The following is an outline of the FBI files of Ben Siegel as to his involvement with the Flamingo and the Strip. Many parts of the file were blacked out but I tried to extract as much as possible regarding Siegel's involvement. The FBI had his room at the Hotel Last Frontier wiretapped, as well as Virginia Hill's penthouse apartment. There were also surveillance reports. The FBI tagged this the "Nevada Project." They also used the terms "show money" and "front money" quite often. This meant money which can be bought out into the open as legitimately earned and reportable money for income tax purposes as opposed to unlaundered money. It appears that Siegel was low on legitimate money but he was unlaundered money rich.
Any mention to the Los Angeles Herald was donated by Jeff Moulton.
Plenty of you wrote in asking why I am even doing this and instead of answering each e-mail individually I would just add this: Being Italian, and coming from the East Coast originally, I found the whole Siegel murder very mysterious. Whenever the Siegel murder came up in conversation my friends would laugh at the mention that the Flamingo caused his death. They pretty much quoted Lansky's comment - you can't get money from a dead person. They told me they maybe would've maimed him, mostly likely maimed or kill a well-off family member but never, ever would they kill the person who owed them money. The thought that he was skimming off of the Flamingo was also unlikely as the Flamingo was losing money. I didn't know if Siegel had any well-off family members or how could one skim from something that has nothing and I've never thought for a moment his death was because of the Flamingo. Not only that, Siegel wasn't broke. He was only broke in front money. He had a great deal of money that he had not yet laundered. Not only that but Virginia Hill was rich and certainly would've given him money. He also had an affair with Countess Di Frasso who was very rich and would've given him anything he asked (as a matter of fact, I'm not quite sure yet that she wasn't giving him money.) It comes to find out that Siegel's brother Maurice was in fact a doctor and was well-off - well there is the family member they could've done something to to make their point.
Over the years I heard so many lies regarding Siegel!! I heard he married Virginia Hill in Mexico, that there was a "summit meeting" where they agreed to bump him off, all these stories were simply untrue. I knew about his wire service and how he was stealing all the Capone clan's wire service customers and I became convinced that was the real reason and if you read my bio page on Siegel in the past you read that was my opinion. The straw that broke the camel's back with me was that movie that Warren Beatty starred in. I never saw it mind you but one day I looked at the TV guide and saw something I wanted to see starting in 10 minutes. I turned the channel on and saw the ending of another movie. I saw Beatty in it and said that couldn't be the movie about Siegel because that's not how he died. I looked at the credits and when I saw the cast I stood there amazed at how accurate those few minutes were and what the movie must have contained. I loved Beatty/Dunaway in Bonnie & Clyde but it was one big lie. Now I'm looking at another one. I became convinced I had to figure out what was going on with Siegel. An added fact is that the Beverly Hills Police Department brags that have solved every murder in their department with the exception of one. Guess which case.
I was fascinated by these files. Siegel went through hell to get the Flamingo up and I have to agree with Gus Greenbaum when he asked Siegel in a tapped phone conversation, why don't you just walk away from it and recoup the money in other areas? If I could ask Siegel one question that would be it. This is a man who was the only Jew who made it as high with an all Italian, all from Sicily Mafia. He was predicted to be the first Jew to ever be a Mafia head and was trusted by Luciano, Adonis and Costello. He didn't need the Flamingo for anything he couldn't get easier elsewhere. As a matter of fact, the only thing I could think was that he was planning to do what Moe Dalitz eventually did - become just a regular joe casino owner and a respected member of the community. The repeated statements by the FBI that he wasn't getting himself involved in anything else but the resort and the wire service and he appeared to give up all other mob related activities. While he was building the Flamingo he had started an animal shelter and was known for his love of animals, and he was highly committed to the Runyon Cancer Foundation which people told he either owned in whole or in part. That's how Dalitz became a member in good standing in the community years later and it just hits me that I think that's what Siegel's ultimate goal was. There was no other reason why he went through all the hell he did to get the Flamingo up and believed in her success without any shadow of doubt.
Now I know he didn't die because of the Flamingo as stated above and the wire service seemed to be the reason until I read the files and being a female and putting myself in Virginia Hill's place. As you will read, Siegel broke Hill's nose in the middle of Flamingo's casino because she went after a cigarette girl who she thought Siegel was getting close to. Now Hill was very rich and was very used to getting her way. She is so humiliated in not only getting her nose broken but Siegel defending the cigarette that she tried to commit suicide. She then asked Siegel to take her and he said not until she apologized. Okay a woman scorned is very dangerous, especially when she is friends to the mob and has a brother who just got out of WWII and was known to be "war wacky". After Siegel's death one particular FBI agent would reject every reason given to him and he always went back to "Hill got her nose broken in public." The more I read the more I was convinced this was the real reason he was killed. I'm also more than halfway convinced that it was her brother that did it. The gun used on Siegel was a military gun, Hill just returned from WWII. He was at the house Siegel was murdered at which did have a back way to get out and it does appear he had enough time to run down the back stairs, kill Siegel, and run back upstairs and yell down if everything was okay. When Lansky was interviewed he thought Hill as well which I thought was fascinating. Witnesses said they heard a car race away. Just think of the criminal who Hill paid and told him just to park outside the house, when you hear gun shots, speed the car down the street. If you get picked up who cares? You won't have a gun with you so there is no way to connect you to anything. Any petty criminal would love to get paid for such a sure thing as racing down the street without any weapon in the car and no relation between you and anyone living on that street. Even though one particular witness said that saw someone sitting outside the house a few days before, the FBI didn't really seem to care. Maybe because it was one of their men watching the house and didn't want to volunteer that information. I don't know for sure but I'm willing to guess that Mr. Hill was just a little upset that his sister got beat up by this thug he was having dinner with. They said she looked really beatened up. Well, if anyone out there ever had a broken nose, it looks much worse because most of the time both eyes turn black and it could like someone really beat the hell out of you. Hmmmmm, Mr. Hill must've been really angry!
Anyway, enjoy the reading both the before death and after death files. Please, please, do not e-mail me and tell me your opinions. I get enough e-mails and I really don't have the time to read about others' opinions. If you have facts that one thing, but please, read these files and articles and discuss them with your family and friends, not with me. Thanks!!!!
In a report dated March 16, 1945, an agent stated that an article appearing in the Las Vegas Evening Review Journal stated that a lease on the El Cortez hotel premises was involved and the monthly rental under the lease was around $12,500 and that rumors were prevalent that Houssels was attempting to purchase the hotel and that price was said to be $1,500,000 with an additional $125,000 for liquor stock and bars.
In an undated memo the FBI stated that Siegel came to Vegas and took the downtown Frontier Club's race book away. Immediately after, Siegel closed it to carry out his faked claimed that the race book business had fallen off in Vegas. Immediately upon taking over the wire service in Las Vegas, blacked out name re-opened the Frontier Club race book and later opened the race books in the Las Vegas Club and Boulder Club. Each race book was set up on paper as a separate business and the wire service was sold to the race books on a monthly rental basis. Moe Sedway and Gus Greenbaum leased the Las Vegas Club from the owner but it was known that they were the front men for Siegel. An informant advised that every business move Sedway had made in Vegas had been with Siegel's money and at Siegel's instigation with the exception of the Las Vegas Club.
An April 29, 1946, the Reno, NV, FBI branch status report stated that they received a copy of a blueprint presumably prepared on January 12, 1946 by blacked out name in Las Vegas reflecting that the Flamingo Hotel building, which at that time bore the name of Hotel Wilkerson, was a single unit horseshoe shaped with lounges, dining room and service facilities on the front or west side; shops and stores on the south side or center of the horseshoe and the hotel building proper on the east and northeast sides. The horseshoe shaped unit was open at the northwest. This plan also called for the erection of seven cottage buildings, containing 60 rooms in the rear or east side of the premises behind the hotel building. Six existing dormitory or barracks buildings were depicted in the blueprint on the south side of the premises. It was requested that someone prepare a letter stating that construction on the hotel begun prior to the March 26, 1946 freeze order. Blacked out name returned after lunch with the signed original and a copy of a letter from blacked out name, attorney for Gus Greenbaum. The copy was retained in the Los Angeles Field Division with the stamp "Reno, Nevada, April 29, 1946" on it.
It was further stated that they were seeking CPA approval commenced by Gus Greenbaum at the El Cortez, Las Vegas. The request stated:
"The construction of the project, known as the Nevada Project, was commenced on December 4, 1945, and the first concrete on the project was poured January 5, 1946. The construction project covers one large building of a horseshoe shape approximately 1,000 feet in length. The westerly portion of the building was the first part of the horseshoe structure started, and the easterly portion of the building was the last portion started. As you will note from the copy of the plans hereto attached, the entire structure is one building, although the building has been started in sections due to the size of the same. It is such a large building that it was impossible to construct the entire construction atone time, and so as a necessity it has been started in various sections. All of the facilities for the entire building are in the easterly portion of the structure, including boilers, cooling equipment, water equipment, etc. All utility tunnels extend from the easterly portion of the building to the westerly and southerly portion of the building. Even if the westerly portion of the building was completed, it would be impossible to operate the same due to the fact that no utility set up was provided for in that portion of the building. It is apparent that the investigating officer who filed the original report with the San Francisco office was not aware of the fact that the entire horseshoe structure was one building. He apparently thought that because the construction was being started in three separate sections, to-wit: the west, east and the south, that the construction in each separate spot was a separate building, when in truth and in fact all of the construction was to join and make the one horseshoe building hereinabove referred to. Up to this point, the owners of the property have expended approximately $444,000, and without the permission of your office to continue and complete the entire horseshoe structure, the money invested to this date will have been an useless expenditure of funds, inasmuch as no single part or portion of said building can be completed without the remaining portion. . . . I respectfully request a certification from your office to the effect that Mr. Greenbaum and blacked out name may, at this time, immediately proceed to complete the construction of the entire horseshoe structure and its appurtenances, which are part of the same. Yours very truly, Attorney for Gus Greenbaum and blacked out name."
They also had a document from blacked out name stating:
"In reference to your letter as attorney for Gus Greenbaum and blacked out name regarding construction already started, and known as the Nevada Project: in accordance with the facts as contained in your letter, you are authorized to continue construction of the entire building referred to, and because the construction of the such building was started prior to March 26, 1946, there will be no need for you to file further application thereof. Very truly yours, blacked out name."
On June 26, 1946, a status report stated that Siegel, Frank Costello and Joe Adonis had always been intimately associated with Charles "Lucky" Luciano, former vice overlord of New York City who was convicted by Governor Thomas E. Dewey when he was serving as District Attorney of New York City. Siegel had put up $250,000 at first for a 37-1/2% interest in the Flamingo but later put an additional $125,000 in the fund for a total investment of $375,000. An informant stated that Siegel always partnered with Frank Costello, Joe Adonis and Meyer Lansky in all of their business enterprises. In addition, they each owned one-fourth interest in the Flamingo. The informant stated that they never mention Wilkerson even though Wilkerson was indeed an owner. In New York, Siegel, Costello, Adonis and Lansky controlled the numbers racket. They also controlled all the numbers in New Jersey, owned The Farm in Hollywood, Florida, Colonial Inn at Miami, Florida, and the dog track at ? Bluffs, Iowa. It was noted that Siegel was alone in his business ventures in California but they weren't business one could put their finger on. This was because the four of them were staunch supporters of the underworld activities of the Unione Sicilian, and that Siegel was the only Jew who had held a position of high regard in the opinions of the other members. Since he was held in such high esteem, they allowed him to control his own businesses in California. It was stated that Siegel was the recognized leader on the West Coast of all activities of New York, Chicago, Detroit, and other major cities' gang activities, he doesn't control gambling in Los Angeles. Siegel liked California and made his home there for several for that reason. He doesn't want to become too involved in illegal activities in California because he was attempting to enjoy a "good" reputation there. He prided himself on the fact that he had never been convicted of a criminal offense of a major nature, and was ashamed of his one felony conviction of bookmaking in Los Angeles in 1945. The four do not own any gambling activities in Chicago and Detroit by agreement of "hand in glove" with underworld elements there. They had a working agreement with the Capone element in Chicago, and the informant felt that the Capone group was getting most of its support from these men until it can again successfully function without their active support.
(The felony conviction was sometimes mentioned in 1945 and sometimes May 25, 1944. In this matter Siegel and Allen Smiley were arrested on bookmaking charges when they were arrested at Smiley's apartment in the Sunset Towers, 8358 Sunset Blvd., where they found betting equipment and notations on scratch sheets, which indicated bets as high as $1,000 per race were being placed. After George Raft testified that there was no bookmaking going on at the apartment, only race betting, Siegel and Smiley pleaded guilty to charges of placing bets and paid fines of $250 each.)
It was reported that Siegel's wife, Esther Siegel was in Reno, Nevada, for the purpose of obtaining a divorce. After his wife left him, he sold his home for $90,000. Loretta Young attempted to purchase the home but Siegel did not like her and refused to sell her the home. She filed a lawsuit against him.
It was noted that when in New York, Siegel frequented the Hollywood Ticket Office at 46th or 47th Street just off Broadway. He could also be located at the Boston Commission Office in New York. This office is engaged in the sale of theater tickets, amusement tickets, and tickets for sporting events. This was same company that on December 18, 1944, an anonymous complaint was received at the Department of Licenses stating that bookmaking was going on there. Investigation was conducted and on December 23, 1944, it produced negative results.
It was noted that Siegel owned a home on Central Park East in New York. Siegel was seeing Virginia Hill "fabulous woman of mystery in in Los Angeles." The Los Angeles Field Division had discussed Hill at length in their semi-annual crime survey memoranda, as having unlimited funds at her disposal. She frequently gave very expensive parties and no one seemed to know the source of her income.
Regarding a request for information on Lansky and his son, the informant didn't know where Lansky was staying in Salt Lake City but suggested that it would be at the best hotel or the best tourist court there. His age was 40-42, 5'4, 140-145 pounds, complexion was medium, sallow and pasty. He had a full head of dark brown hair. Lansky's son's first name was unknown. He was 15, 5'9 with a medium slender build, and was in military school. His complexion was dark. The informant also said the son was very good looking. It was subsequently learned that the Lanskys checked in at the Utah Hotel, room 501, and they gave their address as 233 West 57th Street, New York. They were driving a new 1946 black Oldsmobile "98" sedan with red wheels, bearing New York license 9R9171. The Lanskys hadn't talked with anyone but they had their new car check-up at the Ken Garff Motor Company and the car was ready for travel.
On July 1, 1946, a letter to agent E.J. Connelly stated that the Siegel/Meyer gang "Bugs and Meyer Mob" was responsible for the killing and removal of many rival gang figures. Siegel and Meyer shared the head powers of the gang but Siegel was responsible for the terrorist practices of the group. They had many gunmen at their command who were motivated both by fear and because of the money and prestige Siegel and Lansky could give them. Lansky was responsible for the liquidation of Gordon and after that their underworld prestige increased.
On July 2, 1946, the Lanskys left Salt Lake City at 12:50pm and arrived in Las Vegas Nevada in the evening and they checked into suite #211 at the El Rancho Vegas Hotel, telephone number 1300.
On July 6, 1946, it was confirmed that while Siegel was in Los Angeles, the "Boiler Room" of the Las Vegas Club was wire tapped. The installation was made at 3:00pm. This room was utilized by Moe Sedway as a business office and which he spoke with Siegel when Siegel was in Vegas. In a memo dated July 11, 1946 to A. Rosen, it was stated in the subject line - Reactivation of the Capone Gang. It stated that on July 10, 1946, Siegel suddenly announced that he had to return to Los Angeles immediately and indicated something very important was going to happen. He took a plane at 6:50 out of Vegas to L.A. Agents picked up the information in L.A. They believe it had to do with the Flamingo Hotel which was being constructed in Vegas.
On July 9, 1946, Lansky called Siegel from Lansky's room at the El Rancho. Siegel was either at his room at the Hotel Last Frontier or at the Las Vegas Club. Lansky asked Siegel to drop over that evening for a meeting and stated "You and Moey (Sedway) and I can get together." Siegel replied "Just you and I. We don't need that ____ around." Lansky was taken aback by Siegel's attitude and stated "Well, all right. If you don't want Moey along we will get along without him." Siegel stated they could get along better without Moey, that they could make all the necessary decisions. Later Siegel called Lansky and insisted that the meeting be at Siegel's room at the Frontier where Siegel and Lansky could talk together outside on the terrace. The agent further advised that Lansky called his office in New York and talked to an unknown person. Lansky stated that he, together with his son Paul was going to Los Angeles Sunday morning and would be at the Ambassador Hotel, and that he was "coming back here" the last of the month. He also stated that he was very much pleased with the progress and the looks of the Flamingo and after one look at it, he believed that all of the money was actually going to something special and he approved of what was going on.
On July 13, 1946, an informant stated that Siegel owned the Del Mar Turf Club. The agent seriously doubted this to be true and maybe one of those stories Siegel told. It was more likely that Wilbur Clark, present owner of the El Rancho Las Vegas, had an interest in the Club. The agent also disregards accusations saying Siegel had an interest in the El Rancho stating that again, it was Wilbur Clark, not Siegel. Siegel has never shown any interest in the business El Rancho was doing as a resort concentrating fully on the Flamingo. Siegel was only interested in the wire service being place at the El Rancho.
On July 16, 1946, it was noted that Gus Greenbaum was known to be Siegel's lieutenant, handling his bookmaking and gambling activities in the Luhre Building in Phoenix, Arizona, and frequently contacted Siegel and Moe Sedway in Vegas. Siegel telephoned Sedway at Vegas 7070 and questioned him as to whether he had found a place to put the wire service in so that "they" could finish the joint. Siegel further stated that he would control the El Rancho's wire service.
Virginia Hill was listed as Siegel's paramour residing at 10814 Wilshire Blvd., Her telephone number was AR3007. It was reported that Hill had a vast amount of money, source of which was unknown. She frequently gave expensive parties and no one seemed to know how she paid for it all. Around 1940 or 1941, she became famous for entertaining lavishly and insisting on paying all the bills at the night clubs. Newspaper accounts linked her with many prominent movie stars and she was supposed to have received at one time more fan mail than Gary Cooper or Barbara Stanwyck. As an example of her reputation for spending, several newspapers carried accounts she had spent over $70,000 a year in night clubs alone. In 1941, Hill became financially interested in the Hurricane Restaurant, 1619 Broadway, New York City. In an affidavit filed with the State Liquor Authority, New York City, Hill stated she was born in Bessamer, Alabama on August 25, 1917. She said that in 1932 she was married to George Rogers, who died in 1933 leaving her $50,000. Between the years 1933 and 1940, she stated that a good investment had increased the principal threefold. She had previously resided at 8582 Lookout Mountain Road, L.A., 1055 Sanborn Ave., L.A., Sunset Towers Apartments, West Hollywood, and No. 2 Bella Drive, Beverly Hills. The latter address was known as the Falcon-Lair and was the home that was built by Rudolph Valentino. She also resided at 1720 Coldwater Canyon, Beverly Hills. At one time she was considered for a role in the movie Ball of Fire, but did not get the part. She had been seen with actor John Carroll, and Stephen Crane, Lana Turner's ex-husband. Hill had boasted that she needed an income of $2,000 a day to keep up her expenditures and that she could get a $1,000,000 any time she wanted.
In October of 1942, she was allegedly running around with Joe Adonis, and remained good friends with him. She was known to wear daring clothes, smoked and drank excessively, used foul language and considerable makeup. She was known to be promiscuous.
The FBI listed Seigel's car as a 1946 black Chrysler Convertible Coupe, with a black canvas top and white wheels. It beared 1945 California license plate 87U344. He also had permanent reservations with room 401 at the Hotel Last Frontier in Las Vegas.
On July 18, 1946, Hoover announced that Siegel was visiting Vegas within the next few days staying at the Hotel Last Frontier, Suite 401. Hoover ordered a technical surveillance on the phone at the Frontier which was 1800. It is stressed that because of Siegel's far-flung interests, he is almost constantly in travel status, thereby making it extremely difficult at times to follow his activities and anticipate his movements. It is recommended that authority be granted to cover any hotels, residences, or places of business which might be used by Siegel in his journeys.
Moe Sedway received a long distance telephone call on July 15th from Siegel in L.A. Siegel wanted to know if Sedway had heard Winchell's broadcast Sunday evening, July 14th, and also was interested in knowing what comments he heard around Vegas concerning Winchell's allegation that a prominent West Coast racketeer was attempting to "muscle" a prominent West Coast newspaper publisher out of his interest in a hotel. Sedway told Siegel that he had heard the broadcast but there had been no comment around Vegas about it.
On July 21, 1946, discussion was made about the Walter Winchell broadcast. Siegel had been informed that Winchell claimed the Director furnished him the item he broadcast. Siegel referred to the Director in a degrading and insulting manner. On July 20th, a blacked out name telephone Siegel from L.A. advising that he had received a letter from Winchell. Winchell explained that the Director was his source of information and it was stated "According to the FBI, a prominent West Coast racketeer is endeavoring to muscle a prominent West Coast publisher out of his interest in a West Coast Hotel." A short time later Siegel returned to his suite at the Last Frontier, which he was occupying with his mistress Virginia Hill and the microphone picked up the conversation. Siegel and Hill engaged in a conversation in which both used considerable profanity. Siegel stated that he had someone call Winchell from Vegas to find out the source of his item. Winchell identified the source as the Director and when he learned that Siegel and Wilkerson were involved, exclaimed "God, what a mistake I made. I may have caused them to lose their hotel license." Siegel stated he was going to New York to have Winchell get a hold of the Director and then Siegel shouted "I'll make that cock sucker tell me how he got his information." Siegel implied that he would take care of the people who furnished the information to the Director when he learned their identity. Siegel ranted that all of his money and his friends' money, everything he had, was tied up in the Flamingo, and the publicity given this venture by Winchell might prevent him from getting the licenses, hotel, liquor, gambling, etc.
On July 22, 1946, the L.A. FBI summarized Siegel in a memo to Hoover. It stated that Siegel, his wife and family had resided in the L.A. area at different times since 1937 when he moved there from New York City. It was no secret that Siegel's invasion of Hollywood was resented by local racketeers, and gangland warfare flared intermittently. Shortly after his arrival, he was arrested and charged with the murder of Harry (Big Greenie) Greenberg (not to be confused with Al Greenberg), a local character, who was prominent in the motion picture labor rackets, who was cut down in front of his flat at 1804 Vista Del Mar Ave., November 22, 1939. The following August, Siegel, and Louis (Lepke) Buchalter, were arrested and Siegel was arrested on suspicion of the murder after being found hiding in the attic of his Holmby Hills mansion. He was freed from the County Jail four months later, following a series of scandals which caused the ouster of Dr. Benjamin Blank as jail physician and the removal of a jailer for assertedly permitting the suspect many privileges denied less affluent prisoners.
(The L.A. Herald stated that while he awaited trial for the slaying of Harry "Big Greeney" Schachter, (FBI & other papers referred to him as Greenberg) of which he was later cleared, it was charged that he ate steak and pheasant at mealtime while the other prisoners got beef stew and beans. He wore tailored clothes while the others sported faded blue denims. Fellow prisoners even shined his shoes. He kept getting out of jail in "go to the dentist," and was only kept in 18 days out of the 49 he was supposed to have been confined. On one of the 19 'visits to the dentist' his deputy sheriff guard introduced him to actress Wendie Barrie and they all had lunch together in a Hollywood cafe. It was charged that when he left the jail on one of his frequent trips he was attired in expensive clothes laid out for him by a private valet he assertedly chose from among fellow jail inmates. The Grand Jury also was told that while the chief jailer was absent Siegel was permitted to go into the jailer's quarters and entertain a woman visitor, with a trusty serving spiked soft drinks. Investigators later found $32,000 worth of cancelled checks Siegel had given Dr. Benjamin Blank, the county jail physician, who gave Siegel permission to see the dentist. Dr. Blank explained that he and Siegel were old friends and that the checks merely repaid a loan. He was suspended as a result of the investigation. Others named in the indictment including Frank Carbo, fight manager, accused as the man who pulled the trigger; Mendy Weis, one-time right hand man for Kepke, Harry "Champ" Segal, proprietor of a barber shop in Hollywood, which was an asserted hoodlum hangout. Siegel was named as plotter and participant in the murder.
A 1947 L.A. Herald article stated: "'I always felt we had a pretty strong case against Siegel in 1940' former District Attorney Baron Fitts recalled. Colonel Fitts, a prominent attorney now awaiting his discharge from the United State Army, said he was prepared to try Siegel for murder after the gangster was indicted by the Los Angeles County Grand Jury for the murder of Harry 'Big Greeny' Schacter on Thanksgiving eve, 1939, at 1804 Vista Del Mar Avenue. 'I remember Siegel as a pal of Louis (Lepke) Buchalter, New York mobster. We had woven a pretty tight net around Siegel for the Schacter killing. but before the case came to trial I went out of office and the charge against Siegel subsequently was dismissed.' Fitts indicated he was not surprised to hear Siegel had been rubbed out.)
Siegel was re indicted by the county grand jury on September 23, 1941, for Greenberg's murder after Al Tannenbaum, a witness, testified he had brought the murder gun here by plan and handed it to Siegel and another man shortly before the killing. Siegel, however, was freed. At the trial, Tannenbaum testified that Murder, Inc., a New York gang, had ordered Greenberg's slaying two months before the shooting. Tannenbaum, an admitted New York labor racketeer, told the court Buchalter, head of the mob, had ordered the "rub out" through Emanuel (Mendy) Weiss. Gangland killers continued in the film colony, with Paul (Paulie) Gibbons, 45 year old convict with a record of 30 arrests, being show down on a Beverly Hills street on May 3, 1946. Five months later Benny (The Meatball) Gamson and George Levinson, 43, were shot and killed in the apartment Gibbons once had occupied. Siegel's name was not brought officially into the resulting investigation. Several years before, The Times exclusively disclosed that Siege was regarded in some Hollywood AL union circles as yearning to assume the studio racket crown that was knocked off the brown of Willie Bioff, deposed Chicago gangster. The premature disclosure of his plans was believed by some Hollywood union omen to have chilled the idea of reviving the Bioff empire under Siegel's management. Some leftist "strong men" among the studio unions still cryptically indicate Siegel wielded a behind-the-scenes racket influence in the industry's labor organizations, but have been the soul of discretion so far as giving substantiation is concerned. An informant stated that Siegel mentioned that he was positive all along that he would beat the rap. Informant said that Siegel simply had too much money at his disposal and too many people feared him to warrant the State of California obtaining a conviction. It was alleged that two prosecution witnesses deliberately perjured themselves out of fear of Siegel.
The allegation had been made that Siegel was a direct associate of New York mobster Lepke, who was electrocuted in New York State. Through his association with Lepke, Siegel was identified with the notorious Murder Inc. which had received considerable publicity in the press. Siegel had been having marital difficulties for some time and the thought of divorce was always distasteful to him because he did not want to injure the reputation of his two children. He received considerable publicity in the Los Angles press, particularly in connection with his arrest for bookmaking which was a felony in California when he was picked up with his childhood buddy George Raft. Each pled guilty and were fined $250 each. While in Los Angeles he lived at 250 N. Delfern Drive in Holmby Hills. It was stated that it appeared that Siegel operated as a front for Eastern hoodlum interests and that he himself had never been worth over a quarter million, but that his funds and backing come entirely from Chicago and New Jersey hoodlums. This group was siphoning funds into the hotel business through Kirkeby Hotels which is the subject of an investigation in the L.A. Office entitled "Reported Interests of Racketeers in the Purchase of Hotels." Allegations state that Siegel had acquired the Beverly-Wilshire Hotel in Beverly Hills which is affiliated with the Kirkeby chain. Because of his status with the mob and Luciano's trust, Siegel negotiated for the purchase of a large ranch in Mexico, acting on behalf of Charles "Lucky" Luciano. The exact location was unknown but it was near the California border, but not in Tijuana. Siegel supposedly purchased this residence while Luciano was still in Italy. Even though Lucky had been deported; he allegedly was seen in Los Angeles within the past 90 days, and the opinion was expressed that Lucky would have little difficulty in running his former syndicate from Mexico using Siegel as his main connector. Siegel had been spending an unusual amount of time in Vegas where he has gambling interests and where he was allegedly building a large hotel in partnership with Wilkerson. Indications pointed to the fact that some difficulty may come up for Wilkerson where Siegel will force Wilkerson to lose all his assets.
Siegel was referred to by underworld informants of this office as the man in control of the Western States and he was referred to as a person who could put his friends in touch with the underworld boss of any city in the U.S. There seemed to be no doubt that Siegel seems to be generally respected and feared by the underworld characters because he was to personally have killed at least 30 different individuals. Allegedly, Siegel was a pleasure smoker of opium, but did not appear to have the habit.
In connection with the Reactivation of the Capone Gang, reference was made that Siegel was instrumental in the attempt of the Chicago mob to take over the wire service currently operated by James Ragen. Siegel attempted to move in on the wire service in L.A. and at that time Siegel made the statement to several people that he would soon be operating the service in its entirety.
Siegel was registered at Local Draft Board #245 in Westwood Village, CA. He originally registered for Selective Service while in the custody of law enforcement officers at the Los Angeles County Jail on a murder charge. His Order Number was 2427-A and at that time he resided at 250 N. Delfern Drive, West Los Angeles. He was born February 28, 1906 at New York and married his wife, Esther Krakauer, at 332 Rogers Avenue, Brooklyn, New York, on January 28, 1929. In addition, he supported his father Max, age 66, and his mother, Jeannie, age 65. He set out $12,000 as the amount necessary to support his family with an income of $50,000 a year from his occupation as betting commissioner and investment broker. He claimed eight years grade school education.
The local draft board by letter dated March 10, 1944, asked the State Director of Selective Service for the waiver of an age limit in order to request Siegel to report for induction, but by letter, dated March 15, 1944, the State Director refused the waiver. There was a communication in the file from the legal firm of Pacht-Pelton-Warne & Black, signed by N. Joseph Ross, dated September 8, 1941. Judge Isaac Pacht had been Siegel's attorney for some time and it was know that this firm had represented him as early as 1941.
The memo goes on to state that on November 9, 1932, Siegel attended a meeting of the organization in the Hard Tack Social Club at 547 Grand Ave., New York City. Siegel suffered rather severe head injuries as the result of a bomb explosion. He and some other members of the mob were taken to a hospital for treatment. An Italian named Farrizzo had lowered a bomb down the chimney, but failed to take into consideration that the chimney had a right-angle offset which caused the bomb to become stuck before reaching the proper elevation. Farrizzo was shot and killed on Nov. 20, 1932, for this attempt on the mobs' lives. Siegel had scars on his head caused by the flying bricks. One of these scars, about 1-1/2 inches long on the upper left side of his head was visible through his thinning hair. In 1933, Siegel was arrested when the New York Police conducted a raid on a suite of rooms in the Hotel Franconia. In this raid, he and eight other men were surprised during a conference of the mob attended by Kepke and Garrah. In 1941, while the Greenberg murder charge, as well as the Federal harboring charge, was pending against Siegel, Reles fell from the fifth floor window of the Half Moon Hotel in Coney Island, New York, and was instantly killed. Reles' death ruined the murder case as well as the harboring charge against Siegel. In December of 1945, it was learned that Siegel, Moe Sedway, and Gus Greenbaum had bought out a large gambling hall about a year ago. A blacked out name confided that Siegel's reputation of having unlimited funds was entirely false, and he claimed that Siegel was nearly on the rocks and was forced to sell his 35 room mansion in Holmby Hills for $90,000. Litigation concerning this residence and its sale to Loretta Young had received publicity during the past year when Siegel backed out at the last moment stating he did not like Young and refused to sell her his home. Information was obtained by an informant during contracts with various sources of information in Vegas. It is understood from proprietors of gambling establishes that the wire service used by bookmakers in Vegas was supplied by the organization controlled by Siegel. The price for this service was said to be so high that most of the proprietors of the gambling casinos in Vegas found it unprofitable to operate and a large number of them had leased their bookmaking concession to the operators of the wire service, with the effect that Siegel's wire service controls all bookmaking in Vegas. It was also learned that the same situation prevailed in Reno. Siegel's description was 42 years, 5'9, 157 pounds; dark brown hair, grey-green eyes; medium complexion; medium build; Jewish; FBI No. 190586.
On July 23, 1946, it was stated that Chicago advised that a blacked out name was interviewed by the Birmingham Office, wherein he stated he had been offered $20,000 to kill James Ragen and that this offer occurred 50 days before the actual shooting. This person finally refused the offer 10 days before the actual shooting. It was also reported that the Illinois News Association was replacing the Midwest News Service as the principal retail distributor of racing news in the Chicago area for the Continental Press.
In a memo dated July 26, 1946, it was stated that the problem with using informants on Siegel was that Siegel lied so much to see what was going to go back to him, that it was not known if they can put any credence in anything he tells them. It was noted that Siegel called Drexel 7011 in Los Angeles to Lansky asking whether "that friend" of theirs was in L.A. Siegel later identified the friend merely as a blacked out name but it was believed he was referring to the Capone Syndicate. Lansky stated that he did not know and Siegel instructed Lansky that if the blacked out name was still in L.A., that the new wire service in Vegas would be requested in a blacked out name instead of the name the other person discussed.
On July 26, 1946, it was confirmed that the Trans-America News Service was serving as the competing organization to the Continental Press of racing news throughout the country. Siegel called Sedway and told him to complete his arrangements at the Golden Nugget immediately because "that thing is going in there Thursday." This was interpreted that the wire service would actually be utilized in Vegas on August 1, 1946.
On July 29th, 1946, Siegel was contacted by a blacked out name stating that he should bet at the last race at Empire on a horse named Queen of May. Siegel did make a bet and the horse won.
On July 30, 1946, discussion turned to how to get something on Siegel. They stated physical surveillance is inadvisable because Vegas was so small, it would only be a matter of time before Siegel either noticed or was told that someone was watching him. They could also at any time prove a technical violation of the White Slave Traffic Act as against Siegel each time that he transported Virginia Hill from Los Angeles to Vegas. Of course, the possibility of the prosecution of such a violation was remote at best. Further investigation would be needed for his opium smoking. Apparently he used it from time to time but research couldn't prove he was actually an addict. It was stated to remember in 1939 when the U.S. Customs served a search warrant on Siegel looking for narcotics and they found valuable ?? which apparently had been smuggled into the U.S. This search was a failure as Siegel was either not dealing in narcotics or was tipped off.
On July 30, 1946, Ostholthoof stated that they needed to assemble all material concerning the murder of Greenberg in L.A. on November 22, 1939 in order that blacked out name can be further questioned concerning this. It was possible that the investigation may enable the State of California to try and convict Siegel for this murder. It was noted that Siegel first came to the police's notice during the investigation in 1939 of the murder of Harry Greenberg, New York underworld figure, in Hollywood. Greenberg was shot down by two gunmen in front of his flat at 1804 Vista del Mar Ave. Siegel was arrested in a Holmby Hills mansion in August, 1940, charged with the murder, and four days later was indicted with Louis (Lepke) Buchalter, for the murder. Four months later the murder charges were dropped and he was freed from County Jail, but not until one jail scandal after another had rocked the Sheriff's office. In that period, the jail physician was ousted and the county jailer removed after another prisoner charged Siegel and other inmates with money had been granted special favors.
Siegel originally came to the attention of the Customs in 1939, because of a cruise he took with a blacked out name and others on a yacht, when crew trouble as well as the make-up of the passenger list caused the entire cruise to receive considerable publicity in the press and allegations existed that in addition to smuggling activities, the cruise was intended to facilitate a meeting of hoodlums somewhere on the high seas. Supposedly some mobster hiding out in Mexico met the ship on which Siegel and the others were sailing. This cruise of the Metha Nelson to Cocos Island on a treasure hunt after which Federal agents investigated rumors of smuggling and narcotics. He reportedly set up as the top underworld figure here, but posed as a dapper man-about-town and was accepted in Beverly Hills and Hollywood circles as a "sportsman". He lived in regal fashion and entertained many greats and near-greats in the entertainment world. He often complained about being referred to by his gang-land nickname, "Bugsie" or Bugsy, and insisted on being called Benjamin.
An agent mentioned that he had received some information from a highly confidential source which was given to him in confidence, that he would make available at this time concerning Siegel, with the understanding that the agents would treat it in the manner in which it was being given. The information was gossip in that the source had no knowledge of the facts involved, nor could he vouch for the source of his information. In connection with the Flamingo that Siegel and Wilkerson was building, blacked out name mentioned that construction on the hotel had not gotten any further than "a few stakes being driven in the ground" when the freeze order came into effect. When this order came through the Flamingo had not progressed far enough to qualify for the granting of a permit for its continuance. Shortly thereafter construction was authorized under CPA regulations permitting the construction of the Flamingo.
On July 31, 1946, it was stated that the Capone Syndicate opened offices in the Ferguson Building in Los Angeles intending to put out a scratch sheet of their own and had been looking around for an editor to compete with Siegel's Trans-American.
On August 1, 1946, the Las Vegas Tribune ran an article criticizing Siegel saying he was using materials that should be used in constructing war veterans' homes, including sewer pipes.
Contractors and building supply houses state they do not have any materials to build homes. But, somehow, builders of gambling clubs seem to have no trouble whatsoever getting anything they want. The same builders who have no time to build city jails, swimming pools for the children or homes for the veterans and working man are ready to bend over backwards to build gambling clubs and other unessential buildings. The very last thing Las Vegas needs right now is another gambling club. Our magnificent resort hotels have been able to take care of our tourists in a fine manner. What Las Vegas needs is homes --- and more homes. . . .
No doubt the Flamingo will attract many people to this area. It is reported that the Flamingo will cater to men who bet $1000 chips with the same ease as you and I would play the nickel slot machines. In the casinos of the Flamingo, fortunes would be won and lost. Won by Bugsie Siegel and associates and lost by the wealthy gamblers from Hollywood and elsewhere. . . ." - Richard King, Las Vegas Tribune August 1, 1946
Siegel countered the claim that when the Flamingo opened, she would attract men who bet with $1000 chips, and would be spending more money in the City of Las Vegas as well as the resort, which would better the economy like the El Rancho Las Vegas and Frontier was doing, but on a much larger scale. In addition, Siegel was paying much more than the going rate for these materials. He was not going to the local yards and buying what was on the lots at a price a veteran could afford. Siegel stated that approximately 150 ex-servicemen were employed in the construction of the resort and once it was completed, it was expected that about the same number will be employed at the resort.
The FBI wrote that it would appear that they now had jurisdiction to investigate the construction of the Flamingo in connection with the bribery investigation concerning the CPA Official at Reno. It would also appear that they would had jurisdiction on the theory of Fraud Against the Government since it was probably necessary to furnish false information to the CPA in order to obtain the permit to construct the Flamingo. The advantages to becoming active would be that it might develop a bribery and fraud against the government, a violation which could be attributed directly to Siegel, if not directly, then perhaps under the conspiracy statute. Secondly, such an investigation might have the effect of stopping construction of the Flamingo which could conceivably bring about the bankruptcy and total collapse of Siegel. It was stated that Siegel and his associates were making every effort toward the completion of the gambling casino in the Flamingo in order that they might be in operation that fall. The informant stated that once the casino was completed "there will be no stopping Siegel" because the casino would be good for a $2,000,000 a year income just by itself. In a wiretap on July 30, 1946, Siegel had a conversation with a blacked out name in which he stated that as of that day, they have $1,162,500 in the Flamingo. Siegel was making arrangements through Gus Greenbaum to obtain a $500,000 loan. Siegel also stated that the Utah Corporation had gave him a $350,000 loan and the Cortez Hotel was also going to make them a $600,000 loan against the Flamingo. This would indicate that Siegel and his associates had already put up all of their available front cash. An investigation of this matter under the Fraud Against the Government Statute would permit them to examine witnesses under oath. It would also give them the opportunity through detailed examination of books and records, to trace back all of the money invested in the Flamingo, which should in turn, show exactly how much Siegel had invested and it could possibly reveal a violation of the Income Tax Laws. They would find out what date construction started on the Flamingo and such other information as if the Flamingo had gotten no further than a few stakes being driven in the ground when the freeze order regulating all commercial building under CPA came into effect.
On August 1, 1946, it was stated that the Flamingo did indeed stop building but that a blacked out name arranged to have funds made available to Senator McCarran and the construction of the Flamingo was permitted to continue. It was learned that the funds made available to Senator McCarran were in the nature of a bribe probably originating from Siegel. The official in charge of the construction division of the CPA at Reno, Nevada, was involved in the deal and that the construction records of the Flamingo were falsified to show that the construction was farther along than it actually was, thus enabling the CPA to authorize the completion of the construction.
On August 1, 1946, surveillance teams reported on the Flamingo. They stated that actual construction of the hotel did not begin until sometime in March of 1946, when the ground plan of the main building was staked out and tool houses were erected. By June 1, 1946, the foundation had been laid and a portion of the fabricated steel framework for the walls of the main building were erected. Construction crews were utilized day and night. As of August 1, 1946, all of the outside walls of the main building, housing the lobby, the gambling casino, and the bars, were up and had been plastered. Bare framework for the other two units of hotel suites and rooms were virtually completed. A large sign erected on the highway in front of the hotel announced that the Flamingo was a William R. Wilkerson project; Del Webb Construction Company was the prime contractor; and Richard Stadelman was the Vegas resident architect. Information supplied, newspaper articles, and general rumor, reflected that the hotel was scheduled to cost $3 million when the doors opened. An informant stated that Siegel had just about run out of "show money" and he was looking to take a loan.
On August 2, 1946, an agent reported that he recalled the date of the construction "freeze" order, March 26, 1946, and stated that the construction work was well started by that time. He said that he recalled that the foundations of the main hotel building were in and some of the reinforcing steel for the walls had been installed.
On August 4, 1946, Siegel was denied his application for a gambling and liquor license by Clark County Commissioners. Siegel subsequently appeared in front of the Commissioners in person to defend his resort and his application was granted.
Siegel submitted a statement at the CPA hearing on August 13, 1946. He stated "We will not stop construction. We will go to jail first." He explained that even though the initial plans and application stated there would be a single building, he decided the resort should contain several buildings. Siegel further stated that 16 weeks have been spent building the resort with 75% being completed, and $2 million invested so far. He stated he was under terrible pressure to complete construction and it was unfair for the government to stop construction at this late stage.
Siegel also alleged that some of the other casinos were trying to stop the Flamingo from being built because his ultra-sophisticated resort would take all their patrons.
To date Siegel had a weekly payroll of $46,000, all of which money was being paid to local Las Vegas residents and it was obvious that he was contributing to the city by putting food on these families' tables.
Del E. Webb appeared at the hearing to describe the plans of the resort and why his company was building several buildings instead of one. The CPA stated that the blueprints weren't complete in that there was no elevation. The CPA then asked Webb if he could finish the resort using the first plans that were submitted to them in January. Webb replied no, that the plans were modified daily. It was then presented that the CPA never checked the building of the resort since the initial blueprints were submitted which they should have.
Also on August 5, 1946, the FBI reported they lost track of Virginia Hill at Los Angeles due to the fact that her telephone had been removed.
On August 6, 1946, Agent Ostholthoff reported that agent blacked out name described a telephone conversation from Siegel to a blacked out name, stating that the application for the Flamingo for a gambling and liquor license had been denied by the Clark County Commissions. This was apparently only a temporary denial and that blacked out name was charged with investigating applications for gambling and liquor licenses and undoubtedly would see to it that the Flamingo would have its license.
On August 7, 1946, the Civilian Production Administration (CPA) placed a "freeze order" on further construction of the resort due to the original blueprints not being complete and there was more than one building on the property. The Order to Del Webb stated:
On August 7, 1946, Hoover wrote to A.E. Ostholthoff stating that he was authorized to initiate immediate appropriate investigation into all aspects of reported irregularities dealing with the construction of the Flamingo including apparent alleged irregularities of officials of CPA. The inquiries relating to the alleged participation of Senator McCarran or other prominent people should be handled on a discreet basis in order that no rumor would be circulated that the Bureau was investigating the Senator or other officials until such time as definite information has been received indicating some possible irregularity on their parts.
The Commissioner stated that the Government did not present a case to justify a freeze and it was lifted. Siegel was given permission to proceed with construction.
On August 7, 1946, a FBI wire stated that Siegel received a telegram from CPA in Washington ordering all construction on the Flamingo stopped. Informant stated that Siegel did not pay a bribe to secure CPA permit for construction although he did admit that on April 19, 1946, CPA in Reno or San Francisco ordered construction stopped but subsequently permitted it to proceed. The memo proceeded to state that Siegel was spending all his time concentrating on the Flamingo talking about nothing else. Agent Ostholthoff inquired if the CPA was going to conduct an investigation into the Flamingo. If they were, then he wouldn't. He also told the CPA that the original informant advised that his information concerning irregularities in the construction of the Flamingo had come from blacked out name at Los Angeles.
On August 8, 1946, the New York FBI was requested to immediately secure full facts regarding the alleged black market operation of Siegel since it appeared likely that a considerable portion of the funds invested in the Flamingo may have come from black market sources.
On August 9, 1946, 34 individuals were indicted in a nationwide narcotic conspiracy case. Informant stated it maybe possible that Siegel may be connected with these individuals. FBI records indicated that Siegel never talked about the indictments, and didn't seem to be concerned with the indictments. All his attention was on the Flamingo.
Also on August 9, 1946, blacked out agent obtained a copy of the original articles of incorporation for the Flamingo. They were filed with Malcolm McEachim, Secretary of State, State of Nevada, Carson City, Nevada, July 26, 1946, by Louis Weiner, Jr., of the law firm of Jones, Weiner, and Jones, 208 Beckly Bldg, Las Vegas Nevada. Weiner was Resident Agent and Las Vegas attorney for the Incorporators of the Nevada Project Corporation, owners of the Flamingo Hotel. It stated that the name of the corporation was Nevada Project Corporation. The corporation's address was 208 Beckley Building, Las Vegas. The corporation also had one or more offices located outside the state of Nevada where the books and records may have been kept. The corporation was authorized to issue two classes of stock: 1. 1,000 shares of common stock of the par value of $250 per share; 2. 250 shares of preferred stock of the par value of $1,000 per share, earning an annual dividend of 3% cumulatives. The total value of all shares was $500,000. Directors of the corporation were: William R. Wilkerson, 10425 Sunset Blvd., Los Angeles, CA; Moe Sedway, Bonanza Road, Las Vegas, NV; Ben Siegel Last Frontier Hotel, Las Vegas, NV; N. Joseph Ross, 3047 Motor Ave., Los Angeles 34, CA; and G. Harry Rothberg, Last Frontier Hotel, Las Vegas, NV. The articles of incorporation were signed on the last page, page 8, on July 23, 1946, by Ben Siegel, Moe Sedway, William R. Wilkerson, G. Harry Rothberg, and N. Joseph Ross. Wilkerson's signature was notarized by N. Joseph Ross, Notary Public, Siegel, Rothberg, Ross and Sedway's signatures were notarized on July 23, 1946 by Anna Taylor, Notary Public.
It was stated that on August 9th, Siegel called Lansky at New York City, TF7-6269. The conversation in general referred to the building of the Flamingo and the fact that Siegel had received a stop order from Washington. Siegel inquired of Lansky as to whether he could get "that guy" to send blacked out name a car of beer. Lansky was interested in knowing what the beer was for and Ben stated he wanted to send it to two blacked out names. It was thought to be the "fellows on the Commission."
Siegel told Lansky that every time he goes to the site he saw something else. They got an ice machine for $18,000, making 20 tons of ice a day, they needed two and it needed four guys to make it. Siegel joked he should sell ice instead. Regarding the freeze order, Siegel stated that "we got $2 million here for the building and about another $1-1/2 million on the grounds and we got an okay from you. Why don't you wait until we get ready to put the windows in. So they give us a week to get us a hearing. They set the hearing now. I just got through, they set the hearing for Tuesday up in Frisco. If I blow it I got til Thursday and I got to quit working. Well, I'm not going to quit working, they can send me to jail. Those rates, God Dammit. I'd like to know the guys . . . must be somebody. When Lansky asked what Siegel wanted from him, Siegel stated nothing "I think we got nothing to do, who the hell cares who gets elected senator? We are not butting heads, but I think he is the one who put the finger on us. I may - I called blacked out name in Washington." He said to find out the name and call him back. He said it is a god dam thing, whoever heard of a thing like that, just somebody trying to - he gets burnt up. Somebody trying to shake, they will get the wook shook our of their ?. Siegel then asked Lansky to check out blacked out name. Siegel stated other than the beer and to check out a person, he couldn't think of anything else he wanted from Lansky. Lansky was instructed to call him the following Wednesday at Vegas. Siegel stated he took $2-1/2 million just in case and submitted it all. Lansky stated he wouldn't take anymore for them if he were him (presumably this was unlaundered money as opposed to the front money Siegel had been using.)
On August 12, 1946, Siegel contacted a blacked out name and related that Hill had been taken to the hospital for an operation and that after the operation she was taken home and had to remain there for approximately three month. He indicated that it would be a month before she would be able to leave town to visit in Chicago.
On August 13, 1946, contact was made with a blacked out name. He advised that he was not an employee of CPA but merely a special commissioner directly appointed by Donald Nelson, then head of WPB. He stated he had been requested to hold a hearing at San Francisco that day but he had not been informed as to the names of the parties nor the subject matter. He stated that he had not been approached by anyone in connection with the case but would notify the FBI if he was.
In another memo dated August 13, 1946, it stated that Siegel remained in his room all evening and had no callers nor visitors. He arrived at the Hotel St. Francis 4:00am and arose about 10:30am, after which a blacked out name went to his suite but Siegel was at breakfast. It was reported that Siegel attended a meeting with the blacked out names. Siegel was complaining that 16 weeks work and $2 million had been put into the hotel which was 75% completed, and now a stop order had been issued. He further complained that blacked out name had an ok on a $1,500,000 building in the south. Siegel discussed opening a gambling club in Sacramento. A blacked out name and two senators were known to him. Siegel said that a blacked out name head of the CPA, had given an ok for the Flamingo and then turned around and issued a stop order. A blacked out person stated that Sinatra was building a $1,500,000 building and had been given the Government ok. Siegel had made a telephone call and told an individual that two guys were trying to shake him down for $50,000, but that he had knocked the shit out of both them.
Discussion changed back to the Flamingo. It was mentioned that the plans was originally to build a lattice steel building, however, in January due to the steel situation, it was decided to make the construction concrete. It was stated that a blacked out name could not take care of the whole job, and consequently the Del Webb Construction Company was called in. At that time, the building was reportedly 75% complete.
On August 14, 1946, agents received the divorce file for Siegel. The divorce records of the Washoe County Clerk's Office, Reno, under #103261. On August 3, 1946, Estelle L. Siegel was granted a divorce from Siegel. The complaint recited that they were married in New York City, New York, on January 28, 1928, and that there were two minor daughters from the marriage. The complaint also recited that a property settlement had been agreed upon per a contract made June 20, 1946, and the plaintiff offered this as exhibit "A" in the proceedings, and asked that the terms thereof be adopted in the decree. The complaint alleged that the defendant had been guilty of extreme cruelty, mental in nature, and the prayer of the complaint was that an absolute divorce be granted, with custody of the children given to the plaintiff, but with a right of visitation by the defendant "at all reasonable and seasonable times." Mrs. Siegel was represented by Donnell Richards, a Reno attorney. The file contained an "Appearance and Waiver" signed by Siegel and acknowledged at Los Angeles, CA, July 2, 1946, before Anna Taylor, Notary Public, in which he in effect consented to a default decree. The decree granted an absolute divorce.
On August 13, 14, 1946 a hearing was conducted with CPA Commissioner Owens. Fred G. Tadlock was investigator of the Civilian Production Administration, and Gordon McKenzie was the Legal Counsel for CPA. Introduced into evidence were the blueprints and plot plans which were submitted to Bender of the CPA Construction Division at Reno by Louis Weiner on April 29, 1946, when Wiener first sought the authority of the CPA to continue construction of the Flamingo.
Tadlock stated in April of 1946, that when he drove in, there appeared to be two separate and distinct buildings going up. The one closest to the highway had progressed to the extent that they were just about getting to start up with the steel construction for the walls. The second project, which was beyond that, was where the concrete had been poured in and in the process of having the steel placed in them. He saw Mr. Warrington who represented himself as the Office Manager in charge of the office of Webb Construction. Warrington was asked the starting date of the portion of the project that was being constructed by Webb. He said Webb was in charge of that but the other structure was started by Ralston Construction Company in Los Angeles and they had nothing to do with it. He said that particular structure was to house the dining room pointing to plans on the wall. Underneath it was "Hotel Building, Las Vegas, Nevada, Richard Stadelman, Architect, Las Vegas, Nevada: Ralston was in charge of building A, and Webb was in charge of building B, buildings marked as C and C1 were the stores and shops. The outline in the center was the pool, the outlines of ten buildings in the extreme rear of the project were cottages, which were to be constructed later. Warrington stated that the first day of construction to him would be when they took soil tests to determine the type of footing they would use in that particular location which would've been April 10th. It was noted that there were no connections between the buildings.
Tadlock revisited the site on July 3, 1946 with Mr. Walue. He was introduced to Mr. Thomas who said he was superintendent of the Webb Construction Company. Mr. Thomas showed them plans similar to the ones that they had seen on their first visit, except the stores and shops had been moved from one location to another. On the bottom of the plan it stated "Plot Plan. Hotel for Mr. R.W. Wilkerson & Associates, Las Vegas, Nevada, March 22, 1946." At that time Mr. Thomas stated there were no connections between the buildings. He was told that Ceco Steel Company conducted the reinforcing of the steel used. He stated there still was no construction on C and C1, and the ground was not even broken.
Tadlock then found architect Stadelman and asked him for the updated plans. He stated that he would have to dig them out; that he had just moved into this location and hadn't unpacked. Stadelman stated that the only change was that they moved the stores and shops from center of the location over to the side but he was expecting the plans to be revised again as the stores, shops and cottages were probably not going to be built. Tadlock was asked if he asked Stadelman why they were being moved and/or removed. Tadlock said no he didn't ask. Mr. Thomas said they thought the stores/shops would look better there.
Tadlock then revisited the site again on August 5, 1946 and observed construction was continuing on both Buildings A and B and in addition a new building had been started subsequent to July 3rd but on the side of the project towards L.A. there was building towards the rear of the project. It appeared to be some 50 or 60 feet long and probably 30 or 40 feet wide. The studding was up for the walls and ceiling joints had been put in place. This time though they didn't speak with anyone on the site. The Commissioner asked Tadlock if he asked anyone for mechanical plans or plans showing the pipe, electrical lines, etc. Tadlock said no. He was asked if he asked anyone where the heaters, air conditioning, and other utilities lines were going to be and Tadlock said no.
During the first hearing the Government had no objection to the completion of the casino and restaurant since its construction was started prior to the stop order issued on March 26th, prohibiting all new commercial buildings. Since the construction of the hotel was started after the issuance of the stop order and was physically separate from the casino and restaurant by a space of approximately 120 feet, its further construction must be stopped. Siegel maintained that the casino, restaurant and hotel were all one and the same building project and were intended to be one building from the date of the initial planning. Therefore, they are at liberty to proceed with the building. It was noted that the resort was 75% complete but the hotel portion was only 65% completed.
When a blacked out name took the stand on Siegel's behalf he stated generally to the effect that the casino, restaurant and hotel were all one project, maintaining that the casino and restaurant were only parts of the main building which was the hotel itself. He also testified that this was the original intent of those interested in the construction of the Flamingo, further pointing out that the basements of the restaurant and casino go around and though the hotel, thereby making it one edifice. FBI agent Ostholthoff expressed the belief that these allegations were false since investigation had established that separate building permits were taken out for the casino and the hotel and, secondly, because a different contractor was hired specifically and solely for the purpose of constructing the casino and restaurant.
Photographs were brought in showing windows in the casino and hotel, finished walls and roofs showed there had no intention to join other buildings, that plans showed buildings were structurally independent and gave the opinion that the buildings were separate. Also introduced was a painting of the shops drawn from the plans showing the shops roof connecting with the motel and casino. Blacked out name gave his expert independent testimony and opinion, then rendered his decision, stating that photographs and plans gave a good idea as to what the project was at present, but stated they had to arrive at what the finished product would be. Blacked out name testified there had been no change in the plans since August 14th. He did admit that line which he had previously stated had represented the wall supporting a roof and the hotel/casino was actually a sidewalk. He also admitted being shown a photograph of a small opening for pipes and wires leading into the end of the building about five feet long was actually the tunnel which he had previously testified as being the utility tunnel connecting the hotel and casino through which a could chase a rabbit through. Blacked out name of Del Webb stated that he had plans for a casino and hotel since December of 1945, and the passageways between the buildings were planned with connecting sidewalks.
At the end of the hearing agent Ostholthoff advised that the Commissioner found in favor of Siegel and directed that the construction of the Flamingo should proceed. The Commissioner also gave the Government until September 5, 1946, in which to develop and present further evidence to show that the construction should be stopped. Agent Ostholthoff noted that the San Francisco Office of the CPA was cooperating fully with the FBI in connection with this hearing. The hearing was held on September 5th but was continued to September 12th.
CPA agents told Siegel they didn't think the resort would be a success because it contained no restaurant and was six miles from town and the nearest restaurant. Their knowledge was questioned since the Frontier and El Rancho were down the street and both contained large restaurants. Grace Hayes' Lodge was almost across the street and she had a restaurant in which Siegel ate frequently. It was suggested that one of the reasons Siegel decided against a restaurant was that he liked Grace Hayes and didn't want to take business from her. His reasoning was that 1. If his guests wanted to eat, they would go to her restaurant; 2. Since her restaurant was conveniently located, he could save money by not building a restaurant at his resort.
Later than day, Webb went to Siegel's room and all they talked about was the blueprints for the resort. The decision was to combine the three buildings (casino, rooms, and shops), by connecting them with walls and a roof for an additional $15,000. The resort would then be one building as the original plans specified. A decision was made to add a kitchen and dining area that had been previously deleted to building one that held the casino. They also decided to build a high fence around the area so no one could observe the construction.
A later discussion surrounded a connecting building for the horseshoe that Siegel would temporarily make a health club. They also discussed building a tunnel to join the casino with the other building. A remark was made as to whether it would be most expedient to build a tunnel or merely build a trench in which to bury pipes. A blacked out name remarked that it would be better to have a tunnel since it would be good insurance.
It was rumored that a bribe was made to the CPA. The FBI investigated the bribery allegations stating that if the allegations were true, they could bankrupt Siegel and the resort could not completed. It was feared that once the Flamingo opened, it could bring Siegel $2 million a year and give him financial backing for further illegal endeavors. It was reported that in addition to the $600,000 from the El Cortez, Siegel had used an additional $1,162,500 of his own money, $350,000 from his associates, and requested a loan from his First Lieutenant, Gus Greenbaum in the amount of $500,000 from the Chicago mob at 4% interest. This didn't mean Siegel was broke by any means. This meant he was just out of show money. It was stated that Siegel owed Webb $150,000 but thought that Webb may agree to wait for his final payment. Even though discussions were made about liquor being presented to the CPA, there is no evidence that this was done.
On August 15, 1946, Attorney General Tom C. Clark wrote to the Secretary of the Treasury asking for Siegel's income tax returns for 1943, 1944, and 1945.
Also on this date Moe Sedway and Gus Greenbaum engaged in a telephone discussion between Vegas and Del Mar in which Greenbaum remarked that he did not believe that James M. Ragen, Sr., had died from complications resulting from his shooting in June of 1946, but that he believed that they actually succeeded in killing him that night. Blacked out name stated that on 5:00am, on August 14, 1946, the Trans-American radio announced that Ragen had been killed by members of the Chicago Syndicate who succeeded in getting in Ragen's hospital room. Greenbaum asked Sedway if State Officials in the newspaper had deliberately suppressed the true facts of the killing. Greenbaum remarked that it would be very easy to do if "they have the coroner." Then they discussed blacked out name planning to lease the Continental Wire Service to blacked out name in apparent violation of the verbal agreement between the Continental News Service and Sedway whereby Sedway was to have the exclusive use of the service in Vegas.
On August 16, 1946, Siegel called a blacked out name in New York first asking where Lansky was and then started to talk about the Flamingo. "We started one structure and it is the same structure. We haven't deviated from it. We filed out plans --- the first place as we told the Commissioner we don't come under him, we got plans from January 12, 1946, way before they ever enacted the law. I said we had no business going up there and 14 weeks ago on April 29th the CPA Director of the territory with his office in Reno in writing gave us an ok to proceed. It didn't take them 14 weeks to go in there and find out if we were doing anything wrong. Why didn't they too come in there and tell us? They got an investigator that takes the stand and testified he discussed this proposition with a timekeeper up there. What the hell does a timekeeper know what we are doing. Why don't they go and see one of the owners? Why don't they go see the builders, the architect, the mechanical engineer or somebody. Ok, you know it is just politics. There is a place right along side of us given an ok for $1-1/2 million hotel. A little further up, Sinatra and them are building one. There is plenty of material now. Enough to build ten more."
On August 18, 1946, Siegel at the Last Frontier was called by blacked out name in Los Angeles who wanted to know what the status of the new wire service in L.A. and Vegas. Siegel said that the wire service in Vegas had not been put in Vegas but he was going to find out why. Siegel was asked what he thought would happen to Continental now that Ragen was dead. Siegel replied "We are liable to wind up with the whole thing and might not have to switch over, but just take over from there. There is a good possibility." Siegel went on to state that if the switch was made "We'll get their facilities too."
On August 19, 1946, Siegel then called long distance to blacked out name telling him he was trying to reach blacked out name all day and asked why Trans-America was not proceeding in Vegas. He was told they were having a hard time getting the wire in and they had to go "a round about way". Siegel remarked that he had contacted the Western Union manager in Vegas and was told by the manager that "those other people told him not put in the wires in." Siegel knew the other people were from Continental. The manager told him he was to stall the matter as long as he could and to tell anyone else that the Western Union's lines were loaded. Siegel told him that if he could get the wire in "I will throw the other fellows out." The person replied "I am glad you told me. We will get on with it." The man said he could reach blacked out name at the Blackstone Hotel in Chicago. Siegel asked if they received the $12,000 which he had sent and the man said yes. In another conversation, Siegel asked if the new service was "shooting in from the East yet." and the reply was yes and that the new service had an entire crew that was taken away from Ragen that was making connections in the East. Siegel then told them to hurry up and finish the wire service in the West so he can "throw them out of here."
On August 20, 1946, FBI was in for a rude awakening when they arrived at the CPA, on 1355 Market Street, San Francisco. They were told that the FBI were interested in going over the files of the CPA in connection with the construction of the Flamingo, as they had information that there was a possibly fraud against the Government involved in connection with the original permission granted to the builders. A CPA agent stated that he could not provide the file in view of the fact that an investigation was pending with regard to the Flamingo. He advised that he did not know what further investigation would be conducted by the CPA and stated he was to have a conference with the legal staff. After their meeting the FBI was told that they would not furnish any of the documents to the FBI unless he was instructed to do so by his superiors in Washington. When asked if the builders of the Flamingo would be entitled to a copy of the transcript of this hearing he stated "Yes, they would if they pay the fee." He said he didn't want to appear unreasonable but suggested that the FBI wait until the completion of the September 5th hearing. The FBI pointed out that time is of the essence in a matter of this kind, that the individuals involved in this matter work fast, and that a great of evidence could disappear in two weeks. The CPA representative stated that he could relate the facts as he knew them and the FBI agreed. The representative stated that the matter resolved around whether the first permission which was granted by blacked out name was valid and whether the builders of the Flamingo were constructing one building or more than one building. The FBI said they knew all that, they needed specifics and why the adverse ruling had been given. He stated "You would have to read the commissioner's mind to get the answer to that." The representative stated the stop order was sent to the builders based on investigation conducted by the CPA which had been furnished to the Washington headquarters who had issued the stop order. He said if the FBI conducted an investigation of this matter at this time it would harm the CPA's case. The only information given by the representative was that the CPA was planning to take photographs of the work at it now stands on the Flamingo and to try to get technical assistance. The representative stated that if the stop order was made final, they could appeal to the Chief Compliance Officer of the CPA after which they can have recourse in the Federal courts for a restraining order against the CPA.
On August 21, 1946, agents interviewed a blacked out name who stated that on April 16, 1946, the builders of the Flamingo received a wire from the CPA instructing them to cease building as they were violating CPA regulations. On April 28, 1946, the builders went to Reno, saw blacked out name of the CPA for Nevada and took plans with them which showed that the Flamingo project consisted of only one building. Blacked out name told them that if this were true they were not violating the CPA regulations in continuing the construction. However, he told them to write him a letter to this effect. The builders did this on April 29, 1946. Blacked out name replied to their letter, stating that they could continue construction, if the project was in fact only building. Blacked out name said that the Government introduced a very sketchy plot of the project and they did not show the original plans of the project to compare with the plans that were shown to blacked out name. The respondents, that is the builders, then introduced plans dated January 12, 1946. This was done by Richard Stadelman, the architect. Blacked out name of Del Webb said that these were the plans they were following. Blacked out name asked if he could construct a building from those plans and he said no. He said that he felt the Government presented a very weak case and that he felt that a better case could be made; therefore, he gave a decision in favor of the builders, but allowed the Government until September 5th to introduce new evidence which would justify a stop order. He said that no approach was made to him the way of offering a bribe, although he was introduced to Siegel. He remarked that blacked out name asked if the hearing was to be closed to the public, pointing out that ordinarily these hearing were not open to the public. The usual rule dictated. He was asked if FBI agents could be present. He stated that blacked out name felt it would be all right for FBI agents to be present since they are part of another Government agency.
On August 23, 1946, blacked out name stated that the defense took the position that the buildings comprising the Flamingo Project were joined to the power unit which in effect made them one building. He pointed that blacked out name made a good remark and it was the only good remark he made was that if joining buildings by air conditioning apparatus and power ducts constituted their becoming one unit that a person could conceivably build connected buildings all the way from Vegas to L.A. The defense immediately abandoned this point. The defense then went to their second point that the construction already completed provided for the connection of the various buildings of the Flamingo into one unit. In discussing the investigation, affidavits from the union controlling the steel workers at that point showed that no such labor had been employed on the Flamingo until after April 6, 1946, which was subsequent to the freeze date. Also, the records of the Pre-Mex Concrete Company allegedly were of importance in proving that certain work had not been done on the hotel prior to March 26, 1946.
In discussing the blueprints, he pointed out that "they have their own blue printing machines and can print them up by the hundreds or change them as often as they want to" and this situation materially affected the investigation as far as the plans themselves were concerned. It was brought out that one of the exhibits was the plans signed by the architect in his own writing and there was no connection between the buildings.
On August 26, 1946, Mr. Rosen of the FBI was notified of the CPA's denial to supply records. The FBI contended that the construction of the Flamingo had not progressed further than "a few stakes being driven in the ground" when the freeze order regulating all commercial building under CPA went into effect. The freeze order of the CPA went into effect on March 26, 1946. Blacked out name further reported that when the order came though the construction had not progress far enough to qualify for the granting of a permit for its continuance. It was further reported that when the order came through the construction had not progressed far enough to qualify for the granting of a permit for its continuance. It was rumored that funds were made available to Senator Pat McCarran of Nevada and shortly thereafter construction was authorized. It was further reported that after construction continued, the records of the construction company were falsified to show that the construction had progressed to a greater extent that it had as of March 26, 1946, when the freeze order became effective. A blacked out name from the CPA showed agents a diagram of the Flamingo, which comprised of the casino, the kitchen, and the dining room surrounded by a 200 room hotel, a series of stores and a series of cottages which would complete the layout. The blacked out name advised that Building No. 1, which comprised the casino, kitchen and dining room, was actually under construction prior to the original CPA freeze order issued on March 26, 1946. However, none of the other buildings were under construction nor were there any connecting tunnels or conduits indicating that they were a part of the structure under progress. According to a blacked out name, relative buildings under construction, such as these wherein separate and distinct buildings were being built, the CPA had always refused to permit any further building except the ones actually under construction prior to the freeze order. The name pointed out to the Agents that based on previous CPA decisions in similar cases he did not see how it would be possible for the CPA to give the Flamingo permission to continue with its construction. He stated that the CPA had an "open and shut case against Siegel." At the hearing on August 13th, the architects of the Flamingo presented a plan dated January 12 and contended that this was the plan followed in the construction of the Flamingo. It was pointed out at the hearing that this plan lacked details such as elevation, and therefore, questioned whether they could proceed with the building, using only the plans of January 12,
On August 26, 1946, a conference was held in Siegel's hotel room at the Frontier. A blacked out name stated that Bank of America in L.A. was unwilling to consider a loan because Siegel was being investigated by the FBI and CPA. A call to Mr. Ostholhoff stated that no call was made to his office so Bank of America was only saying that. Siegel stated that he had made a $500 contribution to the campaign fund of a blacked out name on August 20, 1946, and that he was not concerned with Senator McCarran because he was already cooperative. They also discussed plans for pouring the concrete floor, concrete walls and roofs which would physically connect all of the buildings They also were going to construct a high wall around the project so people can't see what is going on. A blacked out name stated that another blacked out name called the FBI office and found out that there were two things that the FBI wanted to know; 1. Was anyone bribed; 2 Where does Siegel get his money. At this point Siegel stated "Why don't they ask Siegel?" It was then suggested to him that Siegel go to the FBI in Vegas and ask them what they want to know. Siegel replied "Let them come to me." Blacked out name said "They don't want to come to you." The blacked out name suggested that Siegel call Pat McCarran and tell him to "be dumb" and not know that Siegel was putting up money on the motel. Agents were then assigned to go out and take aerial photographs of the Flamingo before work was performed the next day, and to take photos of the buildings at this stage of the construction.
At this point the FBI decided to see how far back Siegel went in their files. Research showed a letter to the FBI dated January 9, 1934, L.A. Field Office file 62-999 stating Siegel was one of the more important gangsters in New York City who was extremely wealthy and resided at the Waldorf Astoria Hotel. He was connected with Lepke, Luciano and invested money in the Longy Zwillman mob along hard liquor lines. He was formerly a killer and made considerable money out of bootleg liquors and also controlled the fake label racket. Being a Jew, it was surprising as to how much power he had with the all Italian heads.
A blacked out name went to see the Flamingo personally. He spoke with a blacked out name from Del Webb Construction Company, and examined the plans on file in the office of the Clark County Building Commissioner who a blacked out name there advised that the Flamingo project in his estimation was "hot" and that he did not want to have anything to do with it. This person expressed surprise that the hotel could be built from the blueprints on display in the Del Webb Office at the Flamingo job. Of course, he stated he was not a builder or an architect, but that he personally did not believe that Webb was using the plans shown him in constructing this hotel. He stated that it was his opinion that even at the present time, the project consisted of at least three distinct units. He based this contention on the fact that there were outside windows and doors at the ends of the casino and hotel building which precludes the contention that these adjoining buildings were one structure. It was his opinion that only one building was under construction on March 26, 1946, and that any buildings erected, or started, or plans drawn subsequent to that time were in violation of the CPA regulations regardless of whether these structures were joined by tunnels, porches or utility connections. The employee expressed himself as being disappointed at the support the Compliance Division was receiving from the Construction Division. He went on to say that his office had stopped approximately 2,500 projects, all of which had been immediately authorized for continued construction by the Construction Division of his own organization and the reports his men had made in these cases were apparently completely disregarded.
In an undated status letter, reference was made to the CPA okaying the project in April of 1946. It was stated that CPA regulations prohibited a district manager from approving any building, the costs of which was in excess of $1 million. Approval for such a structure must be granted in Washington. District managers, however, had the authority to approve or disapprove any application for construction in an amount of $1 million and he can also disapprove any construction job, the value of which exceeds $1 million. A district manager may submit his recommendations to Washington when the amount of a construction project exceeds $1 million and was not denied by the district manager. A provision was also made for a builder to appeal an adverse ruling by district CPA managers and this appeal would be made directly to the CPA Headquarters in Washington. Blacked out name did not recall having placed value on the Flamingo and that he did not recall having been asked about the exact value of the building.
Siegel made a phone call to the author of the August 1, 1946 article in the Las Vegas Tribune captioned Gambling Palaces vs. Houses for Veterans. Siegel had stated that none of the building materials had been purchased on the black market and that no money above ceiling price had been paid for the materials. He said that no other contractors in the area had no justification for complaining because Del Webb had purchased all of the materials on the legitimate open market and that if Del Webb could buy the materials, any other contractor could also obtain them. Siegel said he would personally give any veteran $1 million if he could produce any evidence saying that he could not obtain building materials for housing and who had been injured in any way by the construction of his hotel. He went on to state that he had approximately 200 veterans employed at the site presently.
Siegel had asked blacked out name what he expected to gain by having published such a story about his hotel. He replied that he would gain the support of the "little people." Siegel advised him that the paper would get no paid advertising from the Flamingo and reminded him that he has a weekly payroll of $48,000, all of which money was paid to local residents of Vegas and that he was getting all his materials from the community. The blacked out name stated that Siegel had no legal right to build the Flamingo. Siegel reminded him that 14 weeks prior he and the other builders of the hotel had obtained an ok from the Reno office of the CPA. He stated that at the August 14, 1946 hearing, the newspaper article was introduced into evidence and that it was the only damaging thing against him.
Siegel then asked this person why no other construction jobs in Vegas had been attacked and mentioned the new office building. The man responded that the office building was essential, the Flamingo was not. When Siegel kept pressing, the man stated that every veteran's post in Nevada had passed a resolution to investigate the construction. He went on to state that the complaint coming from the veterans was by the leaders of the veterans organizations rather than from the individual members themselves. Siegel kept pressing the man for further information by stating that with the exception of three loads of lumber purchased during the last four to six months, the builders and contractors of the Flamingo had purchased no materials subsequent to the freeze order. He again stated no materials were bought on the black market, no bonuses were given, and that no individual was bribed. Siegel then offered that the reporter interview him regarding his Flamingo instead of listening to everyone else. No one ever asked his side of the story and he would be happy to be interviewed by any newspaper reporter but no one ever approached him. Siegel stated "My word is better than my ? and when that is gone, I will go jump in the Pacific!" In the past, articles were written about him that were entirely false but he would always present the true picture and would tell them to prove him wrong. No one could. He had been blasted by Drew Pearson and when he let the word out Pearson never interviewed him, Pearson called him and interviewed him and the following day Pearson "gave me the whole page." Siegel did admit that he had some connections with prominent politicians and stated he had made political contributions to campaign funds of various candidates including a blacked out name. He went on to say that it was true that he travelled all over the country but it was Jewish charitable organizations paying his expenses while working on their benefits. At the conclusion of the telephone conversation blacked out name told Siegel that he was happy Siegel called and that he will write another article to appear in the Las Vegas Tribune and that he will allow Siegel to read it prior to its being published.
In another telephone conversation Siegel called blacked out name regarding his loan application with the Bank of America. The blacked out name stated that the reason he received such a cool reception was that the person was paid a visit by two FBI Agents on August 20, 1946. Siegel replied that if Agents had visited then there was definitely a lot of "heat on." Siegel stated that agents were probably hanging around the Flamingo. They agreed that they should adopt a plan to keep unauthorized persons off the premises and they would have to employ guards day and night and have them deputized. They also needed to erect a fence and string wire around the hotel. Siegel remarked that he would like to construct a floor of concrete walls and roof to join the hotel building to the casino building in order to conform with the plans but said that the connecting link would be a "phoney" but it would give the appearance of one building instead of two. He estimated that the link would be $15,000. Blacked out name suggested Siegel issue instructions to Del Webb the following morning to erect a fence and link the two buildings. They decided that the connecting link would be used as a health club and everyone should stop referring to the buildings as one and two, and instead use front and rear of the building. It was noted that immediately after the August 16, 1946 hearing blacked out name came up to Siegel and stated that he had no idea that Siegel had any interest in the Flamingo and if he had known, he would have helped Siegel out. Siegel remarked that blacked out name had previously worked with another blacked out name, in an investigation of Siegel, Lansky, Costello and others in New York after the conviction of Luciano and that this investigation was conducted for the purpose of determining if the witnesses against Luciano had committed perjury.
On August 27, 1946, it was noted that Trans-America wasn't working in the West. Special Agent ? inspected the offices to be used by the Golden Nugget News Service on the second floor of the Golden Nugget Casino and observed that the offices had not been completed. The woodwork had not been installed and the raw plaster on the walls had not been finished.
In a memo dated August 28, 1946, Ostholthoff and Hood received a call from a blacked out name stating that he had been hired as public relations counsel. He said he had convinced Siegel that the three of them should come into the FBI and answer any questions that might be put to them. He said that they were willing to admit that at this point "they are whipped"; that they were unable to secure a loan anywhere on the Flamingo because all bankers were turning them down due to the CPA and FBI investigation. He stated that Wilkerson had brought Siegel into the Flamingo deal because he did not know how to operate a gambling casino, but that Siegel had had considerable experience along this line. He now realized that he made a bad bargain because of the character Siegel was and he wants to buy Siegel out. A blacked out name said that Siegel was willing to take a 25% loss and sell his interest. If he can't raise the money then he plans to sell out to Siegel.
On August 29, 1946, a former FBI agent spoke with agent Ostholthoff stating that he learned that Siegel and some of his friends were eating at Doc Ladd's Cafe on South Main Street in Vegas. Siegel found out that blacked out name from the Chamber of Commerce was against him. He called blacked out name and told him to bring that man to him. When the gentlemen showed up Siegel told them that his intention was of spending $2 million on the Flamingo, and he was now spending $4 million instead and that if the Chamber of Commerce was not appreciative of that kind of money being spent in their city, they could go to hell. Siegel said he had Moe Sedway give the "Livewire" Fund of the Chamber of Commerce a check for $3,000 but that since he learned of their attitude he told Sedway to tear up the check. Siegel then stated that if he heard of Sedway or anyone else connected with his business giving one cent to the Chamber in Vegas, he would break their necks. Siegel also said that he had been one of the best customers at the Hotel Last Frontier and that when the Flamingo was completed it would make the Last Frontier look like a two bit auto court; and he would get the real business at his hotel and Vegas would ultimately get real tourists. Agents were dispersed to see if this conversation really took place.
On August 30, 1946, it was noted that Siegel, Costello, Adonis and Lansky controlled the numbers rackets in New York City in the same group with blacked out name who controlled the numbers racket in Philly.
On September 4, 1946, the Bureau inquired of the agents if there a possibility of perjury violation in connection with the CPA hearing. After examining the transcript it was determined that the witnesses were not sworn in, but were warned by the Commissioner that they must testify truthfully, otherwise they would violate the law and also told them that they did not have to testify if they felt that anything they might say would incriminate themselves. Agents were asked what code section the Commissioner referred to and it was stated that the Commissioner did not refer to any Code section but was probably referring to Section 80 of Title 18, U.S. Code. It was the agents' opinion that since the witnesses were not officially sworn in, they would not be found guilty of perjury. Agents reported that the facts were clear - being constructed in Las Vegas was a casino and restaurant. Separated from this building by 120 feet of open space a hotel building was being constructed. On March 26, 1946, the CPA issued the freeze order. The casino and restaurant were started before March 26th, but there was ample evidence that the hotel building was not started until some time in April, probably April 10th. Siegel, etc, were claiming that the hotel and casino were all one building; that they so claimed before blacked out name the CPA representative at Reno on April 29th and took the position that since they had started their construction of the casino before March 26th, they were not bound by the freeze order. Two statements were made by blacked out name that two statements were outright lies. 1. In your discussion concerning the erection of this building, was it at all times to be constructed as one building? He replied Yes. 2. Do the basements go all the way around and through this entire structure? He replied Yes, they do. Agents had the building permits which were issued at Vegas and that the permit called for two separate buildings. The Bureau stated this was a difficult case to prove and the agents agreed. If Siegel loses, it would tie up approximately $500,000 worth of his funds. In addition, agents spoke with the Reconstruction Finance Corporation regarding denying Siegel a loan if he goes to them and the agents were confident that he would be denied. If everything turns out right, this could truly destroy Siegel and the Flamingo would be abandoned.
In a September 5, 1946 report, it was stated on on August 29, 1946, a blacked out name received a call at his office from an individual whose voice he did not recognize, stating: "This is your cousin from San Francisco" and asked to meet a blacked out name at the intersection of 8th Street and Wilshire Blvd. He went on to say that his office had "several deals cooking", any one of which might cause him to be unpopular with certain persons, and that in going out to meet the individual as requested in the phone call he suddenly realized that "I might get my teeth knocked in". So he asked one of his staff, whom he described as "a good man" to follow him in another car. When he got to the designated intersection he noticed a car parked in the vicinity, and upon approaching it found that it contained a blacked out name and Siegel. Siegel told him that he wanted to talk to him and refused to sit in his car and asked him to go for a walk. Consequently, they walked down the street and Siegel said that he knew that the FBI was investigating the Flamingo and that his telephones at Vegas were tapped. Further, he knew that one of the matters under investigation was an alleged bribe of blacked out name District Construction Supervisor for CPA at Reno. Siegel said he knew no bribe had been passed because if anyone had done such a thing they would have gone to him to be reimbursed, and pointed out that if anyone had paid $500, they would ask Siegel for $5,000. Siegel also stated that he knew FBI agents had contacted blacked out in L.A. and blacked out name from Del Webb Construction, but that he had nothing to fear from all this. Siegel stated he was being persecuted by the Government in connection with the Flamingo. Siegel stated every cent he owns in the world was invested in the Flamingo and that if the project were not permitted to continue blacked out name would be ruined financially. Siegel stated that Senator Pat McCarran either had or was going to personally contact a blacked out name on Siegel's behalf and that the Senator was going to "pound the table with his fists" and impress upon that person that the State of Nevada wanted the Flamingo open for business.
The report went on to state that this person stated that as far as his investigation of the Flamingo was concerned the sole question was whether there were one or more buildings actually under construction as of March 26, 1946. As far as he was personally concerned, Siegel's background did not enter into the picture; that whether it was Siegel or "the King of Siam" building the Flamingo, there was only one question involved and that consisted of definitely determining what the status of the construction was on March 26th. He stated that apparently his headquarters in San Francisco lost sight of this point and did not appear to be interested in determining this fact. He went on to state that when the original "stop construction" wire was sent in early April 1946, this action should have been made to stick and the Government should not have permitted construction to continue, in the meantime the builders had invested $1,500,000 and that the hotel building is complete with the exception of the manager's penthouse on the roof. Blacked out name was of the opinion that Siegel intended bringing a petition into the hearing at San Francisco on the part of approximately 150 servicemen who were employed on the construction of the project as well as an additional petition by a like number of veterans who will staff the structure after its completion, but only if the Government permitted the construction to continue and the Hotel to operate so that they would have their jobs.
In looking at the County papers, the FBI found out that the Directors of the Corporation listed were William R. Wilkerson, Moe Sedway, Ben Siegel, Harry Rothberg, and Joseph Ross. The articles of incorporation were signed on July 23, 1946, by Ben Siegel, Moe Sedway, Williams R. Wilkerson, R. Harry Rothberg and Joseph Ross.
In this same report, it was stated that on August 9, 1946, agents called on a blacked out name of the CPA with offices at 1206 Santee. He laid out a diagram showing that the Flamingo Hotel, would be comprised of separate buildings roughly situated in a horseshoe design on acreage six miles west of Vegas on the Los Angeles-Las Vegas Highway. The building nearest the highway, which comprised the casino, the kitchen and the dining room was surrounded by a 200 room hotel, a series of shops or stores and a series of cottages which would complete the layout. Building number one, comprising of the casino, kitchen and dining room, was actually under construction prior to the CPA freeze. However, none of the other buildings were under construction nor were there any connecting tunnels or conduits indicating that there was a structure under progress.
A phone conversation between Siegel and Sedway was taped. Siegel was asking why everyone was so against the Flamingo and why no one would just let him build it. Sedway stated that most of the contractors around Vegas were angry at the Flamingo owners and the Del Webb Construction Company because they had employed all the best carpenters, masonry workers, and laborers available in Vegas and that no other contractor could obtain skilled workmen. Sedway added that negotiations were underway to incorporate the five-mile strip of land on the Vegas-L.A. Highway, which was presently in the County, within the city limits of Vegas which most people do not want. Most of the opposition to the inclusion of this land within the city proper voiced that if the Flamingo was not granted a liquor and gambling license they would withdraw their opposition to the "strip" being included in the city limits and the two big hotels, tiny clubs, lodges, motels, businesses, and housing in this area would be included in taxing, etc. In other words the important people are holding the Flamingo against huge amounts of money that would be paid if it becomes the City of Las Vegas. With this new information, Sedway stated that people have no choice but to back the Flamingo 100%.
Siegel then proceeded to call a blacked out number and bitterly complained that the Flamingo is being targeted. He stated that other places such as the Standard Oil and radio station had received the go ahead for their places but the Flamingo had to stop.
On September 6, 1946, received a call at the St. Frances Hotel in San Francisco. Shortly thereafter, two men talked about slot machines, one being addressed as Benny. There was general discussion concerning the contractor for building arrangements for power and hot water. It was stated that January 4th was the date of the planning. There were no bids at that time for equipping the casino, and mention was made of a March date which was of interest to "the other side". It was decided the equipment was to go in the basement and the plan originally was made to show the heating unit under a separate building. Someone then detailed instructions as to what another should state regarding the planning and construction, and the name of blacked out was mentioned. It was mentioned that the property was bought in October of 1945. The date November 12th and 28th were mentioned, apparently in connection with the time the property was bought. A contractor stated "About seven days after March 26th blacked out name came on the job. Blacked out name walked all over the job and he said "This job is okay, all except one thing --- the swimming pool. Blacked out name talked to blacked out name on the job. From the conversation it appeared that blacked out name apparently told them to stop the swimming pool and also ordered the hotel down the road to stop." The individual speaking stated that blacked out name made his mistake when blacked out name told him that the other construction (apparently the back portion of the hotel) was by another contractor, and he should go to talk to blacked out name. (It is assumed that the "other hotel" was to be the Thunderbird which had problems in constructions taking time to build and had to stop for the same reason until October of 1947. It finally opened in 1948.) It was stated that this individual was overheard saying that he was going to stop the Flamingo's swimming pool as well as the hotel being built down the road. When asked why the building had been relocated from the plans, Siegel answered that they hit some sort of well or water, and had to change the location of the building. When asked why there was a tower in the back, it was answered that it was originally built as a penthouse, something visible from the highway. The original room count was to be 150 but 95 rooms was finally agreed upon.
At 6:18am, two unknown men entered Suites 1133-34, and they talked about the diagram. One suggested a view looking down in order that one would be able to see the hall connections therein and get the picture of the building which was being discussed. The two then discussed governmental regulations pertaining to the buildings. A group then entered the room. Siegel had remarked "they are going to indict us now so what's the difference." Blacked out man answered "I am a business man. There is not enough money in Vegas or in all the hotels in Vegas for me to go to court on an indictment. I have it on the very best authority that the Commissioner decided that if the case went a certain way it would be referred for criminal action. There must be "prompting" for that to happen. Siegel then discussed a deal that he had with George Raft and a third person and told of a race track that had been rebuilt despite the prohibitions against such construction.
L.A. Times 9/10/46
Rights or Wrongs - A recent visitor in Las Vegas was amazed at the building boom going on there. A huge night club, backed by Bugsy Siegel and called the Flamingo was started only a few months ago. It features four swimming pools, and reservations are already being taken for a November opening. Yet our returned soldiers can't even find a shed for shelter - Hedda Hopper's Column taken from FBI Files
In an undated status report on wire tapping, Siegel told Greenbaum that this matter was straightened out and the CPA hearing on August 14, 1946 cost him $15,000. They also discussed Senator Patrick McCarran's putting the heat on the Flamingo. Greenbaum stated that he overheard a conversation at Del Mar indicating that McCarran is the person responsible for the "heat" and he got a letter from Florida "telling about this guy". Siegel remarked that he was attempting to ascertain the source of the opposition and that he was presently working through San Francisco to find out where the "beef came from."
Siegel stated that when the recent discussion arose as to whether the areas including the resort hotels and night clubs on the Las Vegas-Los Angeles Highway should be incorporated within the City of Vegas, blacked out name took the position that he would support such incorporation provided the City of Las Vegas would not grant gambling and liquor licenses to the Flamingo. Greenbaum reminded Siegel that he had an excellent contact in Washington. Siegel replied that was good but first he wanted to contact blacked out name since he was a very good friend of McCarran.
Siegel then called a blacked out name discussing the Flamingo. Siegel was told that Flamingo would need approximately $500,000 more. Siegel replied probably more like $550,000. Blacked out name stated that blacked out name should actually go to Vegas himself and the see the hotel. This person stated he could give a description that it is a single story building of lattice steel of approximately 55,000 square feet, which housed the restaurant, bar, kitchen and casino. The cost of this was estimated at $420,000 exclusive of furnishings. Siegel was asked about cottages and Siegel stated "I'm giving you what we have. This is one building, we haven't started any cottages yet. The building is about 80% completed." Blacked out name stated "Then, we have a three-story and penthouse hotel building, 100 rooms of 55,000 square feet reenforced concrete. That building is going to cost us approximately $770,000 without any furnishings."
Blacked out name asked about the second building and it was stated it was about 60%-70% completed. They should be through pouring concrete by September 15, 1946. In addition to these two buildings they would have some store buildings that would represent approximately 6,600 square feet which would be of concrete block construction on concrete. The cost of these buildings were estimated at $60,000. Landscaping for the hotel would be about $150,000. It was estimated that the costs of the buildings had been estimated at $14.00 per square foot.
This person stated that he would need all of the information prepared in a statement form to be submitted for the loan. If they needed a complete set of plans then they should be sent as well as a detailed summary of the money so far expended. He then asked if anyone included the east of land in the estimate. Blacked out name replied that the land cost of $68,000 had been included, and that the builders had an August 19, 1946 balance sheet reflecting how much money had been spent so far, the balance of their money in the bank, and an itemized statement as to the amount of money spent on each structure.
Blacked out name stated that the plans for the hotel and the front building were not complete. When asked if the architect had a set of plans it was stated "No, the finish may not be completed; the printing specifications. We are working on those things now. We have all the structural and detail plans, but some of the detail plans may be missing."
On September 11, 1946, Siegel was working on the Trans-America Wire Service in Los Angeles, and waiting for the wire to be laid in Vegas.
The night before the September 12, 1946 hearing, a discussion of the resort took place with various people in Siegel's room in San Francisco with his attorneys being present. A discrepancy in the plans would be the main building which was the casino had changed its location. Apparently when they were building the casino, they hit a well or some sort of body of water. Siegel decided to move the casino away from the water altogether out of fear of what the water would do to the building.
One of the men in the room stated that he thought someone from the outside was hired to testify but no one in the room knew who this person was.
When asked why they lifted the freeze the CPA stated that it was clear that Siegel was planning shops and rooms because the January plans specified sewage lines, and utilities throughout the property, not just where the casino was located. They then hired a disinterested architect to look over the plans, photographs, and testimony and the architect stated it was clear that Siegel wasn't planning just a casino. He was laying the property to house rooms, and provide shopping for the customers. He did agree though that Siegel mislead the CPA by stating that there was only one building. That could be easily remedied, and could not be construed as a major infraction of the original plans. When asked, the architect stated that neither Siegel, Del Webb, or any other person had approached him regarding this hearing. This CPA hearing cost Siegel approximately $15,000.
In a memo dated September 13, 1946, the proceedings were described: The hearing took place about noon at 1355 Market Street. In attendance were a few blacked out lines, Siegel, CPA Investigators, and CPA Engineer from Washington. Photographs included the Flamingo building showing finished ends with windows, and plans dated March 8, 1946 which were filed in Clark County. Stadelman testified that he was architect for the casino building and took over the entire Flamingo project a few weeks ago. He testified that at all times corridors were contemplated between the hotel and casino and shops, which he referred to several times as the "connecting link". He also testified that the utilities tunnels previously mentioned were actually vaults leading into the building through the foundation wall for pipes and wires. The largest opening was 10 inches in diameter. He also testified as to the connecting roofs between the hotel, casino and shops. Blacked out name testified that various plot plans in evidence were in effect. A FBI agent contacted the Commissioner and he gave his opinion that the Flamingo project is now one building and that at the conclusion of the hearing he decided in Siegel's favor.
It was noted that an agent was at the property on August 21, 1946 and a fence was erected around the property lines.
At 10:30am on September 12, 1946, all gathered in Siegel's room at the St. Francis Hotel. It was pointed out to the others that it was the contention of the Government that the hotel was in reality composed of three separate buildings, the back, front, and center. All present thereupon apparently began to examine the plans of the hotel and one of the architects, pointed out that the foundations of the buildings would co-join. He indicated that the door of the one building was located at one point; immediately adjacent thereto was located an arch from this section of the building to an adjoining section, the wall continuing to an open passage which was roofed. "That makes the connection -- that's important -- that hasn't been brought up yet". At this point an unidentified individual, possibly Siegel, stated "tell them that this building, right here and right here are joined." Once of the architects pointed out that it required engineering to have a slip-joint but no physical connection. He then pointed out that "we have maintained a 15 foot passage through here. This lattice construction is joined with concrete. This point here where the roof comes down is an ordinary engineering factor. Instead of leaving dowels here we'll co-join it". He then stated that this was a necessity requiring this as an integral part of the whole structure -- "even if you did not put up buildings you would have to build a wall." They then discussed the building of a shield wall or wind break making the hotel property an enclosed area marking it off from the desert. Following this architectural features of several hotels, including the Desert Inn at Palm Springs, and the El Rancho Vegas were discussed generally. It was remarked that Plot Plan A dated July 12, 1946 was a plan which provided 60 rooms. Plan of February 22 provided for 100 rooms which would give an additional 1,500 square feet of space than that shown on the plans of January 12th.
In a September 16, 1946 memo to Agent Rosen, it was stated that Mr. Ostholthoff reported that the CPA determined Siegel and associates constituted the Flamingo to be one building and the CPA planned no further action against the property. Ostholthoff did not know whether the Bureau should proceed with the investigation concerning a possible CPA violation in connection with the Flamingo. Ostholthoff stated that the problem of proof would be different then the CPA case, and much more difficult. The CPA attempted to prove that there were two or more buildings being constructed on the Flamingo site. The FBI must go beyond that and find witnesses who would testify that Siegel and associates knew that and conspired to misrepresent the facts to the Government. He went on to state that any case against Siegel would be difficult to prove in view of his past experiences and present ability to secure legal counsel. "This investigation, if conducted, would show the interest of the FBI in Siegel's activities, but it is not generally believed that this will necessarily prevent investigation of Siegel's general activities from going forward since it is quite possible that he will believe that our interest in him is confined to the Flamingo Hotel project in view of the CPA interest in the matter."
On September 17, 1946, Siegel was involved in a car accident resulting in an injury to his jaw. His brother, Dr. Maurice Siegel, planned to fly to Vegas on the 18th to treat the injury. Siegel parked his car in front of the Hotel Last Frontier. Virginia Hill accidentally depressed the accelerator causing the car to lurch forward. In bringing the car under control before it struck a part of the Frontier, Siegel struck his face on the steering wheel. After Dr. Siegel arrived it was determined that the injury was actually very slight and Siegel considerably exaggerated the injury.
On September 18, 1946, a status memo stated that the FBI's goal was 1. To stop the building of the Flamingo, and 2. Trace back the money which gone into the construction of the hotel. He was told to obtain a copy of the transcript immediately and review it in the hopes that any statements made by witnesses could possibly constitute a violation of the Perjury Statute. Ostholthoff stated he saw an article in Variety Magazine to the effect that the U.S. Attorney at Seattle had stopped construction of a $100,000 theater building for violation of CPA regulations. He would arrange through the Seattle Office to obtain complete details concerning this matter inasmuch as it was not previously known that the U.S. Attorney had handled litigation in connection with CPA violations. Ostholthoff also requested a review be made concerning the American Distillery Company as information had been received indicating the possibility that some of the money of this company was invested in the Siegel project.
On September 19, 1946, L.A. FBI stated that it just maybe possible that Siegel was connected with the operation of narcotic traffic. They contacted the Narcotics Bureau who stated they had been investigating the narcotics conspiracy problem nationwide covering individuals residing in Los Angeles, San Francisco, New York City, Reno, Norfolk, Richmond, and Baltimore. From their information developed as a result of their investigation there was no indication that Siegel was connected with any individual indicted by the Federal Grand Jury in Los Angeles.
On September 20, 1946, blacked out name inquired of blacked out name if someone had left a package for Virginia Hill. When the answer was in the affirmative, he was instructed not to let anyone touch it as "it is full of money." He also remarked that Hill may disappear in a week of two to Chicago.
Around September 20, 1946, a report was prepared entitled Possible Violation in Connection with the Construction of the Flamingo Hotel. The theory of the violation was that Gus Greenbaum made a false statement to the CPA at Reno Nevada on April 29, 1946, when he stated both verbally and in writing that the Flamingo consisted of only one building, construction of which was commenced prior to March 26, 1946, the date on which all non-essential building was ordered stopped by the CPA. The purpose would be first to prove criminal violation of Gus Greenbaum and a possible conspiracy on the part of others which would include Siegel. The second purpose would be to reopen this matter under the CPA regulations which would stop the construction of the Flamingo. It is noted that Siegel had a considerable investment in the project and that the income from the Flamingo would amount of $2 million a year once it is established. Third purpose to see if this can result in stoppage of construction by Government order so Siegel would have trouble securing loans in California and Utah. The fourth purpose would be to give the FBI an opportunity to thoroughly examine the financing of the Flamingo which may show that Siegel placed into this property more funds than he had accounted to the IRS. The facts as stated was that Flamingo Hotel was located approximately six miles outside the city limits of Las Vegas. On December 12, 1945, Permit No. 112, was issued by the Clark County Building Inspector to blacked out names. This permit was for the laying of foundations of the Alhoa Tract, South Fifth Street, Highway 91, cost $5,000, foundations for six buildings. This is undoubtedly for the foundations of the six barracks appearing on the right side of the January 12, 1946 plot plan. On January 12, 1946, Permit No. 139 was issued by the Clark County Building Inspector to blacked out names for remodel dormitories Los Angeles Highway, cost $12,000. This again refers to the barracks appearing on the right side of the plot plan. Originally they were to build a one-story building containing a casino, restaurant, and offices. The plans stated only one building and the hotel did not appear on this plan. On March 26th, VHP-1 was issued by the CPA which stopped all except residential construction. On April 23rd a telegram was sent by the CPA to San Francisco to the Del Webb Construction Company, Wilkerson and Greenbaum ordering them to stop construction of the Flamingo. On April 29, 1946, they went to the CPA Construction Division at Reno representing that the project was one building and in support of that contention produced a blueprint dated January 12, 1946. Based upon their representations, a letter was written advising that since this construction began before March 26th, there would be no need for anyone to file an application for permission to continue with the construction. A transcript of a hearing before the CPA on August 13-14, 1946, shows that the Del Webb Construction records on the Flamingo project show that Webb's men arrived on March 21, 1946. Excavation was started on March 25, 1946, and on April 11th they poured some concrete footings.
In order to prove a violation of Section 80, Title 18, it was necessary to show that Greenbaum/Wilkerson made a deliberate misrepresentation. While there appears at this point to be no doubt that two or more buildings were being constructed on the project, they must prove that all included were aware of that but still agreed to misrepresent the facts. Greenbaum was considered to be one of the builders by the CPA and the public records listed that much. The FBI knows that actually he has nothing to do with the hotel, but is a figure head representing Siegel. It will be necessary to interview him to determine what conferences were held. It is also possible that Greenbaum would furnish them with other information concerning Siegel's activities in view of indications that he was tired of Siegel's domination even though there was no proof that this was true.
Also on September 20, 1946, a Special Agent went to visit the Commissioner to find out why he decided in Siegel's favor. He stated that in his mind there had been three material issues involved in the case:
He stated that he found that the Project, prior to March 26, 1946, embraced the casino, hotel and shops as a unit. In giving a basis for this finding, he stated that the most material evidence to his mind was black out name's testimony that in January 1946 he had made arrangements for utilities, sewage disposal, and telephones for the whole unit, and not just the casino, upon which he was at that time engaged in constructing. This person further stated that the various plans, as well as the construction itself, prior to March 26, 1946, showed that a casino, hotel and shops were embraced in the project from the start, or at least prior to March 26, 1946.
He stated that he found that there was one building. He stated that on this point he had requested the Secretary of the local office of the American Institute of Architects to select a disinterested architect. He stated that the architect selected was blacked out name who was acquainted to his problem and after going over the plans and photographs in evidence, after hearing testimony at previous sessions of instant hearing read, and after hearing six hours' testimony on September 12, 1946, gave his opinion that the project was one building. He stated that he made his finding on the this question on the basis of black out name's opinion, and could not recall any testimony of witnesses that particularly influenced his decision in this regard. He stated that while Respondents admitted that in construction of the hotel, part of the hotel was not started until April, 1946, he felt that the project was one building and that the time of starting construction on one part of that building or project was not material.
He stated that he himself had injected this question into the case and that nothing had been introduced on this point at the time of the first hearing. It subsequently developed that there were two changes, one as to material used and one as to the size. He stated that at the outset the construction was to be of lattice steel and was later changed to reinforced concrete. The Commissioner felt, however, that this was a change from a more critical to a loss critical material, and should not prejudice the Respondents. He stated that in regard to size, the building actually being constructed was determined to be some 7,000 square feet less than that shown on the plot plan of January 12, 1946. He felt that this change also resulted in a conservation of materials and thus was not in violation of CPA order. He stated that he had ruled that the plan plan dated March 22, 1946 introduced into evidence as exhibit 4 was the 'definitive document as to size, and construction was in closed conformity to this plan.' He stated that while there was testimony by blacked out name and other witnesses for the Respondents at the first hearing that the plan of January 12 was the basic plan, he felt there was no material difference between the two plans which would influence his decision, the chief difference, he felt, being that the March 22, 1946 plan was small in size.
The Commissioner felt that there was no evidence of misrepresentation and stated that none had been offered by the Government. He stated that blacked out name did not testify and he thought blacked out name representation that only building was being built was merely a conclusion. He stated that he felt that Respondent's testimony at the first Hearing, that tunnels continued under the entire 'horseshoe' was also only the conclusion of the witnesses, and their idea of the tunnel which they had gained from having talked to the architects, and did not feel that they were materially mis-stating the facts. He stated that he 'tossed the tunnels out' in making his decision, giving testimony regarding the tunnel's weight only in connection with other evidence showing a physical connection between the buildings. . . . He felt that the Government had not sustained the burden of proof that the buildings were separate."
The Commissioner stated that he had not been approached by anyone during the entire Hearing and stated that he had purposely given his decision immediately on the conclusion of the last day's testimony rather than reserve it, since he felt that if anyone were going to approach him they would do so during the time he had reserved his opinion.
On September 23, 1946, agents retrieved Siegel's registrant's affidavit dated February 20, 1943. Under Marital Information he stated he was married at 332 Rogers Ave., Brooklyn, New York. Siegel stated that he had earned $40,000 in the past 12 months and showed as his dependents, Max and Jennie Siegel and his two daughters and wife. He stated that he began contributing to the support of his father Max, age 64 and mother Jennie age 63 in 1929. His parents lived at 1719 67th St, Brooklyn, NY. Under his job title he put "Investments and Promotions. I investigate deals such as hotel purchases, sporting event promotions and other enterprises and consummate deals." As to the specific nature of his duties, he put "I do the following kind of work: In consummating deals stated above, I usually obtain an interest in return for my work. I am required to make trips to appraise and investigate all matters connected with such enterprises and to negotiate terms." His average earnings were shown to be $50,000 a year. A second affidavit dated October 28, 1933 was found that revealed that $3,500 was contributed to his mother and father.
On September 25, 1946, it was decided that the Government would not pursue any further action of the CPA against Siegel. They had no new evidence to submit to the CPA. It was stated that at this rate the resort would cost $14,000 per square foot. It was noted that Jack Dragna had invested $5,000 in Trans-American Wire Service. He secured 12 telephones and expected to start operating immediately. West Coast News was the local Trans-American outlet located at 307 S. Hill, Los Angeles, #604 and 606. Dragna had ordered a couple of phones for Vermont Avenue. A background check on Dragna revealed that he is one of three brothers, Tom and Eddie Dragna. He and his wife Frances and two children Frank and Ann reside at 3927 Hubert Avenue, in Los Angeles. It appears he does all of his business from his home.
On September 26, 1946, blacked out name called the Beverly-Wilshire Hotel and stated he desired to get a two bedroom suite for one month beginning on September 30, 1946, for Hill. The man stated he would do his best and would let them know on Saturday. Blacked out name stated he would give him $50,000 as a bonus. Hill called blacked out name and stated she was going to see a ranch she liked and may buy. Hill stated she was going to Vegas and return on October 2, 1946. She stated she was moving to the Beverly Hills Hotel on September 30, 1946 and Siegel was going to New York, on October 3, 1946. Hill reported that she was going to Chicago on October 7, 1946.
FBI in New York noted that on September 26, 1946, Lansky's chauffeur, driving a car bearing New York license 4L-3392, went to the Hollywood Theater Ticket Agency and appeared to be waiting for someone. After approximately one hour he left unaccompanied.
On September 27, 1946, it was stated that the L.A. Bureau pursue the investigation concerning a possible fraud violation in connection with the construction of the Flamingo in Nevada. It was stated that blacked out name presented the original blueprints for the casino building only and that these plans had been submitted prior to the original freeze order and appeared to be authentic. In addition to the original plans for the casino, the respondents introduced a plot plan which was merely an architect's sketch showing that the completed hotel would consist of one building in the shape of a horseshoe. The informant was of the opinion that the cancellation of the freeze order was because over $1 million was already expended and that was the major factor of allowing the construction to continue.
On September 29, 1946, radio announcer Drew Pearson stated that John D. Small issued an order stopping the construction of the shops and bungalows. The reason was not stated. Reporters stated that even though a stop order was issued, on September 30, and October 1, 1946, construction was still going on with Siegel ignoring the order.
During this time Siegel was in New York being seen with Frank Costello at the Copacabana Club. It was speculated that he was trying to obtain a loan to continue construction of the Flamingo, or in the alternative, selling his interest in the resort and then buying it back once the resort is finished.
On September 27, 1946, the FBI requested all transcripts and evidence on the latest hearing as they wanted to conduct an open investigation concerning possible fraud against the government in connection with the construction of the Flamingo on September 30, 1946.
On October 7, 1946, a request for a wiretap was submitted for Siegel at 721 N. Doheny Drive, in Beverly Hills, phone number CR6-8338.
In October of 1946, Siegel was in New York visiting his ex-wife at 88 Central Park West and returned to his room at the Hotel Roosevelt at 9:00pm. At 2:30am Hill called from Chicago telling him she was staying in room 814 of the Edgewater Hotel under the name Vera Harding and had a personal conversation for 45 minutes. She called back at 4:00am, and continued the conversation. Siegel stated that Del Webb was flying to New York City from Chicago in his own plane and would visit Siegel upon his arrival. Siegel told her that he still had quite a bit of work to do but he would leave the following week, pick her up in Chicago and they would return to the West Coast together. Hill talked about a blacked out name which angered Siegel. He told her to take all his clothes out of the place and to have nothing further to do with him. He hung up at 4:15am.
It was noted that while Siegel was in New York and apparently had no knowledge of what was going on, the veterans organization, the unions for the bricklayers and plasters, and union local 631 got involved sending telegrams to Small stating their paychecks were relying on the construction of the resort and to lift the order. Frank Harris of the Building Trades Council in Las Vegas sent a telegram to Small stating that as of October 3, 1946, about 300 men were hired to work on the Flamingo with approximately 50% being veterans who were relying on their paychecks to live and feed their families. Without the Flamingo, families could become destitute and therefore, the Flamingo was needed to assist these veterans and union workers support their families. This construction site was a necessity.
Now the issue snowballed when the Legionnaires got involved when they voted overwhelmingly for a resolution raising the Wyatt freeze on commercial construction in Las Vegas. This resolution offered by H.E. De Villiers demanded that "restrictions on commercial type buildings be resolved by the Civilian Production Administration in line with the need of veterans in the various communities both with respect to need for housing and for employment of said veterans." Commander Madison B. Graves and members of the post heard a lengthy discussion on the resolution, and also a second resolution, which proposed investigations of commercial building operations on East Fremont Street. Several speakers asserted that the current freeze jeopardized employment of 4,000 men in the community of whom half were residents.
On October 8, 1946, Agent Belmont of the New York FBI inquired as to the surveillance of Siegel while he was in New York. He was told that the investigation was dependent on whether or not the CPA stopped the construction on the Flamingo.
On October 8, 1946, Siegel went to the Copacabana Club and talked with Frank Costello. The sum of $75,000 was mentioned. Siegel left early as he was having dinner with his two daughters.
In October of 1946, it was noted Siegel was having difficulty completing the Flamingo. Gus Greenbaum reminded Siegel that he had an excellent contact in Washington. Siegel stated that he did not want to utilize the contact of Greenbaum but wanted to talk to a very good friend of Senator Patrick McCarran of Nevada.
On October 9, 1946, a status memo was prepared stating that Siegel was spending a considerable time at the Hollywood Theatre in New York City, which was frequented by Broadway characters and racketeers.
In a status memo dated October 11, 1946, it was noted that Siegel had been in communication with Frank Costello along with other individuals who used only their first names and whose identities had not been determined. Siegel was seen meeting Costello at the Copacabana Night Club. He had spent one entire morning at the Park Lane Hotel. He was also seen entering Mastan Company, Inc., at 350 Fifth Avenue, carrying what appeared to be a bundle of floor or building plans. He was also seen entering the Emby Distribution Company. Investigation into Emby and its activities in the distribution of juke boxes under a franchise from the Rudolph Wurlitzer Company in Tonawanda, New York was taken. From informant information it was stated that the principal reason for Siegel's visit to New York was to obtain a loan of a million and a half dollars. It was also ascertained that he was leaving October 15 or 16. It was determined to stop surveillance on this date. It was stated that Meyer Lansky, 211 Central Park West, had a close association with Siegel. It was believed that some of Siegel's funds in the building of the Flamingo might have had their source in Lansky. It was discovered that the Emby Distribution Company, 525 W. 43rd Street was where Lansky had an office. It was determined that Lansky was not there when Siegel arrived and that Siegel in no way contacted Lansky during his stay.
At the same time it was determined to stop physical surveillances on Frank Costello in connection with the Capga case. It was noted that Costello visits the lobby of the Hotel Waldorf Astoria practically every day. It was also noted that in the evenings at about 6:00pm, he visited the Copacabana Night Club where he conducted his business and was believed that he had a finances in the club.
Meanwhile, back in New York Siegel instructed Greenbaum to have checks made out totalling $500,000, payee unknown, to retain 50% of the resort, and total control. Even though the name was blacked out it appears that it was William Wilkerson. It was stated that Del Webb Construction Company was the builder of the Flamingo, Gus Greenbaum was an associate of Siegel, who spent a considerable time at Vegas, Moe Sedway is a front man for Siegel in Vegas. Siegel had said that he had someone who was interested in supplying the necessary money to effect the take-out of the Flamingo from Wilkerson. Webb had told Siegel that he wanted his $435,000 by October 4, 1946, and if he was not paid he would stop building the resort. Siegel stated that he was getting one-quarter million dollars in front money and another one-quarter of a million in notes Siegel instructed Greenbaum to make out checks, one for $60,000, one for $40,000, and two for $10,000 each. The $40,000 and one of the $10,000 checks was to be made out to the Nevada Project Corporation. The second $10,000 check was to be brought to the Gold Nugget downtown. Siegel said to make out another check in the amount of $45,000 to give to the Las Vegas Race Books. Conversation then took a turn when Greenbaum stated that this 100 room hotel is costing $3 million. Siegel would have to charge $58 a day to come out even. Siegel reminded him that he was not relying on the hotel, it was the casino that would bring in the money and he wasn't worried, the Flamingo would eventually make money. He knew that it would take time for the Flamingo to catch up but she would eventually treat him good. Greenbaum told Siegel he was entitled to his opinion but if he was thrown into the situation that Siegel was in voluntarily, he wouldn't mind people calling him crazy too but he wouldn't do it. He was relying too much on the Flamingo and he would give up if he was Siegel and move on to other projects. He then added that he would pay Webb the next day as well so construction can continue. Siegel then stated that a blacked out name had his power of attorney as he wouldn't be at the Flamingo the next day, and to call him if anything needed a signature. It was apparently to the agents that Siegel ignored Greenbaum's advice and he was determined to complete the Flamingo.
On October 14, 1946 a FBI agent wrote that he heard a radio broadcast that the CPA was stop the construction on the Flamingo. The owners would be allowed to finish the hotel and casino, but no additional buildings. On October 18, 1946, agent Ostholthoff advised that when he visited the Flamingo on the 17th, men were still working on the resort. It was stated that the usual number of cars belonging to to the workers was observed on the property. The workers were painting the power house, working on the south wing hotel, north wing of the casino, and constructing a concrete retaining wall on the side. Men were observed working bulldozers and tractors in front of the hotel and there were men working in the nursery. Ostholthoff stated that nothing tangible would be developed as a result of interviews with the remaining principal witnesses. He wanted to know what the Bureau wanted him to do now. He was told to check the hotel again and see if the workers were actually continuing the construction.
On October 15, 1946, an FBI agent wrote that the general counsel of the CPA had called and they were perturbed over the radio broadcast by Drew Pearson. The rumor was that the FBI was also investigating a certain phase of the case. Administrator Jack Small was upset by the release which was made by his public relations man. It was stated that Small was still reviewing the matter, that it had not been formally submitted to the Department by the CPA.
It was stated in another memo that several representatives of the CPA were discussing the possibility of either civil or criminal action against the Flamingo. The organization flaunted CPA restrictions against unnecessary building and was engaged in a large project in connection with a gambling casino. The representatives received information that the FBI was investigating Siegel, who allegedly had a control either personally or through his associates, of the Nevada Projects Corporation, which in turn controlled the Flamingo. They wanted all their information to see if the FBI had anything that could stop the Flamingo for good. The request was given to the appropriate Division and the reps would get a call back from the FBI.
It was reported by the FBI that Siegel had ceased involvement with mob activities as all of his time was being consumed by the Flamingo and getting over the hurdles being presented to him, as well as concentrating on his wire service but on a much lesser degree. It was also speculated that Siegel was friends with one or more of the panel at the CPA.
It was further ascertained that Bank of America didn't want to give Siegel a loan as in their opinion that Las Vegas was not a first-rate town and didn't deserve a first-rate hotel.
In an October 24, 1946 memo, Agent Rosen stated that "... interviews with the architects employed on the Flamingo . . . some data possibly implicating Siegel in the commission of perjury before the recent CPA hearing, I think any interview with these people will be futile. They obviously are going to protect Siegel, who is paying them apparently well for their services, and in addition, they will probably be afraid to furnish any facts if they have them because of implicating themselves in an illegal proceeding. Entirely aside from this, I doubt very much that a successful prosecution could be had in the Federal Courts for false testimony, even though it is under oath, before an administrative board such as a CPA examiner in San Francisco. After all, we took a terrible beating with a much stronger case in the blacked out matter and, consequently, it is futile, I think and actually hurts our prestige to conduct interviews of this kind. I recommend, consequently not to conduct these interviews and that the entire matter be closed out immediately."
In a status report dated October 29, 1946, it was noted that blacked out name of the CPA stated that blacked out name contacted him regarding the application to continue construction of the Flamingo. It was stated the hotel construction began December, 1945, and concrete foundations for the west and south buildings were poured at that time. Blacked out name was instructed to furnish the CPA a letter, showing that construction of the hotel had began before the freeze order. The letter reflected construction started on December 4, 1945, and the first concrete was poured on January 5, 1946. If representations were true, the hotel construction could have passed and no application was needed. Siegel appeared to be hard pressed for front money to complete the hotel. He has stated that he had the cooperation of Senator Patrick McCarran.
In a November 7, 1946, memo it was stated that while in New York in October, Siegel had visited his ex-wife and children and then met with Frank Costello at the Copacabana. He was believed Costello made arrangements for a loan at the Mastan Company in New York. Siegel had suite #627 and 629 and was reserved under the name of Rudolph Wurlitzer Company. On October 6th Mrs. Siegel and her two daughters were observed leaving their residence and getting in her Chevrolet automobile, NY license 4I673. Siegel entered the automobile and they proceeded to 1719-23 67th Street in Brooklyn. This was the address of Siegel's mother. They left and all proceeded to 410 Ocean Parkway, Brooklyn. Then they proceeded to 46th Street and Madison Ave., where Siegel went to his room. Mrs. Siegel left for her home. The next day Siegel proceeded to the Empire State Building and took out his car what appeared to be floor or building plans, and proceeded to Room 817, the office of Mastan Company, Inc. Since the Los Angeles office indicated that Siegel was trying to get a loan, it is assumed that the plans he was carrying was to the Vegas Flamingo Hotel. Siegel and unidentified man left the Empire State Building, boarded a 5th Avenue bus, and got off at 49th Street and 5th Ave. They then entered the RCA Building in Rockefeller Center. Another surveillance team notified them that Frank Costello was at the Copacabana at 5:45pm. At approximately 6:15, Siegel went into the Copacabana, walked up to Costello and greeted him and his companion. Then Costello's companion and Siegel went to a table and remained together until 7:00pm. Then Costello's friend left and Siegel joined Costello. It was observed that exclusive of Costello's two visits with Siegel, he held conference with six other persons at different tables at the Copa, and it was also noted that young men in the place were frequently making phones calls and reporting to him. Therefore, it was noted that Costello used the Copacabana at least part time, for his business activities. On October 9th, a bell boy arrived at Siegel's room with the newspaper but he was unable to enter as Siegel couldn't get his door open. A hotel employee was summoned and was able to open his door. It appeared that when Siegel went into the room he didn't know that the door was not self-locking and during his rounds, the night watchman noticed that his door was unlocked and locked it apparently with a key that did not quite fit the lock and stripped it. After the door was eventually opened, Siegel was very annoyed but the hotel employee convinced him as to what happened. Siegel stated "I was lucky there was a wide-awake night watchman."
In the early afternoon, Siegel out of his car, made a pretence of keeping an appointment, but only walked 1/2 block and then back to his car which was still running and left. It was obvious that Siegel was attempting to shake the surveillance and in view of his movements he was successful in doing so.
In another letter dated November 7, 1946, agents were instructed to determine the exact source of Siegel's income. Frequent allegations have been made that he was engaged in the narcotics business and allegedly controlled the shipment of that commodity on the Pacific Coast.
On November 9, 1946, blacked out names were planning to open a gambling house at the corner of Santa Barbara and Fairfax Streets in Los Angeles and attempted to obtain financial backing from Siegel. Siegel refused to back them due to the fact that he distrusted them as a result of a recent round-up of narcotics peddlers in the Los Angeles area. It was noted that even though Siegel claims he had no front money, he had enough to back this endeavor if he trusted the men.
In November, 1946, Siegel changed his room at the Hotel Last Frontier to 412. It was stated that Siegel may have figured out there was a wiretap in room 401. Also during this month it was stated that Small's stop construction order was not lifted as yet but construction was still continuing without any penalties. Siegel stated that when the construction was finished the resort would cost closer to $4 million, instead of the original $3 that was estimated.
In an undated memo, it was reported that the L.A. office had given a status of Siegel and Hill. They pointed out that Siegel himself was getting very curious as to where Hill was getting all her money. On several occasions Siegel became very angry when Hill refused to relate her source of income to him so it is obvious that he doesn't even know where her money is coming from and she is definitely working independent of Siegel.
On November 9, 1946, it was reported that Siegel returned to Vegas from New Mexico and retired immediately to his room at the Hotel Last Frontier. Blacked out named called Siegel regarding the FBI. Siegel said that no one realized the trouble he had been having with the FBI; that during his stay in New York he learned that Meyer Lansky's and Abe Zwillman's (aka Longy), telephones were tapped and that Siegel and his friends were all under the constant watch of the FBI. Siegel stated "They woke me up in the morning and put me to bed at night." Siegel also stated that he talked with blacked out name of the Del E. Webb Construction Company while he was in New York, and was introduced to John Small, CPA Administrator. Small had not issued the cease-work order on the Flamingo as yet, which cease work order was mentioned by radio commentator and newspaper columnist Drew Pearson on his Sunday broadcast about three weeks ago, and in deference to which the Bureau withheld any open and active investigation. Siegel claimed that Small told blacked out name that he cannot take any action to actually assist them on the hotel job until someone "gets Pearson off Small's back." Siegel planned to open the casino part of the hotel on December 26, 1946, and had as his entertainment Xavier Cugat's orchestra, Jimmy Durante, and Frank Sinatra. He expected to pay approximately $50,000 for this entertainment for one week.
Los Angeles Times, "Las Vegas Club Building Halted" Washington, The compliance division of the CPA has temporarily halted construction of the Flamingo Club at Las Vegas, Nev, pending an investigation to determine whether construction was underway before CPA issued a stop order on nonessential building. The club, when completed, was to cost between $2.5 and $4 million . . . . " It appeared that Siegel was able to get a loan from the Standard Insurance Company located in Los Angeles.
On November 17, 1946, blacked out name residing at the Hollender Hotel in Cleveland, Ohio, called Dragna and asked for Ben Siegel who apparently didn't know that Siegel spent most of his time at the Flamingo and Hotel Last Frontier.
On November 19, 1946, a conversation took place between blacked out name and Jack Dragna. Dragna requested him to ask Siegel if he had gotten to blacked out name, local Los Angeles politician and tango game operator, in an effort to influence blacked out name located "juice men" for the District Attorney's Office in Los Angeles County. In this discussion Dragna stated that only word from Siegel would be necessary and that Benny could do more by that word than any other individual. The conversation indicated that blacked out name was on juice only to a certain extent for the other wire service and they were desirous of making their man in an effort to boost Trans-American. Dragna repeated that only one word from Benny was necessary and that blacked out name had a lot of respect for Benny "if you know what I mean." Dragna was advised that a local Los Angeles jail bondsman and a friend of bookmakers and underworld characters including blacked out name and Ben Siegel could possibly accomplish the same thing that Siegel could do. Dragna stated that he thought Benny could accomplish their purpose in just "one minute of talking" that he could talk anybody out of anything. He would feel better if Siegel would handle this matter and asked this person to ask Siegel if he would do it.
On November 16, 1946, a jewelry robbery occurred at the Sunset Plaza Apartment at 1220 Sunset Plaza Drive, Hollywood. Apparently $20,000 worth of jewelry was taken. Among items taken was one very rare dark blue star sapphire, 25 carats, set in platinum mounting, heavy man's type, valued at $9,500; also stolen was a pair of cuff links, four vest buttons and two shirt studs, sat in square shape with baguette diamonds on surroundings edges, a blood ruby in center, valued at $2,500. On November 21, 1946, blacked out name, Siegel's body guard and gunman appeared at Vegas with jewelry which answered the description of the robbery items. The informant stated that the blacked out name had departed from Vegas to Los Angeles prior to the date of the burglary and had returned to Vegas shortly thereafter in possession of the jewelry. Further investigation and contemplation of arrests in regard to this violation was being considered but it was not known if the blacked out name met with Siegel after the robbery or if Siegel even knew what was going on.
In late November 1946, a report stated that Siegel had been in and out of Los Angeles on several occasions since his last report. He was maintaining an apartment at the Chateau Marmont Apartments, located on the Sunset Strip. He and Virginia Hill lived there when in Los Angeles as man and wife and they were registered as Mr. and Mrs. Hill. They occupied penthouse 6-D for which the were paying $24 a day rent. Siegel's visits to L.A. had been over weekends for two or three days at a time and his activities appear to be mainly along social lines. He was devoting considerable effort and time to the construction of his new hotel Flamingo, in Las Vegas, Nevada and had little time for anything else.
On November 24, 1946, it was noted that Siegel had contacted blacked out name, a local toughie and gangster, and wanted to see him immediately "to take a deal". The informant stated that Siegel stated that he had called The Kid and he would find out Tuesday about the one-half ton truck and the station wagon and that he was getting 200 cases of 90 proof and 50 cases of scotch and 50 cases of gin, etc., for the Flamingo. Another informant stated he spoke with Jack Dragna and he said that when Siegel comes to town for a day or two "we keep jumping around."
On November 27, 1946, a status letter reported that they were determining whether Siegel was committing any violation against the laws of the U.S. or whether any past violation can now be proved. Recently developed information indicated that one of the primary activities of Siegel was trafficking narcotics. They were developing factual information which would either prove or disprove the allegation. This comes from his relationship with Virginia Hill in that she is a very free spender, and has unlimited funds. However, this money does not appear to be Siegel's, it is hers for her own personal needs. She threw expensive parties, wore expensive clothes, spent freely at night clubs, tipped very heavily, and overall dispensed very freely her money. Hill was in constant contact with dope peddlers in the Los Angeles area. She is known to have associated with a blacked out name. She was known to contact Chinese and Filipine places of amusement; however, the purpose of these contacts was definitely undetermined. Hill has used the alias of Oma Virginia Hill, Oma Virginia Rogers, Oma Virginia Griffin and Oma Virginia Valadez. It was noted that Hill had visited a den in Chinatown where outsiders were excluded and that "smoking" was going on and "they were flying high." It was also known that frequent reference was made between Hill and Siegel to "candy". It was a possibility that Hill and Siegel had business interests along similar lines, possibly in narcotics. Even though Siegel seemed to be totally "concentrating on his building in Vegas", he just maybe the King-Pin narcotics distributor in the West. In addition, the possibility of prostitution on the part of Hill should not be overlooked. It was noted that out of her three marriages one husband was deceased and another was an Alabama football player. The San Francisco Division was requested to investigate and report any activities blacked out name which might indicate narcotic activity or prostitution activities. In this connection, it was suggested that mail covers be employed and available informants be used or that a suitable informant be developed who would know the actual operations and designs of Hill. From these observations and from other information already reported, it is apparent that Siegel and many of his hangers on are involved in the narcotic business and it was desired to develop, if possible, concrete evidence which would be admissible in the event of Siegel's trial.
In another status memo it stated that the San Francisco office was securing all available information on blacked out name with an idea of tieing her in to narcotic activities along with Virginia Hill. The New York office was obtaining information on narcotic activities there. It was stated that since Joe Adonis and Frank Costello were close friends of Siegel, investigation should be undertaken to determine whether the syndicate there is engaged in the narcotics traffic. The Vegas office will continue with close scrutiny of the activities of Siegel and obtain information on Virginia Hill. The Cleveland office was obtaining additional information concerning blacked out name who recently spoke with Siegel and then to Dragna when Siegel left. The Chicago office was to determine whether blacked out name, a close friend of Siegel was involved in narcotics trafficking. The Los Angeles office was considering the necessary steps to have blacked out name furnish additional information and it was thought that continued contact with him would result in further information concerning Siegel and the narcotics racket.
On November 27, 1946, a letter was written stating that the New York Division were assigned to conduct the surveillance of Siegel beginning with his arrival at the Laguardia Field Airport at 9:15am on October 5, 1946. Notwithstanding the fact that he apparently arrived as scheduled the report indicates that Siegel was not observed at the airport. Subsequently he went his went alone and it was later ascertain that he registered at the Roosevelt Hotel in New York City at 11:00am. The Bureau was extremely concerned in view of the fact that the surveillance was not properly handled. They requested a complete explanation regarding the failure of Agents to properly identify and watch Siegel on this occasion.
In an undated article by Westerbrook Pegler(sp) it was stated that:
In December of 1946, the FBI installed "technical surveillances" on lines LD 1, 2, 3, and 4 at the Las Vegas Turf Club telephone number 7070. These were the same lines that were temporarily installed in July of 1946 but were taken out when the investigation ended. These lines were to the "boiler room" over the Club located on the second floor, at 23 Fremont Street.
Details as to the plans and steps actually taken by subject in bringing the Trans-American Wire Service to Vegas and the actual cutting off of service furnished by the Continental to various Vegas race books were reported in the matter entitled "Reactivation of the Capone Gang", Chicago origin. As of 8:00am on December 9, 1946, Siegel and Moe Sedway terminated their use of the Continental Press.
Service at all race books in Vegas and the new Trans-American Service furnished to their distribution center in offices located on the second floor of the Golden Nugget Gambling Hall. In addition to the race books previously existing at the Las Vegas Club, the downtown Frontier Club, the Golden Nugget Gambling Hall, the Boulder Club, and the Eldorado Club, Siegel and Sedway furnished wire service on the same date to the downtown Monte Carlo Casino and opened negotiations with the Hotel El Rancho Vegas, and Hotel Last Frontier for the operation of race books. The contemplated race books in the last two hotels had not as yet materialized.
An informant stated that Siegel was also contacted by a member of the Del S. Webb Construction Company in Phoenix Arizona, who advised Siegel that a former Portland, Oregon newspaperman was attempting to obtain competitive news service in Portland and that they desired Siegel's assistance in prohibiting this competition and in obtaining the Trans-American outlet at Portland. They were presently using Continental Press Service and served as distributor for Continental Press Service in the Portland area.
On December 2, 1946, a status report stated that the Flamingo was a $4 million resort hotel and gambling caisno presently under construction at Las Vegas, Nevada by Siegel, Lansky, Costello, Adonis, and blacked out names. Siegel recently moved to Vegas for the purpose of making his permanent resident here. As soon as the Flamingo was completed, he would occupy the hotel's penthouse on a permanent basis.
On December 4, 1946, Virginia Hill spoke with a blacked out name stating that she was going to Vegas on December 5th. Hill stated she was having a party and "The Southern Gentleman" would be there. Hill informed him that at the time a blacked out name had a penthouse at the Flamingo for $35 a day. Hill was "bragging about it and shoots off her mouth about Siegel going to make lots of money." Hill stated that blacked out name wanted to go to the Flamingo's opening but was afraid to, that Benny would not let him attend. Hill stated that Siegel was in Vegas and that she was alone but she did have a gun. It was also noted that Siegel and a blacked out name was bringing three people to Vegas under assumed names. These men will stay at the Flamingo, but would not work there and would not appear to be connected with the hotel in any way. However, he will have them available in case he needs them. He said specifically that he was bringing blacked out name, one of his old gunmen, out to be on hand.
Blacked out name advised agents that Slapsy Maxey's Restaurant at 5665 Wilshire was commonly known among Chicago hoodlums and was owned by the Syndicate. We asked this informant how he knew this to be true and he said that it was only rumored among his Chicago hoodlum friends that the Syndicate controlled by Al Capone and Frank Costello put up the money for the restaurant.
On December 5, 1946, it was noted that blacked out name advised him that some years ago he was investigating narcotic activities and he had ascertained that Virginia Hill had requested the Circle J. Ranch in Newhall, CA. He would have to look up the information but he remembered receiving information that narcotic activities were conducted at the Circle J. It was also stated that the 150 foot San Pedro motorship Pacifica was lost with her crew of 14 off the Central America coast. It was noted that the cargo the ship was carrying belonged to Dragna.
On December 6, 1946, Agent Tamm wrote to Hoover regarding attempts to determine if Siegel was involved in narcotics and more importantly, was Virginia Hill involved. The question was where all of Siegel's front money as well as unlaundered money comes from and how was Hill obtaining the fabulous amounts she spends daily. No unreasonable amount of manpower will be put on this case but Tamm felt it needed to be investigated.
On December 6, 1946, blacked out name stated that he would "unload that stuff." It was reported that it may be narcotics for Siegel and the agent was reminded that Siegel had been ordering "stuff" for the Flamingo and not to get his hopes up that it was narcotics.
On December 8, 1946, a L.A. Times article stated: "Robbery suspect seized - Having posted $5,000 fond, Jack Ignacia Dragna, 55 year old former gambling boat operator, was released from the County Jail on a writ signed by Superior Court Judge Walter S. Gates. Dragna was booked on suspicion of robbery Friday night following his arrest by the police gangster squad at the Hollywood Legion Stadium following the fights. Arresting officers B.E. McClure and R.L. Meade said Dragna, who gave his home address as 8927 Hubert Ave., closely resembled a man sought in connection with recent L.A. robberies."
On December 9, 1946, Siegel and Sedway terminated their use of the Continental Wire Service. Service at all race books in Vegas was catered by the Trans-American Wire Service.
On December 11, 1946, a confirming letter from Agent Rosen stated they wanted to put the wire tapping back on the Last Frontier's lines and approval was given on November 30, 1946. It was determined that the Trans-American News Service was established in the two rear rooms on the second floor of the Golden Nugget, located on Second and Fremont Streets, telephone number 4040. If any other wire tappings were to be authorized they would have to get the okay from the Attorney General.
On December 12, 1946, a memo was sent regarding Trans-American stating that it could be that Ignacio "Jack" Dragna, head of the Mafia in the Vegas area is actually in charge of the wire service using Siegel as a front man. Trans-America was definitely muscling in on Capone's Continental News Service. A known associate of Siegel's stated that members of the Chicago Syndicate headed by Al Capone "have ways of getting to Tom Clark." Also stated was the arrest of two criminals, one is San Francisco and one in Vallejo, CA, in a major opium smuggling deal, operating from Mexico apparently through El Paso. Since Hill was in San Francisco at the same time, investigation needed to be conducted if Hill was involved with the two criminals.
Included in the plans for the opening of the Flamingo on December 26, 1946, was the chartering of a Lockheed Constellation airplane and a special all-Pullman Union Pacific train for Southern California residents who desired to attend the opening. Informants advised that Siegel and his co-owners encountered a great deal of difficulty persuading celebrities and patrons to attend the opening, with the result that the special train had to be cancelled. Among the movie celebrities scheduled to attend the opening was George Raft, whose presence at the opening was compelled by Siegel.
Also on the 12th it was determined that Siegel was in the possession of and Smith and Wesson 38 caliber snub nose revolver, serial number 4391. Request was made to find out all the facts on this gun.
On December 13, 1946, it was noted that blacked out name was in Los Angeles from New York and he was betting $60,000 to $70,000 a day on football, fights and basketball and he was good for an easy touch. Siegel's men immediately contacted him in Vegas regarding this man and Siegel stated "leave him alone, he is smart enough to take care of himself." The gentleman was left alone.
On December 15, 1946, Siegel was overheard talking with a blacked out name stating that he had taken away 7-1/2% from blacked out name and he would take the other 12-1/2% away after the Flamingo opened which would rid them of the blacked out name.
An informant advised that on December 23, 1946, a George Raft representative called Siegel stating that Raft would be unable to attend the hotel opening because he had to be in court at Los Angeles on December 30, 1946. Siegel angrily told the representative to tell Raft that he had to come to the opening.
On December 18, 1946, Siegel was in Los Angeles where he met with entertainer Jimmy Durante. It was determined that he was asking Durante to open the Flamingo for him on December 26th. Lana Turner, Frank Sinatra and others were among the celebrities believed to be attending the opening. Durante accepted Siegel's contract and agreed to appear at the opening and for some time after that.
On December 24, 1946, Siegel had spoke with "The Kid" regarding Siegel asking him to find out about the furs and "stuff". The Kid subsequently contacted George Raft and questioned him concerning the purchase of furs. At this time The Kid asked whether the furs were "warm" to which Raft stated they were not.
On December 25, 1946, the same informant stated that Raft's bodyguard and companion, contacted Siegel to inquire about the correct highway to take to Vegas. Siegel didn't have time to talk on the phone so a person whose named was blacked out got on the phone to explain the highway directions.
A blacked out name stated that Siegel was very anxious to have blacked out name attend the formal opening of the Flamingo and made reservations for him at the El Cortez Hotel from December 28, 1946 through January 1, 1947. He was to fly to Vegas in his privately owned plane, however, due to weather conditions, he cancelled his proposed trip until January 6, 1947.
At this time the bodyguard complained that Raft did not want to stay at the El Cortez Hotel where Siegel made made reservations. He wanted to stay at the Hotel Last Frontier or Hotel El Rancho Vegas. Arrangements were made to have Raft stay at the Hotel Last Frontier.
On December 25, 1946, a blacked out name called from Los Angeles stating that not one ticket had been sold to the opening.
The formal opening of the casino and dining room was held as scheduled on December 26, 1946. The names of the celebrities who attended were blacked out with the exception of George Raft. It was stated that in order to fill the dining room, Siegel extended invitations for complimentary dinners to all local, county, and state officials, many of whom declined by telegram and telephone.
A second opening night was held on December 28, 1946, and guests included Veronica Lake, Lucille Ball, George Raft, Sonny Tufts, Eleanor Parker, Bill Holden, Brian Bowlevy, and June Haver, other names were blacked out.
During the opening, Siegel assume the responsibility of handling all arrangements and greeting the patrons. Opinions were expressed by Vegas residents that the operation of the Flamingo could not continue successfully because it was too large, too elaborate, and to expensive for Vegas.
The casino was dominated by the presence, as employees of the casino, of local gambling figures of questionable or known bad reputations. Due to the presence of business and financial loss at the Flamingo, Siegel took a 10 day vacation in January, 1947, which he spent at Palm Springs, California, with Virginia Hill.
Pursuant to an announcement by the Army Air Corps that unless commercial airlines were removed from McCarran Field, the Vegas Army Air Field would be deactivated. Clark County officials delegated a local committee to select a site for a new commercial air field and to spent one-half million dollars, in addition to Federal funds to construct a commercial field.
The Committee attempted to persuade to locate the commercial airport at the Alamo Airport located approximately one mile from the Flamingo, on the Las Vegas-Los Angeles Highway.
In the end of December, 1946, stated that the Committee had approved the use of the Alamo Airport and that these plans were acceptable to the Army. The informant stated that the use of the Alamo Airport by the commercial airlines at Vegas would benefit Siegel and his Flamingo Hotel and Siegel agreed to the use.
On December 27, 1947, it was presumes that Dragna was not the head of Trans-American with Siegel being the front man. It was Dragna who was the front man for Siegel. Siegel was controlling all the books and giving the orders without making any calls checking in to Dragna. It was also learned that back in 1942, Virginia Hill was in contact with a blacked out name who was closely associated with jewel theft activities. This person was located in 1947 at Miami. Agents were requested to see if Hill has had further contact with this individual regarding jewelry theft.
On January 1, 1947 Siegel had fired the Manager of the Flamingo's dining room and a blacked out name remained only as a director in name.
On January 3, 1947, it was stated that Hill took over a blacked out name's apartment in Mexico City. Hill would not discuss the purpose of her trip with the informant but it was ascertained that Siegel was not planning on joining her.
On January 4, 1947, plans were being made for Siegel to have a conference in an effort to develop publicity for the Flamingo and the "new" opening of the resort. Blacked out name had a conversation with a blacked out name at the Flamingo. he was advised that the Flamingo operations were not too successful and that Siegel was acting like a a prima dona, saying he was not worried, that the Flamingo would be successful. It was stated that Siegel should be told that the Flamingo was not putting out the proper publicity in the line of entertainment. They further discussed that people were complaining about the casino being filled with a "bunch of tight lipped gunman." Siegel should be told that the Flamingo "atmosphere was not friendly." It was stated that one of them was trying to get Frank Sinatra for an appearance at the Flamingo and that maybe Siegel should be contacting him in person instead of one of his men as Sinatra would react better if the "head man" cared enough to call.
On January 6, 1947, agents observed Virginia Hill and an unidentified man - probably her brother driving to Los Angeles from Vegas in Siegel's 1946 Chrysler convertible sedan, license #87U344. The male parked Siegel's car in front of Hill's apartment and they both went in. When an FBI informant asked her if she was done with the headaches of the Flamingo, she said yes, "she was through with it for a while" and she didn't intend to return to Vegas for quite some time.
On January 6, 1947, Virginia Hill had called a blacked out name and reminded him to pay the rent on her apartment. She stated that Siegel had wanted her to go to Vegas with a blacked out name who was going to New York from Vegas. Hill told the blacked out name that she did not like Vegas, and that "she must go to Florida" and would be on her way soon. Blacked out name advised Siegel that blacked out name would stay in L.A. until blacked out name opened her engagement at the Flamingo. Hill indicated that she did not know what Siegel wanted in connection with the leasing of the apartment at the Chatteau and instructed blacked out name that he should contact Siegel to determine if they should pack all their things in order to move.
On January 7, 1947, Siegel received a telephone call from Samuel Goldwyn Studios. Siegel discussed his plans to hire the studio to handle the Flamingo's publicity. Siegel stated that he had sent a notice of a special meeting of the Board of Directors and that he had also sent a telegram to the Music Corporation of America not to contract with a blacked out name in the future since that person would be completely out of the Flamingo's setup. Siegel stated that in the future it would be him alone who has the right of final approval or disapproval of everything. Siegel then had a conversation with a blacked out name at which time he told this individual that he was having the majority of the members of the Board of Directors take the presidency of the Nevada Projects Corporation away from a blacked out name in a few days. Siegel stated that this individual would be stripped of all powers and from now on Siegel was personally handling the entertainment at the hotel. Siegel stated that he may not even recognize prior commitments and contracts; that if he did not like the entertainment contracted, then "just let the people sue."
Also on January 7, 1947, agents reported that Hill called blacked out name stating that she had recently been at Slapsy Maxie's Night Club and had met blacked out name obtaining his telephone number. HIll added that Siegel wanted to talk to blacked out name. Hill added that Siegel was very upset because blacked out name had sent a publicity agent to ask him information concerning the Flamingo. Siegel had hired blacked out name and had him chased the agent agent away from the hotel. In a jesting manner, blacked out name stated that before long Siegel would be out in front of Xavier Cugat directing the band. Hill stated that Siegel had been having much trouble signing up entertainers to appear at the Flamingo. Hill added that Siegel wanted to close the place but Hill herself defended the hotel. Hill stated that she had told Siegel that he should bring a manager from New York who knew how to run a night club in order to operate the Flamingo. She was sure Siegel didn't care about the Flamingo. The informant stated that this was not likely but one could never tell when Hill was telling the truth. She, like Siegel, would tell people different stories to see what came back to them and they would know who had a big mouth.
On January 8, 1947, a rumor was circulating that Siegel was having trouble because the local Vegas businessmen were banding together against Siegel and were refusing to have anything to do with him or his associates. So far there were no fact substantiating this and the Frontier still has Siegel's room open for him and there had been no derogatory comments made about him at the Frontier, El Rancho, or Hayes' Lodge.
In a status memo dated January 9, 1947, it was stated that focus should be on Virginia Hill as Siegel is solely with the Flamingo and the wire service, finding out where she is going, departure dates, where she is staying, and furnishing the latest description. It was noted that Hill frequently changes her hair style and dyes her hair. An example was the first four opening nights of the Flamingo, when on night one Hill's hair was platinum blonde with upswept hairdo, the second night her hair was jet black with a long bob, and on the fourth night her hair was red hanging down long. After Siegel arrived in New York, agents should cover his contacts and activities.
Hill had returned to Vegas and blacked out name was told by Hill that she was returning to L.A. with her husband meaning Siegel, within a few days by car. Hill's plans did not appear to be definite. She told blacked out name she was going to Miami, then she told blacked out name to get her an apartment in Mexico City. As soon as Hill's definite plans were ascertained, the appropriate offices would be notified.
On January 10, 1947, Siegel contacted his ex-wife and told her he would be arriving in New York on the 14th visiting for one week. Siegel did not disclose his plans after that. Siegel then called a blacked out name and to have him obtain space on the late flight on TWA Constellation from Los Angeles to New York. Siegel told this person that Hill was planning to go to Mexico City or Chicago. He also stated that the Flamingo was losing money due to heavy gambling losses in the casino. Siegel stated he still wasn't worried as he knew the Flamingo will make it up soon. He then told this person that he just hired a blacked out name as General Manager of the Flamingo which should help. The reporting agent did not recognize the name and was attempting to identify this person and ascertain his reputation and record.
In a subsequent memo it stated that Siegel cancelled his trip to New York and blacked out name attempted to make reservations for a bungalow for himself and Hill at La Quinta California or Colonial or Lone Palms Hotels at Palm Springs California. Hill agreed to spend 10 days with Siegel resting, but then was going to Mexico City. Siegel called a blacked out name telling him to prepare to go to Vegas and take care of the Flamingo while he was gone. He was to occupy Siegel's room at the Last Frontier. Blacked out name sent money to Vegas to be placed in Flamingo's general fund.
In another status memo dated January 10, 1947, stated that blacked out name, Siegel's lieutenant in Los Angeles didn't seem to be involved in illegal activity. He is solely publicizing the Flamingo and Trans-American Wire Service. A blacked out name contacted this person on behalf of Siegel regarding a motion picture being filmed at the Flamingo. He was assured that Siegel guaranteed "one million percent" cooperation on behalf of all staff at the Flamingo. This person told another blacked out name that people were complaining about Flamingo being filled with a bunch of tight lipped gunmen, saying the boys were nervous and jittery. It was also overheard that Siegel was so over protective of the Flamingo that he was insulting local people who said derogatory remarks about the hotel. Virginia Hill stated she hated Vegas and the Flamingo and she was was going to Florida. She would then return to Vegas, then to Los Angeles, then to New York. She further stated she was moving into a new house off of Sunset. Siegel hired a blacked out name, special deputy sheriff entitled to carry firearms as Director of Plant Protection at the Flamingo and had hired several special police officers as assistants. Some of Siegel's men were continuing to put pressure on local bookmarkers to take the new wire service instead of Continental.
In a status report, dated blacked out, but apparently was in January 1947, it was noted that Siegel spends all his time either at the Flamingo or at his room at Last Frontier. Agents were requesting the wire tapping at the Las Vegas Club be cancelled and that the Flamingo's lines be tapped instead under her phone numbers 4000 and 4001, long distance lines 1 and 2. Hoover granted permission stating that technical surveillance for the Flamingo should be given priority and full details concerning the manner of the installation be given so full security would remain intact.
In a January 11, 1947 status report it was stated that the Flamingo is continuing to lose money and Siegel is out of front money. Instead of risking unlaundered money, he reduced employees salaries and still had to pay $100,000 in bills for food, liquor, etc. Dell Webb may cease further construction on the hotel if Siegel didn't give them money soon. Siegel had taken all available cash from El Dorado Club and race horse books in Vegas to put into the Flamingo to meet expenses but he had not as yet touched unlaundered money or asked Hill for money. The employees were dissatisfied with the Flamingo. As Siegel was leaving on vacation, he doesn't appear to be too worried about the Flamingo's problems so he must have knowledge that he hasn't told anyone.
On January 12, 1947, Siegel obtained a quantity of money in Los Angeles which he sent to Vegas for the purpose of replenishing the operating funds of the Flamingo.
In a January 14, 1947, status memo it was reported that a special squad of 10 agents conducted an intensive investigation on Siegel from July 23 to October 18, 1946. This investigation failed to reflect that Siegel was engaged in violations within the Bureau's jurisdiction. In the investigation conducted since December 11, 1946, disclosed that Siegel's activities had been confined to the Flamingo Hotel and the Trans-American Wire Service. He spoke or met with no regarding any mob activities including prostitution or other illegal activities. The investigation did show that Trans-American had been using a short-wave radio to relay racing information from the Santa Anita Race Track in California indicating a possible violation of the Federal Communication Commission regulations, and that Trans-American was attempting to oust the Continental Press, in various western states including Oregon, California and Nevada. It was reiterated that intensive investigation, including the use of informants, physical, technical and microphone surveillance failed to disclose violations by him within the Bureau's jurisdiction. Information was developed indicating Siegel associates with individuals suspected of handling narcotics and smuggling, but no evidence had been established that Siegel participated in narcotics or smuggling narcotics. Regarding Virginia Hill, investigation had not disclosed whether the source of her income was through the violation of laws within the Bureau's jurisdiction. She recently purchased a rather large house at Miami Beach, Florida and indicated she was going to spend part of the winter there. Investigation showed that Hill purchased Lot #1, Block 1D of Island #1, Sunset Island, Miami Beach, Florida, which was recorded in Flat Book #40, page 8, of the public Record of Dade County, together with all the furniture, fixtures, and equipment located on the premises. The tax stamp indicated that the purchase price was $49,500. It was noted from the Ocean View Postal Station, that they had been carrying mail to this address since March 1946, and that no one had been living there. Occasionally mail comes for Virginia Hill which he puts in the mail box and a colored maid who was there frequently apparently took care of the mail as she took it in and it was never forwarded through him. The mail carrier stated that he would observe mail going to that address in the future and any persons who might take residence there.
Under Recommendations it stated "The results of this investigation to date do not appear to warrant the continued use of the Agent personnel necessary to conduct this investigation and to maintain the technical surveillances. Inasmuch as no specific information has been developed indicating violations within the Bureau's jurisdiction, it is recommended that consideration be given to discontinuing further investigation in this matter."
On January 15, 1947, Siegel was seen driving a 1946 Cadillac Sedan, Licence #6X880. He told an FBI informant that he was considering buying this vehicle. A check of the license number showed it belonged to actor George Raft.
On January 16, 1947, a memo from Agent Tamm concurred with the recommendation that the FBI discontinue all active investigations on Siegel, including the maintenance of technical and physical surveillances. "...of investigation effort in coverage of Siegel and his activities without developing any scintilla of evidence of any activities in violation of Federal statutes within the Bureau's jurisdiction. If there was even color of a Bureau violation, I would be inclined to hang on and make a vigorous effort to establish a case, but actually, after 6 months of almost constant coverage, we still have nothing. I believe, consequently, we should discontinue all coverage at this time and make a spot check of Siegel's activities about the middle of July; in other words, after a lapse of about 6 months." After all said and done, the Flamingo and Trans-American was all Siegel cared about.
On January 20, 1947, an investigation report on Gus Greenbaum, Siegel's Lieutenant was outlined. This person represents Siegel in all of his business transactions and also arranges for meetings of other outstanding hoodlums going to L.A. in his apartment. He was also connected by "fingering a jewelry burglary" which was being investigated by the L.A. and Salt Lake City offices. A microphone installation approval was being sought to cover meetings which Greenbaum had in his apartment. Experience had shown that most of the meetings of this group of underworld characters were held in the apartment rather than in some public meeting place or someone else's apartment where members of the family might overhear their conversation. The lieutenant lives alone. This case was considered one of the most important to the Bureau as Siegel, Dragna, and others associated with them practically control the racketeering and underworld activities in the West and to a large degree influence the activities throughout America.
On January 21, 1947, a background of Siegel was given. It stated that Siegel was identified with the underworld for a number of years. He originally came into prominence in the underworld during the prohibition days in New York City "Hell's Kitchen" whom he associated himself with Meyer Lansky and their gang skyrocketed in underworld circles as they became known as the Bugs and Meyer Mob. The mob became major players in activities in the underworld. This proved extremely useful with Frank Costello, Charles Luciano, Joe Adonis, Jacob Shapiro, Louis Buchalter and Abraham Zwillman. Before the Amendment was repealed, Siegel and Lansky had acquired and controlled the Capital Distilleries, the King's Ransom Distilling Company, White Horse Distilling Company and several other whisky distilleries and distributors. They started running in from England expensive White Horse liquor and they also began muscling into the operations of the "Waxey" Gordon Gang which controlled liquor outlets in Metropolitan New York. Siegel was credited with promoting the infiltration of the Gordon territory which was principally achieved through a series of gangland killings. Following such murders the Mob would take over territory as well as personnel relinquished by the Gordon Gang. Moe Sedway, who had been an important front man for Gordon's liquor business because of his legitimate contacts in the hotel and entertainment fields, was taken over by Siegel with the dissolution of the Gordon Gang just as other assets of that Gang were absorbed. At this time, Siegel and Lansky had reached the summit of their criminal careers and allied themselves with certain other mobsters becoming known at "The Big Six" or "The Combination". This group also included Charles Luciano who handled prostitution and narcotics, Abe "Longie" Zwillman, who handled gambling and Buchalter and Shapiro who organized the first large-scale kickback and shakedown rackets in legitimate business and industry. Siegel and Lansky took care of the liquor interests. After the repeal, Siegel and Lansky disposed of their interests in the above companies. The Big Six began to lose their former importance. Thereafter, the gang began to break up and Siegel moved to California where he is presently living leaving Lansky in charge of the remaining liquor operations of The Combination. Since residing in Los Angeles, Siegel has been operating several bookmaking establishments and gambling sites. He first operated from his sister's home at 721 N. Doheny Drive. His sister's husband "Sol" Soloway was taken in as a Siegel mobster. From the beginning of his activities in California, Siegel exchanged money and counsel with The Combination leaders back East. Among his early activities in California was the investment of funds in various hotels, restaurants, and real estate. Part of this money came from The Combination and Siegel utilized gangster tactics in muscling in on the profits of other restaurants and night clubs. Siegel was rumored to have handled narcotics during his resident in California although there was never any proof. During the war, Siegel also took over a legitimate manufacturing plant which he named The Mercury Engineering Company and successfully obtained aircraft war contracts amounting to approximately $20,000 a month. At the end of the war Siegel disposed of the plant and liquidated the assets. Recently, he and his associates constructed the Flamingo Hotel, which is located just outside of Las Vegas, Nevada, and is known as a hotel and gambling club. Siegel had began living in exclusive apartments and had carried on an open affair with blacked out name until he grew tired of her and took up residence with Virginia Hill. Hill apparently had unlimited funds some of which came from three prior marriages and in addition to being a drug addict has been described as vulgar and obscene. Hill was reputed to have taken an interest in some of Siegel's enterprises during their relationship.
On January 21, 1947, an agent recommended that technical surveillance be continued on Greenbaum. He performed Siegel's errands, conducted many of his business affairs, attempted to bribe track officials and had obviously engaged in activities for the interests of Siegel. In addition he frequently had conferences at his apartment with leaders in gangster activities in this area. Much of this information had gone to the FBI as result of the technical surveillance and it felt it should be continued.
On January 24, 1947, it was noted that blacked out name was talking about opium as he was a known opium smoker. It was attempted to make a connection with Siegel but the Federal Narcotic Bureau as unable to make a case. Letter inspecting showed a letter sent to Virginia Hill from blacked out name showing appreciation for Siegel's kindness to her, adding that blacked out name, could do anything for Siegel who was referred to as "baby blue eyes" to let her know.
When Siegel returned to Vegas he was pleased to see that business at the Flamingo had increased. Total gross revenue from casino since December 26 was approximately $100,000 but the hotel and dining room was still operating at a loss which was what Siegel predicted so it appeared that Siegel's predictions were coming true.
On January 25, 1947, a status memo stated that Siegel attended a meeting with several blacked out names. Siegel became violently angry and threatened to kill a blacked out name immediately. Siegel stated he would positively kill him even if Siegel lost his own life simultaneously. Siegel stated that Nevada Project Corporation, owner of the Flamingo, was going to file bankruptcy in the coming week. That would be the only way to legally save the Flamingo and keep her running until she was making more money. The hotel and casino could still operate while front money could be obtained. Regarding Trans-American, it was doing well. Blacked out name was extremely active in helping Dragna get the new wire service started. He had been working from a list of local bookmarkers contacting these persons by telephone or in person and putting the proposition to them that they should switch their news service to the new organization. Blacked out name had many contacts with Dragna concerning the local bookmakers as to what each says and his reasons for not taking the service and it is apparently recognized that blacked out name, a local bookmaker, was the "bell cow" as far as people in that type of work were concerned. It was still not factually known if Dragna was the head of the bookmaking or was it Siegel as everything was rumor. The fact was Siegel wasn't answering to anybody but informants say it is really Dragna's. Investigation revealed that the telephone company was vigilantly watching Trans-American and if it learned that subterfuge had been used in obtaining instruments, they will be removed. It was stated that bookmakers refusing to sign up with Trans-American was to be paid a personal visit by Siegel who would convince them to join. It was noted that before Siegel was to be contacted, Dragna would contact the difficult bookmakers to induce them to join the service. In an interesting conversation, Dragna was discussing the difficulties of getting the service going 100%, stating that they were of the opinion that a blacked out name was an individual who could "convince" certain bookmakers of the wisdom of taking the new service and that that he would get Siegel's ok to attempt to line up this person. This discussion seems to indicate that Dragna was working for Siegel, not the other way around. It was stated that blacked out name frequently contacted Siegel in connection with accounts that were worth obtaining.
On January 28, 1947, a status report was given that a blacked out name registered five guns under the Flamingo's name. Registration of the guns were vague as the information was given by Siegel. The blacked out name and Siegel were quite friendly and Siegel would furnish the make and serial numbers of the guns for registration. There was no penalty provided in Clark County for failure to register guns. The guns registered to the Flamingo were Winchester 30 caliber rifle, 27375A, 30-06 rifle 18180, probably Springfield made, New Empire shotgun 410 gauge 06524, a GI double barrelled shotgun. Other guns registered included Smith and Wesson 38 caliber "special" revolve with a one inch barrel 403398, and Smith and Wesson 38 caliber model not given, six inch barrel revolver, 820244. Agents will attempt to trace the Smith and Wesson 38 caliber "special", and the 38 caliber six inch barrel. Boston agents will trace the Springfield rifle. New Haven will contact the New Empire Company and attempt to trace the ten gauge double barrelled shotgun. New Haven notified that it was impossible to trace the Winchester 30 caliber rifle.
Another memo stated the agents wanted information on the plan for full security proposed technical surveillance at the Flamingo. It was determined that gun 18180 could be one of two revolvers sold to blacked out name, New York City on May 8th, the 1922 or 38 special with V before the number was sold to the Officer in Charge, Naval Supply Depot, Norfolk, Virginia on September 17, 1943. Gun 820244 could be one of two revolvers sold to the British Ministry of War Transport, 25 Broadway, New York - sold September 3, 1941. Gun S820244 was sold to American Whole Hardware Company, Long Beach California on April 5, 1946.
In a January 29, 1947 memo, it was stated that Special Agent in Charge Hood of the L.A. Division called wanting to know why they were discontinuing Siegel's investigation. After it was explained, Hood said it would be discontinued as to Siegel's associates inasmuch as the information developed therefrom pertained exclusively to Siegel's operation.
On January 31, 1947 Siegel flew to L.A. and was staying either with Virginia Hill or blacked out name. Siegel advised the informant that Frank Costello, Joe Adonis and Meyer Lansky were angry with him since he conducted additional construction against their wishes and may want to kill him if he doesn't meet with them soon. Siegel still wanted to file bankruptcy not on the Flamingo directly but on the Nevada Project Corporation. That way the resort could still operate and gain momentum as he knew it would be a success given enough time. It was doubted that anyone would kill him because he was still held in high regard with the mob and that Siegel was just upset over the Flamingo not going over quickly. There was no wire tapping records or surveillance records on Lansky, Costello, or Adonis ever stating disappointment in Siegel, just amazement at Siegel's dedication to a "building".
In a report covering Nov. 1, 1946 to February 1, 1947 outlining Siegel Vegas' activities, it stated that Flamingo Hotel has had financial difficulties since its formal opening on December 26, 1946. On December 9, 1946 Siegel and Moe Sedway cut off Continental Wire Service in Vegas and began furnishing Trans-American Publishing and News Service wire service to all Vegas race books. It was noted that several "hoodlums" had since visited Siegel at the Flamingo. Siegel's activities seem to be centered primarily on the completing and operating the Flamingo.
On February 24, 1947, it was noted that around March 15, 1948, they were to call the IRS for their investigation into the possibility of Siegel committing tax violations.
In February of 1947 it was noted that Siegel was being forced to close the Flamingo due to lack of funds and pressure from Del Webb's Construction Company to be paid.
On February 29, 1947, Hill stated that Siegel had to remain active in management of the Flamingo because other persons associated with him won't permit his dropping out presumably Costello, Adonis & Lansky. She stated she may have to hide him out because he told her he would have to kill himself in order to get away from these persons. Further investigation must take place as no where before had Siegel ever stated that he wanted out of everything permanently and he was still spending all his time working for the Flamingo's success. This just maybe Hill telling stories. Blacked out informant met with blacked out name regarding the wire service. It was stated that bookmakers going to Trans-America was doing well. When asked who was the head, the man told the informant that Dragna was acting like Siegel was the front man but it was indeed Siegel who headed the wire service and Dragna was the actual front man. The story of Dragna being the head was being used to confuse the Continental Wire Service people. That's why Dragna asked permission and Siegel answered to no one.
During the second opening of the Flamingo in March of 1947, FBI noted an unnamed mob member attending the opening.
Sam Goldwyn Studios were handling the publicity for the resort. They also stated they were thinking of filming the movie "Nick the Greek" using the Flamingo for the location of the movie.
On March 1, 1947, the third grand opening of the Flamingo took place with the Andrew Sisters and Henry King's Orchestra.
In March of 1947, it was noted that when the Flamingo closed from late January to March, Siegel did considerable gambling at various other casinos in the area.
On May 1, 1947, it was reported that Siegel was incensed because he had heard derogatory remarks coming from the officials at the El Rancho Vegas such as informing people not to go to the Flamingo, that it was a "gyp joint and full of racketeers." Siegel threatened to kill the man and burn the El Rancho to the ground if he heard any more such remarks. He was overheard saying he had built the Flamingo "for Las Vegas," that he was here to stay and nobody was going to interfere with him. Siegel further told an official at El Rancho to look at "that man of yours. I just gave him 60 stitches." Apparently, after Siegel bawled out the offending party, he hit him over the eye with the butt of his gun. The following day Siegel again stated that he had built the Flamingo "for Las Vegas," and no other hotels were going to interfere with him.
On May 5, 1947, Virginia Hill took an overdose of sleeping tablets. Physician Jack Cherry stated "Siegel brought her to my office. When I asked them whether it was an accident or a suicide attempt, they would give neither a reason nor motive. We pumped out her stomach that afternoon and Siegel then drove her to the Clark County General Hospital. He stayed there with her for several hours and next morning her stomach was pumped out again. Siegel took her to the Flamingo Club afterward. He insisted they had not had a row." Hill then packed her clothes and stated that she was going to Paris, France, to marry a wealthy Frenchman she met but actually flew to New York first.
An acquaintance of Siegel's who had no connection with the Syndicate or Siegel's business activities, stated that Siegel and Hill had a very serious argument at the Flamingo. Hill allegedly saw Siegel talking with a cigarette girl in the Flamingo's casino in a manner that Hill didn't approve of and Hill attacked the girl and began scratching the girl and pulling her hair. Siegel forcibly pulled Hill from the cigarette girl. Hill began screaming at Siegel calling him a murderer and gangster. A blacked out name and Siegel attempted to forcibly remove Hill from the casino and she became abusive toward them calling them murderers and gangsters. Siegel then struck Hill in the face, breaking her nose. He struck her again and Hill screamed that she would commit suicide.
On June 8, 1947, it was reported that Siegel's activities from November 1, 1946 to February 1, 1947 consisted solely of completing, opening and operating the Flamingo.
On June 17, 1947, it was noted that blacked out name had information concerning the alleged income tax violation by Siegel and had sent a memo to Joseph D. Nunan, Commissioner of the IRS.
In a status report dated June 19, 1947, it stated that Siegel had been a racketeer and hoodlum of some prominence for several years. His activities ranged from New York City to Los Angeles. He was a member of Murder, Inc., and was an associate of Louis Buckhalter, who was executed by the State of New York. Since 1937, Siegel had been residing in the vicinity of Los Angeles. At this time he was operating the Flamingo Hotel at Las Vegas, Nevada, and resided in a penthouse in this hotel. In addition to operating the Flamingo, it had been reported that he had an interest in various gambling clubs located in Las Vegas.
A June 20, 1947 status report stated that Siegel flew Friday, June 20, 1947 morning from Las Vegas, and checked in at about 4:00am at the home of Virginia Hill, where an upstairs room was equipped with his personal belongings. Siegel carried a gold key to the residence, and in his room kept a .38 caliber Colt automatic purchased in 1938 when he lived at 250 Delfern Ave., Holmby Hills. Siegel met his partner Allan Smiley, who also had a small stake in the Flamingo, in the afternoon and was driven by Smiley to a barber shop in Beverly Hills, where they parted, with an agreement to meet in the evening for dinner. After leaving the barber shop, Siegel went to the office of Joe Ross, his attorney, and discussed business for some time. Siegel returned to the Hill home at about 7:30pm, and with Smiley, Charles Hill, 21, and Miss Hill's secretary, Jeri Mason, went to Ocean Park for a trout dinner. They returned home about 10:15 (where Smiley and Siegel sat in the living room to read the early morning editions of the newspapers.)
Smiley had gained notoriety in 1944 when he was involved in the Tommy Dorsey-Jon Hall nose-cutting incident in the band leader's apartment. Smiley was accused of being the "knifeman" in the fight which began when Dorsey accused Hall of being over-familiar with Mrs. Dorsey (Pat Dane). Smiley and Dorsey were freed of felonious assault charges at the end of the lengthy trial. Siegel and Smiley were fined $250 each on September 11, 1944, after pleading guilty to placing an illegal bookmaking bet. While Siegel's name was often linked with bookmaking in this area, he always denied being involved in the business.
In the early morning of June 21, 1947, Agent Tamm said that he had heard on the radio that Siegel was ambushed and killed somewhere in California the night before. Agent Rosen was trying to locate an item in the newspaper about it.