Sports Betting Articles

BY STEVE WARMBIR FEDERAL COURTS REPORTER

Gregory Emmett Paloian has been known to eat paper in public.

Once, he was spotted shoving paper into his mouth at a Super Bowl party at a banquet hall in Lombard, as police officers stormed the doors.

Another time, he scarfed down slips of paper while driving down the street in Chicago, the cops right behind him.

Still another time, he rolled around with cops outside the Elmwood Park Civic Center, where he had been attending one of his kids' athletic events. The cops were trying to stop him from eating paper again, and again they failed.

Paloian is good at eating paper.

He is a bookie, an extremely successful one.

"If I didn't book, I wouldn't be here," Paloian admitted to a federal judge last month at a sentencing hearing.

The paper he loves to eat contains records of illegal gambling--the many large and small bets he takes--the kind of evidence that lands a bookie in prison.

It's a special kind of paper, relatively edible, that dissolves in an instant when touched by moisture. Old-school bookmakers, who worked out of secret wire rooms full of phones and strategically placed buckets of water nearby, used reams of it. When the cops bust through the door, the paper went right into the buckets.

No paper, no case.

But Paloian prefers to move around. No cramped little wire room for him. He fields bets on a cell phone--actually, three or four cell phones--from anywhere. So when incriminating paper has to disappear, he calls on his own saliva.

Actually, Paloian, 47, isn't making book at the moment. After more than 20 years of running what federal prosecutors call "a hugely successful" mob-connected bookmaking operation, raking in millions of dollars, he was nabbed. In March, he pleaded guilty to charges of bookmaking, and in July, he was sentenced to 41 months in prison.

The feds are pleased about catching Paloian. Bookmaking, they say, is not just a matter of boys being boys, betting on sports, with nobody getting hurt. Bookmaking, they say, fills the pockets of the mob.

"The government prosecutes these kind of cases primarily for one reason and one reason only--this was a bookmaking organization run by the mob, for the benefit of the mob," Assistant U.S. Attorney Marsha McClellan explained in court. "Through huge, unregulated, untaxed proceeds from these activities, organized crime is able to fund its other pursuits."

A nice business

Hundreds of mob-connected bookmakers operate in the Chicago area, as they have for decades, law enforcement experts say. They hang out in bars, restaurants, office buildings, sports stadiums. They're like the kid who sold pot in your high school--ask around, and you could find him. They did a nice business in Prohibition days, and they do a nice business today, despite competition from state lotteries, off-track betting parlors and supersaver fares to Vegas. Unlike a casino, a bookie will let you gamble on credit, and your winnings are tax free.

Paloian started out in the late 1970s as one of the bucket guys. At Riis Park on the West Side, where he collected a paycheck for a no-work job, he spent his days on the phone taking bets, his trusty bucket of water nearby, the feds say.

Bookmaking was a slightly rougher line of work then. If a bettor could not pay his debts, Paloian might refer him to an associate, James "Jimmy I" Inendino, for an exorbitantly high-interest juice loan. Inendino was a friend of the notorious hit man Harry Aleman and, for that matter, a scary guy himself. In a phone conversation that was secretly recorded, Inendino once threatened to break every bone in a man's body if the guy didn't pay up.

But bookmakers today are less likely to have people beat up. It's bad for business, and victims tend to squeal. Now they just cut off the deadbeats.

Paloian, speaking in court, said he always treated his gamblers fairly.

"I was always a decent person with the people I dealt with," he said.

A bookmaker such as Paloian can earn $500,000 or more a year. His agents can earn $1,000 a week. For bookmakers as successful as Paloian, their cut to the mob can run about $10,000 a month.

And it's the ultimate cash business--forget about paying income taxes.

When the police raided Paloian's home days before Christmas in 1998, they found $6,090 in his pocket--a thick wad of 20s, 50s and 100s--and $150,000 in cash in the house, as well as jewelry, loose diamonds and Krugerrands. Most of it was stashed in safes in a secret room behind a false wall in a basement closet.

Like most bookies, Paloian moved out of the wire room years ago, appreciating the obvious advantages of cell phones.

Bookies like Paloian can use voice mail to set the betting line on a game, and take bets the same way, said Donald Herion, a veteran gambling investigator now retired from the Cook County sheriff's office. Bookies can move about freely, making it harder for investigators to catch them.

With voice mail, Paloian seldom had to talk directly to the people with whom he did business, said Internal Revenue Service Special Agent Thomas C. Moriarty, in an affidavit filed in the Paloian case.

In March 1994, Paloian was stopped by police for driving erratically. The cops seized $5,100 in cash, four cell phones, three pagers, two walkie-talkies, two calculators and a pocket computer.

In 1997, Paloian was busted in Westchester while watching his child's soccer game. He was sitting on a portable chair, talking on two cell phones and allegedly taking bets.

The vig

In general, bookmakers make their money by putting a tax on a losing bettors' wager, usually 10 percent, also known as the vig or vigorish.

To hide the source of his income, authorities allege Paloian set up a dummy corporation, called U PICK 'EM SPORTS Inc. The company's stated legal purpose was to provide the betting line on games to callers.

Like other bookmakers, Paloian developed a group of agents to bring in new bettors. Typically, a bookie's agents collect money from their own bettors and split the take evenly with the boss. The top bookie earns more than he would working alone, and he enjoys a layer of insulation from the new bettors.

Bookies also like to invite high-rolling customers to big one-time events, such as the Super Bowl party Paloian attended in 1991 at the Carlisle banquet hall in Lombard.

Getting into the party cost $1,000. Bettors and their guests enjoyed great food, ice sculptures and a chance to bet on the game for a big payout.

The party was rife with mob associates and their relatives, police said, but only the hosts were charged with crimes, as is typical in gambling raids. The most serious charges were dropped after prosecutors missed a filing deadline, authorities said.

Among the guests were a number of Melrose Park village employees, as well as Donald Stephens II, son of the mayor of Rosemont. Donald II is in charge of Rosemont's police and fire departments.

In federal court recently, Paloian swore that the booking life was behind him. And, in an unusual scene, he all but begged U.S. District Judge Charles Kocoras to throw the book at him, if only somehow he could be allowed out of prison for a few hours each day to look after his two teenage children.

"Run the table," Paloian urged the judge.

Paloian, it turns out, is crazy about his kids and is a terrific single father.

His defense attorney, Ralph Meczyk, called him "Mr. Mom" and said he had gone from "bookmaker to homemaker."

Paloian drove his kids to and from school, coached a girls basketball team, and never missed an after-school event.

"He may not have baked a cake for the bake sale, but he certainly showed up with an armful of cakes from the local bakery," gushed one mother in a letter to the judge, one of dozens written on Paloian's behalf.

"In my professional opinion, Mr. Paloian is like two parents in one," wrote Melrose Park police Lt. Joseph Amabile.

In the end, the letters and lawyers didn't help much.

Kocoras told Paloian he thought he was a decent man and a good father.

But, the judge added, Paloian knew that booking was illegal, knew that it could hurt his children.

"You ran the risk," Kocoras said, sentencing Paloian to 41 months. "You lost the bet, quite frankly."