Undercover Operations Inside Trump’s Casinos

It may sound absurd, but at times undercover work can also become a reputational tool.

That is what happened with Donald Trump when, even before building his empire in Atlantic City, he tried to position himself as an interlocutor of the FBI and to offer his casinos as potential venues for undercover operations. A way to show that he was “on the right side,” while entering sectors that everyone knew were deeply entangled with organized crime.

Ironically, a few years later, undercover investigations carried out inside his casinos would focus not so much on “external enemies,” but on a figure who was vital to Trump himself.

I explore these relationships between Trump and the Italian-American mafia in my latest book, The Wise Guy: Donald Trump and the Italian-American Mafia, to be published only in Italian (but open for translation if you want to help) in the coming weeks by Round Robin and currently available for pre-order across major book platforms.

In this issue of Debrief, however, we focus on a lesser-known chapter of that story.

This issue is written by Sacha and edited by Luigi.

Before Atlantic City: Trump Introduces Himself to the FBI

In 1981, while he was busy building skyscrapers in Manhattan, Trump decided he wanted to break into another industry long controlled by the mafia: casinos. He did so with his trademark modesty, aiming to become the king of the gambling business in short order. He began laying the groundwork for his move into Atlantic City, a city not far from New York that, in his vision, would become the Las Vegas of the East Coast after gambling was legalized.

Trump was well aware of the elephant in the room: the risk of organized crime infiltrating his gaming operations. He therefore turned to one of his fixers, a former union official named Daniel Sullivan, a man with solid ties to organized crime—useful for resolving disputes with unions controlled by New York’s mafia families—but also an FBI informant.

Through Daniel Sullivan, Trump arranged a meeting with federal agents to “discuss his intentions” to invest in Atlantic City. The agents even tried to dissuade him. There were “easier ways to invest your money,” agent Walt Stowe told him. “Atlantic City is really risky—if we were in your place, we wouldn’t do it.”

Trump did not listen to them, because he was not looking for advice in that room—he was looking for an opportunity. He wanted to show that he was willing to cooperate, so that the New Jersey authorities who had to grant him a license to operate in Atlantic City would see him as “clean.”

According to an internal FBI report, Trump told the agents that if the casino project went forward, he would be ready to “cooperate” with the Bureau, and he even proposed the use of undercover agents inside his future Atlantic City casino. The FBI went so far as to draft an operational proposal to infiltrate Trump’s casino environment.

But this is where the story flips, because what was supposed to function as a guarantee—the contact with the FBI—suddenly became a problem.

When Trump went to speak with Mickey Brown, the director of the Division of Gaming Enforcement, the New Jersey agency that oversees casinos, Brown told him that the main obstacle to obtaining the license he needed to operate in Atlantic City was Daniel Sullivan himself—the fixer with one foot in organized crime who had worked with Trump on his Manhattan real estate projects.

At that point Trump did what he often does: he tried to turn a risk into leverage. He told Brown that it was Sullivan who had introduced him to two FBI agents. The subtext was clear: if Sullivan brings me federal agents, then he cannot be that shady; if I’m talking to the FBI, then you can trust me.

But that argument backfired. According to what former FBI agent Walt Stowe later told me, the commission would not have looked kindly on a federal undercover operation inside a casino. For them, it was a reputational risk—it would imply that the mafia was operating in Atlantic City. And so the operation was shelved.

The Undercover Operation Against LiButti: From the Infiltrated Detective to the Wired Room

After the 1981 episode, however, an undercover operation became necessary nonetheless, because the State of New Jersey wanted to investigate a figure who is central to understanding how permeable Trump’s casinos were to ties with the Italian-American mafia: Robert LiButti.

LiButti was not just any customer. He was a “whale gambler,” one of those players who can determine a casino’s fortunes. Over just a few years, he wagered nearly $100 million in wins and losses. Jack O’Donnell, then president of the Trump Plaza, summed it up for me bluntly: the Plaza became “the number one casino” thanks to him.

And, as often happens in these stories, the most obvious question is also the one that remains unanswered: where did that money come from? When I asked his lawyer, David Fassett, what LiButti did for a living, he replied with a smile that amounted to a non-answer: an “entrepreneur,” with significant “access to money.” One thing, however, was certain: LiButti was well known within New York’s mafia families.

No one seemed particularly concerned, since LiButti alone was able to drive Atlantic City’s economy by sending the Trump Plaza’s revenues soaring. But when, toward the end of 1990, LiButti ran out of money, he suddenly became a problem.

That is when the undercover phase began. To build a solid case against him, the Division of Gaming Enforcement sent a state police detective, Robert Walker, to work undercover within Atlantic City’s betting circles.

In that context, Walker spoke with two bookmakers, Leonard “Leo” Cortellino and Charles Ricciardi Sr., associates of the Gambino family. They described a betting operation that “benefited” John Gotti, the most famous mob boss in the United States. And then, almost as if it were a minor detail, they dropped a line that for an investigator is pure gold: LiButti “was in Donald Trump’s pockets.” They explained why: LiButti had allegedly secured a “big money” contract at the Trump Plaza for his singer brother-in-law, Jimmy Roselli.

From there, the thread of the investigation led straight into the casino—into Trump’s house, so to speak. Robert LiButti had in fact met with Ed Tracy, the executive who in 1990 oversaw operations at Trump’s three Atlantic City casinos.

LiButti proposed a very simple deal: renew his brother-in-law Jimmy Roselli’s engagement by inflating the contract, thereby skimming off a secret commission for himself. He then asked whether John Gotti, head of the Gambino family, could come gamble at the casino. The detail matters, because at the time Gotti was on the official list of 150 mobsters banned by the state from Atlantic City casinos. LiButti was explicitly asking that the ban be ignored.

Ed Tracy, the operational manager of Trump’s Atlantic City casinos, realized he was no longer able to handle Robert LiButti. He alerted New Jersey authorities and, before meeting LiButti a second time, had a room at the Trump Plaza outfitted with microphones and recording devices so that the entire conversation could be taped.

At that point, Tracy did what is typical in a well-run operation: he did not argue or push back, but instead prompted LiButti to repeat the offer. In essence, he asked: “Okay, explain again how you’d like to structure this.” LiButti, convinced he was in a friendly setting, laid out the kickback scheme in plain terms: artificially inflate the singer’s contract, disguise the difference as a “bonus,” and ensure that the real bonus—$250,000—ended up with him.

That recording gave substance to a decision that had already effectively been made. LiButti became the 152nd name on Atlantic City’s exclusion list. But over the years, many other troubling details and circumstances about his relationship with Donald Trump would continue to surface.

Felix Sater: The Man Who Lives Between the Trump Brand and “Undercover” Work

Moving from Atlantic City back to New York, there is one name that, by itself, illustrates how Trump’s world is often populated by figures orbiting between opaque business dealings and federal authorities.

That name is Felix Sater, a man with extensive ties to organized crime. The episode most people recall when his name comes up dates back to 1991, when he was working on Wall Street and got into an argument with a colleague at a bar. Sater stabbed him in the face with the stem of a cocktail glass, leaving a wound that required 110 stitches.

Sater resurfaced in the mid-2000s as an executive at the financial firm Bayrock and as a consultant to the Trump Organization. He carried a business card identifying him as a “senior advisor” to Donald Trump and, according to journalistic investigations and civil lawsuits, became the man who funneled capital from Russian investors and oligarchs into Trump-branded real estate projects.

Yet Sater’s past is particularly noteworthy. In 1998, he confessed to involvement in a penny-stock fraud worth tens of millions of dollars—an operation that, according to court records, also benefited the Genovese and Gambino families, two pillars of New York’s Cosa Nostra. His 1998 guilty plea remained secret, with the files sealed for years, and it took an intervention by the Supreme Court to have portions of those records unsealed in 2012.

When sentencing finally came in 2009, Sater was not sent to prison. Instead, he received probation and a $25,000 fine, with no requirement to repay a single dollar to the victims.

It later emerged that for more than a decade Sater had also worked undercover as an informant for both the FBI and the CIA, providing prosecutors with information of “extraordinary depth and breadth” on organized crime, financial fraud, and even international terrorism.

Why This Story Still Matters Today

This is not just a story from the 1980s and 1990s.

Examining the undercover operations surrounding Trump offers a privileged view into how Trump rose to power, building a world populated by figures connected on one side to organized crime and on the other to federal authorities.

What if this modus operandi never really changed?

If these themes interest you, I explore them in greater depth in The Wise Guy: Donald Trump and the Italian-American Mafia (Round Robin, December 2025), currently available only in Italian for pre-order.

Until the next Debrief,

Luigi and Sacha

If you've come across an undercover investigation you think we should feature, share it with us here:
👉 https://forms.gle/1JbqMBJUfoRU9MBp7

If you have suggestions, questions, tips (or insults), drop us a line at:
👉 [email protected]

If you enjoyed this newsletter, pass it along to your friends using this link:
👉 https://debrief-newsletter.beehiiv.com/

Follow us on Instagram, occasionally we'll upload content different from the newsletter:
👉 https://www.instagram.com/debrief_undercover/

We've also launched a podcast featuring interviews with the authors of memorable undercover investigations:
👉 https://open.spotify.com/show

And if that's still not enough, join our Telegram channel, where we can keep the conversation going:
👉 https://t.me/debrief_undercover