Binion had successfuly won his gambling license back and went about making the Horseshoe Club into one of the most successful of the early casinos. But his troubles with the legal system were not over...
In July of 1952 a Texas federal grand jury indicted L. B. (Benny) Binion on charges that he underpaid his and his wife's 1949 federal income taxes by some $14,000.
Binion had earlier fought extradition to Texas on state charges of operating a numbers racket in Dallas. His attorneys and the U S Attorneys had agreed to transfer the case to Nevada but Attorney General James P. McGranery intervened and ordered Binion returned to Dallas for the trial.
The Nevada gaming commission, on February 3, 1953, discussed the application of Robert F Caudill of Las Vegas for a 2 ½ % interest in the Horseshoe Club whose major interest is held by Benny Binion who would retain an 85% interest in the club while he was under orders to return to Texas on an income tax indictment. The point was made that Binion's license should be revoked if he is found guilty in Texas and should not be allowed to sell portions of his operation while under indictment. At the same meeting, Clarence E. Cannon and Kenneth Cannon had licenses granted for poker games at the Horseshoe Club.
On June 7, 1953, Benny Binion turned himself in to Dallas County Sheriff Bill Decker to face charges of operating a $1 million year policy racket in Texas. He had unsuccessfully fought extradition to Texas to face the federal charge of evading is 1948 income taxes.
In September 1953, Benny Binion pleaded guilty in San Antonio, TX to charges of evading income tax for the years 1945 through 1948. He was set free on bonds totaling $25,000.
A federal judge denied Binions request for reduction in the terms of parole imposed in the Nevada federal courts in 1952. He had pleaded no contest to charges of evading 1949 income taxes and he was placed on probation for five years. He requested that the probation be reduced to 14 months but the plea was denied the decision mailed to the court clerk in Carson, Nevada.
In a November 23, 1953 article regarding the various plans for the sale of the Horseshoe it said that Robert “Dolby Doc” Caudill owned a 2½% piece of the club. However in subsequent articles Caudill's name and interest in the club never came up.
On December 2, 1953, Benny Binion's sentencing for income tax evasion was postponed for a second time and he was now scheduled to be sentenced at 2 PM on December 14,1953 in San Antonio Texas. Binion was given 12 days to sell his casino interest before he would find out the total amount he would owe to the government. Binion claimed that as late as a week before he did not know what he would owe the government and he did not get final figures until he arrived in Texas for sentencing. The US Attorney said there was no legitimate reason to delay the sentencing. He said Joe W. Brown, New Orleans millionaire, was buying a 50% interest in Binion's Horseshoe Club but that Brown had not obtained Nevada gambling license.
You can read a little more about
Joe W. Brown in the article to the left.
On Dec 7, 1953, Benny Binion turned over a check for $516,541.93 to the Internal Revenue Service for unpaid taxes, penalties, and interest. The government released the liens which it had filed against about $1 million worth of his property in Nevada, Texas, Louisiana, Montana and Mississippi to secure payment on the back income taxes for the 1945 through 1948 period.
He still faced sentencing December 14, 1953 in Texas on criminal charges of 4 counts of income tax evasion to which he pleaded guilty. He also faced charges in Dallas for running a policy racket before his move to Las Vegas. Texas state authorities planned prosecute their case when the federal government completed its tax case.
Binion was still on probation at this time after pleading 'no contest' to another income tax evasion charge on his 1948 taxes which he had paid off in 1952. At that time he was fined $15,000 and sentenced to 5 years probation.