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Witness: Mobster Merlino ran firm

Joseph N. Merlino's father, a convicted Mafia killer, set up the business the son now owns, an ex-investigator said.

ATLANTIC CITY - Far from being the self-made man he says he is, Joseph N. Merlino was set up in the construction business by his father, a convicted Mafia killer, a retired federal corruption investigator testified yesterday.

Merlino and his mother are seeking a license that would permit their company, Bayshore Rebar of Pleasantville, to work in the Atlantic City casino industry.

Merlino admits that his father, Lawrence "Yogi," and his cousin Joseph "Skinny Joey" Merlino were mobsters. But he says Bayshore is free of mob influence and is unrelated to his father, who died in 2001 while in the witness protection program.

Ronald Chance, who investigated mob ties to the construction industry in the 1980s for the U.S. Department of Labor, said Bayshore was founded and run by the elder Merlino.

"Larry Merlino created Bayshore," Chance said. "Bayshore was the minority company of Larry Merlino."

Chance said Merlino listed his wife as the owner to get around requirements that a portion of some contracts be awarded to companies owned by women or minorities, and had his son on the payroll as well.

He testified during a hearing of the New Jersey Casino Control Commission that Phyllis Merlino and Joseph N. Merlino were listed as company officers, but Lawrence Merlino was the real boss in the mid-1980s.

"Not one single person ever had any dealings with Joseph or Phyllis Merlino," Chance testified. "Their dealings were with Larry Merlino."

That testimony contradicted the Merlinos' claim of how Bayshore was founded - as a legitimate company free of any mob taint or influence from Lawrence Merlino.

The Merlinos' lawyer, John Donnelly, denied the truth of Chance's testimony.

"He's absolutely, unequivocally, dead wrong," Donnelly said. "It's already found to have been untrue by the Casino Control Commission."

Chance testified that his agency began investigating Lawrence Merlino in the 1980s after an ironworker whose wife had just given birth was hit with a $4,300 hospital bill. The worker went to his union to ask why the hospital said he had no insurance coverage, and was told to see a higher-up in the union, who in turn referred him to "the boss," Lawrence Merlino, Chance testified.

Confronting him at a work site in Atlantic City, Lawrence Merlino grabbed the worker by the throat, told him to open his mouth, stuck a gun inside it, and promised that he would kill the worker if he saw him again, Chance testified.

An investigation determined that Merlino's main company, Nat-Nat, had not been making required payments to a union benefits fund, Chance testified.

"That was the way Nat-Nat got all the jobs: because it wasn't making health and welfare payments," Chance said. Skipping the payments saved the company money and enabled it to underbid other competitors, he added.

The hearing is due to resume Friday.