“Yeah.”
“I’m the kind of guy that—I won’t push,” said DeNaples. “I’m not a pushy guy—you know that there.”
The tape was an important piece of evidence, given DeNaples’ denials the previous summer that he had known Ali. He had been questioned twice, in August and September 2006, by BIE attorneys about his relationship with Ali, and the investigators knew they had trapped him in a lie. The tape and the Katrina truck probe were damning enough, but then came word that the feds had reeled in a very big fish.
* * *
ON OCTOBER 12, 2006, the U.S. Department of Homeland Security and the state police executed a warrant to search the home and car of William “Big Billy” D’Elia.
D’Elia had been previously charged in May with laundering drug money and was free awaiting trial, but he apparently used his freedom to hire a hit man to kill the confidential informant who provided the information that led to the charges against him. The ongoing investigation was of such importance that the government approved cash transfers of up to $50,000 to snare Big Billy.
Following Russell Bufalino’s death, in 1994, D’Elia remained one of the primary organized crime targets in the state, along with Joey Merlino, of Philadelphia’s Bruno family, and Sonny Ciancutti, who led the Pittsburgh mob.
For nearly a decade, the state police had been investigating D’Elia in an attempt to tie up many of the loose ends still hanging from several previous and unsuccessful probes into his activities. Although those cases went nowhere, investigators did cultivate new confidential informants, which resulted in better leads and information, which clearly pointed to direct links between D’Elia and DeNaples.
The police knew, for instance, through routine surveillance that D’Elia regularly visited DeNaples at his auto parts business in Dunmore. D’Elia typically drove around to the back and walked in through a private entrance. The police also had surveillance photos of DeNaples taken at D’Elia’s daughter’s wedding, and they also had video of the pair at the auto parts store.
At six feet four inches and well over 250 pounds, D’Elia was an intimidating figure, though his special talent wasn’t with a gun but his ability to talk and negotiate. D’Elia had been a soldier with the Bufalino family since the 1960s and was one of the last of the Bufalino family members to be “made,” or officially inducted into the organized crime family. During his years at Bufalino’s side, D’Elia made the kind of contacts an up-and-coming wise guy could only dream of. There were lunches and dinners in Philadelphia and introductions to the leaders of New York’s five families and their counterparts across the river in New Jersey. Over time, D’Elia emerged as a trusted figure who could facilitate peace for gangsters throughout the northeast and other parts of the country. D’Elia’s negotiating ability led to his appointment by Bufalino as the point man for conducting family business during Bufalino’s imprisonment through the 1980s.
It wasn’t so much that the other mob families respected D’Elia but that he was representing Russell Bufalino, and D’Elia was called to Pittsburgh, Philadelphia, New Jersey and New York to voice his opinion in family and business conflicts, opinions everyone knew in reality were the wishes of Bufalino.
After Bufalino died, it was D’Elia who was in charge of all family business, most important, its vast gambling operation.
Gambling was for decades a mainstay for Bufalino family income, with associates taking wagers throughout the region on all professional and college sports. Like other mob families, the Bufalinos charged a “vigorish,” or interest payment for taking a bet, much like a credit-card company charges a fee for taking a cash advance at an ATM machine.
In most cases, the “vig” was 5 to 10 percent of the bet. So if someone bet $100, he’d pay a $5 to $10 fee no matter the outcome, win or lose. The idea was to take an equal amount of bets on a game. If the betting was one-sided, a portion would be “laid off” to mob families in other cities willing to take the action.
Bufalino family gambling operations centered in Pennsylvania and central New York State, but there were also associates handling accounts in New Jersey, New York City and Massachusetts, and the monthly proceeds often reached into the mid–six figures, and sometimes more. Law enforcement had from time to time tried to get a handle on the Bufalino family gambling operation. Every now and then, there would be a minor arrest, but it wasn’t until long after Russell Bufalino’s death, in 1994, that a joint federal–state police probe revealed the true depth of the operation. That investigation, explored in a 2001 federal affidavit, revealed the results of a long-standing probe into D’Elia and several associates.
From the mid-1980s through 2000, Bufalino family couriers were transporting the cash in an elaborate and organized fashion in which rental cars were used to drive to preselected pickup locations from Massachusetts to western Pennsylvania and all points in between.
Cash-filled bags would be placed in the cars, and the money would be taken to drop-off points, usually truck stops off of major highways. Among the most popular drop-off points was the Columbia truck stop off of I-80 on the New Jersey side of the Delaware Water Gap, which was about an hour’s drive west of New York City. Couriers, who were paid as much as $10,000 per week, were told to get “gas” if there was a pickup scheduled at the truck stop or “something to eat” if the pickup was inside the restaurant.
Often the bags would contain as much as $200,000 in $50 and $100 bills. The volume was extraordinary, and by the late 1990s, much of the gambling proceeds were being laundered through the casinos in Atlantic City.
According to one informant, the laundering operation consisted of D’Elia giving him upward of $200,000 in small-denomination bills, usually fives, tens and twenties. The money would be counted and placed into $500 bundles, after which a half a dozen or so women would drive to Atlantic City with money in hand and visit each of the casinos there. They would all buy $5,000 worth of chips, wait a little while, and then cash them in. One rule was to never cash more than $10,000, which would necessitate reporting the money to the Internal Revenue Service.
It usually took about half a day to hit all of the casinos, but when they were done, the group members successfully laundered their gambling proceeds. When they returned to Pennsylvania, they handed the “clean” money to D’Elia, usually at the Mountain Top home of a friend.
The Atlantic City laundering operation came to a sudden end in 2003, when the New Jersey state gaming commission got wise to the scheme and identified D’Elia as a member of organized crime. He was slapped with a lifetime ban from entering any of the state’s casinos.
Gambling wasn’t D’Elia’s only source of income. Though he was not convicted of any crimes, the FBI developed intelligence revealing that D’Elia may have had other lucrative businesses that included the acquisition and sale of stolen merchandise, particularly gold, diamonds and clothing. At times he also had his gambling couriers transport drugs, usually cocaine. D’Elia had also for years been involved in the solid-waste business as a “waste broker” who sold air rights at landfills, including the Keystone Landfill owned by Louis DeNaples.
It was D’Elia who steered trash haulers in New York City and Philadelphia owned by other mob families to Keystone Landfill. The police had always heard stories from their informants about bodies being dumped at the landfill, victims who crossed Mafiosi throughout the region. No remains were ever found, and no one was ever charged.
D’Elia held a firearms permit and was usually carrying a gun. He owned sixteen guns, including a 12-gauge shotgun, two .44 caliber handguns and a 9 mm Uzi submachine gun.
The investigation that finally led to D’Elia’s arrest was headed by U.S. Homeland Security special agent Maureen Meschke and state police trooper Dave Swartz, a thirteen-year veteran who was a criminal investigator with BCI and a key member of its Organized Crime Task Force before joining the gaming investigation with Weinstock.
They first
learned in October 2005 that D’Elia was involved in a new laundering scheme. D’Elia was lured to a meeting in Hazleton with a police informant who sought D’Elia’s help in wiring $100,000 in what he claimed was drug money to the Dominican Republic to pay for the smuggling of two illegal aliens to the states.
D’Elia agreed, and his conversation was recorded by the informant.
“Do you want me to give you cash or certified check?”
“Cash is good,” said D’Elia, “anything, cash, wire transfer, I can tell you what to do and where to send it.”
“No, I cannot show the money, it’s illegal money, it’s drug money.”
“You don’t have to tell me, buddy,” said D’Elia. “You don’t have to tell me any secrets. Give me cash and we’ll do it when you’re ready.”
The two men spoke again on May 12, and that conversation was also recorded. The two men agreed to make the money transfer at the Woodlands, a restaurant and catering hall in Wilkes-Barre. Prior to the meeting, the police gave the informant $50,000 in a Cingular Wireless bag, which he put in the trunk of his car. When he arrived at the Woodlands parking lot, the informant took the bag out and gave it to D’Elia, who had parked nearby. He in turn put the bag in the trunk of his black Lincoln Town Car and drove away.
They met again on May 16 at a pizza restaurant in Mountain Top to talk about the wire transfer and to pay D’Elia $2,500, which was his 5 percent cut, or “points,” for facilitating the transfer. Ten days later, on May 26, D’Elia called the informant to say that the transfer had been completed, and D’Elia gave the informant the account information. Unbeknownst to D’Elia, a grand jury had subpoenaed the bank records, which showed that the money was sent from a Citizens Bank account that belonged to longtime D’Elia associate Robert Kulick and his wife, Michelle Mattioli-Kulick, who happened to be the daughter of Joseph Mattioli, the longtime owner of Pocono Raceway.
On June 16, D’Elia met again with the informant at the pizza restaurant to collect the other $50,000, which was stuffed inside a Walmart bag. They left the restaurant in separate cars, and the informant, under police surveillance, followed D’Elia to an abandoned building in an industrial park, where the informant handed over the Walmart bag.
By October, D’Elia learned that the wire transfers were part of a federal probe and that investigators had questioned several people, including Kulick. D’Elia met again with the informant, who feigned anger and sought D’Elia’s help in killing the contact in the Dominican Republic who supposedly received the wire transfers along with another $300,000 the informant claimed to have given him.
“He fucked us for $400,000 and we’re going to find him,” said the informant.
D’Elia offered to help find the man, and, with their conversation again recorded, D’Elia learned at a subsequent meeting that the Dominican contact was partners with a Russian who was part of a human-trafficking ring that imported Russian women to appear in pornography films.
“So when my guys get him, what do you want them to do with him?”
“If I decide to kill this guy, do you have the people over there to wipe him out overnight?” said the informant.
“Yeah,” said D’Elia. “You just gotta tell me what to do.”
D’Elia didn’t agree to kill the man. Instead, he offered to find and detain him so “you go do what you want with him. You get the money out of him, whatever you want.”
But the informant persisted and offered D’Elia $200,000 to “take this guy down.”
“I gotcha,” said D’Elia.
The informant later gave D’Elia a photograph of the bogus Dominican smuggler and $5,000 to pay for the travel expenses of D’Elia’s men. That led investigators to obtain a search warrant of D’Elia’s home as their investigation morphed from money laundering to murder-for-hire.
The search of D’Elia’s home produced a treasure trove of information, including nearly three-dozen assorted guns, bullets and magazines, cell phones, bank records from First National Community Bank and a phone book with the numbers of various associates, among them the home number of Louis DeNaples.
In November 2006, D’Elia was charged in a superseding indictment with conspiring to kill a witness. His bail was revoked and he was sent to a prison in Pike County, which straddled the New Jersey border in northeastern Pennsylvania. D’Elia, now sixty, was facing charges that would keep him in prison for life, and he didn’t waste any time agreeing to cooperate with the government and firing his longtime counsel, Philip Gelso, whose father Charles had for years represented Russell Bufalino.
The deal was such that D’Elia agreed to cooperate with any federal, state or local investigation. To replace Gelso, the court appointed James Swetz, a notable Stroudsburg defense attorney who gained fame in the 1990s for the acquittal of a Stroudsburg police chief accused of looting the town’s parking meters. With D’Elia now cooperating, the first order of business was to have him tell the state police everything he knew about Louis DeNaples.
* * *
THE FBI WIRETAP and Katrina trucks were open criminal investigations, yet somehow, in the middle of December 2006, the state Gaming Control Board unanimously determined that Louis DeNaples was “suitable” to receive a slots license. The board knew about Katrina and the wiretap from their own BIE investigators yet looked the other way.
The police had also gotten wind that suspected DeNaples had given Ed Rendell large contributions over the past few months, more than $100,000, which the board also ignored.
A week before the board would officially announce the new casino licensees, two of its investigators, Roger Greenback and Jack Meighan, asked the U.S. attorney’s office for permission to interview Billy D’Elia. Greenback, BIE’s eastern regional director, and Meighan, an agent in the office, had worked for months on DeNaples’ background investigative report and thought they had more than enough to convince the board it couldn’t award DeNaples a slots license.
Greenback was a former FBI agent who once investigated organized crime in Pittsburgh, and Meighan was also a retired FBI agent who had worked in Pittsburgh. Tasked with completing DeNaples’ background check, the two investigators spent weeks on the ground interviewing dozens of people, and in their final report, they included a host of damning information—from the 2001 federal affidavit linking DeNaples’ and D’Elia’s business interests, to D’Elia’s regular visits to DeNaples’ office at his auto parts facility, to DeNaples’ attendance at the wedding of D’Elia’s daughter.
But the information did little to convince the board that DeNaples wasn’t “suitable,” so with time running out, Greenback and Meighan contacted the U.S. attorney’s office in Harrisburg and requested to interview D’Elia. But the request was denied. The FBI, in a letter previously sent to the gaming board in February 2006, had reasserted its position that it wouldn’t cooperate with BIE, which was still deemed by law enforcement as a civilian agency and thus not privy to criminal information. The U.S. attorney’s office in turn would not allow investigators with a licensing agency to interview D’Elia.
Shut out from D’Elia, the two former FBI agents could only watch with dismay on December 22, 2006, as the gaming board unanimously awarded Louis DeNaples a slots license.
The decision had come with some drama, as word leaked that one member of the gaming board, Ken McCabe, would vote against the DeNaples application. McCabe was a former FBI agent who had worked in Pittsburgh and was said to have genuine concerns about DeNaples. When the seven-member board voted, McCabe paused before giving his vote to approve DeNaples.
At state police headquarters, Ralph Periandi wasn’t surprised. The DeNaples gaming license was a foregone conclusion, just as he had predicted during his initial meeting with the FBI in April 2005. But the state police now had enough information on DeNaples that during the weeks following the slots decision, Periandi put the machinery in place that would result in a grand jury investigation. Th
e venue would be in Harrisburg. Periandi had his misgivings about the state attorney general’s office and decided early on that any prosecutions that evolved from a state police investigation into gaming would be handled in Dauphin County and by its district attorney Ed Marsico.
Periandi remained deeply disturbed over how the state’s political apparatus mobilized in such a way that even someone with DeNaples’ checkered history could be cleansed and given the stamp of approval. Periandi also remained concerned over other issues relating to gaming, including the hiring of several vendors that were close to the Rendell administration, among them G-Tech, a firm that Periandi had discussed during his initial meeting with the FBI.
G-Tech was a global company that operated lotteries in nearly two-dozen states and a number of foreign countries and had been accused elsewhere of bribing officials to gain lucrative contracts.
Nearly a decade earlier, in 1996, G-Tech’s then national sales director, J. David Smith, was convicted of fraud for taking nearly $170,000 from lobbyists in New Jersey. G-Tech also had problems in Texas, where criminal investigators with the Texas Department of Public Safety alleged in a 2006 report that G-Tech bribed lottery officials there and in several foreign countries, including Poland, Brazil, Trinidad and Tobago and the Czech Republic. No criminal charges were filed, but the report said G-Tech was an “aggressive business entity that had a past history . . . of pursuing new contracts with sometimes questionable actions.”
It wasn’t lost on Periandi that Ken Jarin, one of Rendell’s closest confidants, was hired by G-Tech in 2003 to serve as a consultant and successfully brought in the lucrative state gaming contract. Just six days after G-Tech was awarded that contract, the firm made a $50,000 donation to the Democratic Governors Association, for which Jarin served as treasurer. The same group had given Rendell $462,000 for his gubernatorial run in 2002.
Department of Revenue secretary Greg Fajt deflected any criticism of G-Tech’s contract away from Rendell, saying it was his decision and his alone to award the firm the contract. In his press release announcing G-Tech’s hiring, Fajt said the contract was worth less than $7 million. In truth, over the course of the five years, the contract would eventually pay out closer to $40 million, and much more once the contract was renewed.
The Quiet Don: The Untold Story of Mafia Kingpin Russell Bufalino Page 8