 911 claiming he thought Blitzstein had suffered a heart attack. Paramedics arrived and found that Blitzstein’s heart had stopped, but it was due to three bullets in his head. Blitzstein’s body was taken back to Chicago for burial.
The murder had been carried out by two hitmen in an intricate plot to take over Blitzstein’s illegal street operations. The motive was simple - greed. It’s interesting to note that what turned into a high profile killing, was not a typical mob murder. Most underworld murders of this nature are carried out by men looking to make their “bones.” This was strictly a murder-for-hire killing in which $10,000 had been shelled out.
The investigation into the murder forced a two-year FBI probe called “Operation Button-down” to surface. The investigation, which was also targeting the Milano Crime Family, returned indictments on 25 individuals with a total of 101 counts. In the end though, only two men would be tried for the murder of Blitzstein.
The initial indictment alleged that Peter Vincent Caruso wanted Blitzstein killed so he could take over his street rackets. He supposedly hired Buffalo mob associate Alfred Mauriello to clear the hit through Buffalo Family member Robert “Bobby” Panaro and Los Angeles Family member Stephen Cino. Mauriello was then alleged to have received $10,000 to hire hitmen Antonio Davi and Richard Friedman. Blitzstein’s partner in the auto shop, Joe DeLuca, who had intimate knowledge of Blitzstein’s home and security system, planned the murder and a subsequent burglary of the house.
Five months after the killing, DeLuca contacted the authorities and told them everything he knew about the murder. In August 1997, faced with a life if found guilty, DeLuca pleaded guilty to his role during a closed hearing and agreed to testify against his fellow conspirators for a recommended prison term of twelve and a half years.
In January 1999, Caruso, the central figure in the slaying, died in a Las Vegas hospital at the age of 59, after spending eighteen months in the Clark County Detention Center. His wife told reporters, “My husband had no real underworld connections. He was a wannabee, but he could never be because he didn’t have no heart (for the violence).”
In April, just weeks prior to the trial getting underway, the 72 year old Mauriello pleaded guilty to one count of murder in aid of racketeering and agreed to testify for the prosecution for a reduced sentence. One week later the 31 year old Davi, faced with a life without parole sentence, also pleaded guilty and agreed to testify in return for a twenty year sentence. Finally, less than an hour before jury selection was about to begin, Louis Caruso and Anthony DeLulio pleaded guilty to burglarizing Blitzstein’s home the day of his murder to get jewelry he kept there.
Opening statements in the trial began on April 27, 1999. Prosecutors told the jury that Blitzstein “had failed in his obligation to ‘share the wealth’ of his business activities with members of La Cosa Nostra.” Because of this failure, he was murdered by mobsters who wanted to take over his loansharking operations in the Las Vegas Valley. The prosecution claimed that Cino and Panaro sanctioned the killing.
After a four-week trial, which featured testimony from paid government snitches, Cino and Panaro were found not guilty of the charges of murdering Blitzstein. They were, however, found guilty of conspiracy to extort from him.
The final suspect in the murder scheme, Richard Friedman, pleaded guilty to murder-for-hire charges, which left him facing a 25-year sentence as opposed to a life term. Friedman was allowed to admit to receiving payment for participating in the crime, but denied being the triggerman.
Of the seven persons involved in the plot to kill Herbert Blitzstein, four pled guilty in order to receive reduced sentences. One died in prison awaiting trial, and two went to trial and were acquitted. As the record stands, no one officially killed Blitzstein.
Perhaps Louis Palazzo, Cino’s attorney, summed it up best when he told reporters after the trial, “The government paid $1 million in ‘rat-snitch’ fees, and this is the return on your money when you go out and buy their testimony.”
Copyright A. R. May 1999