State gaming board investigators are seeking to interview alleged Scranton mobster William D'Elia to determine whether he has or had ties to slots applicant Louis DeNaples.
D'Elia, 62, of Hughestown, Luzerne County, is being held without bail in Pike County. He was charged in October with conspiring to kill a witness while out on bail from a previous indictment on money laundering and other offenses. In 2003, the New Jersey Casino Control Board barred him from entering any casino in that state.
The request to interview D'Elia was made Dec. 13, according to D'Elia's attorney, James Swetz of Stroudsburg. It has triggered questions because it came just hours before the Pennsylvania Gaming Control Board's staff approved DeNaples as "suitable" for a slots license. The board is scheduled to award licenses Wednesday.
DeNaples, a wealthy and politically connected Scranton-area businessman who is seeking a slots license for his Mount Airy Lodge in Monroe County, is up against proposals in Allentown, Bethlehem, the Gettysburg area and another Poconos site for two licenses.
Character counts in awarding slots licenses in Pennsylvania, so proven ties of any kind between D'Elia, who reputedly heads the Bufalino crime family, and DeNaples could hurt DeNaples' chances of owning a slots parlor.
"It stinks," said DeNaples' spokesman, Kevin Feeley.
Gaming board officials declined to discuss their interest in speaking to D'Elia. Spokesman Doug Harbach would say only that as part of the regulatory process for all applicants, "investigations are ongoing."
DeNaples, who rarely speaks to the media, could not be reached for comment.
But Feeley, DeNaples' Philadelphia-based spokesman, denied any connection between DeNaples and D'Elia, and said DeNaples has "no relationship with organized crime or any member of organized crime."
Feeley pointed out that DeNaples was subject to more than 2,000 hours of investigation and background checks. Feeley found it "absurd" that gaming board investigators, who had many months to speak to D'Elia, would attempt to do so now.
"The timing of this is very suspicious and is an act of desperation trying to smear Louis DeNaples just days before the licenses will be awarded," Feeley said. Gaming board staff "found Mr. DeNaples suitable for a license, and now this comes at the 11th hour."
Pennsylvania's gaming law states casino applicants must show "clear and convincing evidence of good character, honesty and integrity."
Ties between DeNaples and D'Elia have been alleged for years.
In 2001, an affidavit submitted in a federal gambling investigation mentions DeNaples and D'Elia. In the document, four informants alleged DeNaples had made payments to D'Elia for undisclosed work. The affidavit also alleges DeNaples made protection payments to D'Elia to keep mobsters away from DeNaples' landfill business. Neither DeNaples nor D'Elia was charged with a crime. Finally, the affidavit alleges D'Elia sold space at DeNaples' Keystone Landfill in Dunmore, Lackawanna County.
D'Elia was charged in May with laundering drug money for a Florida man, and in October with conspiring to kill a witness in that case. He has been held at a federal detention center since Oct. 12, when authorities searched his home and recovered money, jewelry, documents and more than three dozen guns.
Among the documents obtained through a search warrant and filed in federal court were bank statements from First National Community Bank in Dunmore, a bank DeNaples owns.
The gaming board's background investigations are a routine part of the licensing process, but investigators probing DeNaples interviewed several Scranton businessmen familiar with D'Elia and DeNaples only after D'Elia was imprisoned in October.
DeNaples, of Dunmore, drew interest statewide after announcing he would seek a slots license immediately after buying the once- bankrupt Mount Airy Lodge resort in 2004.
The owner of numerous businesses in the Scranton area, ranging from landfills to banks to auto-parts shops, DeNaples also serves on various boards and is a trustee of the University of Scranton. He has given hundreds of thousands of dollars in political donations to a variety of candidates, Republican and Democrat, and also has given millions to charitable causes. During one gaming board hearing earlier this year, he was accompanied by a Catholic priest and vouched for by a nun.
DeNaples' background also includes a no contest plea to fraud in 1978 after a jury couldn't decide whether he bilked Scranton out of $525,000 by submitting falsified reimbursements for cleanup work following 1972's Hurricane Agnes. DeNaples was sentenced to three years' probation and a $10,000 fine, Feeley said.
According to two Pennsylvania Crime Commission reports, in 1983 and 1990, James Osticco, a Bufalino family underboss, and three others were convicted in 1982 with tampering with the DeNaples jury. A juror had admitted she voted for acquittal at the behest of her husband, who in return was given $1,000, a set of tires and a pocket watch.
A 1991 crime commission report identified D'Elia as a head of the Bufalino crime family who brokered space at landfills in northeastern Pennsylvania.
The crime commission, a bipartisan body, investigated corruption but had no prosecutorial powers. It was disbanded in 1994 after issuing a report linking then-state Attorney General Ernie Preate to illegal video poker vendors.
The New Jersey Casino Control Commission cited the Pennsylvania Crime Commission reports when it barred D'Elia from entering any Atlantic City casino.
Allegations of ties between DeNaples and organized crime prompted the gaming board to hold three closed-door meetings with DeNaples during his licensing hearing last week. In the end, state regulators declared DeNaples suitable to hold a slots license.
"I wouldn't want to be in their shoes," William Thompson, a gaming consultant and professor at the University of Nevada-Las Vegas, said of Pennsylvania regulators. "It's rare that someone with a felony applies for a license, and I'm not aware of anyone that has ever been given one."
While Pennsylvania allows anyone with a felony 15 years or older to apply for a gaming license, other gaming states follow different rules.
New Jersey prohibits anyone with a felony less than 10 years old from applying for a license. In Nevada, anyone can apply, but a felony for fraud would virtually negate any hope of approval, said Dennis Neilander, chairman of Nevada's gaming control board.
"Fraud is something that falls on the more serious side with the commission," Neilander said. "The standard is good character, honesty and integrity, and fraud would be a hard hurdle to get over."
State Sen. Robert Mellow, a Luzerne County Democrat who picked one of the seven gaming board commissioners, openly supports DeNaples' proposal. Mount Airy Lodge, in Paradise Township, is in Mellow's district.
Mellow's first appointee, Scranton attorney William Conaboy, represented DeNaples and serves on the board of DeNaples' First Community Bank. Conaboy quit the board last summer and was replaced by Ray Angeli, president of Lackawanna College. DeNaples' brother, Dominick, was chairman of the college board but resigned after Angeli joined the gaming board.
With a supporter on the gaming board, and political support from Mellow, DeNaples has a lock on getting a casino, some observers say. Others note that any gaming board member can veto DeNaples' or anyone else's proposal. Opinions in Harrisburg differ on whether someone with a criminal past should own a slots casino.
Sen. Jeffrey E. Piccola, R-Dauphin, who stressed he was not referring to anyone in particular, said "no one with a mark on their record should even be considered."
But outgoing Senate President Pro Tempore Robert Jubelirer, who appointed former FBI agent Ken McCabe to the gaming board, said: "If there's any question to [DeNaples'] integrity, then by all means, don't give him a license. But if he's lived an exemplary life since his crime, should he continue to pay for that?"
DeNaples' supporters produced letters of support from two former law enforcement officials -- Peter Vaira, a former U.S. attorney for the Eastern District of Pennsylvania in Philadelphia, and Sal Cognetti Jr., a former assistant U.S. attorney for the Middle District in Scranton.
Cognetti, who prosecuted DeNaples in the 1978 fraud case, said he recommended DeNaples' application "without reservation."Copyright © 2015, Los Angeles Times