A longtime associate of reputed Outfit bosses Peter and John DiFronzo was convicted Monday of extortion for threatening a deadbeat suburban businessman and then hiring a team of goons to break the victim's legs months later when he still wouldn't pay up hundreds of thousands of dollars in debt.
"How are your wife and kids doing? Are you still living in Park Ridge?" prosecutors said Michael "Mickey" Davis asked the victim during a January 2013 confrontation at a Melrose Park used car dealership, according to trial testimony. "Does your wife still own that salon in Schaumburg?"
After two weeks of testimony, a federal jury deliberated about nine hours before convicting Davis, 58, on two extortion-related counts. He faces up to 20 years in prison on each count.
As the verdict was read, Davis, dressed in a light gray suit with his hair slicked back, raised his eyebrows, turned to whisper something to one of his lawyers, sat back in his chair and shook his head.
Prosecutors sought to immediately jail Davis pending sentencing, but U.S. District Judge Samuel Der-Yeghiayan allowed Davis to remain free for now so he can go to a doctor's appointment. Davis could be taken into custody when he is scheduled to return to court next week.
In the lobby of the Dirksen U.S. Courthouse, Davis' attorney, Thomas Anthony Durkin, vowed to appeal, telling reporters he was "disappointed that the jury could conclude from nothing but circumstantial evidence that it was proof beyond a reasonable doubt."
Davis' trial featured some of the biggest names in the depleted ranks of the Chicago Outfit, including the DiFronzo brothers and Salvatore "Solly D" DeLaurentis, all reputed leaders of the notorious Elmwood Park crew. While none of the aging bosses was charged with any wrongdoing, their names and photos were shown to jurors as evidence of Davis' purported connections to the highest levels of the mob.
The alleged victim of the extortion plot, R.J. Serpico, testified that he was well aware of Davis' friendship with the DiFronzo brothers and that he often saw Davis and Peter DiFronzo cruising past his Ideal Motors dealership in DiFronzo's black Cadillac Escalade. Serpico, who is a nephew of longtime Melrose Park Mayor Ronald Serpico, said he also had heard that Davis was partnered with DeLaurentis, a feared capo convicted in the 1990s of racketeering conspiracy in connection with a violent gambling crew run by Ernest Rocco Infelice.
Durkin said Davis has known the DiFronzo brothers since childhood and that for years he has maintained a business relationship with them through his landfill in Plainfield, where two DiFronzo-owned construction companies have paid millions to dump asphalt and other construction debris. Davis and Peter DiFronzo were also golfing and fishing buddies, Durkin said.
"As many witnesses testified, growing up in Melrose Park, or growing up in Elmwood Park as Mickey did, you come to know those people," Durkin said Monday. "I don't think at this point Peter DiFronzo is anything but a businessman. I think it's unfortunate that he gets tarred with the same brush, but the government seems hellbent on continuing to put the Outfit out of business, and I don't begrudge them that, but I do begrudge them the means that they go about doing it."
Prosecutors allege that within months of the ominous January 2013 confrontation at Ideal Motors, Davis, infuriated that Serpico had still failed to pay back a $300,000 loan, ordered his brutal beating, enlisting the help of a well-known Italian restaurant owner in Burr Ridge to find the right guys for the job. The restaurateur went to reputed mob associate Paulie Carparelli, who in turn hired a team of bone-cracking goons to carry out the beating for $10,000, according to prosecutors.
Unbeknownst to everyone involved, however, the beefy union bodyguard tasked with coordinating the assault, George Brown, had been nabbed months earlier in an unrelated extortion plot and was secretly cooperating with the FBI. In July 2013, agents swooped in to stop the beating before it was carried out, court records show.
Thanks to Jason Meisner.
Showing posts with label Peter DiFronzo. Show all posts
Showing posts with label Peter DiFronzo. Show all posts
Tuesday, June 16, 2015
Monday, June 15, 2015
Mickey Davis and Peter DiFronzo, Fishing Buddies or Mob Associates?
The mob-connected plot to break the legs of a deadbeat suburban businessman started at a dingy used car dealership in Melrose Park, federal prosecutors say.
Michael "Mickey" Davis, a longtime associate of reputed Outfit bosses Peter and John DiFronzo, walked into R.J. Serpico's office, closed the door behind him and threw a piece of paper onto the desk.
On the sheet were scribbled notes from a mob bookie indicating Serpico's father owed thousands of dollars in gambling debts. Serpico, who had taken a $300,000 loan from Davis to start the fledgling Ideal Motors dealership with his father, knew instantly he was in trouble.
"This wasn't our (expletive) agreement," Davis growled, according to Serpico's recent testimony in federal court. "I want my (expletive) money."
He then pulled up a chair, leaned in close and issued what prosecutors allege was a thinly veiled threat.
"How are your wife and kids doing? Are you still living in Park Ridge?" the hefty suburban landfill owner allegedly asked Serpico. "Does your wife still own that salon in Schaumburg?"
Without another word, Davis got up and walked out.
Prosecutors allege that within months of that ominous January 2013 confrontation, Davis, infuriated that Serpico had still failed to pay back the loan, ordered his brutal beating, enlisting the help of a well-known Italian restaurant owner in Burr Ridge to find the right guys for the job. The restaurateur went to reputed mob associate Paulie Carparelli, who in turn hired a team of bone-cracking goons to carry out the beating for $10,000, according to prosecutors.
Unbeknownst to everyone involved, however, the beefy union bodyguard tasked with coordinating the assault had been nabbed months earlier in an unrelated extortion plot and was secretly cooperating with the FBI. In July 2013, agents swooped in to stop the beating before it was carried out, court records show.
For the past two weeks, Davis' trial on extortion charges at the Dirksen U.S. Courthouse has featured some of the biggest names in the depleted ranks of the Chicago Outfit, including the DiFronzo brothers and Salvatore "Solly D" DeLaurentis, all reputed leaders of the notorious Elmwood Park crew.
While none of the aging bosses has been charged with any wrongdoing, their names and photos have been shown to jurors as evidence of the 58-year-old Davis' purported connections to the highest levels of the mob.
Serpico testified he was well aware of Davis' friendship with the DiFronzo brothers and that he often saw Davis and Peter DiFronzo cruising past Ideal Motors in DiFronzo's black Cadillac Escalade. He said he also had heard Davis was partnered with DeLaurentis, a feared capo convicted in the 1990s of racketeering conspiracy in connection with a violent gambling crew run by Ernest Rocco Infelice.
Davis' attorneys, meanwhile, have denied he has anything to do with the mob. Davis has known the DiFronzos since childhood and has maintained a longtime business relationship with them through his landfill in suburban Plainfield, where two DiFronzo-owned construction companies have paid millions of dollars to dump asphalt and other construction debris, according to his lawyers.
To bolster their point that he had nothing to hide, Davis' attorneys showed the jury a photo that Davis kept in his office at the E.F. Heil landfill. The undated photo showed a tanned Davis deep-sea fishing off Costa Rica with Peter DiFronzo, the shirtless mob boss appearing to be reeling in a catch with a pole harness strapped around his waist.
Jurors deliberated about seven hours Friday without reaching a verdict. U.S. District Judge Samuel Der-Yeghiayan told the panel to return Monday morning to resume discussions.
In his closing argument Thursday, Thomas Anthony Durkin, Davis' attorney, urged jurors not to get swept up in the dramatic talk of gangsters and to focus instead on the evidence that Durkin said failed to connect Davis to the mob or any extortion plot.
"If you want to get swayed by looking at 'murderer's row' here, Pete DiFronzo, John DiFronzo, Solly DeLaurentis, all the boys, then we are in trouble," Durkin told the jury in his closing argument as the mobsters' photos were flashed on an overhead screen.
Durkin also painted Serpico as a liar and called the government's undercover informant, George Brown, "just pathetic."
Both Carparelli and Brown have pleaded guilty to charges unrelated to Davis' case and are awaiting sentencing.
According to court records and testimony at the trial, Davis, who often golfed with Serpico's father, Joe, loaned the father-son team $300,000 in 2012 to purchase used vehicles to sell at Ideal Motors. The agreement called for the loan to be paid back within three years, plus an extra $300 per car sold tacked on as interest. According to prosecutors, Davis expected to more than double his money. But the deal quickly soured as the business floundered and Serpico's father continued to gamble with the borrowed funds, court records show. By the end of that year, Ideal Motors was in trouble, with creditors breathing down the owners' necks and cars being repossessed.
Serpico, 44, who is married with two children, testified he was terrified and sick to his stomach after Davis threatened him and his family at the meeting at Ideal Motors. He kicked his father off the lot to appease Davis, who became co-owner. Serpico also paid Davis nearly $60,000 in cash and a used Chevelle to try to buy some time, according to prosecutors.
Wracked with fear and not knowing what to do, Serpico "literally walked off the lot" that May 2013 and left control of the business to Davis, Assistant U.S. Attorney Heather McShain said in her closing argument. But with Ideal Motors a financial bust, Davis had had enough, McShain said.
"Mickey Davis made a decision to not only continue to collect but to follow up on his threat," McShain said.
Over the next several weeks, FBI agents secretly recorded a series of phone calls and meetings between Carparelli and Brown in which they discussed the logistics of the beating, including concerns over whether they had the proper clearance from the Outfit to carry out such an attack in the DiFronzos' territory.
In a recorded call on July 11, 2013, Carparelli told Brown their plan was safe because Davis had a direct line to the bosses, court records show.
"OK, listen, I met this guy (Davis) yesterday. You know who this guy is?" a transcript of the call quoted Carparelli as saying. "This is Solly D's partner. Ok? ...So, listen, we definitely can't (expletive) around with these guys or we're going to have a big (expletive) headache, a big headache."
But Carparelli also saw the job as a chance to prove themselves to the bosses, saying if the beating was successful it would "put us right on the map, believe me when I tell ya," according to the transcript.
A few days later, Carparelli told Brown his guys should approach Serpico as he left his new job as a salesman at Al Piemonte Ford, stage a fender-bender and attack him when he got out of his car.
"Say we give him a little tap, like an accident. 'Oh man, I'm sorry,'" Carparelli said on the call. "Guy gets out of his car. Boom, boom, boom. That's it."
Thanks to Jason Meisner.
Michael "Mickey" Davis, a longtime associate of reputed Outfit bosses Peter and John DiFronzo, walked into R.J. Serpico's office, closed the door behind him and threw a piece of paper onto the desk.
On the sheet were scribbled notes from a mob bookie indicating Serpico's father owed thousands of dollars in gambling debts. Serpico, who had taken a $300,000 loan from Davis to start the fledgling Ideal Motors dealership with his father, knew instantly he was in trouble.
"This wasn't our (expletive) agreement," Davis growled, according to Serpico's recent testimony in federal court. "I want my (expletive) money."
He then pulled up a chair, leaned in close and issued what prosecutors allege was a thinly veiled threat.
"How are your wife and kids doing? Are you still living in Park Ridge?" the hefty suburban landfill owner allegedly asked Serpico. "Does your wife still own that salon in Schaumburg?"
Without another word, Davis got up and walked out.
Prosecutors allege that within months of that ominous January 2013 confrontation, Davis, infuriated that Serpico had still failed to pay back the loan, ordered his brutal beating, enlisting the help of a well-known Italian restaurant owner in Burr Ridge to find the right guys for the job. The restaurateur went to reputed mob associate Paulie Carparelli, who in turn hired a team of bone-cracking goons to carry out the beating for $10,000, according to prosecutors.
Unbeknownst to everyone involved, however, the beefy union bodyguard tasked with coordinating the assault had been nabbed months earlier in an unrelated extortion plot and was secretly cooperating with the FBI. In July 2013, agents swooped in to stop the beating before it was carried out, court records show.
For the past two weeks, Davis' trial on extortion charges at the Dirksen U.S. Courthouse has featured some of the biggest names in the depleted ranks of the Chicago Outfit, including the DiFronzo brothers and Salvatore "Solly D" DeLaurentis, all reputed leaders of the notorious Elmwood Park crew.
While none of the aging bosses has been charged with any wrongdoing, their names and photos have been shown to jurors as evidence of the 58-year-old Davis' purported connections to the highest levels of the mob.
Serpico testified he was well aware of Davis' friendship with the DiFronzo brothers and that he often saw Davis and Peter DiFronzo cruising past Ideal Motors in DiFronzo's black Cadillac Escalade. He said he also had heard Davis was partnered with DeLaurentis, a feared capo convicted in the 1990s of racketeering conspiracy in connection with a violent gambling crew run by Ernest Rocco Infelice.
Davis' attorneys, meanwhile, have denied he has anything to do with the mob. Davis has known the DiFronzos since childhood and has maintained a longtime business relationship with them through his landfill in suburban Plainfield, where two DiFronzo-owned construction companies have paid millions of dollars to dump asphalt and other construction debris, according to his lawyers.
To bolster their point that he had nothing to hide, Davis' attorneys showed the jury a photo that Davis kept in his office at the E.F. Heil landfill. The undated photo showed a tanned Davis deep-sea fishing off Costa Rica with Peter DiFronzo, the shirtless mob boss appearing to be reeling in a catch with a pole harness strapped around his waist.
Jurors deliberated about seven hours Friday without reaching a verdict. U.S. District Judge Samuel Der-Yeghiayan told the panel to return Monday morning to resume discussions.
In his closing argument Thursday, Thomas Anthony Durkin, Davis' attorney, urged jurors not to get swept up in the dramatic talk of gangsters and to focus instead on the evidence that Durkin said failed to connect Davis to the mob or any extortion plot.
"If you want to get swayed by looking at 'murderer's row' here, Pete DiFronzo, John DiFronzo, Solly DeLaurentis, all the boys, then we are in trouble," Durkin told the jury in his closing argument as the mobsters' photos were flashed on an overhead screen.
Durkin also painted Serpico as a liar and called the government's undercover informant, George Brown, "just pathetic."
Both Carparelli and Brown have pleaded guilty to charges unrelated to Davis' case and are awaiting sentencing.
According to court records and testimony at the trial, Davis, who often golfed with Serpico's father, Joe, loaned the father-son team $300,000 in 2012 to purchase used vehicles to sell at Ideal Motors. The agreement called for the loan to be paid back within three years, plus an extra $300 per car sold tacked on as interest. According to prosecutors, Davis expected to more than double his money. But the deal quickly soured as the business floundered and Serpico's father continued to gamble with the borrowed funds, court records show. By the end of that year, Ideal Motors was in trouble, with creditors breathing down the owners' necks and cars being repossessed.
Serpico, 44, who is married with two children, testified he was terrified and sick to his stomach after Davis threatened him and his family at the meeting at Ideal Motors. He kicked his father off the lot to appease Davis, who became co-owner. Serpico also paid Davis nearly $60,000 in cash and a used Chevelle to try to buy some time, according to prosecutors.
Wracked with fear and not knowing what to do, Serpico "literally walked off the lot" that May 2013 and left control of the business to Davis, Assistant U.S. Attorney Heather McShain said in her closing argument. But with Ideal Motors a financial bust, Davis had had enough, McShain said.
"Mickey Davis made a decision to not only continue to collect but to follow up on his threat," McShain said.
Over the next several weeks, FBI agents secretly recorded a series of phone calls and meetings between Carparelli and Brown in which they discussed the logistics of the beating, including concerns over whether they had the proper clearance from the Outfit to carry out such an attack in the DiFronzos' territory.
In a recorded call on July 11, 2013, Carparelli told Brown their plan was safe because Davis had a direct line to the bosses, court records show.
"OK, listen, I met this guy (Davis) yesterday. You know who this guy is?" a transcript of the call quoted Carparelli as saying. "This is Solly D's partner. Ok? ...So, listen, we definitely can't (expletive) around with these guys or we're going to have a big (expletive) headache, a big headache."
But Carparelli also saw the job as a chance to prove themselves to the bosses, saying if the beating was successful it would "put us right on the map, believe me when I tell ya," according to the transcript.
A few days later, Carparelli told Brown his guys should approach Serpico as he left his new job as a salesman at Al Piemonte Ford, stage a fender-bender and attack him when he got out of his car.
"Say we give him a little tap, like an accident. 'Oh man, I'm sorry,'" Carparelli said on the call. "Guy gets out of his car. Boom, boom, boom. That's it."
Thanks to Jason Meisner.
Saturday, May 31, 2014
Elementary School Construction Project Subcontractor Has Reputed Chicago Syndicate Ties
A company with alleged ties to Chicago organized crime has been brought on as a subcontractor for a Park Ridge elementary school construction project.
A green dumpster belonging to D&P Construction recently appeared outside Field School, 707 Wisner St., ahead of an air conditioning, heating and ventilation project slated to occur this summer.
Scott Mackall, Director of Facility Management for Park Ridge-Niles School District 64, said he was told D&P is providing only the dumpster for the project and was subcontracted by Palatine-based Bergen Construction Corporation, which is the company performing the bulk of the work. “We’re writing [Bergen] the checks,” Mackall said.
The Better Government Association reported in 2012 that the FBI believes D&P Construction is run by two brothers with Chicago mob connections: Peter DiFronzo and John “No Nose” DiFronzo. During the 2007 “Family Secrets” mob trial in Chicago, the BGA said John DiFronzo was implicated in the murders of two mob brothers, but was not charged with a crime.
According to a 2008 report by the BGA and the Chicago Sun-Times, D&P “was the focus of a Gaming Board disciplinary case that stopped Emerald Casino Inc. from building a floating gambling barge in Rosemont in 2001.” The report also stated that the Gaming Board “linked D&P to individuals who have been identified as known members of organized crime.”
D&P Construction has been used on projects for a number of Chicago Public Schools, according to a 2011 investigation by the BGA and Fox 32.
Mackall said he was unaware of the allegations of mob ties and D&P Construction. “I’ve never heard that at all,” he said.
A representative from Bergen Construction could not be immediately reached for comment.
The Field School construction project, slated to be complete by Aug. 8, will install air conditioning in the school, in addition to heating and ventilation upgrades and asbestos abatement. Field is the last of the District 64 schools to receive air conditioning.
The project, said Mackall, came in under budget at $4.5 million. The contract awarded in February identified the total cost at $5.33 million.
“The bids came in very competitive. They were quite a bit lower than we anticipated,” Mackall said.
Other building projects slated to occur around the district this summer include security upgrades at each school building costing a total of $337,425. The upgrades consist of security cameras on school property, changes in door access and a system that will run the driver’s licenses or state IDs of building visitors through a registered sex offender database.
Thanks to Jennifer Johnson.
A green dumpster belonging to D&P Construction recently appeared outside Field School, 707 Wisner St., ahead of an air conditioning, heating and ventilation project slated to occur this summer.
Scott Mackall, Director of Facility Management for Park Ridge-Niles School District 64, said he was told D&P is providing only the dumpster for the project and was subcontracted by Palatine-based Bergen Construction Corporation, which is the company performing the bulk of the work. “We’re writing [Bergen] the checks,” Mackall said.
The Better Government Association reported in 2012 that the FBI believes D&P Construction is run by two brothers with Chicago mob connections: Peter DiFronzo and John “No Nose” DiFronzo. During the 2007 “Family Secrets” mob trial in Chicago, the BGA said John DiFronzo was implicated in the murders of two mob brothers, but was not charged with a crime.
According to a 2008 report by the BGA and the Chicago Sun-Times, D&P “was the focus of a Gaming Board disciplinary case that stopped Emerald Casino Inc. from building a floating gambling barge in Rosemont in 2001.” The report also stated that the Gaming Board “linked D&P to individuals who have been identified as known members of organized crime.”
D&P Construction has been used on projects for a number of Chicago Public Schools, according to a 2011 investigation by the BGA and Fox 32.
Mackall said he was unaware of the allegations of mob ties and D&P Construction. “I’ve never heard that at all,” he said.
A representative from Bergen Construction could not be immediately reached for comment.
The Field School construction project, slated to be complete by Aug. 8, will install air conditioning in the school, in addition to heating and ventilation upgrades and asbestos abatement. Field is the last of the District 64 schools to receive air conditioning.
The project, said Mackall, came in under budget at $4.5 million. The contract awarded in February identified the total cost at $5.33 million.
“The bids came in very competitive. They were quite a bit lower than we anticipated,” Mackall said.
Other building projects slated to occur around the district this summer include security upgrades at each school building costing a total of $337,425. The upgrades consist of security cameras on school property, changes in door access and a system that will run the driver’s licenses or state IDs of building visitors through a registered sex offender database.
Thanks to Jennifer Johnson.
Monday, December 17, 2012
Stolen Sewer Covers Allegedly Purchased by Junk Yard Tied to Reputed Mob Boss
This story is courtesy of the Better Government Association:
Thieves descend on suburbs to steal municipal sewer covers. How did they end up at a mob-linked scrap yard?
For weeks, thieves have been making off with sewer covers from a slew of western suburbs – a likely by-product of a limp economy and relatively high resale prices for metal.
Last week, police revealed where at least some of those heavy grates ended up: in a Melrose Park scrap yard that’s been linked to reputed mob figures.
The yard on Lake Street is home to two sister companies: D&P Construction and JKS Ventures. Both are, on paper, run by Josephine DiFronzo, wife of Peter DiFronzo, who the FBI has identified as a “made” member of the Chicago mob. But the FBI has long contended that Peter DiFronzo and his brother John “No Nose” DiFronzo, a reputed mob leader, are really in charge of the operation.
The complex pays money for scrap metal, and apparently had been buying the stolen municipal items from thieves – by one account for $6 each, by another for 10 cents a pound, authorities said.
Forest Park police said that over the weekend they arrested a man who was spotted stealing sewer caps and grates, which can weigh upwards of 50 or 60 pounds. Officers found a number of them in the back of his SUV, and he told police he was headed to the scrap yard to cash in, authorities said. The village ultimately recovered other stolen pieces from the scrap yard.
A few days ago, acting on a “tip,” police from Westchester recovered more than 30 of their sewer caps and grates at JKS Ventures, each valued between $150 and $200 new.
Westchester Police Chief April Padalik said there was a large pile of stolen metal – perhaps 100 or more sewer caps and the like.
Other nearby towns that have suffered thefts include: Bellwood, Berkeley, Elmhurst, Hillside, Itasca, La Grange Park, Northlake, Western Springs and Wood Dale. At least some of those communities, alerted to the find, have since visited the Melrose Park scrap yard looking for – and finding – their missing items.
A police investigation is ongoing, with more arrests possible, authorities said.
Whether the DiFronzo operation could face trouble for buying stolen gear – unwittingly or otherwise – is unclear.
Josephine DiFronzo was reached on the phone Thursday night, but after a reporter identified himself the phone went dead. She did not respond to subsequent inquiries.
Another woman in the D&P/JKS office told a FOX 32 reporter the company helped police by alerting authorities to a suspicious sales attempt. However, Padalik said that “help” came after police had found stolen items at the scrap yard.
Despite its reputed (and well-publicized) mob connections, D&P has secured an alarming amount of government-related business in recent years through its waste-hauling operation, as detailed in previous BGA and FOX 32 reports. D&P was one of the sponsors of a village festival in Melrose Park just this past summer.
In 2007 testimony at the “Family Secrets” mob trial, John DiFronzo was implicated in the murders of mobster-brothers Anthony and Michael Spilotro, but he never was charged with their deaths.
In a rare interview several years ago, after cameras found John DiFronzo frequenting D&P/JKS offices in Melrose Park, he was asked about his role there. “Nothing,” he said.
This story was written and reported by the Better Government Association’s Katie Drews, Patrick Rehkamp and Robert Herguth, and FOX 32’s Dane Placko. To reach them, email kdrews@bettergov.org or call (312) 821-9027.
Help the BGA shine a light on government and hold public officials accountable by becoming a member, contributor or tipster. Details at www.bettergov.org.
Sunday, September 20, 2009
John DiFronzo, Reputed Chicago Mob Boss, Connected to Two Constuction Companies That Receive Substantial Government Payments
It’s called Omerta – the code of silence. It’s an old world Mob term that still applies here in modern-day Chicago. And when we started asking about two companies tied to the Mob, we saw it in action.
“Will you get the hell out of here?” one woman yelled when we asked. “Jesus Christ!”
“We just want to know who runs the business,” FOX Chicago investigator Dane Placko replied.
“None of your damned business!”
“D & P Construction” and “JKS Ventures” in Melrose Park are family-run businesses. The family is headed by John DiFronzo, the 81-year-old reputed boss of bosses of the Chicago Outfit.
Former FBI agent Jim Wagner spent his career busting the mob. Now, the head of the Chicago Crime Commission says the businesses are being run by convicted felons. When Dane Placko showed Wagner our video of the business owner, Wagner said he looked like the John DiFronzo he remembered: “He’s actually remained in very good shape for a man his age.”
Back in the day, John DiFronzo earned his nickname “No Nose” when a shard of glass clipped his nose during a gun battle with police. In the historic “Family Secrets” mob trial, a government turncoat testified that DiFronzo took part in the murders of mobsters Michael and Anthony Spilotro, who were beaten to death and buried in an Indiana cornfield. He was named in open court, but DiFronzo has never been charged with the crime.
FOX Chicago investigator Dane Placko spent several days over the summer watching John DiFronzo going in and out of D & P Construction – sometimes spending hours inside. When we finally talked to him, he appeared to be right at home.
"What do you do for D & P Construction and JKS?" Placko asked.
"Me? Nothing. Nothing," DiFronzo replied.
"Well we see you here quite often,” Placko continued.
"It's just my brother. It's my brother."
"Peter?" Placko asked.
"Yes, that's my family,” said DiFronzo.
"Who owns D & P?"
"His wife I think."
Josephine DiFronzo signs her name as the owner of the business. When Placko asked whether Mrs. DiFranzo was in, people at the business did not seem happy.
"Go away. Don't worry about who's here,” said one woman.
"They're not here. Go away," said a man.
Ultimately, FOX Chicago News never saw Josephine Spilotro at the company’s headquarters on the Northwest side. She stayed at their multi-million dollar home in Barrington, while her husband Peter went to work.
Peter DiFronzo also is reputedly a made member of the Chicago Outfit. And we saw Joseph DiFronzo, the youngest brother, who just got out of federal prison after he was caught running a massive indoor marijuana farm. When he arrived at D & P headquarters driving his brother’s car, we approached him to ask some questions.
That’s when a woman on the property told DiFronzo to leave the property rather than talk to us. “Go, go, go,” she yelled at him through the closed windows of DiFronzo’s Chrysler 300.
No one wants to talk about it, but the DiFronzo family clearly has a keen sense of business. Trucks hauling gravel, Dumpsters and fancy Cadillacs pass through the gates all day long. And millions of your tax dollars help keep it going.
"A basic rule of government and politics in the United States of America is you do business with reputable companies,” says Andy Shaw of Chicago’s Better Government Association. “You don't do business with gangsters, you don't do business with mobsters. You don't do business with people with a long record of felony convictions. You don't do that.”
Well, it turns out they do that in Bellwood, Stone Park, Norridge, Harwood Heights, Schiller Park and River Grove.
Suburbs and government agencies which have made payments to D&P Construction and JKSS Ventures since 2001 from the Freedom Of Information Act:
Bellwood: $1,013,295
Stone Park: $61,052
Schiller Park: $79,670
Franklin Park: $1,586,722
Elmwood Park: $787,462
Leyden Township: $59,218
River Grove: $384,416
Cook Co. Forest Preserve: $32,212
Melrose Park: $1,088,041
Stone Park: 61,021
Harwood Heights: $300
Norridge: $1,300
Oak Park: $7,497
Elmhurst: $8,640
Northlake: $75,556
Thanks to Dane Placko
“Will you get the hell out of here?” one woman yelled when we asked. “Jesus Christ!”
“We just want to know who runs the business,” FOX Chicago investigator Dane Placko replied.
“None of your damned business!”
“D & P Construction” and “JKS Ventures” in Melrose Park are family-run businesses. The family is headed by John DiFronzo, the 81-year-old reputed boss of bosses of the Chicago Outfit.
Former FBI agent Jim Wagner spent his career busting the mob. Now, the head of the Chicago Crime Commission says the businesses are being run by convicted felons. When Dane Placko showed Wagner our video of the business owner, Wagner said he looked like the John DiFronzo he remembered: “He’s actually remained in very good shape for a man his age.”
Back in the day, John DiFronzo earned his nickname “No Nose” when a shard of glass clipped his nose during a gun battle with police. In the historic “Family Secrets” mob trial, a government turncoat testified that DiFronzo took part in the murders of mobsters Michael and Anthony Spilotro, who were beaten to death and buried in an Indiana cornfield. He was named in open court, but DiFronzo has never been charged with the crime.
FOX Chicago investigator Dane Placko spent several days over the summer watching John DiFronzo going in and out of D & P Construction – sometimes spending hours inside. When we finally talked to him, he appeared to be right at home.
"What do you do for D & P Construction and JKS?" Placko asked.
"Me? Nothing. Nothing," DiFronzo replied.
"Well we see you here quite often,” Placko continued.
"It's just my brother. It's my brother."
"Peter?" Placko asked.
"Yes, that's my family,” said DiFronzo.
"Who owns D & P?"
"His wife I think."
Josephine DiFronzo signs her name as the owner of the business. When Placko asked whether Mrs. DiFranzo was in, people at the business did not seem happy.
"Go away. Don't worry about who's here,” said one woman.
"They're not here. Go away," said a man.
Ultimately, FOX Chicago News never saw Josephine Spilotro at the company’s headquarters on the Northwest side. She stayed at their multi-million dollar home in Barrington, while her husband Peter went to work.
Peter DiFronzo also is reputedly a made member of the Chicago Outfit. And we saw Joseph DiFronzo, the youngest brother, who just got out of federal prison after he was caught running a massive indoor marijuana farm. When he arrived at D & P headquarters driving his brother’s car, we approached him to ask some questions.
That’s when a woman on the property told DiFronzo to leave the property rather than talk to us. “Go, go, go,” she yelled at him through the closed windows of DiFronzo’s Chrysler 300.
No one wants to talk about it, but the DiFronzo family clearly has a keen sense of business. Trucks hauling gravel, Dumpsters and fancy Cadillacs pass through the gates all day long. And millions of your tax dollars help keep it going.
"A basic rule of government and politics in the United States of America is you do business with reputable companies,” says Andy Shaw of Chicago’s Better Government Association. “You don't do business with gangsters, you don't do business with mobsters. You don't do business with people with a long record of felony convictions. You don't do that.”
Well, it turns out they do that in Bellwood, Stone Park, Norridge, Harwood Heights, Schiller Park and River Grove.
Suburbs and government agencies which have made payments to D&P Construction and JKSS Ventures since 2001 from the Freedom Of Information Act:
Bellwood: $1,013,295
Stone Park: $61,052
Schiller Park: $79,670
Franklin Park: $1,586,722
Elmwood Park: $787,462
Leyden Township: $59,218
River Grove: $384,416
Cook Co. Forest Preserve: $32,212
Melrose Park: $1,088,041
Stone Park: 61,021
Harwood Heights: $300
Norridge: $1,300
Oak Park: $7,497
Elmhurst: $8,640
Northlake: $75,556
Thanks to Dane Placko
Saturday, March 14, 2009
Is John DiFronzo Now the Undisputed Boss of the Chicago Mob
With last month's life sentences for several top hoodlums, Outfit investigators say John DiFronzo is now the undisputed boss of the Chicago mob.
He's been called "No Nose" ever since part of his nose was sliced off while jumping through a window during a Michigan Avenue burglary.
After the I-Team was told by numerous organized crime sources that John "No Nose" DiFronzo holds a regular luncheon meeting at a west suburban restaurant, we took a look for ourselves. (Video of the meeting.)
A train whistle signals the approach of noon in west suburban River Grove. Also like clockwork on this Friday is the arrival of John DiFronzo to the Loon Cafe.
The 80-year-old convicted mob boss has driven his shiny new pickup truck a few blocks from the Grand Avenue home where he has lived for years.
He is the first one at the restaurant for "Lunch with No Nose."
"Mr. Difronzo's been there on a regular basis
. The earlier story was that he was in there like clockwork every Tuesday night. It was his local watering hole just like a lot of guys in Chicago have their local wateringhole. Rumor has it that he's in there a bit more frequently these days," said John Binder, author of "The Chicago Outfit (IL) (Images of America)."
His nose long since re-cast from the old days and more likely to be called "Johnny Bananas" to his face, DiFronzo is the first to arrive.
His brother Peter shows up next. The owner of a suburban waste-hauling firm, Peter DiFronzo is a convicted warehouse thief who did time at Leavenworth. Mob investigators say, like his brother, Peter is a fully initiated "made" member of the Chicago Outfit and believed to be his brother's most trusted lieutenant and advisor.
Then comes Marco "the Mover" Damico, a one-time bricklayer and DiFronzo protoge. Damico is a convicted mob capo with a 50-year criminal history of gambling, racketeering and toug guy intimidation. "Marco at one time was running the Elmwood Park Street Crew. I wouldn't be surprised if they found him a higher stature position if one was available right after he got out," said Binder.
Next to arrive, another DiFronzo brother, Joe, a former juice loan boss, once convicted of running the nation's largest indoor marijuana farm.
Other DiFronzo chums walk in, until the table for nine is full, for what could be a command performance.
"Anybody in the Outfit would go when they're called. It's a very hierarchical organization. A lot of these guys would spit in the face of the devil walking through the doors of Hell," said Binder.
For decades the Chicago mob has been conducting business at restaurant dining tables. One of the most famous photos in Outfit history was snapped in 1976 and was later found by the FBI during a raid. It shows a group of mobsters at a table.
Except for Joey "the Clown" Lombardo who was just sentenced to life in prison, the crime syndicate leaders seen together in the photo are all dead.
But now, there is a new family photo, taken by the I-Team just last Friday as John "No Nose" DiFronzo dishes out pizza to the Outfit's upper crust.
After the two hour pizza and wine meeting, DiFronzo was first to leave.
DiFronzo was not charged during the landmark Family Secrets trial in 2007 that took down major mob bosses and solved more than a dozen gangland murders. But key witness and hitman Nick Calabrese testified that DiFronzo had a hand in the grisly, 1986 murders of Las Vegas mob boss Anthony Spilotro and his brother Michael. During a sentencing hearing last month, Park Ridge dentist Dr. Pat Spilotro challenged the government to arrest DiFronzo for his part in killing of his brothers.
"From the federal government's point of view, the jury believed Nick Calabrese, they believed everything he said. The government convicted everybody. One of the things Nick Calabrese said was that John Difronzo was one of the guys beating on the Spilotros. He's the one guy left still alive who was identified by Nick Calabrese who hasn't been indicted and tried," said Binder.
The pleasantries may soon be finished for John DiFronzo.
In two weeks mob informant Nick Calabrese is scheduled to be sentenced . But Calabrese' work as a government witness will probably not end. His next appearance could come against the man they call "No Nose."
Thanks to Chuck Goudie
He's been called "No Nose" ever since part of his nose was sliced off while jumping through a window during a Michigan Avenue burglary.
After the I-Team was told by numerous organized crime sources that John "No Nose" DiFronzo holds a regular luncheon meeting at a west suburban restaurant, we took a look for ourselves. (Video of the meeting.)
A train whistle signals the approach of noon in west suburban River Grove. Also like clockwork on this Friday is the arrival of John DiFronzo to the Loon Cafe.
The 80-year-old convicted mob boss has driven his shiny new pickup truck a few blocks from the Grand Avenue home where he has lived for years.
He is the first one at the restaurant for "Lunch with No Nose."
"Mr. Difronzo's been there on a regular basis
. The earlier story was that he was in there like clockwork every Tuesday night. It was his local watering hole just like a lot of guys in Chicago have their local wateringhole. Rumor has it that he's in there a bit more frequently these days," said John Binder, author of "The Chicago Outfit (IL) (Images of America)."His nose long since re-cast from the old days and more likely to be called "Johnny Bananas" to his face, DiFronzo is the first to arrive.
His brother Peter shows up next. The owner of a suburban waste-hauling firm, Peter DiFronzo is a convicted warehouse thief who did time at Leavenworth. Mob investigators say, like his brother, Peter is a fully initiated "made" member of the Chicago Outfit and believed to be his brother's most trusted lieutenant and advisor.
Then comes Marco "the Mover" Damico, a one-time bricklayer and DiFronzo protoge. Damico is a convicted mob capo with a 50-year criminal history of gambling, racketeering and toug guy intimidation. "Marco at one time was running the Elmwood Park Street Crew. I wouldn't be surprised if they found him a higher stature position if one was available right after he got out," said Binder.
Next to arrive, another DiFronzo brother, Joe, a former juice loan boss, once convicted of running the nation's largest indoor marijuana farm.
Other DiFronzo chums walk in, until the table for nine is full, for what could be a command performance.
"Anybody in the Outfit would go when they're called. It's a very hierarchical organization. A lot of these guys would spit in the face of the devil walking through the doors of Hell," said Binder.
For decades the Chicago mob has been conducting business at restaurant dining tables. One of the most famous photos in Outfit history was snapped in 1976 and was later found by the FBI during a raid. It shows a group of mobsters at a table.
Except for Joey "the Clown" Lombardo who was just sentenced to life in prison, the crime syndicate leaders seen together in the photo are all dead.
But now, there is a new family photo, taken by the I-Team just last Friday as John "No Nose" DiFronzo dishes out pizza to the Outfit's upper crust.
After the two hour pizza and wine meeting, DiFronzo was first to leave.
GOUDIE: "John...
DIFRONZO: How ya doin' buddy?"
GOUDIE: "How was the meeting?
DIFRONZO: What meeting?
GOUDIE: The pizza lunch.
DIFRONZO: Oh, yeah. that was good. That was good."
GOUDIE: You come here a lot?
DIFRONZO: No, first time.
GOUDIE: Mr. Damico in there?
DIFRONZO: I have...I don't even know who he is.
GOUDIE: I thought I saw him going into your lunch.
DIFRONZO: No, I haven't seen him. He hasn't been around."
DiFronzo was not charged during the landmark Family Secrets trial in 2007 that took down major mob bosses and solved more than a dozen gangland murders. But key witness and hitman Nick Calabrese testified that DiFronzo had a hand in the grisly, 1986 murders of Las Vegas mob boss Anthony Spilotro and his brother Michael. During a sentencing hearing last month, Park Ridge dentist Dr. Pat Spilotro challenged the government to arrest DiFronzo for his part in killing of his brothers.
GOUDIE: "Pat Spilotro said he wanted to know why the government hadn't picked you up in connection with Family Secrets.
DIFRONZO: I, uh--don't know anything about it...sorry.'
"From the federal government's point of view, the jury believed Nick Calabrese, they believed everything he said. The government convicted everybody. One of the things Nick Calabrese said was that John Difronzo was one of the guys beating on the Spilotros. He's the one guy left still alive who was identified by Nick Calabrese who hasn't been indicted and tried," said Binder.
GOUDIE: Are you concerned that you may end up in Family Secrets two?
DIFRONZO: I'm not concerned at all...bye bye...nice talkin' to you."
The pleasantries may soon be finished for John DiFronzo.
In two weeks mob informant Nick Calabrese is scheduled to be sentenced . But Calabrese' work as a government witness will probably not end. His next appearance could come against the man they call "No Nose."
Thanks to Chuck Goudie
Monday, December 03, 2007
No More Snow Plowing at UIC for Alleged Mob Firm
A reputed mob-controlled company no longer holds a snow-removal contract at the University of Illinois at Chicago.
UIC officials say D&P Construction declined to bid for the contract -- after revelations surfaced during the "Family Secrets" mob trial last summer that reputed mob boss John "No Nose" DiFronzo took part in a double murder.
D&P, which has had numerous snow-removal contracts with UIC since 1998, on paper is run by Josephine DiFronzo -- the sister-in-law of John DiFronzo and the wife of Peter DiFronzo, who is purportedly a chief lieutenant to his brother John in mob affairs.
Authorities have said the two DiFronzo brothers really control the firm.
The new contract was awarded to a small minority-run company called Total Property Management and Engineering Services in September, according to UIC records.
D&P "did not submit a bid," said UIC spokesman Mark Rosati.
Rosati said university officials did not ask D&P to give up its contract.
Doing so would be illegal, he said.
When asked whether UIC officials were pleased that D&P and its alleged mob ties decided to move on, he declined comment.
Josephine DiFronzo did not return calls.
Although the school never witnessed nefarious tactics, an internal 2003 FBI memo alleged that D&P "obtained contracts through illegal payoffs or intimidation."
D&P made headlines in 2001 after the Illinois Gaming Board criticized the company for hauling trash from the site of what was intended to be a Rosemont casino.
From 2003 to 2005, D&P made nearly $500,000 for snow removal at the university.
Thanks to Leonard N. Fleming
UIC officials say D&P Construction declined to bid for the contract -- after revelations surfaced during the "Family Secrets" mob trial last summer that reputed mob boss John "No Nose" DiFronzo took part in a double murder.
D&P, which has had numerous snow-removal contracts with UIC since 1998, on paper is run by Josephine DiFronzo -- the sister-in-law of John DiFronzo and the wife of Peter DiFronzo, who is purportedly a chief lieutenant to his brother John in mob affairs.
Authorities have said the two DiFronzo brothers really control the firm.
The new contract was awarded to a small minority-run company called Total Property Management and Engineering Services in September, according to UIC records.
D&P "did not submit a bid," said UIC spokesman Mark Rosati.
Rosati said university officials did not ask D&P to give up its contract.
Doing so would be illegal, he said.
When asked whether UIC officials were pleased that D&P and its alleged mob ties decided to move on, he declined comment.
Josephine DiFronzo did not return calls.
Although the school never witnessed nefarious tactics, an internal 2003 FBI memo alleged that D&P "obtained contracts through illegal payoffs or intimidation."
D&P made headlines in 2001 after the Illinois Gaming Board criticized the company for hauling trash from the site of what was intended to be a Rosemont casino.
From 2003 to 2005, D&P made nearly $500,000 for snow removal at the university.
Thanks to Leonard N. Fleming
Friday, September 21, 2007
Difronzo Family Secrets
John DiFronzo was implicated in outfit murders and other crimes during the recent mob trial of the century, but he wasn't charged. The I-Team has learned more about the man they call "No Nose."
You can call him "No Nose," or you can call him "Johnny Bananas" as he is sometimes known. But to the thugs, hustlers and hoodlums who report to him in the outfit, federal authorities say 78-year-old John DiFronzo is known as the boss. And they say DiFronzo's top lieutenant has the same last name because it's his younger brother.
A finger to the nose: that's mob sign language for John "No Nose" DiFronzo, according to feds. The pantomime act was caught on covert jailhouse tapes of meetings between Chicago Outfit bosses that were used as evidence during this summer's Family Secrets trial.
Authorities say DiFronzo's position is so important to the mob, that his underlings don't want to implicate him by speaking his real name.
So, they signal his nickname "No Nose," awarded to DiFronzo decades ago after a Michigan Avenue fur heist when part of his sniffer was severed as he jumped through a plate glass window.
John DiFronzo cut his teeth with the mob's Elmwood Park crew. He and his wife once lived in a Grand Avenue apartment house that they own, where their name is still on the front mailbox.
No Nose's rap sheet stretches back to the 1950s and features dozens of arrests and convictions. During the Family Secrets trial, federal prosecutors portrayed DiFronzo as a top outfit leader, and for the first time, said he was involved in the 1986 gangland murders of Anthony Spilotro -the mob's Las Vegas boss - and his brother, Michael, who were found six feet under an Indiana farm field.
The only evidence of DiFronzo's role in the Spilotro hit was from mob snitch and star witness Nick Calabrese. Law enforcement sources say they didn't want to risk losing a case against DiFronzo.
In one 2003 conversation between mobster brothers Jimmy and Michael Marcello, feds say they discussed No Nose.
James: "it quieted down on this guy, they didn't have what they thought they were gonna have or something like that?
Michael: I guess. That's what we heard. They thought they had something now they're not so sure."
DiFronzo is now atop the mob's flow chart that started with Scarface and continued through the Big Tuna, according to former federal agent and ex-Chicago crime commission director Bob Fuesel. "Their spots change, but they're still the same outfit that we know about from the days of Capone through Accardo for 50 years up until John DiFronzo today," Fuesel said.
DiFronzo was unreachable in River Grove or at his corner lot vacation home in Lake Geneva. His longtime lawyer, Carl Walsh, declined to comment Wednesday.
The FBI said a gag order prevented them from answering why DiFronzo hasn't been charged with the murders that prosecutors say he committed.
Do they even know where he is? "There is no reason for us to know his whereabouts because he hasn't been charged with anything," said Ross Rice, FBI spokesman.
Mob investigators say No Nose will lean on his brother, Peter DiFronzo, to help manage outfit rackets. Peter DiFronzo is a convicted warehouse thief who did time at Leavenworth. He and his brother are both fully initiated "made" members of the Chicago Outfit, according to the Chicago Crime Commission.
FBI records state that Peter and No Nose operate a west suburban construction and waste hauling firm, a politically connected company that "obtained contracts through illegal payoffs or intimidation."
When the I-Team visited D and P Construction Tuesday, Peter DiFronzo thought we were there to survey for new sewer lines. When told that the I-Team was there on an outfit investigation, he claimed to no know nothing and drove off in a new Cadillac Escalade.
Thanks to Chuck Goudie
You can call him "No Nose," or you can call him "Johnny Bananas" as he is sometimes known. But to the thugs, hustlers and hoodlums who report to him in the outfit, federal authorities say 78-year-old John DiFronzo is known as the boss. And they say DiFronzo's top lieutenant has the same last name because it's his younger brother.
A finger to the nose: that's mob sign language for John "No Nose" DiFronzo, according to feds. The pantomime act was caught on covert jailhouse tapes of meetings between Chicago Outfit bosses that were used as evidence during this summer's Family Secrets trial.
Authorities say DiFronzo's position is so important to the mob, that his underlings don't want to implicate him by speaking his real name.
So, they signal his nickname "No Nose," awarded to DiFronzo decades ago after a Michigan Avenue fur heist when part of his sniffer was severed as he jumped through a plate glass window.
John DiFronzo cut his teeth with the mob's Elmwood Park crew. He and his wife once lived in a Grand Avenue apartment house that they own, where their name is still on the front mailbox.
No Nose's rap sheet stretches back to the 1950s and features dozens of arrests and convictions. During the Family Secrets trial, federal prosecutors portrayed DiFronzo as a top outfit leader, and for the first time, said he was involved in the 1986 gangland murders of Anthony Spilotro -the mob's Las Vegas boss - and his brother, Michael, who were found six feet under an Indiana farm field.
The only evidence of DiFronzo's role in the Spilotro hit was from mob snitch and star witness Nick Calabrese. Law enforcement sources say they didn't want to risk losing a case against DiFronzo.
In one 2003 conversation between mobster brothers Jimmy and Michael Marcello, feds say they discussed No Nose.
James: "it quieted down on this guy, they didn't have what they thought they were gonna have or something like that?
Michael: I guess. That's what we heard. They thought they had something now they're not so sure."
DiFronzo is now atop the mob's flow chart that started with Scarface and continued through the Big Tuna, according to former federal agent and ex-Chicago crime commission director Bob Fuesel. "Their spots change, but they're still the same outfit that we know about from the days of Capone through Accardo for 50 years up until John DiFronzo today," Fuesel said.
DiFronzo was unreachable in River Grove or at his corner lot vacation home in Lake Geneva. His longtime lawyer, Carl Walsh, declined to comment Wednesday.
The FBI said a gag order prevented them from answering why DiFronzo hasn't been charged with the murders that prosecutors say he committed.
Do they even know where he is? "There is no reason for us to know his whereabouts because he hasn't been charged with anything," said Ross Rice, FBI spokesman.
Mob investigators say No Nose will lean on his brother, Peter DiFronzo, to help manage outfit rackets. Peter DiFronzo is a convicted warehouse thief who did time at Leavenworth. He and his brother are both fully initiated "made" members of the Chicago Outfit, according to the Chicago Crime Commission.
FBI records state that Peter and No Nose operate a west suburban construction and waste hauling firm, a politically connected company that "obtained contracts through illegal payoffs or intimidation."
When the I-Team visited D and P Construction Tuesday, Peter DiFronzo thought we were there to survey for new sewer lines. When told that the I-Team was there on an outfit investigation, he claimed to no know nothing and drove off in a new Cadillac Escalade.
Thanks to Chuck Goudie
Monday, March 19, 2007
Waste Hauler with Alleged Mob Ties Doing State Work
Friends of mine: Peter DiFronzo, John "No Nose" DiFronzo
A waste-hauling firm that's repeatedly been accused of having ties to the mob is still doing taxpayer-funded work and has surfaced on a government-produced list of environmentally friendly businesses.
In recent days, a Dumpster from D&P Construction was on site at a Metra station construction project in Edison Park. D&P also saw a longtime snowplowing contract it has with the University of Illinois at Chicago renewed last year.
Besides that, D&P and a sister company, JKS Ventures, are listed in a state government "Green Your Space Database," which helps people find "environmentally friendly building products you may use to improve your home or office."
D&P was widely publicized as having alleged mob links in 2001, when the Illinois Gaming Board took issue with it hauling trash from a casino site in Rosemont. "The owner of D&P, Josephine DiFronzo, is married to Peter DiFronzo and is the sister-in-law of John DiFronzo, individuals who have been identified as known members of organized crime," board officials wrote at the time.
In November 2005, a Gaming Board hearing officer -- citing a memo from the FBI -- wrote D&P was "controlled" by the DiFronzo brothers. Josephine and Peter DiFronzo declined to return messages left at D&P's Northwest Side office. John DiFronzo's lawyer did not return a call.
D&P's continued involvement in government work angers the president of the Chicago Crime Commission. "I can understand if it's a private company, but we're dealing here with taxpayer money," said Jim Wagner, who headed the Chicago FBI's organized-crime squad and was the Gaming Board's investigations chief before being hired by the crime-fighting group in 2005. "Is it in the best interest of the public to do business with people who have a history of intimidation as reported by law enforcement?" he said.
Metra officials didn't know D&P had a Dumpster at the Edison Park station site until being contacted by the Chicago Sun-Times. Neither Metra nor its general contractor were aware of the firm's alleged mob links, spokeswoman Judy Pardonnet said.
D&P was hired recently to haul bricks left by a subcontractor "and it doesn't sound like a lot of taxpayer dollars have gone toward them," Pardonnet said. The rail agency plans to investigate whether future dealings with D&P should be prohibited, she said.
UIC officials last year renewed D&P's longtime snowplowing contract because the firm was the low bidder and met all legal criteria, UIC spokesman Mark Rosati said. UIC paid D&P $55,169 under the deal last winter. The final tally for this winter is pending.
Susan Hofer, a state spokeswoman, said the Green Space Database makes clear that all firms named, including D&P, are not being endorsed by the state.
Thanks to Chris Fusco
A waste-hauling firm that's repeatedly been accused of having ties to the mob is still doing taxpayer-funded work and has surfaced on a government-produced list of environmentally friendly businesses.
In recent days, a Dumpster from D&P Construction was on site at a Metra station construction project in Edison Park. D&P also saw a longtime snowplowing contract it has with the University of Illinois at Chicago renewed last year.
Besides that, D&P and a sister company, JKS Ventures, are listed in a state government "Green Your Space Database," which helps people find "environmentally friendly building products you may use to improve your home or office."
D&P was widely publicized as having alleged mob links in 2001, when the Illinois Gaming Board took issue with it hauling trash from a casino site in Rosemont. "The owner of D&P, Josephine DiFronzo, is married to Peter DiFronzo and is the sister-in-law of John DiFronzo, individuals who have been identified as known members of organized crime," board officials wrote at the time.
In November 2005, a Gaming Board hearing officer -- citing a memo from the FBI -- wrote D&P was "controlled" by the DiFronzo brothers. Josephine and Peter DiFronzo declined to return messages left at D&P's Northwest Side office. John DiFronzo's lawyer did not return a call.
D&P's continued involvement in government work angers the president of the Chicago Crime Commission. "I can understand if it's a private company, but we're dealing here with taxpayer money," said Jim Wagner, who headed the Chicago FBI's organized-crime squad and was the Gaming Board's investigations chief before being hired by the crime-fighting group in 2005. "Is it in the best interest of the public to do business with people who have a history of intimidation as reported by law enforcement?" he said.
Metra officials didn't know D&P had a Dumpster at the Edison Park station site until being contacted by the Chicago Sun-Times. Neither Metra nor its general contractor were aware of the firm's alleged mob links, spokeswoman Judy Pardonnet said.
D&P was hired recently to haul bricks left by a subcontractor "and it doesn't sound like a lot of taxpayer dollars have gone toward them," Pardonnet said. The rail agency plans to investigate whether future dealings with D&P should be prohibited, she said.
UIC officials last year renewed D&P's longtime snowplowing contract because the firm was the low bidder and met all legal criteria, UIC spokesman Mark Rosati said. UIC paid D&P $55,169 under the deal last winter. The final tally for this winter is pending.
Susan Hofer, a state spokeswoman, said the Green Space Database makes clear that all firms named, including D&P, are not being endorsed by the state.
Thanks to Chris Fusco
Tuesday, January 03, 2006
Mob Contract Under Review at UIC
Friends of ours: John "No Nose" DiFronzo, Peter DiFronzo
University of Illinois at Chicago administrators are taking a fresh look at a longtime snowplowing contract their institution has held with a construction firm that authorities say is controlled by two "made" members of the Chicago mob. The company, D&P Construction, has been paid nearly $500,000 by the public university during the past two years. D&P was widely publicized as linked to organized crime in 2001, when the Illinois Gaming Board took issue with it hauling trash from the site of what was supposed to become a Rosemont casino.
A recent report by a board hearing officer cited an internal FBI memo from 2003 that stated that D&P "obtained contracts through illegal payoffs or intimidation," though UIC officials said they've never witnessed such acts since the firm began plowing snow at their Near West Side campus in the late 1990s.
D&P, on paper is run by Josephine DiFronzo, whose name appears on the recently extended contract that D&P holds with UIC. But authorities contend the firm is "controlled" by her husband, Peter, and his brother, John. Law enforcement documents identify John "No Nose" DiFronzo, 76, as one of the three top organized crime leaders in the city. Peter DiFronzo, 72, allegedly is his chief lieutenant.
Thomas Hardy, communications chief for all University of Illinois campuses, said the D&P contract is now under review after inquiries by the Chicago Sun-Times. University officials initially told the newspaper they saw no reason to review the contract, but Hardy said Sunday that the university's vice chancellor for administrative services, Joseph Muscarella, will oversee a review that's set to begin this week. "We are reviewing the contract to ensure all procedures were followed properly and that the contractor remains a qualified bidder under state law," Hardy said. "You've raised a lot of questions, so we want to get to the bottom of it."
Josephine and Peter DiFronzo did not return telephone calls seeking comment.
The university paid D&P $203,574 in its 2004-2005 budget year and $267,740 in 2003-2004 to augment its own in-house snow-removing crews. In addition, UIC paid D&P about $10,000 each of those years to deliver mulch to the campus.
D&P is known more as a top waste-hauler in the Chicago area than for plowing snow. UIC officials asked six companies to bid on the snowplowing contract in 2002, but only D&P submitted a bid. (This is a common technique that was used in the past by the Mob. They would divide the work up among themselves first and then only the choosen company would bid on the contract.)
Thanks to Chris Fusco.
University of Illinois at Chicago administrators are taking a fresh look at a longtime snowplowing contract their institution has held with a construction firm that authorities say is controlled by two "made" members of the Chicago mob. The company, D&P Construction, has been paid nearly $500,000 by the public university during the past two years. D&P was widely publicized as linked to organized crime in 2001, when the Illinois Gaming Board took issue with it hauling trash from the site of what was supposed to become a Rosemont casino.
A recent report by a board hearing officer cited an internal FBI memo from 2003 that stated that D&P "obtained contracts through illegal payoffs or intimidation," though UIC officials said they've never witnessed such acts since the firm began plowing snow at their Near West Side campus in the late 1990s.
D&P, on paper is run by Josephine DiFronzo, whose name appears on the recently extended contract that D&P holds with UIC. But authorities contend the firm is "controlled" by her husband, Peter, and his brother, John. Law enforcement documents identify John "No Nose" DiFronzo, 76, as one of the three top organized crime leaders in the city. Peter DiFronzo, 72, allegedly is his chief lieutenant.
Thomas Hardy, communications chief for all University of Illinois campuses, said the D&P contract is now under review after inquiries by the Chicago Sun-Times. University officials initially told the newspaper they saw no reason to review the contract, but Hardy said Sunday that the university's vice chancellor for administrative services, Joseph Muscarella, will oversee a review that's set to begin this week. "We are reviewing the contract to ensure all procedures were followed properly and that the contractor remains a qualified bidder under state law," Hardy said. "You've raised a lot of questions, so we want to get to the bottom of it."
Josephine and Peter DiFronzo did not return telephone calls seeking comment.
The university paid D&P $203,574 in its 2004-2005 budget year and $267,740 in 2003-2004 to augment its own in-house snow-removing crews. In addition, UIC paid D&P about $10,000 each of those years to deliver mulch to the campus.
D&P is known more as a top waste-hauler in the Chicago area than for plowing snow. UIC officials asked six companies to bid on the snowplowing contract in 2002, but only D&P submitted a bid. (This is a common technique that was used in the past by the Mob. They would divide the work up among themselves first and then only the choosen company would bid on the contract.)
Thanks to Chris Fusco.
Monday, November 28, 2005
Firm with reputed mob ties flourishes
Friends of ours: Peter DiFronzo, John DiFronzo, James Marcello, Sam Carlisi
Near the front of this fall's Columbus Day Parade rolled a shiny, massive truck from D&P Construction -- one of many signs the local waste-hauling business is prospering.
D&P dumpsters, often emblazoned with painted American flags, have sprouted up all over the Chicago region: at an Old Town-area church being rehabbed; outside a Loop bridgehouse renovated by the Friends of the Chicago River; at a new strip mall in Niles, and along a canal in Evanston. But the company also continues to surface in other places: the files of the FBI and Illinois Gaming Board. Officials from those agencies have, in recent years, repeatedly described D&P as a mob-linked company.
On paper, D&P is run by Josephine DiFronzo. But authorities contend D&P really is "controlled" by her husband Peter and his brother John, and a Chicago Sun-Times examination indicates that Peter DiFronzo is deeply involved with the company.
The DiFronzo brothers are identified in law enforcement documents as "made" members of the Chicago mob, with John "No Nose" DiFronzo, 76, allegedly one of the three top organized crime figures in the city. Peter DiFronzo, 72, allegedly is his chief lieutenant and, at least for a time, was a leader of the mob's Elmwood Park Street Crew.
A recently released report from an Illinois Gaming Board hearing officer offers disturbing new allegations about D&P's operations -- and its success. The report, penned by retired judge and congressman Abner Mikva, cited an internal FBI memo from 2003 that not only alleged that D&P is "controlled by Peter and John DiFronzo," but it also said that the business "obtained contracts through illegal payoffs or intimidation."
Reached on the phone at her Barrington-area home this week, Josephine DiFronzo declined to comment. "I have a wake to go to. I'm just running out the door," she said before hanging up. Neither she nor her husband responded to subsequent phone calls to D&P. John DiFronzo's lawyer had no comment.
Despite the DiFronzos being shy with the press, D&P's profile only has increased in recent years. The company and a sister recycling and materials firm, JKS Ventures, now have sophisticated Web sites that, among other things, boast about them being family-owned for more than 30 years. "Whether it is providing waste removal options, delivering material or tearing down your old facility . . . D&P is 'At Your DISPOSAL!' " the D&P site reads.
D&P and JKS contribute generously to certain politicians, including state Rep. Angelo "Skip" Saviano (R-Elmwood Park) and Republican Cook County commissioner and Elmwood Park Mayor Peter Silvestri. D&P, with addresses in Chicago and Melrose Park, co-sponsored a charity golf event earlier this year.
D&P used to operate quietly as a subcontractor for the once-mighty Palumbo Construction, which specialized in road building and public works projects but ultimately ran afoul of the law. Peter and John DiFronzo, one law enforcement source said, had a firm foundation from which to build D&P. "[Peter] knows trucking. He knows road building. He knows construction. He's got experience in those areas," the source said. "And his brother John knows cars. He's been a car dealer his whole life . . . he went to the auctions and would buy cars. He knew a good car from a bad car."
D&P now does a good deal of work leasing dumpsters for home renovations and larger developments. A D&P dumpster even was spotted around the corner from mob turncoat Nick Calabrese's old Norridge home, where a neighbor's building a new house. The number of union employees working for the DiFronzos has doubled in the past few years, said a person familiar with Peter DiFronzo and D&P. "While others are struggling . . . he is getting bigger every day," said the person. "He's definitely moving through the ranks, big and getting bigger."
The person believes D&P is offering competitive prices to beef up its customer list and sell, perhaps to a larger rival. Industry officials contacted in recent days said they aren't aware of that strategy and didn't want to speculate.
A D&P customer willing to talk is well-known developer Sam Zitella, who has used D&P dumpsters "for many years." Zitella lives near Peter and Josephine DiFronzo, and he considers Peter DiFronzo a good friend. "He's been providing my dumpsters for many years, he's a good guy," Zitella said. "He's a hard worker" who helps run a "great operation."
"He's a good person, good family, very family-oriented," Zitella added. "He gets a lot of business because the service is there, decent price."
While some customers are aware of the DiFronzo brothers' reputations, others are not. Like the Archdiocese of Chicago. This week, a D&P dumpster was on site at St. Joseph's Catholic Church near Orleans and Division in the Old Town area. Neither the contractor overseeing a project to convert an old rectory into a parish center nor the archdiocese's construction office apparently was aware of D&P's history.
After a Chicago Sun-Times inquiry to the archdiocese, the contractor agreed to hire a different firm, said Jim Dwyer, an archdiocese spokesman. "We don't micromanage our projects to the extent we would know who's doing the waste hauling," Dwyer said. "The contractor we had wasn't aware of anything like this, and they have volunteered to hire somebody else." Still, "we're not making any judgments about this company," Dwyer said, adding he was not aware of D&P being involved in any other current archdiocese construction work. A D&P dumpster, however, was at an archdiocesan facility on the Northwest Side in recent years.
D&P was widely publicized as a mob-linked firm in March 2001, when the Gaming Board took issue with D&P hauling trash from the Rosemont site where Emerald Casino Inc. tried to build a gambling barge. Emerald's use of D&P, the board stated, was one of many reasons Emerald discredited the integrity of state casino operations and deserved to have its gaming license revoked. Mikva's ruling last week supports the board's original finding. Emerald is expected to appeal the case.
Former federal prosecutor Gregory Jones was the Gaming Board chairman in 2001. Reached Wednesday, he said he wasn't surprised by D&P's growth. "It's a little hard to say what the public reacts to. . . . It could be there are so many allegations surfacing around today that they don't pay too much attention to it until there's some sort of action from a legal standpoint," Jones said. "Our views back from the Gaming Board were that you don't have to be convicted for something to be hurting your reputation or hurting the integrity of gaming. That's a much broader standard."
The DiFronzo brothers have had their share of legal trouble. John DiFronzo, whose family has residences in River Grove, McHenry County and southern Wisconsin, has more than two dozen arrests, and he was convicted in 1993 in a scheme to infiltrate an Indian casino. Peter DiFronzo did time in Leavenworth in the 1960s for a warehouse heist. Their younger brother Joseph, meanwhile, is imprisoned in Springfield, Mo., on federal drug offenses.
Peter DiFronzo's other trouble has stemmed from the Teamsters. In 1998, a government-union agency known as the Independent Review Board tried to kick him out of the group "for being a member of the Chicago La Cosa Nostra . . . and knowingly associating with other organized crime members," according to union documents.
Those reputed mob figures included John DiFronzo and Joseph Andriacchi, described as a childhood friend of Peter DiFronzo. "According to the FBI, [Peter] DiFronzo has a close relationship with his [older] brother," the union documents stated.
Peter DiFronzo was believed to be a liaison between his older brother and other reputed hoodlums, including James Marcello and the late Sam Carlisi, according to records and the law enforcement source. A confidential informant told the FBI in 2001 that John DiFronzo "visits Peter DiFronzo every morning at . . . JKS Ventures, and gives Peter DiFronzo instructions and orders for the day with regards to Chicago Organized Crime," according to testimony at the Gaming Board's Emerald Casino disciplinary hearing.
Peter DiFronzo resigned from the Teamsters in 1998, but did not admit to any of the charges.
Since then, it's clear that he's been part of D&P's operations.
Peter DiFronzo is listed as the D&P contact for the June charity golf event; he's the point person for the sale of an old JKS grinder, according to a U.S. Manufacturing Inc. Web site, and he regularly directs D&P workers, said the source familiar with the company. "He has daily contact with the drivers, or their supervisors," the source said.
Meanwhile, two workers from D&P ran unsuccessfully in the most recent Teamsters Local 731 election, raising concerns among some about whether Peter DiFronzo was trying to exert influence at his former union. "There seems to be a general attitude that there's no need to be concerned about the Outfit" any more, the law enforcement source said. "Nothing could be further from the truth."
Thanks to Robert Herguth and Chris Fusco
Near the front of this fall's Columbus Day Parade rolled a shiny, massive truck from D&P Construction -- one of many signs the local waste-hauling business is prospering.
D&P dumpsters, often emblazoned with painted American flags, have sprouted up all over the Chicago region: at an Old Town-area church being rehabbed; outside a Loop bridgehouse renovated by the Friends of the Chicago River; at a new strip mall in Niles, and along a canal in Evanston. But the company also continues to surface in other places: the files of the FBI and Illinois Gaming Board. Officials from those agencies have, in recent years, repeatedly described D&P as a mob-linked company.
On paper, D&P is run by Josephine DiFronzo. But authorities contend D&P really is "controlled" by her husband Peter and his brother John, and a Chicago Sun-Times examination indicates that Peter DiFronzo is deeply involved with the company.
The DiFronzo brothers are identified in law enforcement documents as "made" members of the Chicago mob, with John "No Nose" DiFronzo, 76, allegedly one of the three top organized crime figures in the city. Peter DiFronzo, 72, allegedly is his chief lieutenant and, at least for a time, was a leader of the mob's Elmwood Park Street Crew.
A recently released report from an Illinois Gaming Board hearing officer offers disturbing new allegations about D&P's operations -- and its success. The report, penned by retired judge and congressman Abner Mikva, cited an internal FBI memo from 2003 that not only alleged that D&P is "controlled by Peter and John DiFronzo," but it also said that the business "obtained contracts through illegal payoffs or intimidation."
Reached on the phone at her Barrington-area home this week, Josephine DiFronzo declined to comment. "I have a wake to go to. I'm just running out the door," she said before hanging up. Neither she nor her husband responded to subsequent phone calls to D&P. John DiFronzo's lawyer had no comment.
Despite the DiFronzos being shy with the press, D&P's profile only has increased in recent years. The company and a sister recycling and materials firm, JKS Ventures, now have sophisticated Web sites that, among other things, boast about them being family-owned for more than 30 years. "Whether it is providing waste removal options, delivering material or tearing down your old facility . . . D&P is 'At Your DISPOSAL!' " the D&P site reads.
D&P and JKS contribute generously to certain politicians, including state Rep. Angelo "Skip" Saviano (R-Elmwood Park) and Republican Cook County commissioner and Elmwood Park Mayor Peter Silvestri. D&P, with addresses in Chicago and Melrose Park, co-sponsored a charity golf event earlier this year.
D&P used to operate quietly as a subcontractor for the once-mighty Palumbo Construction, which specialized in road building and public works projects but ultimately ran afoul of the law. Peter and John DiFronzo, one law enforcement source said, had a firm foundation from which to build D&P. "[Peter] knows trucking. He knows road building. He knows construction. He's got experience in those areas," the source said. "And his brother John knows cars. He's been a car dealer his whole life . . . he went to the auctions and would buy cars. He knew a good car from a bad car."
D&P now does a good deal of work leasing dumpsters for home renovations and larger developments. A D&P dumpster even was spotted around the corner from mob turncoat Nick Calabrese's old Norridge home, where a neighbor's building a new house. The number of union employees working for the DiFronzos has doubled in the past few years, said a person familiar with Peter DiFronzo and D&P. "While others are struggling . . . he is getting bigger every day," said the person. "He's definitely moving through the ranks, big and getting bigger."
The person believes D&P is offering competitive prices to beef up its customer list and sell, perhaps to a larger rival. Industry officials contacted in recent days said they aren't aware of that strategy and didn't want to speculate.
A D&P customer willing to talk is well-known developer Sam Zitella, who has used D&P dumpsters "for many years." Zitella lives near Peter and Josephine DiFronzo, and he considers Peter DiFronzo a good friend. "He's been providing my dumpsters for many years, he's a good guy," Zitella said. "He's a hard worker" who helps run a "great operation."
"He's a good person, good family, very family-oriented," Zitella added. "He gets a lot of business because the service is there, decent price."
While some customers are aware of the DiFronzo brothers' reputations, others are not. Like the Archdiocese of Chicago. This week, a D&P dumpster was on site at St. Joseph's Catholic Church near Orleans and Division in the Old Town area. Neither the contractor overseeing a project to convert an old rectory into a parish center nor the archdiocese's construction office apparently was aware of D&P's history.
After a Chicago Sun-Times inquiry to the archdiocese, the contractor agreed to hire a different firm, said Jim Dwyer, an archdiocese spokesman. "We don't micromanage our projects to the extent we would know who's doing the waste hauling," Dwyer said. "The contractor we had wasn't aware of anything like this, and they have volunteered to hire somebody else." Still, "we're not making any judgments about this company," Dwyer said, adding he was not aware of D&P being involved in any other current archdiocese construction work. A D&P dumpster, however, was at an archdiocesan facility on the Northwest Side in recent years.
D&P was widely publicized as a mob-linked firm in March 2001, when the Gaming Board took issue with D&P hauling trash from the Rosemont site where Emerald Casino Inc. tried to build a gambling barge. Emerald's use of D&P, the board stated, was one of many reasons Emerald discredited the integrity of state casino operations and deserved to have its gaming license revoked. Mikva's ruling last week supports the board's original finding. Emerald is expected to appeal the case.
Former federal prosecutor Gregory Jones was the Gaming Board chairman in 2001. Reached Wednesday, he said he wasn't surprised by D&P's growth. "It's a little hard to say what the public reacts to. . . . It could be there are so many allegations surfacing around today that they don't pay too much attention to it until there's some sort of action from a legal standpoint," Jones said. "Our views back from the Gaming Board were that you don't have to be convicted for something to be hurting your reputation or hurting the integrity of gaming. That's a much broader standard."
The DiFronzo brothers have had their share of legal trouble. John DiFronzo, whose family has residences in River Grove, McHenry County and southern Wisconsin, has more than two dozen arrests, and he was convicted in 1993 in a scheme to infiltrate an Indian casino. Peter DiFronzo did time in Leavenworth in the 1960s for a warehouse heist. Their younger brother Joseph, meanwhile, is imprisoned in Springfield, Mo., on federal drug offenses.
Peter DiFronzo's other trouble has stemmed from the Teamsters. In 1998, a government-union agency known as the Independent Review Board tried to kick him out of the group "for being a member of the Chicago La Cosa Nostra . . . and knowingly associating with other organized crime members," according to union documents.
Those reputed mob figures included John DiFronzo and Joseph Andriacchi, described as a childhood friend of Peter DiFronzo. "According to the FBI, [Peter] DiFronzo has a close relationship with his [older] brother," the union documents stated.
Peter DiFronzo was believed to be a liaison between his older brother and other reputed hoodlums, including James Marcello and the late Sam Carlisi, according to records and the law enforcement source. A confidential informant told the FBI in 2001 that John DiFronzo "visits Peter DiFronzo every morning at . . . JKS Ventures, and gives Peter DiFronzo instructions and orders for the day with regards to Chicago Organized Crime," according to testimony at the Gaming Board's Emerald Casino disciplinary hearing.
Peter DiFronzo resigned from the Teamsters in 1998, but did not admit to any of the charges.
Since then, it's clear that he's been part of D&P's operations.
Peter DiFronzo is listed as the D&P contact for the June charity golf event; he's the point person for the sale of an old JKS grinder, according to a U.S. Manufacturing Inc. Web site, and he regularly directs D&P workers, said the source familiar with the company. "He has daily contact with the drivers, or their supervisors," the source said.
Meanwhile, two workers from D&P ran unsuccessfully in the most recent Teamsters Local 731 election, raising concerns among some about whether Peter DiFronzo was trying to exert influence at his former union. "There seems to be a general attitude that there's no need to be concerned about the Outfit" any more, the law enforcement source said. "Nothing could be further from the truth."
Thanks to Robert Herguth and Chris Fusco
Thursday, November 17, 2005
Illinois Gaming Board and Emerald Casino
Friends of Ours: Sam Giancana, James Marcello, John DiFronzo
Friends of Mine: Donald Stephens, Vito Salamone, Joseph Salamone, Nick Boscarino, Peter DiFronzo, Michael Marcello
Recommendations to the Illinois Gaming Board
In the Matter of Emerald Casino, Revocation of License Proceeding
Abner J. Mikva
Administrative Law Judge.
This matter officially commenced on March 6, 2001 when the Illinois Gaming Board (IGB, the Board) formally revoked the license of Emerald Casino, Inc. (Emerald) pursuant to Section 5(c) of the Illinois Riverboat Gambling Act (The Act) and Subpart K of the Rules of the IGB (Rules). Emerald duly answered (Answer) the complaint for disciplinary action (complaint) and an Administrative Law Judge (ALJ) was appointed to hear the matters in dispute concerning the revocation.
Protracted hearings were held by Herbert Holzman, ALJ, until August 4, 2004 when he recused himself from further proceedings o the matter. On April 14, 2005 the undersigned was appointed as successor ALJ and continued the hearings until their conclusion. A short procedural history of Emerald and its Owner's license follows.
On July 9, 1992, Emerald, then known as H.P. Enterprises, was issued a three - year Owner's License by the IGB for a riverboat gaming operation in East Dubuque, Illinois. Subsequent renewals of that license were granted in July, 1995 and July, 1996.
On December 1, 1994, the Board issued a disciplinary complaint against Emerald for its failure to obtain prior Board approval to change its equity and debt capitalization and for failure to notify the Board of its source of funds. Emerald had entered into various loan agreements in July, 1994 that were not timely disclosed to or approved by the Board. Emerald was fined $30,000.00.
In June, 1997 IGB denied Emerald's renewal application for its failure to submit a responsive renewal application, significant compliance shortcomings and failure to adhere to the overall requirements of the Act. Emerald stopped gaming operations in July, 1997. Emerald requested an administrative hearing regarding the denial of its renewal application and in 1999, at the conclusion of hearings, the ALJ concurred with the Board and recommended that the Board take final action to deny the renewal of Emerald's license.
However, before the Board acted on the ALJ's recommendations, the Illinois General Assembly amended the Act by adding a provision that "A licensee that was not conducting Riverboat Gambling on January 1, 1998 may apply to the Board for renewal and approval of relocation to a new home dock location ... and the Board shall grant the application and approval upon receipt by the licensee of approval from the new municipality or county as the case may be in which the licensee wishes to relocate...". This provision, Section 11.2 of the Act, became effective June 25, 1999.
Emerald accordingly applied for renewal of its license and for relocation for its operations to Rosemont Illinois. IGB undertook an investigation of Emerald and its key persons and proposed stockholders. The Board denied the renewal of Emerald's license on January 30, 2001. Emerald took an appeal from IGB's denial of the license and the case was heard both by the Appellate Court of Illinois and the Supreme Court of Illinois. Both these courts agreed with Emerald's contention that "shall" is mandatory in Section 11.2 of the Act and that the Board had no discretion in terms of the renewal of the license. However, both courts specifically upheld IGB's authority and discretion in all other respects under the Act and specifically told IGB that it could pursue the revocation hearings, which had previously been instituted. (Philip N. Crusius v. The Illinois Gaming Board, et al., Case No. 98351 September 22, 2005) IGB accordingly modified its directive to the undersigned to pursue only the revocation proceeding and to discontinue any reference to the denial of the renewal which had been previously been heard as part of the same proceeding. The findings of fact and conclusions of the law, which follow, pertain, therefore, to the revocation.
Two lengthy and complete staff reports were prepared pertaining to the Board's revocation action. Both of those reports are included in the record and made available to Emerald as part of this proceeding. There were 59 hearing days in this matter. The record consists of 6498 pages. The Board offered 440 exhibits and Emerald offered 112 exhibits, all of which are made a part of this record. All subpoenas requested by Emerald were carried out except that I rejected efforts to call Chairman Jaffe as a witness in this proceeding, since he is one of the ultimate adjudicators. (R. 5223) The Inspector General also resisted a subpoena as to one of its investigations of a board employee. Emerald conducted interrogation as to that investigation through another witness. And in both instances Emerald made offers of proof which are part of the record. The Board made an offer of proof in lieu of cross-examining one of Emerald's witnesses. I did not deem any of the allegations in any of the offers of proof to be pertinent to the outcome of this proceeding.
I recommend to the IGB that it confirm its order of revocation against Emerald and that order be made final pursuant to the Act. My Findings of Fact and Conclusions of Law are as follows:
FINDINGS OF FACT
1. EMERALD AND ITS PRINCIPALS DISSEMBLED ABOUT ITS PLANS TO MOVE THE LICENSE LOCATION TO ROSEMONT, ILLINOIS.
Emerald's gambling operations at East Dubuque, Illinois had been financially unsuccessful for some time. At least since 1995 Emerald had been making efforts to move those operations either by obtaining permission from IGB or by lobbying to get legislation passed, which would allow such relocation. IGB did not have the legal authority to authorize such relocation.
(R. 2846)
In November, 1997 an entity known as Lake County Riverboat LP entered into negotiations with Emerald to create a joint venture for gaming operations in Lake County, Illinois. (R. 1880) On or about November 6, 1997, the parties entered into a non-disclosure agreement. (R. 1887) On November 12, 1997, the parties entered into a joint venture agreement. Neither of the agreements were ever disclosed to the IGB and were not discovered by the IGB until subsequent litigation between Emerald and the Davis Companies. (R. 473-75, 485-88, 2963) These negotiations were largely conducted by Joe McQuaid and Kevin Flynn on behalf of Emerald. Their roles in this matter will be further discussed below.
In 1997, Kevin Flynn and Victor Cassini, on behalf of Emerald met with Rosemont Mayor Donald Stephens at the mayor's office (R. 393, R. 5301-5304). At that meeting, Flynn and Stephens discussed the possibility of relocating the Emerald Casino operation to the Village of Rosemont, according to Stephens in his sworn statement and in his testimony in this hearing. (R. 395-96) Kevin Flynn acknowledged that he met with Mayor Stephens, but testified that they only talked about the Flynn's Blue Chip operation in Indiana. Kevin Flynn's testimony in this aspect was not credible. (R. 2431-32)
In October, 1998 Kevin Flynn and David Filkin, then Vice President and General Counsel of Duchossois Industries, met with other representatives of Duchossois to discuss legislative efforts which would allow the relocation of the Emerald Casino. (R. 1783) Kevin Flynn commented that the Village of Rosemont was "a no brainer" as far as relocation. (R. 1785-86) At or about that same time the Davis Companies of California were also interested in owning or investing in a casino in Illinois, particularly in Rosemont. Michael Colleran was a Vice President of the Davis Companies. (R. 1789) In December, 1998, Kevin Flynn agreed to sell an ownership interest in the Emerald operation to the Davis Companies and to the Duchossois group. The Davis Companies would purchase 37.5 percent of the Emerald operation, while the Duchossois group would purchase 20 percent of the Emerald operation. The parties agreed to cooperate to pass legislation that would allow the casino to relocate. (R. 1806-07) This was all set forth in the First Amended Complaint in the Davis litigation. In addition to the three way split between the Flynns, the Davis Companies, and the Duchossois group , a 5 percent ownership interest in the casino was reserved for "local investors". (R. 1806-07) In Mayor Stephens sworn statement to IGB of September 2000, Mayor Stephens testified that as to the 5 percent designated for local investors, "that was for me". (Stephens sworn statement at 69-70) At or about that same time, Filkin telephoned Kevin Flynn and Kevin Flynn confirmed to Filkin the terms of the agreement. (R. 1809-10) The IGB was not notified of any of these agreements at any time until the Davis Companies tried to enforce the agreements through litigation. (R. 1844-45)
Throughout 1998 and 1999, the Duchossois group and the Davis group were actively involved in and supported the legislative initiative to authorize Emerald's relocation. (R. 1815-16) The Village of Rosemont and Mayor Stephens also participated in the lobbying efforts in 1998-99 to pass the legislation allowing relocation of Emerald's license. (R. 5352) In his sworn statement Mayor Stephens stated "you get a bill down there and I can probably kill it with people that I know in the forty-five years I have been around. I can convince enough people to squash your bill unless it is something the public really wants." (Stephens sworn statement at 47).
Emerald repeatedly told IGB that it never considered Rosemont as its prospective site until after Section 11.2 of the Act was passed by the General Assembly. As late as the filing of its Verified Answer in this proceeding, paragraph 15, it maintained that position. Everybody else seemed to know differently. The legislative history of the debate during which Section 11.2 of the Gaming Act was approved, was replete with references to Rosemont as the designated city for the relocation.
Representative Hoeft said "We're [taking the riverboat] and putting it in Rosemont and anyone here that tells me that we're not doing that, pardon the pun folks, but you want to make a bet, because that is where this boat is going." (Transcript from May 21, 1999, Illinois House of Representatives debate on SB 1017, at 102). Senator Shaw said: "and most of us do not come from such rich districts as up in Rosemont and up in Arlington ...I do not have anything against Rosemont... [Now] the argument is going to be, but do I know it is going to Rosemont. Let me tell you this; Those of us who are elected to this Body we did not come out of the dust closet to get here: we understand this process." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 117)
Senator Welsh stated, "the question that we have to ask is why it is going where it is going. Is that really economic development or are we just cutting a deal that started out being dock site gambling for ---- to keep a few boats going... [W]e've come to some kind of - secret agreement that it is going to Rosemont. And to get it there, another person, who wanted it up in Arlington Heights, agreed to give up his contention that he deserved it in exchange for a piece of the pie... what we have here is akin to a run-away train." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 123)
It was not until July, 1999, that Emerald's attorney advised IGB that it intended to move its operation to Rosemont. (R. 182, 183)
In October, 1999, the parties who had cooperated to see that the legislation allowing the new location had passed were still cooperating with each other and with Mayor Stephens. A fundraiser for the Donald E. Stephens Committeeman Fund produced the following contributions:
a. American Trade Show Services Inc. -donated $25,000 to the Fund. Nick Boscarino- husband of a new Emerald investor, Sherri Boscarino, is a principal of that company. The Boscarino interests, persons who were called to testify in these hearings, asserted their Fifth Amendment rights and refused to answer any questions. The Individuals contributed $21,000 to the Fund.
b.
D & P Construction, which ended up a contractor for Emerald,
contributed $5,000 to the Fund.
c.
The Davis interests contributed $20,000 to the Fund.
d.
The Duchossois interests contributed $21,000 to the Fund.
e.
The Flynn interests contributed $25,000 to the Fund.
Loans to by Parkway Bank to the Fund were extensive. Apparently there was one gift of over $208,000 (R. 6095) As will be detailed below, principals of Parkway were included as secret investors in Emerald. These included its president, Rocco Suspenzi. Mr. Suspenzi as well as Jeffrey Suspenzi were subpoenaed to testify in this proceeding, but exercised their Fifth Amendment rights.
The refusal of Mr. Rocco Suspenzi and Mr. Jeffrey Suspenzi to testify at these board proceedings, notwithstanding their secret investment in Emerald, and notwithstanding their closeness to Mayor Stephens and his activities, entitled IGB to draw inferences from these political loans and contributions, notwithstanding the "legality" and "timing" of such loans and contributions.
Counsel for Emerald insisted that all of these contributions were legal and indeed they are. Illinois has no limit on contributions nor does it prohibit contributions from investors or would-be investors in the gaming industry. However, IGB was entitled to infer from contributions and their timing and the lobbying efforts acknowledged by the parties involved that there was indeed an agreement in 1998-99 to get such legislation passed through the General Assembly, to relocate the Emerald gaming operations to Rosemont, and to divide the pie in some kind of secret arrangement.
2. THE RENEWAL APPLICATION FILED BY EMERALD ON SEPTEMBER 28, 1999 WAS NEITHER ACCURATE NOR COMPLETE.
Joe McQuaid testified that as the responsible official of Emerald, he completed and filed the Renewal Application. He testified that he reviewed the instructions for the application carefully. (R. 3176-77) As would be detailed, Mr. McQuaid had extensive experience as the Chief Enforcement Officer and Interim Administrator of IGB for many years immediately prior to being employed by Emerald. Indeed he was the official of IGB who signed the first disciplinary action against Emerald in 1994, which resulted in the $30,000 fine against Emerald.
Notwithstanding Mr. McQuaid's experience and his testimony that he had reviewed the instructions, the application stated that none of the shareholders were public officials or relatives of public officials. A list of stockholders submitted to IGB included a relative of State Representative Ralph Caparelli, one of the prime movers of the relocation amendment to the Act, as well as two other public officials. McQuaid never asked any of the persons involved whether or not they were public officials and testified that he thought that it was not important to ask such questions because none of the stock purchased and transferred to these public officials had ever been approved by the IGB. Therefore, even though the proceeds of such sales and others were used by Emerald, McQuaid's position was that it was of no consequence who the stockholders were until the IGB finally approved the transfer. Neither McQuaid nor anyone else at Emerald had ever examined the Personal Disclosure Forms (PDF) which were submitted to the Board directly.
The application also requested that Emerald submit "all agreements, arrangements, and commitments related to proposed gaming facility and related projects". Emerald submitted five agreements, none of which were pertinent to this inquiry and stated it had not executed any other agreements. In fact, Emerald had executed a letter of intent with the Village of Rosemont; Emerald made no reference to any of the arrangements that it had made with the Davis interests (which were about to lead into a law suit filed by Davis).
The application specifically asked whether the licensee or any of its affiliates had been a party to any legal action, including pending or threatened litigation. Emerald did not include any information about the threatened litigation by the Davis companies, even though the Davis companies had already planned a complaint and notified Emerald of that fact.
One of the questions asked whether any current or proposed shareholders had been arrested, charged, indicted, convicted etc. of any felony or misdemeanor. Emerald answered by saying it relied on the PDF's that were submitted directly to the Board. Emerald thus sought to absolve itself of any responsibility for the identity of the stockholders other than perfunctory interviews by Mr. McQuaid. As will be detailed below, several proposed stockholders were covered by that question, but not disclosed to IGB.
In July and August 1999 Rosemont and Emerald entered into several letter agreements relating to the development of the proposed casino on the Rosemont property. (R. 3229) These letter agreements were not disclosed to IGB until sometime in 2000. IGB became aware of these letter agreements with Rosemont in September, 2000, pursuant to a letter received from the attorney for Rosemont. Emerald did not disclose these agreements with IGB until December, 2000. (R. 3220)
3. EMERALD FAILED TO NOTIFY IGB OF ITS CONSTRUCION ACTIVITES OR ITS LEASE AND DEVELOPMENT AGREEMENT WITH ROSEMONT IN A TIMELY FASHION.
It would appear that after Emerald and its principals were successful in obtaining the amendment to the Act from the legislature pertaining to relocation, it decided that the rules and procedures of IGB need not be given too much concern. On July 21, 1999, Rosemont and Emerald had entered into a Letter of Intent regarding the construction of a casino at the site agreed upon between them. The Letter of Intent was "intended to memoralize key items that had been agreed to which are to be incorporated into a lease and development agreement". (R 1235-36) This Letter of Intent was extended and augmented by various letter agreements signed in August 1999 and December 1, 1999. Emerald did not include the Letter of Intent or any of the documents previously signed with Rosemont in its September 24, 1999 application. Indeed none of those agreements were sent to IGB by Emerald until December, 2000 more than one year after commencing construction and after IGB had obtained these letters from the Village of Rosemont in September, 2000. (R. 1235-36)
On February 10, 2000 Emerald submitted a fully executed copy of the Lease and Development agreement between Emerald and Rosemont. That Agreement contained many of the identical terms originally memoralized in the July 21 Letter of Intent. This February submission to IGB was long after Emerald had commenced construction at the site, and Rosemont had commenced construction of a parking garage. Indeed, on or about February 29, 2000 Emerald informed IGB that it had ceased all construction activities at the site as of that date.
The Lease and Development Agreement contained many provisions violative of IGB's rules and procedures. That Agreement allowed the Village of Rosemont to waive the requirement that Emerald obtain necessary regulatory approval from IGB prior to commencing construction of the casino. That Agreement committed Emerald to fund the construction of the parking garage addition even though Emerald did not have sufficient financing dedicated to do so. That Agreement failed to provide Emerald the ability to exercise appropriate control or supervision over the management of the contractor or sub-contractors for the casino and parking garage construction project. At the hearings, Emerald took the position that submission of construction contracts or review of construction contractors was not necessary because IGB would always have an opportunity to reject anything that had been built in the final instance before the "casino" became a "casino". Such a position is contrary to the statute.
At least one of the subcontractors doing work on the casino construction project was a company known as D & P Construction. The FBI in its memorandum of April 16, 2003 identified D & P Construction as controlled by Peter and John DiFronzo. The Memorandum stated that D & P obtained contracts through illegal payoffs or intimidation (IGB Exhibit 397). During the hearings, none of the witnesses, either for Emerald or for any other party would admit that they hired D & P Construction.
4. KEVIN FLYNN, AS A MAJOR STOCKHOLDER AND PROPOSED CHIEF EXECUTIVE OFFICER OF EMERALD, CONSISTENTLY DISSEMBLED TO IGB AS TO HIS ACTIVITES ON BEHALF OF EMERALD.
Kevin Flynn identified himself as a stockholder of Emerald in December, 1996. However Kevin Flynn, both in sworn statements and letters to the IGB, insisted that he did not become involved in the activities or management of Emerald until June of 1999 when he was appointed to the new post of Chief Executive Officer of Emerald.
As far back as November, 1997 Kevin Flynn had negotiated on behalf of Emerald with the Lake County Riverboat L.P. to discuss a joint venture for a riverboat in Lake County Illinois. Kevin Flynn acted as the primary spokesman for Emerald in those negotiations. (R. 1890-91, R. 1900-01) In November, 1997 Emerald and Lake County Riverboat entered into a nondisclosure agreement and a joint venture agreement to pursue a Lake County operation. (R. 1887) These agreements and Kevin Flynn's role in negotiating these agreements were not disclosed to IGB. IGB only become aware of the circumstances through a review of material produced in the Davis litigation at a much later time. (R. 473-75, R. 485-88)
In 1997, Kevin Flynn met with Mayor Stephens at the Mayor's office. They discussed the possibility of moving the Emerald Casino operation to Rosemont. (Stephens' sworn statement at 12; R. 5301-04) Kevin Flynn insisted that Rosemont "was not anything considered as far as I know until the legislation passed" in 1999. (R. 2439) Kevin Flynn lied about his 1997 meeting with Mayor Stephens and the possibility of moving to Rosemont.
In October, 1998, Kevin Flynn met with representatives of Duchossois Industries including David Filkin, Vice President and General Counsel for Duchossois. Kevin Flynn stated at that meeting that Rosemont was a "no brainer" as to relocation. (R. 1785-86) While Kevin Flynn testified that he was just there listening, that he "had no role" as to Emerald. (R 70) Filkin and others testified that Kevin Flynn was the primary spokesman for Emerald. (R 1785-86) In the Fall of 1998 Kevin Flynn told Filkin that any negotiations or deal among Emerald, Davis, and the Duchossois group, need be kept secret. (R. 1802-03) Kevin Flynn had meetings with representatives of the Davis Companies around the same time.
(R. 1793-98) At a meeting on December 1, 1998, Kevin Flynn agreed or reached an understanding to sell an ownership interest in the Emerald operations to the Davis Companies and to the Duchossois group. (R. 246364, R. 1799-1801) (R. 1806-07) In addition to agreeing about the division between the three groups at the meeting, a 5 percent interest was reserved for "local" investors. (R. 1806-07) Mayor Stephens in his sworn statement to IGB testified that the 5 percent designated for local investors, "that was for me." (Stephens sworn statement 69-70)
After talking to the parties representing Davis, Filkin called Kevin Flynn and Kevin Flynn confirmed that the terms of the agreement that had been outlined to Filkin were correct. (R. 1809-10)
In 1998 and 1999 the Duchossois group and the Davis Companies were actively involved in lobbying the legislature to allow Emerald to relocate. (R. 1815-16)
After the legislation was passed which allowed the relocation, Filkin learned that Emerald might not abide by the agreement that had been reached in December 1998. (R. 1814-15) McQuaid advised Filkin in the summer of 1999 that the Duchossios group would be able to invest in Emerald but that the Davis Companies may be cut out of the deal. (R. 181617)
On September 20, 1999, Emerald organized a meeting with the Duchossios group. At the meeting Kevin Flynn told the Duchossios group that they would not be given the opportunity to invest in Emerald regardless of the prior agreement or understanding. Kevin Flynn stated that, "things change." (R. 1817) (R. 2495)
Notwithstanding all these negotiations and agreements, Kevin Flynn repeatedly denied that he had made any kind of deal with the Davis Companies or the Duchossios group. (R. 423-24; Kevin Flynn sworn statement 107-08) Indeed, in all his presentations to IGB and in subsequent litigation with the Davis Companies, Kevin Flynn insisted that he had nothing to do with running Emerald until June, 1999.
Kevin Flynn attended four of the five Emerald Board of directors meetings held between April, 1997 and April, 1999. Kevin Flynn insisted that the only reason he was at the Emerald meetings was because they coincided with the dates of the Blue Chip Casino Board meetings. Kevin Flynn testified that at some Emerald meetings he would get up and leave and sometimes he would stay. Donald Flynn gave similar testimony about Kevin Flynn's attendance at board meetings. Donald Flynn, father of Kevin and principal stockholder of Emerald, was not in town often and apparently relied heavily on his son to represent his interest. In fact, only one of the five Emerald Board of Directors meetings coincided with a Blue Chip Casino Board of Directors meetings. (R. 499-501; R. 2451)
In sum, the record is replete with clear and convincing evidence that Kevin Flynn dissembled to IGB about his activities on and in behalf of Emerald prior to June of 1999. Whether his reasons for such dissembling was to establish deniability of responsibility for agreements reached with such groups as the Davis Companies and the Duchossios group or negotiations with other dissenting stockholders or to deny how long Emerald was involved in its desire to relocate to Rosemont, he did not tell the truth to IGB.
Between April 1996 and 1999 Kevin Flynn was the CEO of Blue Chip Casino, a gambling boat operating in Michigan City, Indiana. In 1999, Blue Chip was sold to Boyd Gambling. (R. 5704-05) On June 27, 1999 as part of the sale of Blue Chip to Boyd, Kevin Flynn created a company known as Field Street. That company entered into a consulting and lobbying agreement with Boyd. Under this agreement, known as the Field Street Agreement, Kevin Flynn agreed to lobby to prevent tribal gambling from entering into southwest Michigan; such gambling would compete with Blue Chip in Michigan City. The agreement was also to cover activities in Indiana and Illinois. (R. 5726-27) Under the agreement Kevin Flynn was to be paid $500,000 a year plus expenses. If Kevin Flynn was successful in keeping tribal gaming out of southwest Michigan for five years, he would be paid five million dollars as a bonus. One of the activities that Kevin Flynn agreed to pursue was to facilitate the funding of money from Boyd to grass roots anti-gambling interests that were opposed to gambling and the expansion of gambling in Michigan. (IGB Exhibit 306, page 129, R. 572627)
Neither Kevin Flynn nor Boyd disclosed the existence of the Field Street Agreement either to Indiana or Illinois authorities. The Indiana authorities determined that it was Boyd's responsibility to disclose the agreement and for such non-disclosure the Indiana Gaming Board fined Boyd the equivalent of one million dollars. IGB first learned of the Field Street Agreement in late 1999 on receipt of a telephone call from the Indiana Gaming Commission. (Supplemental staff report at 63) Kevin Flynn did not disclose the existence of the Field Street Agreement until June 29, 2000. (IGB Exhibit 210) Whether such an agreement would or would not be against public policy under Illinois precedents, such a contract could affect the gaming industry and the reputation of persons in the gaming industry in Illinois.
5. EMERALD FAILED IN ITS OBLIGATION TO PREVENT INELIGIBLE INTERESTS FROM INVESTING IN ITS CASINO. AS A RESULT, NUMBEROUS INELIGIBLE INTERESTS WERE SOLD STOCK IN THE CASINO AND THE PROCEEDS OF SUCH SALES WERE USED TO FINANCE CONSTRUCTION OF THE NEW CASINO FACILITY AT ROSEMONT.
Throughout these proceedings Emerald insisted that it was IGB's obligation to investigate the eligibility and background of investors in the casino, since no stock purchase was complete until IGB approved it. It claimed its only responsibility was a very perfunctory review of the eligibility of the proposed stockholders; it caused such stockholders to fill out a Personal Disclosure Form 1 (PDF) and submit it directly to IGB. Emerald insisted that it could not look at the PDF's, since they were confidential. As a result, at least three of the individuals to whom stock was sold were ineligible because of their status as public officials or relatives of public officials. (R. 233) This has been covered above.
In addition to persons ineligible to be stockholders as a result of the public official disqualification, several persons and interests who had some association with organized crime were allowed to purchase stock in Emerald. In a complicated transaction involving a trust instrument with his daughter and a loan from Parkway Bank in the amount of $1,500,000, Nick Boscarino was allowed to acquire an interest in Emerald. Boscarino did business with the Village of Rosemont and was a partner in a company with Mayor Stephens' son, Mark Stephens. The company cleans office buildings including the Rosemont Exposition Center. Mayor Stephens acknowledged that he had been close to Nick Boscarino until Boscarino was indicted and convicted for defrauding the Village of Rosemont. (R. 5330-32)
Boscarino, his mother Ida L. Hansen, and his wife were all subpoenaed to testify in this proceeding; all of them took the Fifth Amendment and refused to answer questions regarding the transactions or anything else about their background.
Vito Salamone was identified by the FBI as being close with members and associates of organized crime. (R. 1353) The stock certificate issued by Emerald was originally in the name of Vito Salamone but was changed to Joseph Salamone, his brother. Whatever the effect of this crude change of ownership, there was in fact a secret memorandum of agreement, not provided to the Gaming Board, which showed that both brothers, as well as officers of the Parkway Bank and Trust Company, were sharing in the ownership interest purchased in the name of Joseph Salamone. Rocco Suspenzi was the chairman of Parkway Bank and Trust, and he as well as the Salamone brothers and Jeffrey Suspenzi were all subpoenaed to testify in this proceeding. All of them refused to testify, claiming their Fifth Amendment rights when asked questions about the secret agreement or any other questions pertaining to Emerald. Parkway Bank served as Mayor Stephens' bank in many other transactions.
Agent John Mallul (Mallul) testified as a special agent employed by the Federal Bureau of Investigations since 1986. In 1988, Mallul was assigned to an organized crime squad and has been assigned to that position since that time. For the last two years Mallul has been a supervisory special agent within the organized crime division of the FBI. (R. 2178) Mallul testified as to various terms used to describe organized crime in Chicago. (R 2182-85) Mallul directed the preparation of five letterhead memorandums, which were introduced into evidence. (R. 2186-94) These memoranda, from confidential sources, provided information regarding Nick Boscarino and the Salamone brothers and their relationships to organized crime. They also described activities of Peter DiFronzo and Joseph DiFronzo and D & P Construction Company, one of the contractors performing work at the Rosemont casino site. (IGB Exhibit 251, 252, 397, 396) Agent Mallul testified that he was satisfied as to the veracity and credibility of the source information which was used in these memoranda. (R. 2199-2200) Agent Mallul's testimony was credible and the FBI had determined to its satisfaction that the sources of the material contained in the memoranda were credible. IGB was entitled to use this information to make decisions concerning Emerald's conduct and its relocation move to Rosemont. This is particularly true since most of the individuals identified in the FBI memoranda that were involved in stock ownership in Emerald or construction activities in Rosemont refused to testify in these proceedings.
Mayor Stephens, who was identified in several of the FBI memoranda, vigorously denied any associations with organized crime. He stated that he severed his personal relationship with Mr. Boscarino after Boscarino was indicted. He acknowledged knowing Mr. DiFronzo (Sworn statement at 99-100) and others identified by Mallul. Mayor Stephens acknowledged that he at one time purchased a hotel from Sam Giancana who was then the head of the Chicago Outfit. (R. 5368-71) Mayor Stephens acknowledged that he had brushes with law enforcement early in his career.
(R. 5337) However, he vigorously denied that he was present at a meeting where organized crime figures planned their involvement in the Rosemont Casino. He also denied that he had anything to do with selecting shareholders in Emerald or contractors that Emerald hired for the construction. He did not make any effort to explain his earlier statement to IGB that under the arrangement that Emerald made prior to the amendment allowing the relocation to Rosemont, 5 percent of the stock was set aside for him. (Stephens statement at 69-70).
It is not necessary to resolve the conflicts between Mayor Stephens' testimony and the information provided by the FBI. It is not even necessary to resolve the conflict between Mayor Stephens testimony as to the selection of shareholders at the hearing as compared to his earlier sworn statement. There was sufficient credible evidence about Emerald's stock transactions, about its construction activities and about its lack of candor in its statements and submissions to IGB to warrant the revocation action taken by IGB.
Similarly it is not necessary to rely on the tape of a conversation between James and Michael Marcello, which has been recorded by the FBI pursuant to court authorization. (R. 5921-24) James Marcello is a member of organized crime and was in prison at the time the tape was made. Michael Marcello was visiting his brother and the tape of the conversation was made at that time. An approximate two and one half minutes portion of recorded tape was presented at the hearing and agent Mallul stated that no other portion of the conversation pertained to Mayor Stephens or the casino in Rosemont. (R 5932) The tape and the accompying testimony of agent Mallul were not useful in resolving any of the controversies involved in this proceeding. The tape itself had very poor fidelity and the brothers were speaking in some kind of cryptic code. Agent Mallul had to testify as to the words and as to the true meaning. Even if he were confident as to both fidelity and his interpretation of code words and phrases, there is no way that anybody could verify the facts related in the conversation. The brothers may have been puffing their own exploits and influence to each other, or they may have been deliberately trying to confuse law enforcement or anybody else that might be overhearing their conversation. In any event, notwithstanding the admissibility and relevance of agent Mallul's testimony concerning this conversation, I give it no weight in my findings of fact.
6. THERE WAS NO EVIDENCE OF BIAS ON THE PART OF THE STAFF OR OF THE MEMBERS OF IGB IN THIS REVOCATION PROCEEDING.
Throughout the proceedings, attorneys for Emerald insisted that staff and members of IGB were biased against Emerald. These bias challenges raised questions about everyone from former Governor James Edgar to Chairman Aaron Jaffe to the staff of the U.S. Attorney's office, to the various ALJ's that were involved in this proceeding and to numerous members of the IGB staff. No evidence was presented to back up the charges. Emerald presented some evidence concerning a "voodoo doll" which was given to a departing employee on the day of her departure from IGB. She allegedly stuck a pin into it and stated that the pin was for Joe McQuaid. (R. 4481-82) There was never any connecting evidence to show that if this incident took place, it was anything more than jest or an expression of irritation against Mr. McQuaid who had previously been the employee's supervisor. There was nothing to indicate that this employee did anything, said anything, or wrote anything which affected the decision to revoke Emerald's license because of any bias.
It is always unfortunate when lawyers decide to challenge the tribunal or the process rather than present their case. In this instance, Mr. Ficaro, then attorney for Emerald, delivered his opening statement in this proceeding by turning his back to the presiding officer, ALJ Holzman, and announcing to the assemblage of reporters and others who were present in the room "I would like to welcome everybody to Kangaroo Court. This proceeding is a sham." At the same time, various computers were displayed to the audience showing kangaroos jumping on the screen.
Four separate motions to disqualify previous ALJ Holzman were made; he granted the fourth one. I denied three separate motions to disqualify me; two were taken to the Gaming Board for review. Motions were made to disqualify Chairman Jaffe, and add him as a witness. The motions were all denied. On two occasions I had to remonstrate with Mr. Clifford to behave in a professional manner. (R 4919-20, 5084-85)
CONCLUSIONS OF LAW
1. When gambling was first authorized in Illinois in 1990, the Legislature
declared, that gambling would only be good for Illinois
"if public confidence and trust in the credibility and integrity of the gambling operations and the regulatory process is maintained. Therefore, regulatory provisions of this Act are designed to strictly regulate the facilities, persons, associations and practices related to gambling operations pursuant to the police powers of the State, including comprehensive law enforcement supervision." (230 ILCS 10, Riverboat Gambling Act)
2. IGB rules adopted pursuant to the Act provide that licensees shall be subject to revocation of their licenses
"for any act or failure to act...that is injurious to the public health, safety, morals, good order and general welfare of the people of the State of Illinois or that will discredit or tend to discredit the Illinois Gaming industry of the State of Illinois. (IGB Rules 3000.110(a))
As examples of such acts which can lead to revocation, the rule provides
in subsection 5:
"associating with, either socially or in business affairs, or employing persons of notorious or unsavory reputation or who have extensive police records, or who have failed to cooperate with any officially constituted investigatory or administrative body and would adversely affect public confidence and trust in Gaming."
Section 3000.140(a) of such Rules states that "Board licensees and applicants for licenses issued by the Board shall have a continuing duty to disclose promptly any material changes in information provided to the Board." Section (b) of that same rule requires licensees to disclose agreements, whether oral or written relating to "construction contracts", "agreements with or involving Key Persons", "agreements to sell… or otherwise transfer or share", "agreements in lieu thereof, relating to ownership interest or interest in an owner's license."
Subsection (c) of the same rule specifically provides that the failure to meet the requirements of subsection (a) or (b) may result in discipline "up to and including revocation of a license."
Emerald insist that revocation of its license was too harsh a remedy even some or all of the alleged conduct occurred. It suggests that transgressions of other riverboat gambling licensees were disciplined by settlement short of revocation of their licenses. Indeed, the instant matter was tentatively settled at one point and the hearing process was held in recess; however Emerald violated the terms of the tentative settlement, and the hearings were resumed. In any event the Board has discretion to judge the seriousness of the transgressions and the fitness of the penalty that should be applied. The fact that no license had been revoked before would not cause the revocation authority of the Board to lapse.
The record discloses that numerous lawsuits were filed in both federal and state court seeking to halt or terminate these proceedings and to challenge the Board's authority to act. As previously indicated, both the Appellate Court of Illinois and the Supreme Court of Illinois specifically found that IGB had continued authority to engage in these disciplinary proceedings for revocation notwithstanding the action of the legislature in making the renewal process for Emerald a mandatory matter. Most recently, Judge Thomas P. Quinn of the Circuit Court of Cook County and Judge Matthew T. Kennelly of the United States District Court for the Northern District of Illinois specifically refused to halt these proceedings or to intervene. (Emerald Casino, Inc. v. Aaron Jaffe, et al Case No. 05 C 4077, October 12, 2005)
3. Section 3000.1140(a) of the Rules states "the licensee bears the burden of
rebutting the charges contained in the complaint by clear and convincing
evidence." Section 3000.1145(a) states that
"the hearing need not be conducted according to technical rules of evidence. Any relevant evidence may be admitted and shall be sufficient in itself to support a finding if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in a civil action."
Hearsay evidence, which might normally be inadmissible in a civil action, thus was allowed to be admitted into evidence. Specifically, the FBI reports and the testimony accompanying such reports by agent Mallul were admitted under the evidence rules adopted by IGB. The reports which were identified as reliable by agent Mallul and which were made in the course of law enforcement procedures of the FBI, were admitted and given appropriate weight. The tape conversation between the Marcello brothers, while admitted, was not given weight because of the circumstances described above.
4. Case law of this state and of other states where gambling is allowed, is replete with statements of reviewing courts that the regulatory authorities of gambling have wide discretion in exercising their judgement on matters relating to licensure and revocation thereof. See Archview - Casino Cruises Inc. v. the Illinois Gambing Board 263 ILA 3rd 375 (1994); Balmoral Racing Club v. Illinois Racing Board 240 ILA 3rd 112 (1991); Oklahoma Park Inc. v. Oklahoma Horseracing Commission 716 P2d 666 (1986); Circuit Court of Virginia v. City of Richmond and Harold R. Wall, 1982 WL215-291 (VA Circuit Court, (1982)).
Section 3000.1105 of IGB Rules provides that "All Board licensees have a continuing duty to maintain suitability for licensure. A Board license does not create a property right, but is a revocable privilege granted by the State contingent upon
continuing suitability for licensure." This provision has been in the Rules since 1993 and makes clear IGB’s authority to revoke a license if it finds that the licensee is not suitable to maintain its license.
At least since 1997, when Emerald first lost its license, it and its principals have played fast and loose with the law and with the rules and regulations of IGB. Its modus operandi seemed to be "Catch me if you can", rather than abide by the legal and ethical standards that the law imposes on those privileged to get a gambling license.
Kevin Flynn flat - out lied and others dissembled as to when Emerald first attempted to move its gambling operations to Rosemont. Instead of advising IGB of its plan to sell interests in it s operations to others, Emerald claimed that "Letters of Intent" do not count as anything and that Kevin Flynn did not have "authority" to make such deals. When Emerald was confronted with undeniable facts that persons ineligible by law to be stockholders because they were public officials or related to public officials, Emerald said it was IGB's responsibility to determine such facts. When Emerald was confronted with evidence that persons associated with organized crime had obtained interests in Emerald's operation, Emerald's defense was that it was IGB's responsibility to determine such facts and that such stock transactions were not binding. When asked about making Joe McQuaid its principal enforcement officer even before he had gone off the State Police payroll for his terminal leave, (R. 2607) Emerald insisted that it was not against the law at that time. When Emerald was asked about the propriety of the Field Street Contract and why it was not reported to either the Indiana or the Illinois authorities, Emerald insisted that it was somebody else's responsibility, not Kevin Flynn's.
Any one of these defaults probably would have been sufficient to justify IGB's action in revoking Emerald's license. The sum of the parts far exceeded the making of a prima facie case against Emerald's suitability. The rebuttals by Emerald were wholly insufficient. The operation of gaming by Emerald in Rosemont would greatly undermine "public trust and confidence in that credibility and integrity of the gambling operations and of regulatory process" in Illinois.
I recommend that IGB make permanent its order of revocation and that any efforts by Emerald to engage in gambling in Illinois at any location be denied.
Dated : November 15, 2005
Abner J. Mikva
Administrative Law Judge
Thanks goes out to Jim McGough, Director of the Laborers for Justice, for bringing this to my attention. You can find a lot more additional information at IPSN .
Friends of Mine: Donald Stephens, Vito Salamone, Joseph Salamone, Nick Boscarino, Peter DiFronzo, Michael Marcello
Recommendations to the Illinois Gaming Board
In the Matter of Emerald Casino, Revocation of License Proceeding
Abner J. Mikva
Administrative Law Judge.
This matter officially commenced on March 6, 2001 when the Illinois Gaming Board (IGB, the Board) formally revoked the license of Emerald Casino, Inc. (Emerald) pursuant to Section 5(c) of the Illinois Riverboat Gambling Act (The Act) and Subpart K of the Rules of the IGB (Rules). Emerald duly answered (Answer) the complaint for disciplinary action (complaint) and an Administrative Law Judge (ALJ) was appointed to hear the matters in dispute concerning the revocation.
Protracted hearings were held by Herbert Holzman, ALJ, until August 4, 2004 when he recused himself from further proceedings o the matter. On April 14, 2005 the undersigned was appointed as successor ALJ and continued the hearings until their conclusion. A short procedural history of Emerald and its Owner's license follows.
On July 9, 1992, Emerald, then known as H.P. Enterprises, was issued a three - year Owner's License by the IGB for a riverboat gaming operation in East Dubuque, Illinois. Subsequent renewals of that license were granted in July, 1995 and July, 1996.
On December 1, 1994, the Board issued a disciplinary complaint against Emerald for its failure to obtain prior Board approval to change its equity and debt capitalization and for failure to notify the Board of its source of funds. Emerald had entered into various loan agreements in July, 1994 that were not timely disclosed to or approved by the Board. Emerald was fined $30,000.00.
In June, 1997 IGB denied Emerald's renewal application for its failure to submit a responsive renewal application, significant compliance shortcomings and failure to adhere to the overall requirements of the Act. Emerald stopped gaming operations in July, 1997. Emerald requested an administrative hearing regarding the denial of its renewal application and in 1999, at the conclusion of hearings, the ALJ concurred with the Board and recommended that the Board take final action to deny the renewal of Emerald's license.
However, before the Board acted on the ALJ's recommendations, the Illinois General Assembly amended the Act by adding a provision that "A licensee that was not conducting Riverboat Gambling on January 1, 1998 may apply to the Board for renewal and approval of relocation to a new home dock location ... and the Board shall grant the application and approval upon receipt by the licensee of approval from the new municipality or county as the case may be in which the licensee wishes to relocate...". This provision, Section 11.2 of the Act, became effective June 25, 1999.
Emerald accordingly applied for renewal of its license and for relocation for its operations to Rosemont Illinois. IGB undertook an investigation of Emerald and its key persons and proposed stockholders. The Board denied the renewal of Emerald's license on January 30, 2001. Emerald took an appeal from IGB's denial of the license and the case was heard both by the Appellate Court of Illinois and the Supreme Court of Illinois. Both these courts agreed with Emerald's contention that "shall" is mandatory in Section 11.2 of the Act and that the Board had no discretion in terms of the renewal of the license. However, both courts specifically upheld IGB's authority and discretion in all other respects under the Act and specifically told IGB that it could pursue the revocation hearings, which had previously been instituted. (Philip N. Crusius v. The Illinois Gaming Board, et al., Case No. 98351 September 22, 2005) IGB accordingly modified its directive to the undersigned to pursue only the revocation proceeding and to discontinue any reference to the denial of the renewal which had been previously been heard as part of the same proceeding. The findings of fact and conclusions of the law, which follow, pertain, therefore, to the revocation.
Two lengthy and complete staff reports were prepared pertaining to the Board's revocation action. Both of those reports are included in the record and made available to Emerald as part of this proceeding. There were 59 hearing days in this matter. The record consists of 6498 pages. The Board offered 440 exhibits and Emerald offered 112 exhibits, all of which are made a part of this record. All subpoenas requested by Emerald were carried out except that I rejected efforts to call Chairman Jaffe as a witness in this proceeding, since he is one of the ultimate adjudicators. (R. 5223) The Inspector General also resisted a subpoena as to one of its investigations of a board employee. Emerald conducted interrogation as to that investigation through another witness. And in both instances Emerald made offers of proof which are part of the record. The Board made an offer of proof in lieu of cross-examining one of Emerald's witnesses. I did not deem any of the allegations in any of the offers of proof to be pertinent to the outcome of this proceeding.
I recommend to the IGB that it confirm its order of revocation against Emerald and that order be made final pursuant to the Act. My Findings of Fact and Conclusions of Law are as follows:
FINDINGS OF FACT
1. EMERALD AND ITS PRINCIPALS DISSEMBLED ABOUT ITS PLANS TO MOVE THE LICENSE LOCATION TO ROSEMONT, ILLINOIS.
Emerald's gambling operations at East Dubuque, Illinois had been financially unsuccessful for some time. At least since 1995 Emerald had been making efforts to move those operations either by obtaining permission from IGB or by lobbying to get legislation passed, which would allow such relocation. IGB did not have the legal authority to authorize such relocation.
(R. 2846)
In November, 1997 an entity known as Lake County Riverboat LP entered into negotiations with Emerald to create a joint venture for gaming operations in Lake County, Illinois. (R. 1880) On or about November 6, 1997, the parties entered into a non-disclosure agreement. (R. 1887) On November 12, 1997, the parties entered into a joint venture agreement. Neither of the agreements were ever disclosed to the IGB and were not discovered by the IGB until subsequent litigation between Emerald and the Davis Companies. (R. 473-75, 485-88, 2963) These negotiations were largely conducted by Joe McQuaid and Kevin Flynn on behalf of Emerald. Their roles in this matter will be further discussed below.
In 1997, Kevin Flynn and Victor Cassini, on behalf of Emerald met with Rosemont Mayor Donald Stephens at the mayor's office (R. 393, R. 5301-5304). At that meeting, Flynn and Stephens discussed the possibility of relocating the Emerald Casino operation to the Village of Rosemont, according to Stephens in his sworn statement and in his testimony in this hearing. (R. 395-96) Kevin Flynn acknowledged that he met with Mayor Stephens, but testified that they only talked about the Flynn's Blue Chip operation in Indiana. Kevin Flynn's testimony in this aspect was not credible. (R. 2431-32)
In October, 1998 Kevin Flynn and David Filkin, then Vice President and General Counsel of Duchossois Industries, met with other representatives of Duchossois to discuss legislative efforts which would allow the relocation of the Emerald Casino. (R. 1783) Kevin Flynn commented that the Village of Rosemont was "a no brainer" as far as relocation. (R. 1785-86) At or about that same time the Davis Companies of California were also interested in owning or investing in a casino in Illinois, particularly in Rosemont. Michael Colleran was a Vice President of the Davis Companies. (R. 1789) In December, 1998, Kevin Flynn agreed to sell an ownership interest in the Emerald operation to the Davis Companies and to the Duchossois group. The Davis Companies would purchase 37.5 percent of the Emerald operation, while the Duchossois group would purchase 20 percent of the Emerald operation. The parties agreed to cooperate to pass legislation that would allow the casino to relocate. (R. 1806-07) This was all set forth in the First Amended Complaint in the Davis litigation. In addition to the three way split between the Flynns, the Davis Companies, and the Duchossois group , a 5 percent ownership interest in the casino was reserved for "local investors". (R. 1806-07) In Mayor Stephens sworn statement to IGB of September 2000, Mayor Stephens testified that as to the 5 percent designated for local investors, "that was for me". (Stephens sworn statement at 69-70) At or about that same time, Filkin telephoned Kevin Flynn and Kevin Flynn confirmed to Filkin the terms of the agreement. (R. 1809-10) The IGB was not notified of any of these agreements at any time until the Davis Companies tried to enforce the agreements through litigation. (R. 1844-45)
Throughout 1998 and 1999, the Duchossois group and the Davis group were actively involved in and supported the legislative initiative to authorize Emerald's relocation. (R. 1815-16) The Village of Rosemont and Mayor Stephens also participated in the lobbying efforts in 1998-99 to pass the legislation allowing relocation of Emerald's license. (R. 5352) In his sworn statement Mayor Stephens stated "you get a bill down there and I can probably kill it with people that I know in the forty-five years I have been around. I can convince enough people to squash your bill unless it is something the public really wants." (Stephens sworn statement at 47).
Emerald repeatedly told IGB that it never considered Rosemont as its prospective site until after Section 11.2 of the Act was passed by the General Assembly. As late as the filing of its Verified Answer in this proceeding, paragraph 15, it maintained that position. Everybody else seemed to know differently. The legislative history of the debate during which Section 11.2 of the Gaming Act was approved, was replete with references to Rosemont as the designated city for the relocation.
Representative Hoeft said "We're [taking the riverboat] and putting it in Rosemont and anyone here that tells me that we're not doing that, pardon the pun folks, but you want to make a bet, because that is where this boat is going." (Transcript from May 21, 1999, Illinois House of Representatives debate on SB 1017, at 102). Senator Shaw said: "and most of us do not come from such rich districts as up in Rosemont and up in Arlington ...I do not have anything against Rosemont... [Now] the argument is going to be, but do I know it is going to Rosemont. Let me tell you this; Those of us who are elected to this Body we did not come out of the dust closet to get here: we understand this process." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 117)
Senator Welsh stated, "the question that we have to ask is why it is going where it is going. Is that really economic development or are we just cutting a deal that started out being dock site gambling for ---- to keep a few boats going... [W]e've come to some kind of - secret agreement that it is going to Rosemont. And to get it there, another person, who wanted it up in Arlington Heights, agreed to give up his contention that he deserved it in exchange for a piece of the pie... what we have here is akin to a run-away train." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 123)
It was not until July, 1999, that Emerald's attorney advised IGB that it intended to move its operation to Rosemont. (R. 182, 183)
In October, 1999, the parties who had cooperated to see that the legislation allowing the new location had passed were still cooperating with each other and with Mayor Stephens. A fundraiser for the Donald E. Stephens Committeeman Fund produced the following contributions:
a. American Trade Show Services Inc. -donated $25,000 to the Fund. Nick Boscarino- husband of a new Emerald investor, Sherri Boscarino, is a principal of that company. The Boscarino interests, persons who were called to testify in these hearings, asserted their Fifth Amendment rights and refused to answer any questions. The Individuals contributed $21,000 to the Fund.
b.
D & P Construction, which ended up a contractor for Emerald,
contributed $5,000 to the Fund.
c.
The Davis interests contributed $20,000 to the Fund.
d.
The Duchossois interests contributed $21,000 to the Fund.
e.
The Flynn interests contributed $25,000 to the Fund.
Loans to by Parkway Bank to the Fund were extensive. Apparently there was one gift of over $208,000 (R. 6095) As will be detailed below, principals of Parkway were included as secret investors in Emerald. These included its president, Rocco Suspenzi. Mr. Suspenzi as well as Jeffrey Suspenzi were subpoenaed to testify in this proceeding, but exercised their Fifth Amendment rights.
The refusal of Mr. Rocco Suspenzi and Mr. Jeffrey Suspenzi to testify at these board proceedings, notwithstanding their secret investment in Emerald, and notwithstanding their closeness to Mayor Stephens and his activities, entitled IGB to draw inferences from these political loans and contributions, notwithstanding the "legality" and "timing" of such loans and contributions.
Counsel for Emerald insisted that all of these contributions were legal and indeed they are. Illinois has no limit on contributions nor does it prohibit contributions from investors or would-be investors in the gaming industry. However, IGB was entitled to infer from contributions and their timing and the lobbying efforts acknowledged by the parties involved that there was indeed an agreement in 1998-99 to get such legislation passed through the General Assembly, to relocate the Emerald gaming operations to Rosemont, and to divide the pie in some kind of secret arrangement.
2. THE RENEWAL APPLICATION FILED BY EMERALD ON SEPTEMBER 28, 1999 WAS NEITHER ACCURATE NOR COMPLETE.
Joe McQuaid testified that as the responsible official of Emerald, he completed and filed the Renewal Application. He testified that he reviewed the instructions for the application carefully. (R. 3176-77) As would be detailed, Mr. McQuaid had extensive experience as the Chief Enforcement Officer and Interim Administrator of IGB for many years immediately prior to being employed by Emerald. Indeed he was the official of IGB who signed the first disciplinary action against Emerald in 1994, which resulted in the $30,000 fine against Emerald.
Notwithstanding Mr. McQuaid's experience and his testimony that he had reviewed the instructions, the application stated that none of the shareholders were public officials or relatives of public officials. A list of stockholders submitted to IGB included a relative of State Representative Ralph Caparelli, one of the prime movers of the relocation amendment to the Act, as well as two other public officials. McQuaid never asked any of the persons involved whether or not they were public officials and testified that he thought that it was not important to ask such questions because none of the stock purchased and transferred to these public officials had ever been approved by the IGB. Therefore, even though the proceeds of such sales and others were used by Emerald, McQuaid's position was that it was of no consequence who the stockholders were until the IGB finally approved the transfer. Neither McQuaid nor anyone else at Emerald had ever examined the Personal Disclosure Forms (PDF) which were submitted to the Board directly.
The application also requested that Emerald submit "all agreements, arrangements, and commitments related to proposed gaming facility and related projects". Emerald submitted five agreements, none of which were pertinent to this inquiry and stated it had not executed any other agreements. In fact, Emerald had executed a letter of intent with the Village of Rosemont; Emerald made no reference to any of the arrangements that it had made with the Davis interests (which were about to lead into a law suit filed by Davis).
The application specifically asked whether the licensee or any of its affiliates had been a party to any legal action, including pending or threatened litigation. Emerald did not include any information about the threatened litigation by the Davis companies, even though the Davis companies had already planned a complaint and notified Emerald of that fact.
One of the questions asked whether any current or proposed shareholders had been arrested, charged, indicted, convicted etc. of any felony or misdemeanor. Emerald answered by saying it relied on the PDF's that were submitted directly to the Board. Emerald thus sought to absolve itself of any responsibility for the identity of the stockholders other than perfunctory interviews by Mr. McQuaid. As will be detailed below, several proposed stockholders were covered by that question, but not disclosed to IGB.
In July and August 1999 Rosemont and Emerald entered into several letter agreements relating to the development of the proposed casino on the Rosemont property. (R. 3229) These letter agreements were not disclosed to IGB until sometime in 2000. IGB became aware of these letter agreements with Rosemont in September, 2000, pursuant to a letter received from the attorney for Rosemont. Emerald did not disclose these agreements with IGB until December, 2000. (R. 3220)
3. EMERALD FAILED TO NOTIFY IGB OF ITS CONSTRUCION ACTIVITES OR ITS LEASE AND DEVELOPMENT AGREEMENT WITH ROSEMONT IN A TIMELY FASHION.
It would appear that after Emerald and its principals were successful in obtaining the amendment to the Act from the legislature pertaining to relocation, it decided that the rules and procedures of IGB need not be given too much concern. On July 21, 1999, Rosemont and Emerald had entered into a Letter of Intent regarding the construction of a casino at the site agreed upon between them. The Letter of Intent was "intended to memoralize key items that had been agreed to which are to be incorporated into a lease and development agreement". (R 1235-36) This Letter of Intent was extended and augmented by various letter agreements signed in August 1999 and December 1, 1999. Emerald did not include the Letter of Intent or any of the documents previously signed with Rosemont in its September 24, 1999 application. Indeed none of those agreements were sent to IGB by Emerald until December, 2000 more than one year after commencing construction and after IGB had obtained these letters from the Village of Rosemont in September, 2000. (R. 1235-36)
On February 10, 2000 Emerald submitted a fully executed copy of the Lease and Development agreement between Emerald and Rosemont. That Agreement contained many of the identical terms originally memoralized in the July 21 Letter of Intent. This February submission to IGB was long after Emerald had commenced construction at the site, and Rosemont had commenced construction of a parking garage. Indeed, on or about February 29, 2000 Emerald informed IGB that it had ceased all construction activities at the site as of that date.
The Lease and Development Agreement contained many provisions violative of IGB's rules and procedures. That Agreement allowed the Village of Rosemont to waive the requirement that Emerald obtain necessary regulatory approval from IGB prior to commencing construction of the casino. That Agreement committed Emerald to fund the construction of the parking garage addition even though Emerald did not have sufficient financing dedicated to do so. That Agreement failed to provide Emerald the ability to exercise appropriate control or supervision over the management of the contractor or sub-contractors for the casino and parking garage construction project. At the hearings, Emerald took the position that submission of construction contracts or review of construction contractors was not necessary because IGB would always have an opportunity to reject anything that had been built in the final instance before the "casino" became a "casino". Such a position is contrary to the statute.
At least one of the subcontractors doing work on the casino construction project was a company known as D & P Construction. The FBI in its memorandum of April 16, 2003 identified D & P Construction as controlled by Peter and John DiFronzo. The Memorandum stated that D & P obtained contracts through illegal payoffs or intimidation (IGB Exhibit 397). During the hearings, none of the witnesses, either for Emerald or for any other party would admit that they hired D & P Construction.
4. KEVIN FLYNN, AS A MAJOR STOCKHOLDER AND PROPOSED CHIEF EXECUTIVE OFFICER OF EMERALD, CONSISTENTLY DISSEMBLED TO IGB AS TO HIS ACTIVITES ON BEHALF OF EMERALD.
Kevin Flynn identified himself as a stockholder of Emerald in December, 1996. However Kevin Flynn, both in sworn statements and letters to the IGB, insisted that he did not become involved in the activities or management of Emerald until June of 1999 when he was appointed to the new post of Chief Executive Officer of Emerald.
As far back as November, 1997 Kevin Flynn had negotiated on behalf of Emerald with the Lake County Riverboat L.P. to discuss a joint venture for a riverboat in Lake County Illinois. Kevin Flynn acted as the primary spokesman for Emerald in those negotiations. (R. 1890-91, R. 1900-01) In November, 1997 Emerald and Lake County Riverboat entered into a nondisclosure agreement and a joint venture agreement to pursue a Lake County operation. (R. 1887) These agreements and Kevin Flynn's role in negotiating these agreements were not disclosed to IGB. IGB only become aware of the circumstances through a review of material produced in the Davis litigation at a much later time. (R. 473-75, R. 485-88)
In 1997, Kevin Flynn met with Mayor Stephens at the Mayor's office. They discussed the possibility of moving the Emerald Casino operation to Rosemont. (Stephens' sworn statement at 12; R. 5301-04) Kevin Flynn insisted that Rosemont "was not anything considered as far as I know until the legislation passed" in 1999. (R. 2439) Kevin Flynn lied about his 1997 meeting with Mayor Stephens and the possibility of moving to Rosemont.
In October, 1998, Kevin Flynn met with representatives of Duchossois Industries including David Filkin, Vice President and General Counsel for Duchossois. Kevin Flynn stated at that meeting that Rosemont was a "no brainer" as to relocation. (R. 1785-86) While Kevin Flynn testified that he was just there listening, that he "had no role" as to Emerald. (R 70) Filkin and others testified that Kevin Flynn was the primary spokesman for Emerald. (R 1785-86) In the Fall of 1998 Kevin Flynn told Filkin that any negotiations or deal among Emerald, Davis, and the Duchossois group, need be kept secret. (R. 1802-03) Kevin Flynn had meetings with representatives of the Davis Companies around the same time.
(R. 1793-98) At a meeting on December 1, 1998, Kevin Flynn agreed or reached an understanding to sell an ownership interest in the Emerald operations to the Davis Companies and to the Duchossois group. (R. 246364, R. 1799-1801) (R. 1806-07) In addition to agreeing about the division between the three groups at the meeting, a 5 percent interest was reserved for "local" investors. (R. 1806-07) Mayor Stephens in his sworn statement to IGB testified that the 5 percent designated for local investors, "that was for me." (Stephens sworn statement 69-70)
After talking to the parties representing Davis, Filkin called Kevin Flynn and Kevin Flynn confirmed that the terms of the agreement that had been outlined to Filkin were correct. (R. 1809-10)
In 1998 and 1999 the Duchossois group and the Davis Companies were actively involved in lobbying the legislature to allow Emerald to relocate. (R. 1815-16)
After the legislation was passed which allowed the relocation, Filkin learned that Emerald might not abide by the agreement that had been reached in December 1998. (R. 1814-15) McQuaid advised Filkin in the summer of 1999 that the Duchossios group would be able to invest in Emerald but that the Davis Companies may be cut out of the deal. (R. 181617)
On September 20, 1999, Emerald organized a meeting with the Duchossios group. At the meeting Kevin Flynn told the Duchossios group that they would not be given the opportunity to invest in Emerald regardless of the prior agreement or understanding. Kevin Flynn stated that, "things change." (R. 1817) (R. 2495)
Notwithstanding all these negotiations and agreements, Kevin Flynn repeatedly denied that he had made any kind of deal with the Davis Companies or the Duchossios group. (R. 423-24; Kevin Flynn sworn statement 107-08) Indeed, in all his presentations to IGB and in subsequent litigation with the Davis Companies, Kevin Flynn insisted that he had nothing to do with running Emerald until June, 1999.
Kevin Flynn attended four of the five Emerald Board of directors meetings held between April, 1997 and April, 1999. Kevin Flynn insisted that the only reason he was at the Emerald meetings was because they coincided with the dates of the Blue Chip Casino Board meetings. Kevin Flynn testified that at some Emerald meetings he would get up and leave and sometimes he would stay. Donald Flynn gave similar testimony about Kevin Flynn's attendance at board meetings. Donald Flynn, father of Kevin and principal stockholder of Emerald, was not in town often and apparently relied heavily on his son to represent his interest. In fact, only one of the five Emerald Board of Directors meetings coincided with a Blue Chip Casino Board of Directors meetings. (R. 499-501; R. 2451)
In sum, the record is replete with clear and convincing evidence that Kevin Flynn dissembled to IGB about his activities on and in behalf of Emerald prior to June of 1999. Whether his reasons for such dissembling was to establish deniability of responsibility for agreements reached with such groups as the Davis Companies and the Duchossios group or negotiations with other dissenting stockholders or to deny how long Emerald was involved in its desire to relocate to Rosemont, he did not tell the truth to IGB.
Between April 1996 and 1999 Kevin Flynn was the CEO of Blue Chip Casino, a gambling boat operating in Michigan City, Indiana. In 1999, Blue Chip was sold to Boyd Gambling. (R. 5704-05) On June 27, 1999 as part of the sale of Blue Chip to Boyd, Kevin Flynn created a company known as Field Street. That company entered into a consulting and lobbying agreement with Boyd. Under this agreement, known as the Field Street Agreement, Kevin Flynn agreed to lobby to prevent tribal gambling from entering into southwest Michigan; such gambling would compete with Blue Chip in Michigan City. The agreement was also to cover activities in Indiana and Illinois. (R. 5726-27) Under the agreement Kevin Flynn was to be paid $500,000 a year plus expenses. If Kevin Flynn was successful in keeping tribal gaming out of southwest Michigan for five years, he would be paid five million dollars as a bonus. One of the activities that Kevin Flynn agreed to pursue was to facilitate the funding of money from Boyd to grass roots anti-gambling interests that were opposed to gambling and the expansion of gambling in Michigan. (IGB Exhibit 306, page 129, R. 572627)
Neither Kevin Flynn nor Boyd disclosed the existence of the Field Street Agreement either to Indiana or Illinois authorities. The Indiana authorities determined that it was Boyd's responsibility to disclose the agreement and for such non-disclosure the Indiana Gaming Board fined Boyd the equivalent of one million dollars. IGB first learned of the Field Street Agreement in late 1999 on receipt of a telephone call from the Indiana Gaming Commission. (Supplemental staff report at 63) Kevin Flynn did not disclose the existence of the Field Street Agreement until June 29, 2000. (IGB Exhibit 210) Whether such an agreement would or would not be against public policy under Illinois precedents, such a contract could affect the gaming industry and the reputation of persons in the gaming industry in Illinois.
5. EMERALD FAILED IN ITS OBLIGATION TO PREVENT INELIGIBLE INTERESTS FROM INVESTING IN ITS CASINO. AS A RESULT, NUMBEROUS INELIGIBLE INTERESTS WERE SOLD STOCK IN THE CASINO AND THE PROCEEDS OF SUCH SALES WERE USED TO FINANCE CONSTRUCTION OF THE NEW CASINO FACILITY AT ROSEMONT.
Throughout these proceedings Emerald insisted that it was IGB's obligation to investigate the eligibility and background of investors in the casino, since no stock purchase was complete until IGB approved it. It claimed its only responsibility was a very perfunctory review of the eligibility of the proposed stockholders; it caused such stockholders to fill out a Personal Disclosure Form 1 (PDF) and submit it directly to IGB. Emerald insisted that it could not look at the PDF's, since they were confidential. As a result, at least three of the individuals to whom stock was sold were ineligible because of their status as public officials or relatives of public officials. (R. 233) This has been covered above.
In addition to persons ineligible to be stockholders as a result of the public official disqualification, several persons and interests who had some association with organized crime were allowed to purchase stock in Emerald. In a complicated transaction involving a trust instrument with his daughter and a loan from Parkway Bank in the amount of $1,500,000, Nick Boscarino was allowed to acquire an interest in Emerald. Boscarino did business with the Village of Rosemont and was a partner in a company with Mayor Stephens' son, Mark Stephens. The company cleans office buildings including the Rosemont Exposition Center. Mayor Stephens acknowledged that he had been close to Nick Boscarino until Boscarino was indicted and convicted for defrauding the Village of Rosemont. (R. 5330-32)
Boscarino, his mother Ida L. Hansen, and his wife were all subpoenaed to testify in this proceeding; all of them took the Fifth Amendment and refused to answer questions regarding the transactions or anything else about their background.
Vito Salamone was identified by the FBI as being close with members and associates of organized crime. (R. 1353) The stock certificate issued by Emerald was originally in the name of Vito Salamone but was changed to Joseph Salamone, his brother. Whatever the effect of this crude change of ownership, there was in fact a secret memorandum of agreement, not provided to the Gaming Board, which showed that both brothers, as well as officers of the Parkway Bank and Trust Company, were sharing in the ownership interest purchased in the name of Joseph Salamone. Rocco Suspenzi was the chairman of Parkway Bank and Trust, and he as well as the Salamone brothers and Jeffrey Suspenzi were all subpoenaed to testify in this proceeding. All of them refused to testify, claiming their Fifth Amendment rights when asked questions about the secret agreement or any other questions pertaining to Emerald. Parkway Bank served as Mayor Stephens' bank in many other transactions.
Agent John Mallul (Mallul) testified as a special agent employed by the Federal Bureau of Investigations since 1986. In 1988, Mallul was assigned to an organized crime squad and has been assigned to that position since that time. For the last two years Mallul has been a supervisory special agent within the organized crime division of the FBI. (R. 2178) Mallul testified as to various terms used to describe organized crime in Chicago. (R 2182-85) Mallul directed the preparation of five letterhead memorandums, which were introduced into evidence. (R. 2186-94) These memoranda, from confidential sources, provided information regarding Nick Boscarino and the Salamone brothers and their relationships to organized crime. They also described activities of Peter DiFronzo and Joseph DiFronzo and D & P Construction Company, one of the contractors performing work at the Rosemont casino site. (IGB Exhibit 251, 252, 397, 396) Agent Mallul testified that he was satisfied as to the veracity and credibility of the source information which was used in these memoranda. (R. 2199-2200) Agent Mallul's testimony was credible and the FBI had determined to its satisfaction that the sources of the material contained in the memoranda were credible. IGB was entitled to use this information to make decisions concerning Emerald's conduct and its relocation move to Rosemont. This is particularly true since most of the individuals identified in the FBI memoranda that were involved in stock ownership in Emerald or construction activities in Rosemont refused to testify in these proceedings.
Mayor Stephens, who was identified in several of the FBI memoranda, vigorously denied any associations with organized crime. He stated that he severed his personal relationship with Mr. Boscarino after Boscarino was indicted. He acknowledged knowing Mr. DiFronzo (Sworn statement at 99-100) and others identified by Mallul. Mayor Stephens acknowledged that he at one time purchased a hotel from Sam Giancana who was then the head of the Chicago Outfit. (R. 5368-71) Mayor Stephens acknowledged that he had brushes with law enforcement early in his career.
(R. 5337) However, he vigorously denied that he was present at a meeting where organized crime figures planned their involvement in the Rosemont Casino. He also denied that he had anything to do with selecting shareholders in Emerald or contractors that Emerald hired for the construction. He did not make any effort to explain his earlier statement to IGB that under the arrangement that Emerald made prior to the amendment allowing the relocation to Rosemont, 5 percent of the stock was set aside for him. (Stephens statement at 69-70).
It is not necessary to resolve the conflicts between Mayor Stephens' testimony and the information provided by the FBI. It is not even necessary to resolve the conflict between Mayor Stephens testimony as to the selection of shareholders at the hearing as compared to his earlier sworn statement. There was sufficient credible evidence about Emerald's stock transactions, about its construction activities and about its lack of candor in its statements and submissions to IGB to warrant the revocation action taken by IGB.
Similarly it is not necessary to rely on the tape of a conversation between James and Michael Marcello, which has been recorded by the FBI pursuant to court authorization. (R. 5921-24) James Marcello is a member of organized crime and was in prison at the time the tape was made. Michael Marcello was visiting his brother and the tape of the conversation was made at that time. An approximate two and one half minutes portion of recorded tape was presented at the hearing and agent Mallul stated that no other portion of the conversation pertained to Mayor Stephens or the casino in Rosemont. (R 5932) The tape and the accompying testimony of agent Mallul were not useful in resolving any of the controversies involved in this proceeding. The tape itself had very poor fidelity and the brothers were speaking in some kind of cryptic code. Agent Mallul had to testify as to the words and as to the true meaning. Even if he were confident as to both fidelity and his interpretation of code words and phrases, there is no way that anybody could verify the facts related in the conversation. The brothers may have been puffing their own exploits and influence to each other, or they may have been deliberately trying to confuse law enforcement or anybody else that might be overhearing their conversation. In any event, notwithstanding the admissibility and relevance of agent Mallul's testimony concerning this conversation, I give it no weight in my findings of fact.
6. THERE WAS NO EVIDENCE OF BIAS ON THE PART OF THE STAFF OR OF THE MEMBERS OF IGB IN THIS REVOCATION PROCEEDING.
Throughout the proceedings, attorneys for Emerald insisted that staff and members of IGB were biased against Emerald. These bias challenges raised questions about everyone from former Governor James Edgar to Chairman Aaron Jaffe to the staff of the U.S. Attorney's office, to the various ALJ's that were involved in this proceeding and to numerous members of the IGB staff. No evidence was presented to back up the charges. Emerald presented some evidence concerning a "voodoo doll" which was given to a departing employee on the day of her departure from IGB. She allegedly stuck a pin into it and stated that the pin was for Joe McQuaid. (R. 4481-82) There was never any connecting evidence to show that if this incident took place, it was anything more than jest or an expression of irritation against Mr. McQuaid who had previously been the employee's supervisor. There was nothing to indicate that this employee did anything, said anything, or wrote anything which affected the decision to revoke Emerald's license because of any bias.
It is always unfortunate when lawyers decide to challenge the tribunal or the process rather than present their case. In this instance, Mr. Ficaro, then attorney for Emerald, delivered his opening statement in this proceeding by turning his back to the presiding officer, ALJ Holzman, and announcing to the assemblage of reporters and others who were present in the room "I would like to welcome everybody to Kangaroo Court. This proceeding is a sham." At the same time, various computers were displayed to the audience showing kangaroos jumping on the screen.
Four separate motions to disqualify previous ALJ Holzman were made; he granted the fourth one. I denied three separate motions to disqualify me; two were taken to the Gaming Board for review. Motions were made to disqualify Chairman Jaffe, and add him as a witness. The motions were all denied. On two occasions I had to remonstrate with Mr. Clifford to behave in a professional manner. (R 4919-20, 5084-85)
CONCLUSIONS OF LAW
1. When gambling was first authorized in Illinois in 1990, the Legislature
declared, that gambling would only be good for Illinois
"if public confidence and trust in the credibility and integrity of the gambling operations and the regulatory process is maintained. Therefore, regulatory provisions of this Act are designed to strictly regulate the facilities, persons, associations and practices related to gambling operations pursuant to the police powers of the State, including comprehensive law enforcement supervision." (230 ILCS 10, Riverboat Gambling Act)
2. IGB rules adopted pursuant to the Act provide that licensees shall be subject to revocation of their licenses
"for any act or failure to act...that is injurious to the public health, safety, morals, good order and general welfare of the people of the State of Illinois or that will discredit or tend to discredit the Illinois Gaming industry of the State of Illinois. (IGB Rules 3000.110(a))
As examples of such acts which can lead to revocation, the rule provides
in subsection 5:
"associating with, either socially or in business affairs, or employing persons of notorious or unsavory reputation or who have extensive police records, or who have failed to cooperate with any officially constituted investigatory or administrative body and would adversely affect public confidence and trust in Gaming."
Section 3000.140(a) of such Rules states that "Board licensees and applicants for licenses issued by the Board shall have a continuing duty to disclose promptly any material changes in information provided to the Board." Section (b) of that same rule requires licensees to disclose agreements, whether oral or written relating to "construction contracts", "agreements with or involving Key Persons", "agreements to sell… or otherwise transfer or share", "agreements in lieu thereof, relating to ownership interest or interest in an owner's license."
Subsection (c) of the same rule specifically provides that the failure to meet the requirements of subsection (a) or (b) may result in discipline "up to and including revocation of a license."
Emerald insist that revocation of its license was too harsh a remedy even some or all of the alleged conduct occurred. It suggests that transgressions of other riverboat gambling licensees were disciplined by settlement short of revocation of their licenses. Indeed, the instant matter was tentatively settled at one point and the hearing process was held in recess; however Emerald violated the terms of the tentative settlement, and the hearings were resumed. In any event the Board has discretion to judge the seriousness of the transgressions and the fitness of the penalty that should be applied. The fact that no license had been revoked before would not cause the revocation authority of the Board to lapse.
The record discloses that numerous lawsuits were filed in both federal and state court seeking to halt or terminate these proceedings and to challenge the Board's authority to act. As previously indicated, both the Appellate Court of Illinois and the Supreme Court of Illinois specifically found that IGB had continued authority to engage in these disciplinary proceedings for revocation notwithstanding the action of the legislature in making the renewal process for Emerald a mandatory matter. Most recently, Judge Thomas P. Quinn of the Circuit Court of Cook County and Judge Matthew T. Kennelly of the United States District Court for the Northern District of Illinois specifically refused to halt these proceedings or to intervene. (Emerald Casino, Inc. v. Aaron Jaffe, et al Case No. 05 C 4077, October 12, 2005)
3. Section 3000.1140(a) of the Rules states "the licensee bears the burden of
rebutting the charges contained in the complaint by clear and convincing
evidence." Section 3000.1145(a) states that
"the hearing need not be conducted according to technical rules of evidence. Any relevant evidence may be admitted and shall be sufficient in itself to support a finding if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in a civil action."
Hearsay evidence, which might normally be inadmissible in a civil action, thus was allowed to be admitted into evidence. Specifically, the FBI reports and the testimony accompanying such reports by agent Mallul were admitted under the evidence rules adopted by IGB. The reports which were identified as reliable by agent Mallul and which were made in the course of law enforcement procedures of the FBI, were admitted and given appropriate weight. The tape conversation between the Marcello brothers, while admitted, was not given weight because of the circumstances described above.
4. Case law of this state and of other states where gambling is allowed, is replete with statements of reviewing courts that the regulatory authorities of gambling have wide discretion in exercising their judgement on matters relating to licensure and revocation thereof. See Archview - Casino Cruises Inc. v. the Illinois Gambing Board 263 ILA 3rd 375 (1994); Balmoral Racing Club v. Illinois Racing Board 240 ILA 3rd 112 (1991); Oklahoma Park Inc. v. Oklahoma Horseracing Commission 716 P2d 666 (1986); Circuit Court of Virginia v. City of Richmond and Harold R. Wall, 1982 WL215-291 (VA Circuit Court, (1982)).
Section 3000.1105 of IGB Rules provides that "All Board licensees have a continuing duty to maintain suitability for licensure. A Board license does not create a property right, but is a revocable privilege granted by the State contingent upon
continuing suitability for licensure." This provision has been in the Rules since 1993 and makes clear IGB’s authority to revoke a license if it finds that the licensee is not suitable to maintain its license.
At least since 1997, when Emerald first lost its license, it and its principals have played fast and loose with the law and with the rules and regulations of IGB. Its modus operandi seemed to be "Catch me if you can", rather than abide by the legal and ethical standards that the law imposes on those privileged to get a gambling license.
Kevin Flynn flat - out lied and others dissembled as to when Emerald first attempted to move its gambling operations to Rosemont. Instead of advising IGB of its plan to sell interests in it s operations to others, Emerald claimed that "Letters of Intent" do not count as anything and that Kevin Flynn did not have "authority" to make such deals. When Emerald was confronted with undeniable facts that persons ineligible by law to be stockholders because they were public officials or related to public officials, Emerald said it was IGB's responsibility to determine such facts. When Emerald was confronted with evidence that persons associated with organized crime had obtained interests in Emerald's operation, Emerald's defense was that it was IGB's responsibility to determine such facts and that such stock transactions were not binding. When asked about making Joe McQuaid its principal enforcement officer even before he had gone off the State Police payroll for his terminal leave, (R. 2607) Emerald insisted that it was not against the law at that time. When Emerald was asked about the propriety of the Field Street Contract and why it was not reported to either the Indiana or the Illinois authorities, Emerald insisted that it was somebody else's responsibility, not Kevin Flynn's.
Any one of these defaults probably would have been sufficient to justify IGB's action in revoking Emerald's license. The sum of the parts far exceeded the making of a prima facie case against Emerald's suitability. The rebuttals by Emerald were wholly insufficient. The operation of gaming by Emerald in Rosemont would greatly undermine "public trust and confidence in that credibility and integrity of the gambling operations and of regulatory process" in Illinois.
I recommend that IGB make permanent its order of revocation and that any efforts by Emerald to engage in gambling in Illinois at any location be denied.
Dated : November 15, 2005
Abner J. Mikva
Administrative Law Judge
Thanks goes out to Jim McGough, Director of the Laborers for Justice, for bringing this to my attention. You can find a lot more additional information at IPSN .
Friday, September 16, 2005
Mayor Donald E. Stephens: I didn't meet with mob
Rosemont Mayor Donald E. Stephens adamantly denied under oath Thursday that he met with the mob in 1999 to talk about a casino for his town. And, in an ironic twist, a reputed mob boss on the lam is backing him up.
Joey "The Clown" Lombardo fired off a letter to his lawyer last month denying an FBI informant's claim that Lombardo and reputed mobsters John "No Nose" DiFronzo, his brother Peter DiFronzo, Joe "the Builder" Andriacchi, Rudy Fratto and other alleged hoodlums met with Stephens at Armand's Pizzeria, an Elmwood Park restaurant, according to Rick Halprin, Lombardo's lawyer.
"Let me inform you that it is positively a lie," the hand-printed letter, which included misspellings, read. "I have never, never, ever sat down with Mayor Stephens and the rest of the names in the article. I will take truth serum or lie detector test if the agent and there reliable witness will take one. It has to be done by a private co., not the FBI."
Lombardo, 76, has been missing since a major federal indictment linking the mob to 18 unsolved murders came down in April. Shortly after the indictment, a letter from Lombardo arrived by mail at Halprin's Chicago office. That letter, postmarked in Chicago and directed at U.S. District Court Judge James B. Zagel, proclaimed his innocence and asked for a separate trial from the others indicted. However, FBI spokesman Ross Rice said agents don't necessarily think Lombardo is hiding out in the Chicago area.
The FBI launched international manhunts for Lombardo and co-defendant Frank "the German" Schweihs and are offering rewards of up to $20,000 apiece for their arrests. Lombardo, 76, who had lived on Chicago's Near West Side for more than half a century, and Schweihs, 75, who last lived near Ft. Lauderdale, face up to life in prison if convicted.
The latest letter was dated Aug. 24 and postmarked Aug. 25 in Chicago. The letter was on three-ring notebook paper and was accompanied by two Chicago Sun-Times articles, including a July 19 clipping about Lombardo's alleged meeting with Stephens, Halprin said. "I doubt that he has a home subscription," Halprin said of Lombardo. "I have no idea where Mr. Lombardo is," Halprin said. "I'm saying the same thing I've said over and over again: It's my obligation to tell Joey, I can only tell him he should surrender himself and prepare for trial."
'Ridiculous nonsense'
FBI agent John Mallul had testified on July 18 that an informant told him of the Armand's meeting. Mallul's testimony came during a state Gaming Board hearing to revoke the license of Emerald Casino, which has been trying to open a casino in Rosemont but has been bogged down by mob allegations.
Lombardo says he also sent a separate letter to Rosemont's village attorney denying the Armand's meeting. "And also if I met with these people on that date, May 29th, 1999 I would have been in violation of my parole and probation," the letter to Halprin read.
Rosemont attorney Bob Stephenson confirmed he recently received two letters, purportedly from Lombardo. One appeared to mirror the Halprin letter, the other was a brief note in which Lombardo told Stephenson he remembered him from an old Teamsters trial, Stephenson said. The letters were signed "Joseph Lombardo I'm an innocent man," wording similar to the letter sent in the spring. The Rosemont letters were turned over to the feds, Stephenson said.
Word of the latest round of Lombardo correspondence came as Stephens testified before retired Judge Abner Mikva, who will rule whether Emerald should lose its gaming license. Stephens testified he was "absolutely not" at the Armand's meeting -- and said he had never even been to the restaurant.
Outside of the hearing, Stephens, 77, called the Armand's allegation "such ridiculous nonsense."
'I hate my son-in-law'
"The FBI agent said there was some informant. Well, at the very least, the informant's a liar," Stephens said. "As a matter of fact, I also understand that my [ex-]son-in-law was at this meeting. I've got news for you, I hate my son-in-law. I've never gone around the block with him in my car. Never."
Excerpted from articles by Carol Marin and Shamus Toomey of the Sun Times and by Matt O'Connor and John Chase of the Tribune.
Joey "The Clown" Lombardo fired off a letter to his lawyer last month denying an FBI informant's claim that Lombardo and reputed mobsters John "No Nose" DiFronzo, his brother Peter DiFronzo, Joe "the Builder" Andriacchi, Rudy Fratto and other alleged hoodlums met with Stephens at Armand's Pizzeria, an Elmwood Park restaurant, according to Rick Halprin, Lombardo's lawyer.
"Let me inform you that it is positively a lie," the hand-printed letter, which included misspellings, read. "I have never, never, ever sat down with Mayor Stephens and the rest of the names in the article. I will take truth serum or lie detector test if the agent and there reliable witness will take one. It has to be done by a private co., not the FBI."
Lombardo, 76, has been missing since a major federal indictment linking the mob to 18 unsolved murders came down in April. Shortly after the indictment, a letter from Lombardo arrived by mail at Halprin's Chicago office. That letter, postmarked in Chicago and directed at U.S. District Court Judge James B. Zagel, proclaimed his innocence and asked for a separate trial from the others indicted. However, FBI spokesman Ross Rice said agents don't necessarily think Lombardo is hiding out in the Chicago area.
The FBI launched international manhunts for Lombardo and co-defendant Frank "the German" Schweihs and are offering rewards of up to $20,000 apiece for their arrests. Lombardo, 76, who had lived on Chicago's Near West Side for more than half a century, and Schweihs, 75, who last lived near Ft. Lauderdale, face up to life in prison if convicted.
The latest letter was dated Aug. 24 and postmarked Aug. 25 in Chicago. The letter was on three-ring notebook paper and was accompanied by two Chicago Sun-Times articles, including a July 19 clipping about Lombardo's alleged meeting with Stephens, Halprin said. "I doubt that he has a home subscription," Halprin said of Lombardo. "I have no idea where Mr. Lombardo is," Halprin said. "I'm saying the same thing I've said over and over again: It's my obligation to tell Joey, I can only tell him he should surrender himself and prepare for trial."
'Ridiculous nonsense'
FBI agent John Mallul had testified on July 18 that an informant told him of the Armand's meeting. Mallul's testimony came during a state Gaming Board hearing to revoke the license of Emerald Casino, which has been trying to open a casino in Rosemont but has been bogged down by mob allegations.
Lombardo says he also sent a separate letter to Rosemont's village attorney denying the Armand's meeting. "And also if I met with these people on that date, May 29th, 1999 I would have been in violation of my parole and probation," the letter to Halprin read.
Rosemont attorney Bob Stephenson confirmed he recently received two letters, purportedly from Lombardo. One appeared to mirror the Halprin letter, the other was a brief note in which Lombardo told Stephenson he remembered him from an old Teamsters trial, Stephenson said. The letters were signed "Joseph Lombardo I'm an innocent man," wording similar to the letter sent in the spring. The Rosemont letters were turned over to the feds, Stephenson said.
Word of the latest round of Lombardo correspondence came as Stephens testified before retired Judge Abner Mikva, who will rule whether Emerald should lose its gaming license. Stephens testified he was "absolutely not" at the Armand's meeting -- and said he had never even been to the restaurant.
Outside of the hearing, Stephens, 77, called the Armand's allegation "such ridiculous nonsense."
'I hate my son-in-law'
"The FBI agent said there was some informant. Well, at the very least, the informant's a liar," Stephens said. "As a matter of fact, I also understand that my [ex-]son-in-law was at this meeting. I've got news for you, I hate my son-in-law. I've never gone around the block with him in my car. Never."
Excerpted from articles by Carol Marin and Shamus Toomey of the Sun Times and by Matt O'Connor and John Chase of the Tribune.
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