Louis A. DeNaples, who opened Mount Airy Casino Resort in October, was charged with four counts of perjury by the state police after a seven-month investigation by a Dauphin County grand jury. His company, Mount Airy No. 1 LLC, was also charged.
The suspension of DeNaples' license allows the casino to continue operating but prohibits him for exerting control over it or profiting from it. With the order, which DeNaples can appeal, the state gaming board's executive director assumed oversight of the casino.
Contrary to DeNaples' claims, the grand jury found that the 67-year-old businessman had close relationships with William D'Elia, the reputed head of a Scranton-area organized crime family, and the late Pennsylvania organized crime boss Russell Bufalino.
Prosecutors said he also lied, during a background investigation, about his dealings with the late Ron White, a businessman at the center of a municipal corruption scandal in Philadelphia, and Shamsud-din Ali, who is imprisoned for using his political connections in Philadelphia to obtain dubious loans, donations and city contracts.
"I'm confident that the questions were clear, and that there could be no misunderstanding as to whether or not Mr. DeNaples understood those and he answered falsely," Dauphin County District Attorney Ed Marsico said during a press conference. "There are serious ramifications and there should be."
DeNaples denied all the charges through a spokesman.
"Anybody who knows Louis DeNaples knows that he tells the truth," said Kevin Feeley, the spokesman. "And he's eager to have the chance to show he did exactly that before the gaming board."
DeNaples is expected to turn himself in within a few days, prosecutors said.
The Pennsylvania Gaming Control Board awarded a license to DeNaples after an investigation that looked into whether he had any ties to organized crime or financial problems. In three months, the casino's slots have generated over $28 million in revenue.
Through Feeley, DeNaples has maintained that he has not had ties to organized crime. His lawyers have accused prosecutors of misusing the grand jury as a fishing expedition and a tool in a turf war over who should regulate the state's casinos.
Marsico denied that accusation. He said he had no ulterior motive or grudge against DeNaples.
More than two dozen witnesses, including D'Elia and former Philadelphia Mayor John F. Street, appeared before or gave testimony to the grand jury. D'Elia is in federal prison awaiting trial on charges of money laundering and conspiring to kill a prosecution witness. DeNaples did not testify before the grand jury.
Dauphin County prosecutors brought the case to the grand jury last year after reviewing information given to them by state police investigators, according to court documents.
DeNaples has business interests that span waste hauling, auto parts and real estate. He chairs a bank in which he is the biggest shareholder, and is a generous philanthropist and campaign donor.
DeNaples opened his casino and hotel on the site of the storied, but shuttered, Mount Airy Lodge resort with the promise of spreading economic cheer to northeastern Pennsylvania. Anticipating that he would beat a competing group to win the license, DeNaples had already razed the old lodge and broken ground on the new facility by the time the gaming board voted unanimously for him in December 2006.
For years, law enforcement agents have taken an interest in DeNaples, whose name has surfaced several times in state and federal intelligence reports on organized crime.
In 1978, DeNaples was fined $10,000 and placed on probation for three years after pleading no contest to a felony charge of conspiracy to defraud the federal government in a case involving government payments to clean up the aftermath of Hurricane Agnes.
In its 23-page presentment to Dauphin County Judge Todd A. Hoover, who is supervising the grand jury, the panel cited testimony from other witnesses to challenge DeNaples' denials.
For example, DeNaples told the gaming board he knew D'Elia only as a customer of his bank who occasionally patronized his auto-parts store. The grand jury said DeNaples had a "close relationship with D'Elia spanning many years," that DeNaples was a guest at D'Elia's daughter's 1999 wedding and that DeNaples' unlisted home telephone number was found in an address book that police seized from D'Elia's car in 2006.
DeNaples told the gaming board he knew Bufalino "only by name." In the 1970s, the panel said, Bufalino gave DeNaples a ring he was wearing after DeNaples complimented him on it, and he gave DeNaples three suits to wear to meetings after his home was struck by fire. DeNaples also gave Bufalino, a mechanic, two junked Fiats to work on, the grand jury said.
Bufalino served lengthy prison terms in the 1970s and '80s and died in 1994.
Ali, a prominent Muslim cleric in Philadelphia, is serving a seven-year prison term stemming from a separate federal investigation of Philadelphia's "pay-to-play" culture.
White, a key fundraiser for Street, died of cancer in 2004 before he was to be tried as the central figure in the sprawling federal corruption probe, which centered on the awarding of city contracts.
The grand jury previously charged the Rev. Joseph F. Sica, a Roman Catholic priest and friend of DeNaples, with perjury. Prosecutors said Sica lied to the grand jury about his relationship with Bufalino.
