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FBI Links Emerald Casino, Mob and
 the Mayor of Rosemont, Illinois

By John Chase, Chicago Tribune
Knight Ridder/Tribune Business News

Jul. 19, 2005 - Days after lawmakers authorized the Emerald Casino's move to Rosemont in 1999, the suburb's longtime mayor, Donald Stephens, met with five high-ranking organized crime figures to discuss what control the mob would have over contracts at the casino, an FBI agent testified Monday.

Sitting with Stephens at Armand's restaurant in Elmwood Park were reputed mob leader Joey "The Clown" Lombardo, who is being sought by U.S. officials; John "No Nose" DiFronzo; his brother Peter; Joe "The Builder" Andriacchi; and Rudy Fratto, among others, said John Mallul, head of the FBI's organized crime unit in Chicago.

Testifying at a state hearing about whether to strip Emerald of its casino license, Mallul said agents learned of the May 29, 1999, meeting just days after it occurred from a longtime FBI informant who also was there.

"One topic of discussion," Mallul read from an FBI report based on the confidential source's information, "concerned a casino in Rosemont, Ill., and [organized crime] control of various contracts regarding its construction and operation."

Reached at home Monday evening, Stephens blasted the allegations as scurrilous and called them the unconfirmed ramblings of an anonymous informant.

The mayor said the FBI never corroborated the information from the unnamed informant. Stephens also said he spent that Memorial Day weekend at his summer home in Lake Delavan, Wis., and has family members who can testify that he's telling the truth.

"God almighty, what the FBI is doing is wrong," the mayor said. "It's more allegations. ... Why don't we start practicing law? I thought this is the United States."

The FBI accusation is the newest twist in the state's long-running case against Emerald, in which it seeks to revoke the gambling license once destined for Rosemont. For the first time, this claim would place the top mob leaders in behind-the-scenes planning for the casino.

Lombardo is believed to be a leader of the mob in the Chicago area. He was among a dozen charged in April in connection with at least 18 murders. He has eluded capture.

The state administrative hearings in which Mallul testified Monday, overseen by retired appellate court judge Abner Mikva, stemmed from the Illinois Gaming Board's decision to deny the casino's license.

Although the legislature and Gov. George Ryan approved the deal six years ago, the board in 2001 argued Emerald officials lied to regulators, and that some Emerald investors, including Nick Boscarino, a one-time Stephens friend and confidant, had ties to the mob. Boscarino was recently convicted in federal court of defrauding Rosemont. Stephens has said he no longer is a friend.

A Gaming Board attorney alleged three years ago at another hearing on the bankrupt casino that organized crime elements close to Stephens had infiltrated that venture.

Last year, Illinois Atty. Gen. Lisa Madigan cited alleged ties between Stephens and organized crime to try to stop a sale of the Emerald license to another casino company that intended to build on the same spot in Rosemont.

But this is the first time the FBI had made any link between Stephens to organized crime as part of the village's attempts to open the Emerald.

State gambling regulators were unaware that the FBI had the memo recounting the purported meeting until a few weeks ago as the state's case was heating up. When they learned of the report, Gaming Board attorneys asked to see it, and the FBI obliged, according to Mallul, a supervisory special agent.

Dogged over the years by allegations and rumors of mob ties, Stephens has repeatedly denied the accusations. Last year, he released a report--which he commissioned--that found he is free of mob influence and that Rosemont is one of the few U.S. communities that can make that claim.

On Monday, Stephens reiterated his defense. He said he has never been to the Italian restaurant on Grand Avenue where the meeting allegedly took place, and that he "wouldn't know Lombardo or Fratto if they hit me in the face."

He said he's never met two alleged mob associates that Mallul said were also at the meeting, William Messino and Rick Rissoulo.

Stephens did acknowledge that he has met the DiFronzo brothers and Andriacchi. But he maintained he does not have a relationship with any of them.

"I think they introduced themselves to me at some point. I don't even remember," he said. "But I want to be very clear about this: I do not know them. I have not had coffee with them. I have not had dinner with them. I have not had drinks with them. I have not taken a trip around the block with them in their car. I've met them. That's it."

In addition, the FBI report alleges Stephens brought an unnamed son-in-law to the meeting, Mallul said.

Both Stephens and his attorney denied that Monday, saying Stephens was estranged from his son-in-law by that time. Stephens' daughter and her husband, who used to work for Rosemont's Police Department, were separated in 1999, and they divorced a few years later.

On cross-examination, attorneys for Emerald attempted to discredit the report because federal agents never independently verified the information.

Emerald attorney John Karnezis also questioned why the FBI memo indicates that the preliminary report, written shortly after the alleged meeting, is not the FBI's final determination of the events, because the bureau did not independently confirm what happened.

Mallul said he felt confident about the veracity of the information, because although the FBI may have had only one source at the meeting, other information in the report was confirmed by confidential sources.

"The sources seemed to corroborate each other," he said.

Earlier, under questioning by Gaming Board attorney Michael Fries, Mallul said the primary source is someone the FBI has used for more than 30 years. He said the source had achieved "statistical accomplishments," meaning the information the source had provided had been used by the FBI to initiate wiretaps and lead to indictments, arrests and convictions.

Stephens' attorney was not swayed.

"The testimony of FBI agent John M. Mallul is a shameful and outrageous lie that has dragged the bureau to a new low of misconduct and McCarthyism that cannot go unanswered," attorney Robert Stephenson said. "To use an unnamed and unverified source to commit character assassination in a proceeding that Rosemont cannot even participate in makes the Gaming Board hearing nothing more than a charade in a kangaroo court."

Mallul's testimony followed a decision earlier Monday in which a Cook County judge ruled the Gaming Board was not in contempt of court when it renewed Emerald's gambling license retroactively last month. The judge also said the board would have to accept a request from the casino to renew that already-expired license.


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