Wayne Newton Stars in a Real-Life Drama of Mob Extortion in Las Vegas

What, has developed into the most trying ordeal of Wayne Newton’s recent life began with the breakdown of a small business deal. One night last year at the Frontier Hotel and Casino in Las Vegas, he was approached backstage after the second show by Ron Delpit, a former associate with a bone to pick. Newton had withdrawn his support from a joint publishing venture, and Delpit arrived—accompanied by an employee—to try to change the singer’s attitude. A source close to the case says that heated words were exchanged, and Newton, taking offense at something his ex-associate’s companion said, pinned the man against a wall. Newton’s bodyguard broke up the altercation quickly, but some time later, the source says, “Delpit started threatening Wayne. He indicated that he was connected to a Mob family, that he would hurt Wayne.”

Much is unknown about the case; a gag order prevents any of the principals from talking about it. But from several sources close to the investigation, PEOPLE has been able to confirm the outlines of what authorities describe as an extortion plot against Newton, his personal manager, Mark Moreno, and another client of Moreno’s, singer Lola Falana.

Delpit denies having any Mob connections or making any threats. Newton does say, however, that he received menacing phone calls—some threatening his 5-year-old daughter, Erin. Then, “out of desperation” (according to his lawyer, Frank J. Fahrenkopf Jr.), Newton phoned a reputed West Coast mobster, Guido “Bull” Penosi, to get the threats called off. Authorities say that soon after, some 2,000 miles away in the Bronx, there was a Mob “sit-down,” apparently to settle the dispute. Members of the Gambino and Genovese crime families of New York were there, as was a relative of Penosi’s, Frank Piccolo. As one source close to the investigation describes the result: “Piccolo finds out there aren’t any Mob threats and that this punk Delpit isn’t connected at all, just pretends to be. So Piccolo and Bull [Penosi] decide to take advantage of the situation, telling Moreno and Wayne that they can take care of the trouble, for a piece of the action.”

Much of this is confirmed by an indictment returned in June, which alleges that Piccolo and Penosi “did use their power and influence within the criminal underworld” to stop the first set of threats—and then decided to make some of their own against Newton, Falana and Moreno. The precise nature of the threats is unclear, but they were plainly persuasive. “I can’t tell you what it’s like for Mark,” says a friend of Moreno’s, “to get a phone call in the middle of the night and hear a Damon Runyon voice whisper, ‘Don’t get in your car tomorrow.’ ”

Fortunately, the scheme was quickly detected. “The beauty of this,” says a source, “is that this whole thing was going down on a wiretap.” Federal agents in New Haven, Conn., listening in on Piccolo’s phone conversations, uncovered the plot and took it to the federal prosecutor. “When Wayne was called before the [Connecticut] grand jury and asked about his relationship with Penosi, he gave the party line—that Penosi was just a friendly fan,” says this source. “But when the grand jury revealed the wiretap, Wayne had no choice but to cooperate.” He is now a government witness against the two reputed mobsters.

The entanglement with Penosi and Piccolo is a complication that Newton does not need. The highest-paid entertainer in Las Vegas history ($1 million a month), Newton, 39, helped raise money for the Reagan campaign in 1980 and headlined one of the Inaugural Balls. With his 52-acre estate outside Las Vegas and his stable of Arabian horses, he has become, in his own estimation, “an example of what America can be.” He counted on that reputation last September, when the Nevada gaming commission held hearings on his application for a license to buy and operate the Aladdin Hotel and its casino. A Las Vegas figure named Ed Torres had initially attempted to buy the hotel in partnership with Delbert Coleman, a businessman once charged with stock manipulation. They were turned down, and it seemed likely that a consortium headed by the Tonight show’s Johnny Carson would get the Aladdin. But then Torres resurfaced with Newton as his partner. During the investigation of their application, state authorities discovered that Torres had met on occasion with reputed mobsters, including Meyer Lansky, and that Newton was acquainted with several, including Penosi; Wayne had even appeared in a pilot for a country-and-Western TV series produced by Penosi’s son. “I have not discussed my acquisition of the Aladdin Hotel with either of the Penosis,” Newton testified at the gaming commission hearings. “They are in no way involved in the Aladdin acquisition.”

The commission was evidently satisfied with that, finding Newton’s admitted associations to be evidence of his loyalty to his friends. “He could have gotten rid of them,” said the commission’s chairman, Harry Reid. “But he wouldn’t do that. Through all this, he said, ‘These people are my friends.’ ” The Torres-Newton application was approved.

A tale as tergiversated as this one could hardly be expected to have a simple ending. Last October, just after the Aladdin purchase was approved, NBC News correspondent Brian Ross reported the federal investigation into Penosi and Piccolo, and hinted that they were connected to the Aladdin deal. The singer responded with a lawsuit, accusing NBC’s then president Fred Silverman of ordering up the story on Newton at Johnny Carson’s behest—and presented as evidence two purported memos from Silverman to the reporter. “Use the strength of your network association to publicly expose Newton’s ties with certain underworld figures,” one “memo” read. An NBC affidavit points out that neither of the memos bears Silverman’s signature, which appears on all of his memos, and that they are in a different typeface than that of any machine in Silverman’s office. “Complete forgeries,” Silverman fumed in his affidavit, but Newton is sticking to his guns, labeling the case “a civil Watergate.”

Newton will no doubt be spending valuable time in courts in the months to come. If his stated plans hold, he will apply for a license to own and operate another casino and hotel in Atlantic City. In that city, still marginally winning its war against the ever-threatening invasion of organized crime, Newton’s friendships with alleged mobsters will not be viewed benignly. Says a New Jersey law enforcement official: “We don’t condone or put up with arrangements like that.” But in Nevada, despite his involvements with Penosi & Co., Newton’s future as a casino owner appears safe. “I don’t anticipate there will be any ramifications for Mr. Newton,” says Richard Bunker, chairman of the Nevada gaming control board. “After all, we can’t hold a licensee responsible for extortion attempts.”