Las Vegas Sun

March 29, 2024

Former Tropicana owner Gustafson dies at age of 67

The story of Deil Otto Gustafson is one of a simple Iowa farm boy who grew up to become a multimillionaire Las Vegas casino owner and financier, only to fall hard, the victim of his scheming ways and ties to organized crime.

Gustafson, a former owner of the Tropicana hotel-casino and Summit Banks in the St. Paul-Minneapolis area and a convicted felon linked to Kansas City mobsters, died Friday in Cannon Falls, Minn. He was 67.

The cause of death was not released.

Gustafson owned the Tropicana from 1971 to 1975 and co-owned it with Mitzi Stauffer Briggs Smith from 1975 to 1979. They were forced out by gaming regulators when it was learned that their entertainment director, mobster Joe Agosto, was calling some of the shots and diverting casino funds to the mob.

Gustafson was convicted in 1983 on a $4 million check-floating scheme involving two Minnesota banks. The scheme was to give the Tropicana interest-free loans in the late 1970s.

His conviction on mail fraud, misapplication of bank funds and conspiracy was upheld in February 1984 by a federal appeals court in St. Louis. Gustafson surrendered in St. Paul in late June of that year to begin serving a 10-year prison sentence. He was released after serving 40 months.

Gustafson later turned government informant and agreed to testify against Kansas City mobsters in the Tropicana skimming trial. Several Mafia bosses were convicted and sent to prison.

Gustafson also pleaded guilty in 1995 to federal charges that he diverted and tried to hide millions of dollars in proceeds from the sale of the Tropicana, then owned by Gustafson's Hotel Conquistador Inc., to Ramada Corp.

Last May, after six weeks of trial in federal court, U.S. Justice Department prosecutors, with Gustafson as their star witness, failed to convict former Tropicana hotel-casino landlords Ed and Fred Doumani and their tax attorney, John Jagiela, of bankruptcy fraud.

The jury deliberated more than three days before acquitting the Doumanis and Jagiela of charges that they withheld information from creditors and skimmed part of a $34 million judgment over the sale of the Strip resort.

The case hinged to a great extent on stories told by Gustafson, an admitted liar who was trading his testimony about his association with the Doumanis for leniency regarding his own legal problems.

In the case, Dan Albregts, Ed Doumani's attorney, during closing arguments called Gustafson "a revisionist historian who changed history to fit his own purpose ... the version the government wanted to present."

In mid-February, Gustafson was given five years probation and fined $50,000 in a federal court in Las Vegas.

In his formative years, life had been promising for Gustafson. He grew up on an Iowa farm and earned a law degree from a St. Paul law school. He later was a Minnesota college professor and in 1960 served as a deputy director of Hubert Humphrey's presidential campaign.

Gustafson became a successful financier, banker and real estate developer. By the time he bought the Tropicana, he had a net worth of more than $20 million.

In October 1973, Gustafson had become popular enough locally to be feted with a roast by the Las Vegas Saints and Sinners at a Las Vegas hotel.

Still, from nearly the beginning of his years in Las Vegas, Gustafson's past was questioned.

In a March 1, 1972, Sun story, it was reported that the Clark County Liquor and Gaming Licensing Board had "strong questions about the capability and intentions" of Gustafson, whose Consolidated Financial Corp. included a maze of subsidiaries.

Gustafson is survived by a daughter, sister and two grandchildren.

Services were today in Cannon Falls.

The Associated Presscontributed to this report.

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