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Tuesday, April 06, 1999
Copyright © Las Vegas Review-Journal
Clarification: An April 6 obituary of Deil Gustafson noted that he sold 51 percent of the Tropicana to Mitzi Stauffer Briggs Smith in 1975 and that both left the hotel amid reports that Joe Agosto, a reported mob associate, had made management decisions at the hotel and diverted money to the Kansas City mob. Mitzi Stauffer Briggs Smith has consistently maintained she did not know Agosto was a mobster or allegedly diverting funds. She has never been convicted of criminal activity.
Former owner of the Tropicana dies in Minnesota
By Jane Ann Morrison
Review-Journal
Deil Gustafson, who owned the Tropicana Hotel from 1971 until he was forced out by gaming regulators in 1979 because of his ties to the Kansas City mob, died Friday in Minnesota at age 67.
Services are being held today in Cannon Falls, the Minneapolis suburb where he had been living.
The Minnesota businessman was a self-made man who parlayed buying banks in Minneapolis into a career in real estate investment. He bought the Tropicana Hotel in 1971 when it was so run-down that he described it in the Wall Street Journal as "an old elephant that needed a stab in the rear."
He sold 51 percent of the hotel's stock to chemical heiress Mitzi Stauffer Briggs Smith in 1975.
Both of them were forced out in 1979, after FBI tapes revealed they had allowed mobster Joe Agosto, while serving as the Tropicana's entertainment director, to make management decisions and divert funds to mobsters in Kansas City.
The resort was sold to Ramada Corp. for $80 million and later that sale, and the subsequent bankruptcy of Gustafson's operating company, Hotel Conquistador Inc., became the focus of another criminal case.
His first criminal conviction in 1983 was for a $4 million check-kiting scheme involving two of his Minnesota banks and the Tropicana. The scheme was designed to provide the Las Vegas hotel with interest-free loans in the late 1970s.
He was convicted of fraud and conspiracy in one trial and then pleaded guilty of failing to report currency transactions stemming from the scheme. At that time, he agreed to become a government witness and testify in a skimming trial against Kansas City mobsters. He was sentenced to 10 years in prison and served 40 months on the check-kiting case between 1984 and 1987.
But his legal woes didn't end with that case.
Federal prosecutors investigated him for allegedly trying to hide millions of dollars in proceeds from the sale of the casino to the Ramada Inns through a bankruptcy scam.
He pleaded guilty in 1995 to the bankruptcy charges, where he was accused of helping divert $22 million from the sale of the Tropicana Hotel and the subsequent bankruptcy of his Hotel Conquistador Inc., which ran the Tropicana when he owned it.
One sentencing document alleged he received about $7.7 million of the diverted funds.
On Feb. 17, Gustafson was placed on probation for five years by Senior U.S. District Judge Lloyd George, who also fined him $50,000 and ordered him to perform 100 hours of community service work.
At his Las Vegas sentencing less than two months ago, Gustafson said, "I did wrong and I take responsibility."
His attorney, Stan Parry, argued at the time he deserved probation because of his cooperation and his poor health.
However, his testimony against the others in the bankruptcy case has not been as helpful as federal prosecutors had hoped it would be.
Gustafson was found by a federal judge to not be a credible witness. Prosecutors were able to convict only one of the six defendants in the bankruptcy fraud case.
Gustafson was an Iowa farm boy who earned a master's degree from the University of North Dakota and a law degree from William Mitchell School of Law in St. Paul. He taught economics at the University of Minnesota and was deputy director of Hubert Humphrey's 1960 presidential campaign.
He moved from the world of academia into the world of business. The Wall Street Journal said his net worth in the early 1970s was between $20 million and $30 million and he controlled assets of $150 million.
The Minneapolis Star Tribune quoted his daughter, Kristina, as saying her father did good things that were overshadowed by media coverage of his criminal background.
He is also survived by a sister and two grandchildren.
The Associated Press contributed to this report.
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