The Mafia Connection

Two decades after the event, police files on gangsters in Miami, Florida, have unlocked the key to the emergence in Australia of sophisticated, international-style organised crime.

Miami, more so than Las Vegas, Nevada, has been a free city’ — free from territorial monopoly rigidly enforced by crime families elsewhere in the United States. A haven where crime figures from Chicago and New York gained control of major banks, Miami has served as the launching post for mafia expansion abroad — not just to the nearby Caribbean, but to England, South East Asia and, of course, Australia.

Whereas Florida recognised their gangster intruders for what they were, a naive Australia initially welcomed them with celebratory press articles.

Perhaps too imbued with the film and television image of a racketeer as somebody in a black shirt, white tie and diamond stickpin, Australians have been slow to accept that the real masters of crime have graduated to grey flannel suits.

In retrospect, it is significant, perhaps, that the coming to power of Sir Robert Askin in 1965 paralleled the entry into Australia of overseas identities with American mafia connections. During a decade of Askin rule, organised crime and corruption became institutionalised in NSW.

Within months of Askin assuming the premiership of NSW, a high-rolling identity, with millions upon millions of dollars illegally skimmed from Las Vegas at his disposal, was welcomed to Sydney.

Publicised simply as a Miami hotel millionaire, Morris Lansburgh so captivated Sydney that he was featured in the Australian Women’s Weekly. A headline described him as a visitor ‘with varied interests’. Just how varied those interests were is only now becoming clear.

At that time, Lansburgh was the nominated owner of the legendary Flamingo casino in Las Vegas, the first casino built with crime syndicate money by mobster Benjamin ‘Bugsy’ Siegel, which opened up Las Vegas as a gambling mecca.


Although it was some years before authorities caught up with him, Lansburgh was at that time skimming money from Las Vegas for investment abroad. The biggest skim in the history of Las Vegas, it had been going on for five years before Lansburgh visited Australia, and this skimming continued for two years afterwards.

Lansburgh and five others, including Meyer Lansky (the so-called ‘chairman of the board’ of organised crime in America) were indicted for skimming $36,000,000 from the Flamingo alone. Much of the money was deposited in numbered Swiss bank accounts.

Lansburgh pleaded guilty and served five months in prison.

In Sydney, Lansburgh had been impressed with the scene. In one newspaper, he said Chequers nightclub, run by Denis Wong, was ‘better’ than either the Copacabana or the Latin Quarter in New York. Chequers made its name by spending lavish sums importing topline artists from America, among them many who had also appeared at Lansburgh’s Eden Roc Hotel in Miami and the Flamingo in Las Vegas.

Shortly after Lansburgh’s welcome to Australia, he was put on a ‘stop’ list by British authorities after he had flown into London with Angelo Bruno, mafia boss of Philadelphia. Bruno was slain in 1980 during mafia warfare over casino rackets in Atlantic City, New Jersey.

The British-controlled government of the Bahamas did likewise, much to Lansburgh’s embarrassment since he had leased King’s Inn Casino on Grand Bahama from Daniel K. Ludwig, the millionaire recluse who was to invest millions of dollars in coal and other ventures in NSW under patronage from the Askin regime.

A Royal Commission in 1967 recorded that, when Lansburgh’s skimming partner Meyer Lansky visited Nassau in the Bahamas, he offered Bahamas’ Minister of Finance, Sir Stafford Sands, $2,000,000 in cash (to be deposited in a Swiss bank account for his personal use) to allow casino gambling. Sands himself told the commission of having rejected the bribe offer.

Lansburgh and Lansky were revealed to have linked up in the Bahamas with a syndicate of Canadian-based financial operators known as the Bay Street Boys. Experts in fraudulent mineral floats and manipulation of shares, the Bay Street Boys, according to Australian Federal Police (AFP) files, became active in Australia during the mining and share boom of the 1960s.

The significance of Lansburgh’s presence in Australia was first noted by an officer of the Victoria Police Force’s Bureau of Criminal Intelligence, Detective Michael Schuett, and confirmed to the author in 1985 by crime intelligence authorities in Florida and Nevada.

More significantly, Florida mafia boss Santos Trafficante travelled to Saigon, Singapore and Hong Kong in 1968 to negotiate western access to the now fabled Golden Triangle heroin base. Within a year, the new supply began flooding the American and Australian markets.

Whatever may have been going on at higher levels among operators such as the Bay Street Boys, more discernible links were simultaneously opened up at other levels.

For it was also in 1965 that Chicago mobster Joseph Dan Testa first visited Australia. The name Testa was to become synonymous years later with accusations of mafia infiltration of Australia.

During that visit, Testa befriended two Sydney gambling identities, Ronnie Lee and Reg Andrews, then in smalltime gambling rackets and soon to be partners in the lucrative Forbes Club illegal casino when, with American expertise and police and political protection, sophisticated shopfront casinos replaced backstreet baccarat joints.

Testa was to return to Sydney four years later.

In the meantime, at least two other Chicago mobsters, Jimmy ‘The Monk’ Allegretti and Felix ‘Milwaukee Phil’ Alderisio, had reportedly began visiting Sydney. Police in Chicago sent information to NSW police detailing their links with the Chicago mob.

Allegretti was described by Chicago police as a ‘Chicago mafia kingpin’ and by the FBI as a ‘top local (Chicago) organised crime figure’.

A suspect in 14 murders, Alderisio was categorised as lord high executioner’ of the Chicago mob by the United States House Select Committee on Assassinations.

In a report brought down in 1979, after reviewing earlier findings on the assassination in 1963 of President John F. Kennedy, the committee confirmed that evidence linking the mob to his assassination had been suppressed, and found that the mob had the ‘motive, means and opportunity’ to kill him.

Investigations found that Dallas nightclub owner Jack Ruby, who shot Kennedy’s alleged assassin Lee Harvey Oswald, originally thought to have been a lone gunman, had worked in Chicago with interests associated with Allegretti and that 27 days before the Kennedy assassination, Ruby had telephoned Irwin S. Weiner, once charged with extortion with Alderisio in Miami and who, according to FBI reports, handled ‘all the skimmed money from Las Vegas for Chicago’s organised crime community’.

Little has ever been uncovered on what Allegretti and Alderisio were up to in Australia. But two Australian identities, George Freeman and Stan Smith, went to Chicago in 1968 and were feted by Joe Testa and others. Testa also paid their expenses for a visit to Las Vegas.

When Testa made a return visit to Australia in 1969, he too, like Lansburgh four years earlier, was featured in the press. Incredibly, he was written up in People magazine as, of all things, a millionaire cop from Chicago. ‘His official title’, said the article, ‘is Chief of Detectives of the State of Illinois’.

Away from the public spotlight, he was entertained by Australian underworld leaders at Chequers nightclub and at the Watsons Bay home of Ronnie Lee. At the Fisherman’s Lodge Restaurant at Watsons Bay, virtually the whole underworld turned up to pay homage. A cake bearing the solicitous proclamation WELCOME JOE commanded pride of place.

Apart from George Freeman and Stan Smith, other key figures in attendance included Arthur ‘Duke’ Delaney and Lennie ‘Mr Big’ McPherson.

With his expenses paid by Testa, McPherson visited ‘Chicago the following year.

Back in Australia in 1971, Testa outlayed $150,000 to go into partnership with Freeman in a company called Grants Constructions and flamboyantly bought himself a racehorse, calling it Just U Wait.

A Federal police file notes that information from an informant claimed Testa had brought with him a suitcase full of money, reputedly $1 million, as a ‘gift’ for distribution among the ‘right’ people.

Testa came unstuck when Federal police came across his name while collecting information about suspected Italian criminal societies in Australia. His name turned up not in Sydney but in Melbourne where, it was stated, Testa met with an Italian identity to talk about putting poker machines into Victoria.

Giving evidence in 1973 to the NSW Moffitt Royal Commission into allegations of mafia infiltration of NSW licensed clubs, Testa said: ‘I have never been connected with any mafia organisation or mafia-type organisation, or any criminal organisation or group in Chicago or anywhere else.’

Judge Moffitt found that Testa was ‘unlikely to bring anything to this country other than a totally undesirable connection between organised criminal groups in this country and the United States of America’.

Labelled a psychopathic killer during the Moffitt inquiry, Testa himself was assassinated in a mob execution in July 1981 in Miami. A bomb triggered by radio signals exploded in his Lincoln Continental as he left the Oakland Park Country Club.

Shortly before his assassination, Testa had been recorded by US authorities making arrangements for another trip to Australia, this time, curiously, nominating Grafton in the northern coastal region of NSW as his destination.

A check by the author in 1985 of charts prepared by the Florida Department of Law Enforcement listed Testa and Alderisio as ‘soldiers’ in the mafia family of Tony Accardo, one-time bodyguard of Al Capone and suspected gunman in the St Valentine’s Day Massacre.

Testa was associated with Alderisio in both Chicago and Miami. Alderisio in turn was associated with notorious mafia hitman Jimmy ‘The Weasel’ Fratianno. In his book The Last Mafioso, written with Ovid Demaris since turning FBI informant, Fratianno confesses to have been an accomplice with Alderisio in the killing in 1953 of a Las Vegas identity named Louis Strauss.

Fratianno himself has never been to Australia, but in time he was to be linked in America with a string of Australian criminals and businessmen. Their entre to Fratianno and other mafia figures was provided by another early associate of Fratianno, George ‘Duke’ Countis, who took up permanent residence in Australia in 1967.

In a report of a Commonwealth-NSW Joint Task Force on Drug Trafficking tabled in the Federal and NSW parliaments in 1982, Countis was listed as a ‘connection between Australian and US criminals’.

Apart from acting as host at a Double Bay restaurant for some years, Countis ‘owned’ card tables at illegal casinos conducted by Testa’s friends, Ronnie Lee and Reg Andrews.

According to Fratianno, Countis was one of his book-making agents in the late 1940s and early 1950s. In 1965, Countis had been involved with Fratianno in an ill-fated attempt to take over the Crystal Bay casino in Reno, Nevada.

In the joint task force report, Countis is reported to be an example of a ‘patron’ in organised crime dealings.

The report states: ‘The existence of “patrons”, “wheelers and dealers”, “background operator”, “fixers”, or by whatever name they are described, is widely known, but by and large their activities are “intangible crimes” in the sense that, although we can be sure that they are going on in general terms, each particular occurrence leaves no trace. Indeed, their “crimes” may amount to no more than an “introduction”, for which a commission is paid or a debt repaid.’

It was also stated in the report that Countis himself had travelled to the United States with drug trafficker Murray Riley on several occasions in an attempt to extend drug activities.

Countis also introduced Riley to the money laundering services of the now defunct Nugan Hand Bank, established by Frank Nugan and Michael Hand. The bank collapsed when Nugan was found shot dead in 1980 (official verdict: suicide) shortly after returning from Miami where he had bought a condominium. Hand, who subsequently fled back to America, was reportedly persuaded by Riley to open an office of the bank in Chiang Mai and Bangkok in Thailand.

In late 1976, Countis and Riley sought to arrange for $23 million through Nugan Hand to buy and develop a tract of land in Las Vegas as a hotel-casino complex. The bank’s finance manager, Stephen Hill, was directed by Hand to make inquiries in Las Vegas where Hill dealt with Johnny George, an associate of Fratianno. Hill says he reported back to Nugan Hand that the proposition was not feasible.

In a reference to the same proposition in The Last Mafioso, Fratianno says he was advised by a New Mexico lawyer, William ‘Billy’ Machiondo, that if any mafia families put up ‘black’ money, it could be laundered as loans from foreign banks.

The previous year, Countis and Riley had been part of another unsuccessful casino deal. In that instance, they were involved in negotiations again involving Johnny George. as well as San Francisco Teamsters’ Union boss Rudy Tham, aimed at taking over the Howard Johnson casino in Las Vegas.

A year after Countis settled in Australia, another American identity, Harry Sayvanus Wainwright, appeared in Australia, linking up with Countis and Riley, as well as a host of other organised crime figures.

Also introduced to Nugan Hand by Countis, Wainwright maintained a $30,000 floating account with the bank. Referring to Riley and another criminal associate, Kenneth Derley, Wainwright said: ‘These are good boys and if they want any of my money they can use it.’ They did use it — for heroin smuggling.

As reported in the joint task force report: ‘Wainwright and Riley were, of course, at that time, and later, involved in joint and separate drug activity.’

A lawyer by profession, Wainwright was involved with a syndicate running topless bars in San Francisco when he arrived in Australia in 1968. He made repeated trips back and forth — until targeted by the US Department of Justice’s organised crime strike force.

In April 1973, Wainwright and six others were indicted for skimming $US1,722,362 from takings of seven topless bars. Five of the defendants later pleaded guilty. The US Marshal in San Francisco is still holding a warrant for Wainwright’s arrest for conspiracy to defraud the US Government as well as for tax evasion.

One month before his indictment, Wainwright managed to have himself naturalised as an Australian citizen in what has been officially termed ‘suspicious circumstances’. The Australian Citizenship Act requires that a person must have lived continuously in the country for 12 months, yet Wainwright had spent only 96 days in Australia.

Within months, Wainwright transferred funds from America and, among other things, bought a property called Broken Bit on the NSW north coast at Port Macquarie. He paid $58,000 for it — and resold it to Cambridge Credit Corporation for $1,467,000 (plus a penthouse then valued at $125,000 at Darling Point in Sydney). After taking the $467,000 and penthouse as a deposit, Wainwright himself financed a mortgage for Cambridge Credit for the remaining $1 million.

Cambridge Credit paid another $80,000 in interest payments. Shortly before Cambridge Credit’s much-publicised crash in 1976, Wainwright foreclosed and took the property back, and resold the penthouse for $250,000.

Wainwright has since been called upon occasionally to lecture law students in NSW.


from Connections 2 by Bob Bottom