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Pittsburgh scam changed American hustler's game

| Thursday, Dec. 19, 2013, 11:18 p.m.
Christian Bale (left) as Irving Rosenfeld, Amy Adams as Sydney Prosser, and Bradley Cooper as Richie Dimaso walking down Lexington Avenue in a scene from Columbia Pictures' film, 'American Hustle.'

“American Hustle” wouldn't have happened without a Pittsburgh hustle.

Mel Weinberg, the swindler behind the movie's main character, became a government informant when federal investigators in Pittsburgh broke up his scam.

When they did, he tried to talk them out of it.

As FBI agents showed up at his Long Island, N.Y., house with a search warrant, Weinberg did some quick research and called James West, the assistant U.S. attorney in Pittsburgh who authorized the investigation.

“I've been involved in hundreds, if not thousands, of cases, and that was the only time I had a defendant get on the phone and try to talk to me,” West recalled on Thursday. “He was quite persuasive, in that he was able to get ahold of me and make rapid arguments about why we should call this whole thing off.”

A grand jury indicted Weinberg in February 1977 on wire fraud, mail fraud and conspiracy counts. He pleaded guilty and was sentenced to three years in prison.

Only then did he agree to work for the FBI, eventually leading to the “Abscam” scandal and prosecution of a U.S. senator, six House members and other politicians and businessmen for taking bribes from people they thought were Arab sheikhs.

“For the first time in his life, Weinberg knew that there was no way out,” t he late investigative journalist Robert W. Greene Sr. wrote in his book, “ The Sting Man .” “Nobody could be bought. No political connection could fix things. Nobody could be conned. He had no place to hide.”

Weinberg, now in his late 80s, lives in Florida, according to Slate.com. The Trib could not reach him.

Before his Abscam involvement, Weinberg scammed a Pittsburgh real estate developer, Lee Schlag, who needed money to purchase a dairy.

Schlag, who died several years ago, never married and had no children. Several distant family members talked about his life but told the Tribune-Review they had no idea about his connection to Weinberg.

Schlag's father developed Ross farmland into the White Oak Heights neighborhood, and the family ran North Hills Dairy on McKnight Road, his cousin Walter Schlag said.

Weinberg ran a classic advanced fee swindle, West said. For an upfront payment of several thousand dollars, he would offer to help an investor borrow money from overseas banks.

The banks did not exist. After months of stringing along a victim, or “mark,” Weinberg would say the loan application was rejected.

Schlag paid $3,564 to apply for a $1.9 million loan, Greene wrote. When the money never came, Schlag turned to the FBI.

As an informant, Weinberg was brilliant. Convicted politicians were caught on tape taking bribes from people they thought were Arab sheikhs.

In perhaps the most famous line uttered in a public corruption case, former Rep. Michael “Ozzie” Myers, a Philadelphia Democrat, was captured on tape saying, “Money talks in the business, and b--- walks.” Myers was sentenced to three years in prison .

The late Rep. John Murtha, a Johnstown Democrat, testified against the other lawmakers.

West, who wonders if the movie is as good as the true story, became a court-appointed U.S. attorney in Harrisburg. He oversaw public corruption cases that included a Pennsylvania lottery-rigging scandal and an investigation of state Treasurer R. Budd Dwyer, who killed himself during a 1987 news conference.

“I think Mel Weinberg was surprised somebody hadn't come for him long ago,” said West, who retired from private practice a year ago and lives in Sacramento, Calif. “He just figured, ‘The jig is up, and I'm going to have to cooperate.' ”

Andrew Conte is a Trib Total Media staff writer. Reach him at aconte@tribweb.com. Staff writers Adam Smeltz and Brian Bowling contributed.

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