In March 1975,
Penthouse published an article headlined "La Costa: The Hundred Million-Dollar Resort with Criminal Clientele," written by
Jeff Gerth and
Lowell Bergman. The article indicated that Omni La Costa Resort & Spa in Carlsbad was developed by
Mervyn Adelson and
Irwin Molasky using loans from the
Teamsters Pension Fund and that the resort was a playground for organized crime figures. The owners, along with two officials of the resort,
Morris B. "Moe" Dalitz and Allard Roen, filed a libel lawsuit for $522 million against the magazine and the writers. In 1982, a jury absolved the magazine of any liability against the lawsuit from the owners. The plaintiffs appealed, but before a new trial could begin, the two sides settled in December 1985.
Penthouse issued a statement that they did not mean to imply that Adelson and Molaskey were members of organized crime. In turn, the plaintiffs issued a statement lauding
Penthouse publisher
Bob Guccione and his magazine for their "personal and professional awards." Total litigation costs were estimated to exceed $20 million. According to the
San Diego Reader, Adelson finally admitted to mob ties in an interview published in the March 2013 issue of
Vanity Fair magazine. ==Connection to other controversies==