Mob Shakedown Target, 2 Others Named in Loan-Sharking Case

A suspected loan shark who was once the target of a mob shakedown has been indicted on charges of concealing earnings of up to 1% a week on his operation from the Internal Revenue Service, authorities announced Thursday.

Daniel Mondavano, 59, whose operation was uncovered when former Arizona Democratic U.S. Senate candidate Roy Elson went to the Los Angeles Mafia for help in collecting lost investments, was named in a five-count indictment that also targets his son, Dennis, 38, and former wife, Rose, 58.

The indictment, secretly returned by a federal grand jury April 14 and unsealed Thursday, alleges that Mondavano and his business partners solicited prospective investors to provide capital, promising weekly interest of 0.5% to 1%.

The money, according to the indictment, was being used to fund high-interest loans to other businessmen, real estate investments or to purchase and resell distressed goods at a profit.

Invested Funds

The indictment, which is limited to tax charges, does not accuse Mondavano of loan-sharking. But prosecutors have said it was a loan-sharking operation that first lured Elson, a former vice president of the National Assn. of Broadcasters, into investing nearly $750,000 with Mondavano on behalf of himself and several business associates.

Elson, who ran for the Senate in 1964, eventually hired several reputed members of the Los Angeles Mafia family to shake down Mondavano when he allegedly quit paying returns. Secretly recorded conversations showed that one alleged mob boss ordered that Dennis Mondavano be beaten as a message to his father.

“Now you see what happened to your son. . . . The next time we are going to bury the whole . . . family,” alleged street boss Luigi Gelfuso Jr. said of the plan on the tape.

Elson provided testimony to a federal grand jury about his dealings with Mondavano and Los Angeles crime family members but apparently never got his money back. At one point, Elson estimated that Mondavano, a former Tarzana resident, had funneled millions of dollars in investments into his money-lending operation.

According to the indictment, Mondavano required investors to buy in with cash, telling them that because they would receive their return in cash, they would not have to report the interest income to the IRS.

Bank Accounts

Mondavano then used bank accounts in the names of other individuals and companies to conceal the money he was taking in, the indictment alleges.

Both Daniel and Dennis Mondavano are also accused of using threats of physical violence against certain investors who sought to report the investment scheme to the government.

The allegations in the indictment, which include conspiracy and subscribing to a false income tax statement, cover the period between 1981 and 1984.

Daniel and Dennis Mondavano were arrested Wednesday in Phoenix and are scheduled for bail hearing in Phoenix on Monday.

Rose Mondavano was arrested in East Boston on Thursday and released on $5,000 bail.