The Mob and Pornography

From the I.P.S.N. Archives, Spring 1996. The Mob is never very far away from the sex business, evidenced by the 22-count indictment against some familiar figures in the Chicago area in 1996.

Adult Book Store Owners Pinched: Sex, Sin & Sleaze in the Suburbs

A federal grand jury recently handed over to U.S. Attomey James B. Burns, a 22-count indictment accusing some familiar figures with criminal conspiracy in connection with the day to day operation of a string of adult bookstores in Downers Grove, Las Vegas, and Bristol, Wisconsin. Frank Panno, one of the accused, is a well known outfit associate with a lengthy history of involvement in local vice operations. In the mid-1980s he was convicted and sentenced to four-years in prison on prostitution charges stemming from his role in Operation Safebet.

During the critical stages of the suburban-vice investigation which sent several highranking Cook County police officials and corrupt attorneys to prison, Panno was a partner in a multi-million-dollar call- girl ring with Doris “Dolly” Fischer, the notorious Buffalo Grove madame who employed her live-in boyfriend, renowned burglar and hijacker Paul “Peanuts” Panczko, to chauffeur the prostitutes around Chicago as they made their appointed rounds. Fischer disguised the true purpose of her Fantasies Unlimited business in the veneer of a professional escort service.

The business responded to customer’s orders for sexual favors via telephone hookups. Records were carefully maintained in personal computers. Payments were accepted through either cash or credit cards with credit card orders processed through an undercover F.B.I. processing service known as National Credit Service, Inc. (NCS).

In this latest vice escapade occurring more than a decade after Safebet, Panno is among five men accused of hiding the ownership of Ogden Books in Downers Grove and the Wisconsin outlet in order to defraud the Internal Revenue Service out of income and payroll taxes. The government further accuses Panno of filing false statements concerning the source of his income, and amount of money received from his sundry operations.

It is alleged that Panno and friends skimmed from the store’s profits by creating a duplicate set of cash register tapes and destroying original records, thus hiding the earnings of the two retail sex emporiums.

Back in the mid 1970s when there was less heat on syndicate vice action than today, Frank Panno and his good friend Salvatore “Sam” Cecola opened a string of resorts along the notorious Mannheim Road strip. Preceding the wide-ranging Safebet investigations which clamped a lid on the flourishing sex business around town, Panno operated the Smokers Health Club next door to his Roaring 20s Adult Bookstore. In 1981, he opened the Marco Polo Hotel featuring adult movies and mini- suites.

The principals in the book store scam in addition to Panno include Raymond D. MaGray, 49, of Chicago; John Spudeas, 80, of Pompano Beach, Florida; Spero “Gus the Greek” Palladinos, 67, of suburban Norridge; and Barrington resident Sam Cecola, a long time associate of Panno. His name appears on a recent organizational chart of Chicagoland mob figures. Cecola is reputedly aligned to the Cicero crew headed by James Marcello, who took over after Rocco Infelise went off to prison.

During the time when Panno was making a name for himself as a leading purveyor of girls in the suburban environs, Cecola was busy in the city operating a string of lucrative massage parlors including the Harlem Leisure Spa, across the street and in plain view of the Moody Bible Institute on LaSalle Street. Cecola and Frank Amato, who ran the Fox Theatrical Agency on Wabash Avenue were charged with supplying under-age girls as dancers at local strip clubs. However, the charges were dismissed in 1972.

In the intervening years Cecola was a major player in the porno business in Chicago and other locales outside Illinois. He opened two adult bookstores in Houston until local authorities, working in conjunction with Chicago Police Department vice officers, arrested him in his apartment on charges of promoting obscenity. He is listed as the owner of the Club Paradise in Las Vegas, another adult- oriented business. The club was repeatedly targeted by organized crime investigators in Nevada, who had kept the establishment under surveillance. In 1994, Cecola and a Club Paradise employee were arrested on a money-laundering charge which came about as aresult of a police undercover sting operation.

Cecola, Panno, Spudeas, and Palladinos were the hidden owners of the Midwest stores. Frank Panno and Gus “the Greek” Palladinos disguised their ownership of the A-Action Adult Books and Venus Unlimited – the two Las Vegas outlets: The defendants allegedly attempted to conceal their ownership by failing to file W-2 forms with the government for their employees, and instead paid the salaries in cash or with checks. All of the stores generated sizeable revenues which were split up among the hidden owners. The mob is never far away from the sex business, even in these moralistic, and re pressive times when the government and local municipalities have redoubled their efforts on eradicating topless bars, and porno book store.

If convicted, Frank Panno faces a possible 17-year sentence and a $1.3 million dollar fine. Sam Cecola faces the prospect of a 20-year sentence and $1.5 million-dollar fine. The case was presented to the September 1995 grand jury, and will commence later this year.