John Factor, the Kennedy's and the Star Dust Casino

If any one hoodlum can take claim for inventing Las Vegas, it was Tony Cornero. Tony not only built the Vegas that we know today, fittingly, he died there, dropped dead gambling at the Desert Inn, while Moe Dalitz, the Godfather of Sin City, stood in the middle of the casino floor, his fat, stubby little arm around the waist of his slim and much younger wife.

Cornero had gone to the Desert Inn for a last chance meeting with Godfather of the Strip, Moe Dalitz, to beg the mobs favorite front man for financing to help him complete construction on his own Casino, the cursed Stardust. The place was scheduled to open in just two weeks, on July 13, 1955, and Cornero didn't have the cash to pay the staff or supply the house tables.

He was in over his head and Dalitz and everybody else knew it. Tony was in the hole to the mob to the tune of $6,000,000 that he had already borrowed finance the Stardust, and he couldn't account for half of the cash. It was a mistake to give him the money in the first place, because Tony the Hat was no businessman, just dice jockey with high ambitions.

Cornero and Dalitz met for several long hours in a conference that went nowhere. Cornero wanted the mobs money and the mob wanted Cornero's casino, but had no intention of paying another penny for it. During a break in the meeting, Cornero went out to the floor and gambled at the crap tables and quickly fell into the hole for $10,000.

Then a waitress came and handed him a tab for twenty-five dollars for the food and drinks he's had. Cornero went ballistic. He was a guest of Moe Dalitz. The waitress didn't care and Dalitz stood by and watched Tony Cornero suffer through the ultimate Vegas insult to a big timer. Cornero screamed, ranted and raved and then he grabbed his chest and fell forward on the table, desperately clutching his heart through his shirt, the dice still wrapped in a his fat, hot hands.

For decades the story circulated in the underworld that Cornero didn't die of a heart attack, that his drink had been poisoned. If he was poisoned, the answer went with him. An autopsy was never done. His body was shipped off to Los Angeles for a quick funeral where an organist from the Desert Inn knocked out a rendition of his favorite song, "The Wabash Cannon Ball" and within eight hours after he hit the cold floor of the Desert Inn. Nobody checked the contents of the 7&7 he had been sipping before he dropped dead. No one cared enough to ask any serious questions anyway. The important thing was that Tony Cornero was dead, Jake the Barber Factor, a Chicago favorite, was moved into position as the Stardust’s new owner of record, and everybody in mobdom was happy.

They outfit had probably set Tony up from the very beginning anyway. He never would have gotten a license to run the place because he had a long criminal record and the even longer lists of powerful political enemies he had made across the state. And he had his enemies in the underworld as well. His endless arguments with the New York syndicates over the size of the Stardust, five hundred rooms, were legendary. Myer Lansky and Frank Costello were positive that Las Vegas would never be able to attract enough gamblers to fill all of those rooms, and the Stardust would cause a glut on the market reducing prices for all the other casinos.

Cornero knew about the license problem of course, but it didn't concern him, maybe he could get a license anyway. A few million went a long way in Nevada in 1950s but the word was that Moe Dalitz had taken care of that already. There was no way that Tony Cornero was going to get a gaming license in Nevada or anywhere else. So, as the opening day drew closer, Cornero entered into talks with Dalitz about leasing the place to the Dalitz operation, and Dalitz was interested but the terms that Cornero wanted were steep, a half a million a month. So Dalitz bid his time because he knew Cornero was broke and would have to crawling back to him, and when he did, they'd handle him.

ile it lasted, Cornero has an amazing life. Born Anthony Cornero Stralla in an Italian village near the Swiss border in 1895, the Cornero family had owned a large farm there but his father lost it in a card game. More bad luck came when young Tony Cornero accidentally set fire to the family harvest, driving them broke and forcing them to immigrate to San Francisco in the early 1900s. At age 16, Tony pleaded guilty to robbery and did ten months in reform school, he moved to southern California and racked up another ten arrest in ten years which included three for bootlegging and three for attempted murder.

He was ambitious, but as late as 1922, Cornero was still driving a cab before he decided to branch off into the rum running business. He started with a string of small boats and smuggled high priced whisky over the Canadian border and sold it to the wealthy and better clubs in Los Angles. At the same time, Cornero ran rum from Mexico to Los Angles, his freighters easily avoiding the understaffed coast guard. Next, Tony purchased the merchant ship, the SS Lily, which he stocked with 4,000 case's of the best booze money could buy and ran the booze into Los Angles under moonlight.

In 1931, Cornero decided to switch over to gambling and moved, with his brothers, to Las Vegas and opened one of the town’s first larger casinos, the Green Meadows, which was known for its staff of attractive and friendly waitresses. The Meadows turned a small, but healthy profit, and soon Cornero was investing his returns into other casinos in the state, mostly in Las Vegas.

The money started to pour in, and before long, New York's Luciano, Lansky, Frank Costello sent around their representatives and demanded a cut in Cornero's action, but Cornero, who had always operated on the fringe of the national syndicate, refused to pay. Instead he had built up his own organization and was strong enough to turn the syndicate bosses down. The Syndicate, which had a small but powerful presence on the West coast, prepared for war and started by burning Cornero's Green Meadows casino to the ground. Realizing he could never win the fight, Cornero sold out his interest in Nevada and returned to Los Angles.

In 1938 Cornero bought several large ships and refurbished them into luxury casino's at a cost of over $300,000, and anchored them three miles off the coast of Santa Monica and had gamblers shuttled from shore by way of motor boats. Cornero's lead ship, The Rex, had a crew of 350, waiters’ waitresses, cooks, a full orchestra, and enforcers. The first class dining room served French cuisine only and on most nights, some 2,000 patrons flooded on to the ship to gamble, dance and drink the night away. Tony was hauling in an estimated $300,000 a night after expenses, and the money would have continued to pour in, had he not become the center of a reform movement in Los Angeles County.

State Attorney General Earl Warren ordered a raid on the Rex and several other of Cornero's off coast ships. Cornero and the California government fought a series of battles, with Tony's lawyers arguing that his ships were operating in international waters, and the California government taking the indefensible stance that it didn't care where they were they were, they were still illegal. Back and forth it went, until at one point, after raiders had smashed almost a half a million worth of gambling equipment on one of his ships, Cornero decided to fight back. When the law men came to raid his ships, Cornero ordered his men to repel the attackers with water hoses. A sea battle went on for nine hours and the lawmen finally gave up. But Cornero was beaten and he knew it and he closed up his off shore operations. Tony tried to open a few gambling joints inside Los Angles, but Micky Cohen, the ruling bookie and dope dealer in the town, shut him down. When Cornero refused to back down, Cohen had his boys bomb Cornero's Beverly Hills estate. Fearing for his life, Cornero took his fortune and moved to Las Vegas.

After several years in Vegas, Cornero undertook his dream, to build the largest gambling casino-hotel in the world, the Stardust. Then he went broke. Tony went out like the gambler he was. Of the estimated $25 million he had earned his career as a gambler, Tony Cornero had less than $800 in his pockets when he died. "I got the Stardust for Chicago," Johnny Roselli bragged and for once, he may have been near the truth.
After the Las Vegas Stardust casinos original owner Tony Cornero, either died of a heart attack or was poisoned, Tony Accardo called Johnny Roselli back to Chicago for a meeting at Moe's Restaurant with Murray Humphreys and Jake Guzak. Always the hustler, Roselli knew that the bosses back in Chicago were worried because they were losing what little presence they had in Vegas, and as the power west of New York, they felt, as a matter of mob pride, that they should have a major presence on the Strip. Roselli filled them in on the situation at the Stardust. It was, as Roselli called it, a "grind joint," a paradise for the low rollers located right in the heart of the Strip. It was agreed immediately that Chicago would take the Stardust for themselves. Eventually Kansas and Milwaukee had a piece of the Stardust, but all activity in the Stardust was overseen by the Chicago family, they got paid for babysitting the action in Las Vegas but they also took a bigger cut because of it.

Fronting the entire operation would be the mob's favorite and most successful con man, John Factor, brother to cosmetic king Max Factor. John Factor, AKA "Jake the Barber" went way back with the Chicago outfit, back to the days when Johnny Torrio was running things. Humphreys either put up Chicago's money for the purchase and used Factor as its front man, or had Factor put up the purchasing money he got from Humphreys. One way or the other two things were certain. From that point on, Jake the Barber was Chicago's front man in Vegas and Chicago had the Stardust, lock, stock and barrel. And it was a mob gold mine. The Stardust boasted 1,032 rooms, and, when it opened for business in 1955, with Lyndon Baines Johnson and Bobby Baker as the guests of honor, the Stardust had one of the biggest casinos in the world. There were some luxury suites but mainly the Stardust was for low rollers. To stress that, in the back parking lot there were the cheap one-room cabins and spaces for RV units.

It was Dalitz's idea to set up the Stardust as a place for "low rollers" and the Desert Inn for "high rollers." But first they would have to spruce up the Stardust in the fabled Las Vegas tradition of tacky splendor for the masses, and Murray Humphreys arranged for a million dollar loan from the Teamsters Welfare Fund by way of Red Dorfman via Jimmy Hoffa. At first, the outfit was excited at the prospect of having Jake the Barber as their front man. Jake was, if nothing else, trustworthy.

And the reason he was trustworthy was that he was smart enough to know the outfit would kill him in a heartbeat if he tried anything slick with them. The way the boys saw things running was that they would steal the place blind and if anything went wrong, Factor could take the fall for them. "But," wrote Hank Messeck, "he couldn't get a license either, much to the disgust of the Chicago boys. The Barber tried everything he could to get a license but there was no way it was going to happen. He finally bowed to reality and announced he would lease the Desert Inn Group." Factor said he wanted six and a half million a year for the rent but Dalitz was not about to pay that since he held all the aces in the deal including heavy clout with the Nevada state government. "It took," wrote Hank Messeck, "a western Apalachin to solve the matter."

Meeting in Sidney Korshak's Beverly Hills office were Meyer Lansky, Longy Zwillman, and Doc Stacher who represented their syndicate and Moe Dalitz and Morris Klienman who represented the Desert Inn. Representing Chicago was Johnny Roselli's replacement by order of Momo Giancana, Marshal Caifano and John Bats Battaglia. It was decided that the lease on the Stardust would be $100,000 a month, a low figure for the second largest moneymaker in Las Vegas. In the end, the true owners of the Stardust were Moe Dalitz and his partners, Paul Ricca, Tony Accardo, Sam Giancana and Murray Humphreys. Other smaller point holders included Wilbur Clark and Yale Cohen.

Large or small point holders, everybody was making money off the Stardust. Carl Thomas, the master of the Las Vegas Skim, estimated that the Chicago mob was skimming $400,000.00 a month from the Stardust in the early sixties, and that was only for the one arm bandits in the casino, the blackjack game, keno and roulette and poker yielded a different and higher skim. "Everybody," Thomas said, "played with cash. You couldn't get the paddle into the slot at the craps table, there were so many hundred dollar bills crammed into the drop boxes. That's why the front men who were the big shots in town, got laws passed that kept the wise guys who were the real owners, out of town."

As a rule, cash from the skims were paid out to each member of the Chicago operation in accordance with the number or percentage of points each person held in the casinos. Normally, only a few thousand dollars per point or percentage were paid out on a regular basis, with the bigger lump sum payments coming in March after the accountants were finished with their end-of-year figures. Then, hidden investors flew into Vegas with their girlfriends and wives to pick up their cash payments in person staying as "comped" guests all over town. Free women, free hotel suites, free gambling, and free money, free everything. For wise guys there was no place in the world like Vegas.

Ida Devine, the wife of Irving "Niggy" Devine who owned the New York Meat Company, which supplied the Las Vegas casinos, was the prime courier for the skim money out of Vegas to Chicago. She replaced Virginia Hill as Chicago deep cover operative in Vegas and chief exporter for the skimmed cash out of Vegas. Ida would take the train out of Vegas to Chicago's union station where she was normally met by one of Humphreys' people, Gus Alex or George Bieber, law partner to Mike Brodkin. From there, she was escorted to the Ambassador East Hotel on Goethe Street, not far from where Humphreys and Gus Alex lived. They would check into a room there for several hours, Chicago would receive its share of the skim money and then Ida was brought back to Union Station and placed safely on a train out of town.

By 1958, Accardo and Sam Giancana were taking $300,000.00 a month each out of Las Vegas. After a while, Giancana didn't trust anybody to bring in his share of the skim, so he went to Vegas and got it himself. Least of all, Giancana didn't trust Jake Factor and eventually assigned the Chicago outfit's "Outside man" in Vegas to follow Factor around Vegas and Beverly Hills and report his every move back to Chicago.

Murray Humphreys also stayed very close to Factor during his entire involvement in the Stardust and influenced Factor to follow through with his lease of the Stardust to Moe Dalitz's United Hotels Corporation. Sidney Korshak acted as the "go-between" for Factor and the Desert Inn Group, which was made up of Moe Dalitz and Allard Roen. The entire deal was so convoluted that the Nevada State Gaming Commission called a special meeting to look into the purchase and called Allen Roen, the Stardust representative, to answer a few questions.
Moe Dalitz closed the Stardust deal in Chicago on November 5 and 6, 1960. He met with Accardo, Humphreys and Giancana and worked a deal, which would give Chicago a greater interest in the Stardust as well as the Desert Inn, the Riviera, and the Freemont.

The remarkable sale of the Stardust Casino by Factor and his group to Moe Dalitz and his United Hotels happened in August of 1962 for $14,000,000.00, a relatively small amount for such a large enterprise. Eugene "Jimmy" James acted as his go between to the Teamsters fund.

James was the former secretary-treasurer of the Laundry Cleaning and Dye House Workers International Union as well as the President of Local 46 of the same union. However, he was caught stealing union funds on November 17, 1960 and he was going to jail as a result. So when Humphreys approached him to act as a go for one point in the Stardust, paid to his family directly while he was in jail, James readily agreed. Tony Accardo, Paul Ricca and Murray Humphreys took at least five points each, a point being valued at $125,000.00. Another mobster named Nick Civella, got $6,000.00 a month out of the deal, paid by the casino, as a broker's fee.

When news of the transaction hit the media, that John Factor had sold out what was then one of the largest and most profitable casinos in the world for the paltry sum of $15,000,000.00, Robert Kennedy, then the Attorney General of the States, thought it was a ridiculously small sales figure and ordered an investigation to find out who really owned the Stardust and why the sale price was so small. At the same time Kennedy's Justice Department and the Nevada state gaming commission began scrutinizing the stockholding in the Stardust, they opened this investigation in search of hidden assets by Momo and other hoods. Had those investigations not been halted on the President's orders, it would have revealed that Factor was a pawn in a much larger game as well as uncovering the Teamsters enormous funds buried in the casinos by mob accountants.

In September of 1962, the Federal Government decided that it wanted to talk to John Factor about his incredibly profitable deals at the Stardust Casino. They had lots of questions for Jake the Barber. Two months later, in November of 1962, Factor gave deposition in Chicago about his dealing in Las Vegas and explained that although he was the owner of record of the Stardust, and was still making money off the place, $110,000.00 a month in fact, he had leased the casino portion of the club to the Dalitz group and said that he was shocked when he found out that Moe Dalitz may have been involved with gangsters. Asked about the reported $500,000.00 finder's fee paid out by Moe Dalitz to Chicago's mob lawyer Sidney Korshak, Factor said he knew nothing about Korshak, a finder's fee or the workings of the Parvin-Dohrmann Company, the company Dalitz set up to purchase the casino from Factor. But before the Justice department/Nevada investigation could call Factor in to answer any questions the Immigration and Naturalization Service decided that Jake the Barber was an undesirable alien and made moves to deport him back to England where Jake was still wanted for his part in the stock swindles there.

At seventy years of age, John Factor, who had lived in America since at least 1919, was being booted out of the country. It was in this atmosphere that the Los Angeles office of the INS decided to deport the seventy-year old Factor to his native England based on the 1943 conviction because it involved "moral turpitude." George K. Rosenberg, the District Director of the INS was aware that Factor was seeking a pardon. "But because no action had been taken on Factor's pardon application, we figured that he was deportable and we moved to deport him."

On December 3, 1962, the Department of Justice requested that the Immigration and Naturalization begin proceedings to deport John Factor from the United States to England where he was a wanted felon. Unable to show due cause why he should not be deported, Factor was ordered to surrender to the Los Angeles office of the INS on December 21, 1962, at which point he would be arrested and deported out of the country. Adding to Factor's woes was the ongoing IRS investigation into his back taxes for the years 1935 through 1939. The government wanted Factor to explain where he received $479,093.27 in income, and Factor couldn't remember. If he were deported, the Government would impound his holdings until the matter was settled. But Factor was saved by a Presidential Pardon. Abusing the pardon privilege has a torrid and often astounding history, even on a state level. In the early 1920s, Illinois incredibly corrupt Governor, Len Small, sold an estimated 500 pardons before he was indicted and chased from office. Small's broker on the pardon deals was a union extortionist named "Umbrella Mike" Boyle, a bigwig in the Electrical Workers Union. Among Boyle's clients was Spike O'Donnell, who immediately started the great Chicago beer wars of 1926 upon his release, James "Fur" Sammons, a lunatic killer who scared even the Capone organization he worked for, and Johnny Touhy, the short-lived boss of the Terrible Touhy gang.

In the 1970's, when federal prosecutors tried to deport southwestern Pennsylvania mob boss, John S. LaRocca, Governor John Fine pardoned the alleged Godfather of corruption along with his caporegime, Frank Rosa. Later, Governor George Earle pardoned mafia boss Joe Luciano, Luigi Quaranta and alleged Caporegime Nicholas Piccolo. He also pardoned Frankie Palermo, an alleged made member of the Mafia, Felix Bocchiccio, a fight fixer, Leo Kamminski and Louie Barish, suspected mob gamblers. One of the earliest and most outrageous pardons on records belongs to Harry Truman who pardoned "Ice pick" Danny Motto, a labor thug in the Gambino family. Motto had been convicted of war time racketeering and as a result, Danny the Ice Pick wasn't allowed to hold an "elective" office in New York's Bakers union, local 350, a 900-member local which he terrorized from 1939 until his death in the 1980s. Motto's 1947 federal racketeering charge, plus a previous conviction for murder, gave the Justice Department due cause to deport the hood. However, at the last moment, when deportation had been ordered, Truman granted a pardon and the deportation was canceled. The man who worked behind the scenes on Motto's behalf was his lawyer, Herb Itkin, a shadowy figure with unspecified connections to Naval Intelligence and later to the CIA.

It was Itkin who introduced New York's Lindsay administration to labor mobster, loan shark and Danny Motto's boss, Anthony "Tony Ducks' Corralo, a meeting that would eventually led to the James Marcus scandal of 1966. Truman also pardoned an enormous number of felons from the Boss Pendergast political machine. More than half of those pardoned were convicted of interfering with a citizen’s right to vote, or, in other words, were members of Owney Madden's goon squads.

Richard Nixon, who was pardoned by Jerry Ford, pardoned Angelo "Gyp" DeCarlo, a capo in the Gambino crime family and a major loan shark in Northern New Jersey. Officially, DeCarlo got the pardon because he was supposed to be dying of cancer. When released however, he reentered the loan sharking business and was suspected in ordering at least one murder within the first six months of his release. In 1970, DeCarlo told an FBI undercover agent that he paid singer Frank Sinatra $150,000 in cash to give to Vice President Spiro Agnew, to secure the pardon.

Nixon also pardoned the mobs personnel loan officer, Teamster President Jimmy Hoffa in 1974. Three years later, two federal informants reported that Allen Dorfman and gangster Tony Provenzano had each collected about $500,000 in cash, which was delivered to Nixon's counsel, Charles Colson. According to the informants, the money had been skimmed off of the Vegas casino's and was a payoff for both Hoffa's release and for the restrictions on that release which forbade Jimmy from returning to the Union business During his brief presidency, John F. Kennedy issued 472 pardons, more than any Chief Executive before or since. About half of which are appear to be questionable at best but the most outrageous is the Factor pardon.

In 1926, Factor, (AKA Jake the Barber) brother to Max Factor, conned thousands of British citizens out of $8 million dollars, (1928 value) Factor fled England for Chicago and successfully avoided extradition by paying to have himself kidnapped and accused six innocent men of the crime who served a total of 130 years for the fake abduction.

In 1942, Factor was convicted on federal charges and sentenced to ten years for a botched confidence scam. Released in 1948, Factor claimed he was broke, but, seven years later, opened the Stardust Casino in Vegas. In 1962, Factor sold his share of the casino, then the largest and most profitable in the world, for a paltry 14 million dollars. The buyer was the mobs other front man, Moe Dalitz. Chicago bosses Tony Accardo, Paul Ricca and Murray Humphreys took at least five points each from the sale, a point being valued at $125,000. Another hood, Nick Civella, got $6,000 a month out of the deal, paid by the casino, as a broker’s fee.

Attorney General Robert Kennedy thought it was a ridiculously small sales figure and ordered an investigation to find out who really owned the Stardust and why the sale price was so small. At the same time, Kennedy's Justice Department and the Nevada state gaming commission, began scrutinizing the stockholders in the Stardust and opened an investigation in search of hidden assets by the Mafia. t was in this atmosphere that the Los Angeles office of the INS decided to deport the seventy year old Factor to England based on the 1943 fraud conviction. On December 3 1962, the Department of Justice requested that the Immigration and Naturalization begin proceedings to deport Factor from the United States. Unable to show due cause why he should not be deported, Factor was ordered to surrender to the Los Angeles office of the INS on December 21 1962, at which point he would be arrested and tossed out of the country. Then the Kennedy's gave John Factor a full pardon. But at what cost?

The executive clemency had all the earmarks of a mob style shake down because just seven days before Bobby Kennedy's Justice Department ordered Factor deported, on November 26 1962, the Attorney General did something unusual, he changed the laws that govern Presidential pardons. It was only the second time the rules, which are actually a mere fourteen set of suggestions since they are advisory in nature, would be tampered with from 1946 until 1997.

Bobby Kennedy changed the rules by cutting out the middle man, all pardon requests went directly to the White House and then to the Justice Department, not the other way around which is how it was before Factors pardon was granted. It appears that Bobby's tampering was all about money because one day a very drunken Chuckie English, one of Chicago's mob boss Sam Giancana top men, strolled out of the Armory Lounge, the outfits meeting place, and leaned against the FBI observation car parked just across the street from the tavern and started a conversation with the agents who reported "English is bemoaning the fact that the federal government is closing in on the organization and nothing can be done about it. He made several bad remarks about the Kennedy administration and pointed out that the Attorney General raising money for the Cuba invaders make's Chicago's syndicate look like amateurs"

What English was talking about in front of a bar on a cold Chicago afternoon was the same thing business executive across the country were whispering about in their paneled board rooms. Many of the nation’s leading CEO's had taken phone calls and were amazed to find themselves on the other end of phone line with the Attorney General of the United States of America. They were even more amazed at what they heard. Kennedy wanted money to help rescue the Bay of Pigs survivors. The Attorney General reminded the executives that they had either pending contracts before the government or criminal cases pending, brought by the Justice department. Before they could respond, Kennedy interrupted, mentioned the fund to free the Cubans again, and hung up. Jake Factor was a rich man and nobody’s fool.

He threw $25,000 cash into the project and explained to a curious press that James Roosevelt, the problem child of the clan, had approached him about the donation, which he swore had nothing to do with his pardon. He was also one of Kennedy's single largest political contributors.

On December 24 1962, from his father’s estate in Palm Beach Florida, John F. Kennedy signed a Presidential Pardon for Jake the Barber. Pardons are normally granted on a master warrant and although several sentence reductions were given that day on a master pardon, Factors was the only single pardon granted. The deportation proceeding against Jake was dismissed on December 26 1962, and the investigation into the Stardust casino was quietly drawn to a close. A Presidential pardon was golden but just to be sure, on July 16, 1963, in Los Angeles John Factor, the poor kid from the ghettos of Chicago, raised a slightly shaking hand and along with other more recent arrivals, took the oath of citizenship of the United States of America. "I'm the luckiest man alive," he said and he was probably right.

Factor always denied that the mob used pressure with the White House to win him his pardon but in mid 1963, while Factor was trying to gain control of the National Life Insurance company of America and was buying up the company's shares at $125.00 each, he then sold 400 shares of his $125.00 a share stock to Murray Humphreys at $20.00 each. A loss of $105.00 per share to Factor.

Humphreys then sold the shares back to Factor for $125.00 a share making Humphreys $42,000.00 richer in one day. As far as the Hump's unusual and creative stock transaction with Jake the Barber was concerned, the government decided that it was a taxable exchange "for services rendered" and sent tax gain bills to both them.