Threat in A.C. mob case was of litigation, not harm

ATLANTIC CITY - It was the threat of a lawsuit - not violence - that made a key government witness abruptly stop testifying against a New Jersey construction company owned by relatives of the mob, a state prosecutor said yesterday.

Ronald Chance investigated mob ties to the construction industry in the 1980s for the U.S. Department of Labor. He was to resume testifying last Friday against Bayshore Rebar of Pleasantville, but told authorities late Thursday night he would not do so.

Assistant Attorney General Anthony Zarrillo said Chance was threatened with a lawsuit about his testimony by someone he had dealt with in a previous investigation.

"There was no threat of violence directed at Chance," Zarrillo said.

Because he refused to continue testifying, including submitting to cross-examination by defense lawyers, Chance's testimony had to be stricken from the record at a hearing before the New Jersey Casino Control Commission.

Joseph N. Merlino and his mother, Phyllis, who own Bayshore Rebar, acknowledge that some of their relatives are mobsters, but they insist they and their business are clean.

Merlino's father and his mother's ex-husband, Lawrence "Yogi" Merlino, was a convicted mob killer who died in the federal witness protection program in 2001. And Merlino's cousin is jailed Philadelphia mob boss Joseph "Skinny Joey" Merlino.

Bayshore Rebar is seeking a license from the casino commission that would enable it to do work in the Atlantic City casino industry. The commission has rejected the company's two previous applications dating back to the 1980s.

John Donnelly, the Merlinos' attorney, said the revelation that the alleged threat involved litigation and not violence further burnished their case.

"It certainly had nothing to do with my clients, and my clients have and have had nothing to do with any form of organized crime," he said.

Last Monday, Chance testified that the elder Merlino established Bayshore Rebar as a way to get around minority set-aside requirements on some construction projects. Joseph N. Merlino says that he founded the company on his own and that his mother joined afterward.

Donnelly said he was looking forward to introducing into evidence a quote from Chance in a 1993 newspaper article in which he claimed the younger Merlino and his mother had no dealings with "Yogi" Merlino.

"As far as I know, they've split with the father," Chance was quoted as saying in the Press of Atlantic City article.

Chance did not respond to telephone and e-mail messages seeking comment.

A decision in the licensing case is expected by mid-November.