Agency: FBI
Originator: FBI
From: SD
To: HQ
Document date: 11/29/1976
Document type: PAPER, TEXTUAL DOCUMENT

## Page 1

JFK Assassination System

Identification Form

Agency Information

Date:

6/8/2015

AGENCY:

FBI

RECORD NUMBER:

124-90056-10001

RECORD SERIES :

HQ

AGENCY FILE NUMBER :

CR 66-2542-11-46-159

Released under the John

. Kennedy

assassination Records

Collection Act of 1992

144 USC 2107 Notel.

Case#:NU 45906 Date:

11-16-2017

Document Information

ORIGINATOR:

FBI

FROM:

SD

TO:

HQ

TITLE :

DATE: 11/29/1976

PAGES:

11

SUBJECTS :

SAMMY PAXTON

TOP ECHELON CRIMINAL INFORMANT PROGRAM

DOCUMENT TYPE: PAPER, TEXTUAL DOCUMENT

CLASSIFICATION : Unclassified

RESTRICTIONS: 4; 10(a)1; 10(a)2

CURRENT STATUS: Redact

DATE OF LAST REVIEW: 06/09/1998

OPENING CRITERIA: INDEFINITE

COMMENTS: MEMO

v9.1

HH 45906

DocId: 32326694

Page 1

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## Page 2

OPTIONAL FORM NO: 10

1573 EDITION

65A FPMR 141

CFRI 101-11.6

UNITED STATES GOVERNMENT

Memorandum

DIRECTOR, FBI. (66-2542-11-46)

DATE: 11/29/76

FROM

TSAC, SAN DIEGO (137-1329) (P)

SUBJECT: TOP: ECHELON CRIMINAL,

INEORMANT PROGRAM (TECIP) ;

ORGANIZED CRIME PROGRAM

MONTHLY SUMMARY. (TECIP)

At.

-During the past month, SD 1064-C-TE made trips to Los

Angeles, San Francisco, Las Vegas and Palm Springs to gather

pertinent information of organized Crime activities involving LCN

hoodlums and their associates

In Palm Sprinas, he met with 10.

ingeles ICN family acting underboss, JIMMY "The Weasel" FRATAANO

The confidential meeting

The contention in on ansane the montreen countera,

SINATRA's confidant, restauranteur JILLY RIZZO, FRATIANO and the

informant.

The meeting concerned SINATRA putting on a couple of

benefits for the Knights of Columbus. The benefits will probably

be held in New York in a theater owned by MARSDEN.

After the meeting with SINATRA, the informant held a

private meeting with FRATIANO to discuss LCN business.

FRATIANO

told informant that Los Angeles ICN bOSS JIMMY REGACE has just been

released from federal prison, but is in frail health and needs a

heart bypass operation.

They discussed plans to set up a meeting

with REGACE in his attorney son's office in the near future if

REGACE's health permits it. They want to determine if REGACE and

his underboss SAM SCIORTINO are going to "step down" and allow new

leadership in the Los Angeles LCN family. SCIORTINO also has been

paroled from federal prison, and has been staying in Palm Springs,

where he owns property.

The informant and FRATIANO also discussed upcoming federal

prosecution against Los Angeles ICN family for extorting porno-

graphers in Los Angeles. FRATIANO was extremely concerned because

his chief lieutenant MIKE RIZZATELLO, also known as Mike Rizzi,

2)

10

Informant

also

cago LCN member, TONY

Bureau (REGISTERED

San Diego

(1 - 92-62)

DA: pgh

to Las Vegas, meeting with

who represents the chicago mo

22 DEC & 1976

1AIL)

Buy U.S. Savings Bonds Regularly on the Payroll Savings Plan

NINE

5010-110

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• "

SD 137-1329

NV

in Las Vegas.

(Seyeral months ago the informant reported meeting in

SPILOTRO's home with Chicago LCN capo AL PILOTTO and a Chicago labor

consultant, DAN MILANO.

Informant reported at that time that PILOTTO

signed with the Culinary Union.)

In Las Vegas to get a union health insurance contract

The information was given to

Chicago and since that time, the Chicago FBI has been successful in

learning about it.

These Chicago hoodlums under LCN control have set up

Consultants and Administrators, Inc; Dental and Vision Care Centers,

Inc.; Pinckard Associates; Fortune Services, Inc.; Southeast Florida

Laborers Council District, Miami. They are

attempting to control

health and welfare funds in particular unions as well as kickbacks

to union officials and "union consultants".

Using DAN MILANO as one of their fronts, they have set up

Consultants and Administrators, Inc., an Illinois corporation, to

provide dental and vision care.

Through their Dental and Vision

Care Centers, Inc., they are providing similar services in Miami and

are now moving in on Las Vegas.

This activity is under the direct supervision of AL

PILOTTO, a Chicago capo, who reports directly to acting Chicago

ICN boss, JOE AIUPPA, also known as Joey O'Brien.

Consultants and Administrators, Inc., obtains the contract.

Services are handled through Dental and Vision Care Centers, Inc.,

and kickbacks are paid through dummy companies like Pinckard

Associates in Chicago and Fortune Services, Inc., in Miami.

Officers

in

MILANO's Consultants and Administrators, Inc.,

set up to receive kickbacks are Chicago Organized Crime figures:

ANGELO EOSCO - Regional Manager of Laborers Union and

President of Local 2:

JAMES

CAPORELLI, Secretary-Treasurer of Chicago's

Laborers

District Council;

DOMINICK SENESE - President of Chicago Local 703;

AI PILOTTO - President of Local 5.

(SENESE is the brother-in-law of TONY ACCARDO, also known

as Joe Batters - longtime Chicago LCN chief - and was instrumental

in bringing JIMMY HOFFA into the Chicago LCN "net").

These hoodlums are now concentrating on the powerful

Culinary Union in Las Vegas under AL BRAMLET (Las Vegas boss), and

the Union President ED HANLEY.

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SD 137-1329

Meetings between these phony laborer consultants under

hoodlum control and the Culinary Union bosses were arranged by

prominent New York LCN member, VINCENT ALO, also known as Jimmy

Blue Eyes.

NVI

This month, SD 1064-C-TE returned to Las Vegas in an

se information. He held secret meetings with

NICK.

PODAR and MIKa

PISANELLO.

PODAR handles the health and welfare

benefits for the Culinary Union in Las Vegas and PISANELLO iS AL

BRAMLET's chief lieutenant in the Las Vegas local. (The informant

advises it is extremely important for the Chicago ICN to control the

Culinary Union and through that Union control, the Las Vegas hotels).

PODAR and PISANELLO admitted to the informant that two Chicago

mobsters had recently been in Las Vegas exerting pressure on BRAMLET.

BRAMLET has now shown up with three busted ribs claiming he got them

by falling off a bar stool. PODAR tried to explained to the informant

that he was not in a position to force the membership to accept dental

and vision care and that the Chicago hoodlums wanted the union to

set up a dental and eye clinic in Las Vegas, which would be very

expensive.

PODAR told the informant that the rank and file would

object to such an expenditure of union funds and that he could not

control it.

(All of this information has been furnished to Chicago

and Las Vegas in San Diego airtel to Las Vegas, 11/22/76).

The informant also reported that TONY SPILOTRO is bank- of

rolling bookmaking and loan shark activities of RAY PAUL VARA and

JOEY, CUSAMANO in Las Vegas.

(VARA is now on appeal bona from a

federal gambling conviction in Cleveland as well as under a federal

gambling indictment in Las Vegas).

SPILOTRO is also concerned about being indicted in the

near future in Chicago on an old hijacking score.

He is attempting

to learn the activity of the government's informant and chief

witness, believed to be in protective custody.

Shortly before Thanksgiving, the informant was in telephone

contact with JOE BONANNO, who is preparing to join his wife and two

sons in San Jose, California.

He was making preparations to place

his wife in a San Jose hospital and indicated

that he was thinking of

expanding his private financial and business investments in

California. (BONANNO has a hidden interest in a Los Angeles

area

restaurant and has helped finance his sons

in various business

ventures in San Jose and Los Angeles.

He is reported to be

considering buying into a Cadillac distributorship).

BONANNO called the informant to discuss the arrest this

month of VINCENT J. DI GIROLAMO,

44, who, for the past several years,

has been one of his closest soldiers in California.

DI GIROLAMO

also known as Jimmy Styles, was arrested 10/21/76 in San Jose, for

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SD 137-1329

CA.

B. APPROX 1946

surchasing stolen property.

He was arrested along with MAURICE P.

HARTIGAN,

30, a well known

HARTIGAN

s father, JAMES T

California; and DANIEL A BJORK, 25:

B. APPROX / 923/

B. APPROX 195

arrests climaxed a two-year investigation by the

Sheriff's Office in San Jose, and U.S. Customs undercover agents;

GIROLAMO was introduced to the undercover agents by

SALVATORE

AMARENA, operator of Sal's Espresso Caffe, in San Francisco.

Lime DI GIROLAMO was accompanied by JIMMY "The Weasel"

FRATIANO.

MAURICE P: HARTIGAN was the star prosecution witness in

the 1971 extortion trial in San Jose of JOE BONANNO's two sons, JOE

and SALVATORE BONANNO. In exchange for his testimony which helped

convict the BONANNO boys, HARTIGAN was given a light sentence.

HARTIGAN, once an outstanding athlete, tried out as a pitcher with

the New York Yankees several years ago.

HARTIGAN and his father are

accused of trying to set up the sale of two truckloads of cosmetics

worth $750, 000.

from the undercover agents.

DI GIROLAMO made five separate purchases of stolen goods

CA.

'After the arrest, CHRIS

PETTI. of San Diego, flew to San

Jose and arranged to bail out DIA GIROLAMO.

SD 1064-C-TE reports

that PETTI and his partner, FRED SICA Of Los Angeles, are close

business associates of DI GIROLAMO and have money invested in his

home construction company.

(Another San Diego informant, SD

1080-PC reports that DI GIROLAMO, SICA and, PETTI are also into

bookmaking and loan sharking in Southern California, as well as

operating a Montgomery Ward franchise for home improvement siding

work).

SD 1111-C-TE continued to furnish information on members .

of the MATRANGA family.

LCN capo MIKE POLIZZI and Detroit boss, TONY ZERILLI have again

been turned down for federal parole.

SD 1234-PC continued to furnish information on activities

at Rancho La Costa.

SD 1080-PC and SD 2631-PC continue to furnish excellent

Information on San Diedo hoodlums involved in prostitution,

pornography,. etc. SD 1080-PC, in addition, is now giving informatior

on CHRIS PETTI, EREDASICA and PETE MARCOS...

This informant reports

(MARCOS is now bookmaking and probably bankrolled by PETTI and SICA.

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SD 137-1329

During the past month, SD 1869-C-TE, SD 1062-C-TE, and

SD 2681-PC continued to furnish

activities which information is being used as a basis for

monitoring these activities through Title III coverage (see below).

so throug ng 10 4 4°

information of local bookmaking

ORGANIZED CRIME PROGRAM

MONTHLY SUMMARY

I. Organized Crime

ÜEK-Law 10(a)2

1.

On

L.CN

family consiglieri, answered a subpoena and appeared before the

Federal Grand Jury in Los Angeles, along withl

family boss. They

were

interrogated along with several selected

about

They all took the Fifth Amendment privilege and

refused to testify.

Reliable information (furnished by SD 1080-PC

and SD 2681-PC) indicates one of the major downtown San Diego book-

making centers now is the New Orleans Card Room and adjacent Opera

House Bar.

The New Orleans Card Room has been taken over by JOHNNIE

ANTONELLI, a leading San Diego pornographer in this area for several

years, his partners, TOMMY CAMPISE and MIKE DE MASE. DE MASE iS

being

bankrolled by JOE PAPITTO, a bar owner, who has become wealthy

For several years now these

hoodlums have been making their money in pornography, prostitution,

stolen property, and to some extent by narcotics.

They now appear

to be moving into bookmaking, and are working with TONY BALSAMO.

BALSAMO, for years, has been a prominent downtown bookmaker with

JOHN WILLIAM SPATAFORE, the leading bookmaker in this area.

3. This month, San Diego County officials inspected

the Charter Oil

Building, one of downtown San Diego's largest

buildings. It has been offered to the county for $4.7 million dollars

as an alternative to plans to build a new county office building in

the area.

The Charter Oil Building is owned by a partnership made

up of MORRIS SHENKER, St. Louis criminal attorney; SIDNEY WYMAN, and

"KEWPIE" RICH, former St. Louis bookies,

Louie bookie, ano

who are now prominent

operators of the Dunes Hotel and Casino in Las Vegas.

At this time, countyofficials seem to be

disinclined to purchase the building because of the Organized Crime

background of the owners, as well as dissatisfaction with some of

the office space in the building.

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SD 137-1329

4, Thismonth, MAX BROOKS was sentenced in U.S.

District Court, San Diego, to a four-year prison term. Also

sentenced was his partner, JOE BRIOLA, also of Denver. BROOKS and

BRIOLA were tied in with the Smaldone Organized Crime Family in

Denver, and attempted to sell large quartity counterfeit Bank of

America money orders to undercover FBI Agents in San Diego. Other

defendants in

II. ALLEN ROBERT GLICK

bankrupt Saratoga Development Corporation (SDC), testified before

the Federal Bankruptcy Court. (GLICK, a former partner with WITTMAN,

has taken over SDC and is attempting to reorganize the company under

the bankruptcy laws before it drags GLICK down into financial ruin).

GLICK is especially concerned about the affect of this bankruptcy on

his position in Las Vegas, where he is operating several major

hotels with multi-million

dollar Central States Teamster Pension

Fund loans.

loan

from Home Federal Savings and Loan in San Diego as well as his

$1.97 million dollar loan from Allied Bank of Houston.

The Home Federal loan was given by RICHARD TAYLOR, a

former vice-president and loan officer and a personal friend of

WITTMAN who later joined him in sDC.

ANTHONY CANARIS, Assistant Manager of Home Federal's

Main Office, Loan Department, admitted he did not investigate the

financial capability of

Saratoga to repay the $3.75 million dollars;

did not get an updated financial statement, or take other usual

financial cautions, but simply followed the instructions of his

superior, TAYLOR, in putting together the "loan package".

Other litigants in the bankruptcy hearings were Dr.

PHILLIP RAND, and attorney, HENRY GLASSER, executor of the Estate

Of DI. RAND's wife, TAMARA

RAND. The RANDs are attempting to

recover $560,000 from Saratoga made for real estate loans.

The

RANDs were limited partners with WITTMAN and GLICK in Saratoga and

now claim they were defrauded out of their money:

(TAMARA RAND

after a falling out with GLICK - was found murdered in gangland

fashion. The murder was never solved.. She had threatened to expose

GLICK's activities).

A highly confidential source reports continued negot-

iations are underway toward the sale of GLICK's Hacienda Hotel-

Casino in Las Vegas. They are being handled by GLICK's business

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SD 137-1329

partner in Las Vegas, EUGENE CLEMENT FRESCH, a part owner in the

Hacienda.

These sources report that FRESCH's real name is FRISCHETTI

and that he is an old associate of Chicago LCN hoodlum, LEONARD

ROBERT "NEEDLES" GIANOLA (deceased), a Chicago loan shark boss. The

negotiations for the sale of the Hacienda are being handled by FRESCH

along with JOE ALAMA, also known as "Joe the Bubble", whose real

identity is JOSEPH ANTHONY GIRALAMI, FBI Number 119478C, another old

chicago shylock now working as a "las Vegas businessman"

GLICK will also be called upon to testify before the

bankruptcy court in San Diego in the coming weeks.

He will be

questioned. regarding compensating financial balances of SDC.

It

appears that when GLICK and WITTMAN obtained the $3.75 million dollar

loan from Home Federal, they deposited four million

dollars in Home

Federal. These were in the form of Certificates of Deposit (CD).

Two million dollars in CDs came from the Central States Teamster

Pension Fund which had been purchased for the fund by the former fund

director, AL BARON. As soon as the $3.75 million dollar loan came

through from Home, however, the four million dollars in CDs deposited

were drawn out.

III. CHARLES E. LEGGETT

On 11/24/76, LEGGETT was

sentenced in State Superior

Court, San Diego, to an interdeterminate 1 to 10 years in State

Prison, in connection with the theft of funds for the purchase of a

La Jolla mansion built by EARL GAGOSIAN.

In a complicated 1973 transaction, LEGGETT posted as

additional security for a loan from Baltimore Federal Savings and

Loan, $1.75 million dollar phony Certificate of Deposit which he had

been

given by the Federal Strike Force in Chicago for use as "flash

money" to investigate the illegal market in stolen securities.

For several years, LEGGETT had been used by the FBI

and Strike Force attorneys in Philadelphia, Chicago, and Las Vegas,

as a high level informant, in security theft cases.

: "LEGGETT's attorney, STEPHEN STEIN of Las Vegas,

(formerly a Philadelphia Strike Force attorney who had operated

LEGGETT), claimed in his closing argument that LEGGETT had been

attempting to "make a case" against GAGOSIAN for manipulation of his

RoyalInns: stock. And that LEGGETT had also been investigating

GAGOSIAN's dealings with San Diego businessman C. ARNHOLT SMITH.

Chicago Strike Force Head PETE VIRA, was being held as

a rebuttal witness by the prosecution, but was not used. The

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SD 137-1329

prosecution contended

that LEGGETT - thinking he had the FBI and the

Chicago Strike Force "in a bind" - converted the phony CD to his

Own

use, using it as security for the bank loan.

JFK Law 10(a)1

IV. GAMBLING

Title III coverage on

continues.

This coverage also had led the FBI, through Title III, into

another

under

Other Title III installations connected with

had to be discontinued recently for lack of activity at those

locations. Indictments and searches are forthcoming

In other gambling investigations, informant information

reflects JOHN LAWRENCEY

ADAmse also known as JackAdams, has quietly

moved back into

the Encinitas, California, arearin the

San Diego

Division. ADAMS, fd years, was a leading Los Angeles bookmaker and

telephone spot in the HARRY GROSS operation. Using toll free phones,

he has been operating in the Lake Tahoe area of Northern California,

after being raided in San Diego County on 1/11/75 by FBI Agents.

The HARRY GROSS operation is probably the largest in Southern

California.

GROSS became prominent in the early fifties when he

operated the largest bookmaking syndicate in New York City.

His

organization at that time, was protected by payoffs to police and

other government officials

and included the operation of 27 back

offices with 400 employees.

In those days, GROSS' gambling profits

totaled about 60 and 70 million a year and he admitted before a Grand

Jury paying almost $20,000 a month in bribes to New York City police.

GROSS, however, refused to testify against eight New York City police

officers and was sentenced to seven years in prison. Upon his

release he came to California in 1958 and set up his bookmaking

operation centered at Long Beach.

Since then he has received several

convictions in California, serving prison time. He is currently

awaiting federal prosecution.

In Southern California his annual

handle is estimated at around 25 million dollars.

His operations

extend into Los Angeles, Orange, San Diego, Riverside and San

Bernardino Counties.

V. JOHN S. ALESSIO

The ALESSIO family filed suit this month against the u.s.

Government seeking over fourteen million dollars in losses and

damages related to the collapse of C. ARNHOLT SMITH's U.S. National

Bank and Westgate - California Corporation.

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SD 137-1329

The ALESSIO law suit charges that the U.S. Comptroller

of Currency "operated a vast cover-up to shelter the massive

illegalities and irregularities of SMITH and U. S. National Bank".

The former Comptroller, JAMES SAXON, was not cited as a defendant,

however.

ALESSIO charges the U. S. Government with misfeasance,

nonfeasance and legligence in the supervision and examination of

U. S. National Bank and its losses.

The plaintiffs include the family head, JOHN S. ALESSIO,

as well as his brothers and son, DOMINIC "BUD" ALESSIO, and several

of their corporations, including Kodiak Industries, Del Coronado

Spa, Inc., and the Alessio Investment Company of San Diego.

The law suit seeks $153,175 in losses on U. S. National

Bank's stock (now declared insolvent); $4,057,185, as a result of

Watergate-California bankruptcy and ten million dollars for damages

because the collapse of U. S. National Bank eliminated their primary

source of financing.

Ironically, at the same time that the ALESSIOs were

claiming. a

federal bank supervising agency was not protecting them

from SMITH's banking irregularities the Securities and Exchange

Commission (SEC) was accusing the ALESSIO family and C. ARNHOLT

SMITH of attempting to take over fraudulently a New Mexico

corporation, which owns and operates two racetracks in New Mexico.

The firm, Fortuna Corporation, operates

Track and Rudioso Downs.

Sunland Race

The SEC

suit, filed in U. S. District Court, San Diego,

this month, alleges that SMITH as head of the now defunct U. s.

National Bank, helped arrange a series of circumstances enabling the

ALESSIOs to gain control of Fortuna without the knowledge of other

shareholders.

Now the other shareholders in Fortuna are being asked to

formally merge Kodiak (the ALESSIOs corporation), with Fortuna.

The Fortuna shareholders will be cashed out at $3.60 a share.

Kodiak currently owns 67% of Fortuna, but under a Consent

Order signed by a U. S. District Court Judge in San Diego, only

those shareholders unconnected with Kokiak or the ALESSIO

family

were permitted to vote on the merger offer.

Fortuna corporation is publicly owned subject to SEC

regulations, while Kodiak, a private corporation, is not.

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SD 137-1329

The SEC charge in their 21-page complaint that the take-

over was accomplished by SMITH and ALESSIO through MICHAEL J. COEN

of Kansas City, a former close business associate of SMITH's

He

formed Sunland Development, Inc., to get working control of Fortuna,

in 1969.

Sunland Development, Inc.,

then purchased California real

estate and commercial paper from business entities owned by SMITH,

making Sunland a substantial creditor of SMITH. COEN then turned

around and began negotiations with DOMINIC ALESSIO for Kodiak to

get control of Sunland.

Later in the month, the merger of Kodiak and Fortuna

Corporation was put to a vote and the ALESSIOs were successful in

getting the other shareholders to agree to the merger.

Even. though

the Federal Court order disallowed the ALESSIO shares to be voted

in the merger vote, it did not prohibit kodiak from voting its

shares to constitute a quorum and elect its own Board of Directors.

(Kodiak is controlled by DOMINIC ALESSIO - 70 percent; TONY ALESSIO -

•20 percent; and ALVIN ROSA, JOHN ALESSIO's son-in-law - 10 percent).

Kodiak Corporation currently is $5.6 million in debt and

is losing $1,185 per day in interest payments to the FDIC which has

taken over as collector

for U. S. National Bank debts.

In the merger, Kodiak will acquire $700, 000 in Fortuna's

liquid assets and Kodiak will also acquire increased income from

Fortuna through its own tax-loss carry-forward. Even though the

merger will substantially increase Fortuna's long-term debt, enough

shareholders of Fortuna

"bought" the offer and "bailed out".

After

the merger vote, the New Mexico State Attorney General filed a law

suit charging that Kodiak and Fortuna failed to provide adequate

information to minority shareholders as well as violating New

Mexico securities laws, by not submitting the proposed merger to

the State Racing Commission.

If successful, this will give the ALESSIOs complete control

over race tracks in New Mexico as well as Juarez, Mexico.

VI. C. ARNHOLT SMITH

This month, SMITH was subjected to court examination behind

closed doors as a judgment debtor.

Examination was brought by

attorneys for the First National Bank of Chicago.

insisted on

examining SMITH's finances to determine his personal assets.

SMITH

owes First National $1.4 million as a result of U. S. National Bank

loans with personal guarantees.

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SD 137-1329

In other action this month, SMITH was blocked by the u.s.

District Court, San Diego, from taking control of British Columbia

Investment Corporation (BCIC). A Federal judge here appointed a

receivor

for BCIC on a motion by trustees of SMITH's former Water-

gate-California Corporation.

over BCIC through his association with Sovereign State Capital

Corporation (SSC). It is owned by his daughter-in-law, MYRA JEAN

SMITH.

Last month MICHAEL J. COEN of Kodiak Corporation, a former

close business conspirator with SMITH, who now is fighting him,

relinquished his interest in BCIC in favor of SSC, and SMITH was

The fight is really over a subsidiary of BCIC

Southern California, ERNEST HAHN, has offered El Portel $5.7 million.

for 70 acres in the

shopping complex.

FDIC took this action against

SMITH saying that it had more than $7,000,000 in liens on the property.!

SMITH and his co-defendant, PHILLIP A. TOFT, continue

through their attorneys in State Court to block seizure of their

financial records.

They are also successful up to now in blocking

the District Attorney from using business records seized by federal

authorities in 1973. If they

are successful, it will greatly diminish

the chances of state authorities of putting SMITH in prison.

San Diego Superior Court Judge ROBERT W. CONYERS quashed a

large amount of evidence and ruled the public records received as a

result of the federal search warrant in 1973 as invalid. (CONYERS

previously quashed records seized by the District Attorney investig-

ators in

September, 1975, through a search of SMITH's personal

offices):

All of these records, both federal and state, provide the

backbone of the state case against SMITH and TOFT:

The federal

records were not used as a result of SMITH and TOFT pleading nolo

contendere for which they were fined $30,000 and placed on probation.

Judge CONYERS referred to the federal search warrant

affidavits as completely inadequate and told Deputy District Attorney

THOMAS MC ARDLE he felt sorry the District Attorney has to "suffer

the consequences of someone else's work".

MC ARDLE commented: "I feel like I just entered the Indy

500. and had four flat tires. I don't know what to do next."

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