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Laundering of Minkow Funds Admitted

February 18, 1988|KIM MURPHY | Times Staff Writer

A man accused of helping ZZZZ Best founder Barry Minkow launder $320,000 stolen from his failing carpet cleaning company by funneling it through Las Vegas casinos pleaded guilty Wednesday to a federal conspiracy charge.

Eugene Lasko, 56, of Reseda, admitted he withdrew the money from ZZZZ Best accounts in the form of travelers and cashier's checks and then attempted to cash the checks by gambling the money in the Nevada gaming center.

"I felt like a fool, because I was taking out large amounts (from the casino cashier) and I was only allowed to play a small amount," Lasko told U.S. District Judge Dickran Tevrizian.

Hoax Targeted in Probe

Lasko was the first to enter a guilty plea among 11 former ZZZZ Best employees and associates indicted on racketeering and fraud charges in connection with an elaborate hoax to inflate the value of the company.

Two other defendants, Brian Morze and Thomas Padgett, were expected to plead guilty today.

"I think as this case goes on, there's going to be one defendant (Barry Minkow) and the rest are going to be witnesses," Minkow's lawyer, Donald Re, said.

In another development, Tevrizian refused to reduce Minkow's $1.5-million bail, rejecting defense lawyers' arguments that there is new evidence to refute government prosecutors' contention that there is $10 million in ZZZZ Best funds still unaccounted for.

The evidence, submitted to the court under seal, apparently deals at least in part with testimony Minkow presented to a federal grand jury in 1986 investigating reputed organized crime figure Jack M. Catain.

Catain, who has long been linked by law enforcement authorities with Mafia families in Chicago and Philadelphia, was convicted in 1986 of conspiring to sell part of a $3.3-million cache of counterfeit $100 bills.

Minkow has said that Catain arranged loans for ZZZZ Best, charging 2% to 5% interest a week. Catain sued Minkow in 1985, alleging he was owed $1.3 million. Catain died last February.

Assistant U.S. Atty. James Asperger said the grand jury transcript, which was among the documents Minkow's lawyers sought to introduce, stemmed from a January, 1986, investigation of Catain by the Organized Crime Strike Force. Minkow's testimony to the grand jury was presented under a grant of immunity.

Minkow's lawyers argued Wednesday that if there is evidence that their client does not, in fact, have access to a large stockpile of cash which he could use to flee prosecution, his bail should be reduced.

With the new evidence--which the judge did not review--"there now should be no contention that Mr. Minkow took that money," Re said. "There is no $10 million. There is no money for Mr. Minkow to use in his flight from justice."

But Tevrizian said his original ruling merely considered the fact that the government cannot account for $10 million.

"This court did not presume that Mr. Minkow had the $10 million," the judge said.

Tevrizian set Lasko's sentencing for March 28. He faces a maximum of five years in prison and a $250,000 fine.

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