Palermo couldn't get Sfouris to pay rent on bar
Co-owner takes stand
Post-Tribune (IN)
August 14, 1991
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The co-owner of a Gary building used as notorious house of prostitution took the stand as a defense character witness in the trial of six reputed mobsters here Tuesday.
Janet Elias, formerly of Gary and Griffith, now of the posh Gulf Coast community of Marco Island, Fla., told jurors in U.S. District Court she has known defendant Dominick "Tootsie" Palermo for 20 to 25 years.
Palermo, 73, of Orland Park, Ill., and co-defendants Nicholas "Jumbo" Guzzino, 49, of Chicago Heights, Ill.; Bernard "Snooky" Morgano, 54, of Valparaiso; Sam Nuzzo Jr., 45, of Merrillville; Sam "Frog" Glorioso, 48, of Gary; and Peter "Cadillac Pete" Petros, 56, formerly of Gary now of Cicero, Ill., are charged with gambling and racketeering.
Closing arguments in their trial, which began June 22, are scheduled to start today.
Elias testified she and her husband, Joe Elias, bought the building at Cline Avenue and the Borman Expressway in 1964 and ran a bar there - Josef's Lounge - until her husband sold the business, but not the building, in 1978.
Elias complained tenant Steve Sfouris, who renamed the bar Duchess Lounge, was chronically late paying the building's insurance, taxes and $1,800-a-month rent.
She said neither her lawyer, nor the sheriff, nor an appeal for help to her friend Palermo could get Sfouris to pay regularly.
"I had a miserable time," Elias said.
Apparently the defense, in placing Elias on the stand, wanted to refute the prosecution's depiction of Palermo as an all-powerful mob boss. The government contends Palermo heads the crime syndicate in Northwest Indiana and the South Chicago suburbs.
Sfouris reputedly ran a high-stakes Greek dice game called barbotte from the Cline Avenue bar.
The government alleges Sfouris paid "street taxes" to the crime syndicate for "protection" of his gambling operations.
Sfouris, charged with gambling and racketeering, fled to Greece to avoid prosecution.
Under cross-examination by Assistant U.S. Attorney Michael Thill, Elias emerged as something other than Sfouris' victim.
During his questioning of Elias, Thill carried photocopies of newspaper articles about prostitution and vice raids at Josef's Lounge in the 1970s and late 1960s.
In other testimony, two defense character witnesses said Palermo and Guzzino were responsible men, employed at full-time jobs.
Frank Zeuberis, 45, of Chicago Heights, testified that when he became a field representative with International Laborers Local 5 in Chicago Heights in 1987, Palermo was already working in that position making $1,000 a week. Palermo retired in 1990.
Guzzino's former boss, Raymond J. Holeman, retired director of field representatives for the Laborers Welfare and Pension Funds, testified that Guzzino was a "reliable and dilligent" field representative.
Holeman also testified Guzzino's duties caused him to call on Indiana construction companies.
Guzzino's alleged interstate pickup and delivery of gambling proceeds is a key element in the government's case against all six defendants.
Stephanie Morgano, defendant Bernard Morgano's wife of 30 years, also testified Tuesday she was constantly at her husband's bedside after his April 1986 heart attack.
She refuted previous testimony by Anthony Leone, 49, of Porter Township, who said he took orders on gambling operations from Morgano at his bedside after his two heart surgeries that April at Porter Memorial Hospital in Valparaiso and St. Anthony Medical Center in Crown Point.
Stephanie Morgano also testified about the home she and her husband bought in 1971.
An enlarged photo of the Morganos' house was placed in evidence by the prosecution.
Stephanie Morgano said she and her husband lived for years with their parents in Gary to save money for a down payment on their first and only home. She said they paid $45,000 for the house and made a customary down payment.
Porter County records show their deed was recorded Dec. 21, 1970. Their 25-year mortgage for $33,000 to the First State Savings and Loan Association of Gary required payments of $254.70, records show.
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