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Lombardi’s Pizza was set to open in Parx Casino. Then investigators alleged it had mob ties.

The owner of Lombardi's Pizza says the allegations are "ridiculous."

Pennsylvania gaming regulators say Mike Giammarino is unsuitable to operate a restaurant in a casino because of alleged links to organized crime. Giammarino,  shown here in 2013 in Gennaro's Tomato Pie in South Philadelphia, is fighting back.
Pennsylvania gaming regulators say Mike Giammarino is unsuitable to operate a restaurant in a casino because of alleged links to organized crime. Giammarino, shown here in 2013 in Gennaro's Tomato Pie in South Philadelphia, is fighting back.Read moreDAVID M WARREN / Staff Photographer

Michael Giammarino says it wasn't his idea to open an offshoot of Lombardi's Pizza in Parx Casino in Bensalem. But two intermediaries said Parx was eager to host his famous New York restaurant, and a deal was struck.

That was when his problems began.

Law enforcement officials in late 2016 told gaming regulators that organized crime was attempting to get a toehold in Pennsylvania casinos via Lombardi's, which was founded in New York's Little Italy and claims to be America's oldest pizzeria.

Last December, only weeks before Lombardi's was scheduled to open in Parx, investigators for the Pennsylvania Gaming Control Board moved to revoke Giammarino's 2016 permit. Investigators said he was unsuitable to be a gaming service provider "due to his associations with reputed organized crime members."

Parx paid Giammarino $155,000 for his investment but dropped Lombardi's like a scalding slice. It opened the restaurant this year under the name Oliveto.

But Giammarino did not go away. He had run a Lombardi's outlet on 18th Street near Rittenhouse Square until 2005, and had operated a South Philadelphia restaurant, Gennaro's Tomato Pie, until 2017. He wanted to clear his name. "Everybody's going to make the assumption that I'm mobbed up, and it's not true," he said in an interview.

The 53-year-old restaurateur challenged the revocation. Giammarino said he barely knew the two intermediaries who recruited him — a New York cannoli merchant who is an alleged associate of the Gambino crime family, and a South Philadelphia ex-convict best known as the victim of a Mafia hit man's electric drill.

And Giammarino said he had no idea that the Waterfront Commission of New York Harbor, the agency overseeing the port, had named his stepfather, John Brescio, as a captain in the Genovese crime family. Brescio was the public face of Lombardi's in New York.

"I just don't understand how all these people's misdeeds got basically tattooed on me," Giammarino said at an appearance last month before the gaming board, which is scheduled to rule on the revocation on Nov. 28.

PGCB investigators portrayed Giammarino as a clear risk. "Everywhere our investigators looked in this matter, they found histories of drug trafficking and ties to organized crime," Michael Roland, a lawyer with the board's Office of Enforcement Counsel, said at the Oct. 31 hearing.

Roland urged the gaming board to reject any casino supplier with even a whiff of organized crime connections. "We encourage the board to take a zero tolerance policy to any association with organized crime by any applicant or licensee," he said.

Giammarino said the only black mark against him was a misdemeanor drug conviction when he was 20, which he disclosed in his gaming board application and for which he expressed remorse. He says his legal challenge is about restoring reputational damage.

But the matter also ventures into uncharted territory for gaming regulators, who will be pressed to define more precisely what makes a person unsuitable to do business with a Pennsylvania casino.

State law requires that the gaming board grant service-provider permits only to people of "good character, honesty and integrity" whose past activities or associations "do not pose a threat to the public interest or the effective regulation and control" of gaming.

A hearing examiner in August sided with the pizza-shop owner, saying the gaming board's Office of Enforcement Counsel (OEC) had "failed to prove by a preponderance of evidence" that Giammarino's management firm, Sonic Services Inc., was unsuitable to provide casino services.

"The problem with OEC's mafia infiltration narrative is that it begins with an allegation that is not supported by the record," the hearing examiner, Jay R. Lantzy, said in an August report to the gaming board.

Rather than adopting the zero tolerance policy recommended by Pennsylvania investigators, Lantzy recommended following the guidance of New Jersey courts, which he said establish a more lenient standard of "fundamental fairness and due process" to determine the suitability of a licensee.

Giammarino, in an interview last week, said the allegations against him were "ridiculous" and "totally without merit," and called investigators "very vindictive."

"It's not what they think it is, but unfortunately they have a lot of time and money invested in this, and they're used to getting their way," he said. "Let's just hope the board sees it for what it is and does what I think is the right and just thing."

By all accounts, Parx's courtship of the pizzeria owner was complicated and drawn out, and involved several intermediaries with colorful nicknames and shady histories.

In 2014, the casino was looking to expand its food offerings, according to the hearing examiner's report. Five Parx officials, including Paul Greco, the current general manager, and Anthony Ricci, the chief executive of Greenwood Racing Inc., the casino's parent company, met with John DeLutro, the owner of a New York pastry shop, and Joseph DeSimone, a regular Parx patron.

A Parx entourage later traveled to New York to visit DeLutro's pastry shop, Caffe Palermo, in Little Italy. Ricci said the cannolis were very good, according to testimony, and Parx officials decided they wanted DeLutro's shop at the casino.

DeLutro, who is known as "Baby John," then walked the Parx contingent around the block to Lombardi's Pizza on Spring Street. John Brescio, who managed the store, gave them a tour and some pizza. The Parx emissaries were favorably impressed with Lombardi's.

After departing New York, they asked DeLutro to explore whether the pizzeria would also set up shop in the casino.

Giammarino rejected DeLutro's overtures. Parx officials, meanwhile, abandoned plans to do business with DeLutro after doing some research and discovering he had an extensive criminal history. Law enforcement officials called him an associate of the Gambino crime family.

DeLutro did not respond to phone messages and emails.

In 2015, Joseph DeSimone picked up where DeLutro left off and sought to connect the Lombardi's owner with Parx.

DeSimone, 65, who was present during the initial Parx meeting with the pastry shop owner, approached Giammarino at his South Philadelphia restaurant, Gennaro's Tomato Pie. Giammarino said he had never met DeSimone before but was impressed that DeSimone immediately got a Parx official on the phone to set up a meeting.

As talks between the pizza shop owner and Parx got underway, Giammarino said he made it clear that DeSimone was not a partner in the project, though he told Parx officials he might pay DeSimone a small finder's fee for making the introduction. They eventually signed a deal in 2016.

Giammarino said he had no idea that DeSimone had a criminal history.

DeSimone, interviewed at his South Philadelphia house last week, acknowledged that he had been aligned with Philadelphia mob boss John Stanfa in the early 1990s. DeSimone also occupies a small, uncredited role in local Mafia lore after John Veasey, a mob hit man, assaulted him with an electric drill. DeSimone was identified only as "Joe Fudge" in Veasey's dramatic 1995 courtroom testimony.

DeSimone said he has gone straight since his 2005 release from prison for conspiracy, and he now makes a living from Social Security, odd jobs, and work as a "consultant," connecting parties in business deals. He says he is shopping a screenwriter's script to potential investors. The condition of his unheated, two-story, rented rowhouse, with a hole in the living room ceiling from leaking pipes, suggests he has not been entirely successful.

DeSimone said that Giammarino is "100 percent legit," and that he introduced the pizza shop owner to Parx officials because he hoped to earn a commission, not because he was getting a foothold in the casino for the mob. He is still unhappy with Giammarino that he never got a finder's fee.

Parx permanently banished DeSimone from the casino on Christmas Eve last year, three days after the gaming board moved to revoke Giammarino's permit. A Parx spokeswoman declined to comment.

Lantzy, the hearing examiner, discounted Giammarino's associations with DeLutro and DeSimone. "If anything, the evidence established that Joseph DeSimone had associations with the general manager of the Parx as opposed to Michael Giammarino," he wrote.

But he said Giammarino's relationship with his stepfather, John Brescio, was "more problematic."

Brescio married Giammarino's mother, Joan Volpe, in 1996, when Giammarino was an adult, and the stepson said did not know his stepfather well. He had heard Brescio had done jail time — it was for gambling, drug, and conspiracy offenses in the 1970s and 1980s — but Brescio was not in trouble by the time he became his stepfather.

The only public evidence connecting Brescio to organized crime was a May 2017 news release from the Waterfront Commission of New York Harbor, which named Brescio as a captain in the Genovese crime family. Giammarino said it was the first time he had ever heard of an alleged mob association involving his stepfather. Brescio did not respond to requests for comment.

Brescio, along with Volpe, restarted Lombardi's Pizza in the mid-1990s with the blessing of the Lombardi family after it had been out of business for more than a decade. Brescio presented himself as the owner in public and to the parade of celebrities, including Jack Nicholson, who stopped in to have a pie, though it was actually Brescio's wife who was the sole shareholder, according to gaming board testimony.

When Volpe died without a will in 2011, ownership transferred to Brescio, her husband. Brescio transferred ownership through a trust to Giammarino in 2012 in accordance with Volpe's wishes that her son take ownership, according to the gaming board record.

But Brescio maintained some legal ties to the trust, which the gaming board investigators cited as proof that the restaurant was associated with organized crime. Brescio renounced all legal claims on the restaurant this year.

Gaming regulators maintained that Giammarino's associations were not innocent, but a concerted effort by the Mafia to get their hooks into Parx.

But the hearing examiner wrote that based upon the evidence, he could not find that Giammarino's relationship with Brescio "was anything but innocent, a familial relationship brought about by virtue of John Brescio marrying Michael Giammarino's mother."