A Justice Department strike force in Las Vegas announced yesterday the indictment of six men on conspiracy charges involving the sale of life insurance for members of the allegedly mob-dominated Hotel Employes and Restaurant Employes Union.
Officials said the indictment alleged kickbacks of more than $175,000 during the six months the policy was in effect for members of Las Vegas' biggest union, the Southern Nevada Culinary Workers and Bartenders Local 226.
FBI agent John Schreiber said that Ben Schmoutey, 66, a former secretary-treasurer of the local, conspired with an East Coast insurance agent to provide insurance from the National Western Life Insurance Co. of Austin, Tex., "at a substantially higher cost than other companies were willing to provide."
The insurance company and two of its executives were among those indicted. Other defendants are Joseph V. Cusumano, 50, of Las Vegas; Louis Steve Bluestein, 73, of Las Vegas, a former Local 226 organizer and international union representative, and Louis C. Ostrer, 63, who is serving a 20-year sentence in federal prison on a racketeering conviction.
Law enforcement sources said that Schmoutey, Cusumano and Bluestein had links to the Chicago branch of the Mafia, and that Ostrer had ties to organized-crime families in New York City.
Schreiber declined to be so specific, but he said "there's no question certain organized-crime figures had to be satisfied" before various payments were made.
He said Schmoutey was to have received $50,000 in kickbacks, but got only $14,000 before payments "were suddenly stopped and diverted to Ostrer," who allegedly received $175,000 during the six months the life insurance policy was in effect.
The payments allegedly came from $630,000 in premiums charged to Local 226.