Argued: September 10, 2019
BEFORE: HONORABLE P. KEVIN BROBSON, Judge HONORABLE MICHAEL
H. WOJCIK, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Senior
KEVIN BROBSON, JUDGE.
Sonic Services, Inc. (Sonic Services) petitions for review of
an adjudication by the Pennsylvania Gaming Control Board
(Board) dated November 28, 2018, revoking Sonic Services'
Gaming Service Provider Registration (Registration). For the
reasons that follow, we affirm.
Giammarino (Giammarino) formed Sonic Services in 1988, and he
is the corporation's sole owner. (Reproduced Record
(R.R.) at 787.) On August 10, 2016, the Board approved
Sonic Services as a Registered Gaming Service Provider,
thereby permitting Sonic Services to provide
restaurant-related services to an affiliate of Parx Casino
(Parx). (R.R. at 785.) Months after the Board made this
approval, the Board's Bureau of Investigations and
Enforcement (BIE) received information alleging that Sonic
Services and/or Giammarino had ties to organized crime.
(Id.) BIE investigated the veracity of the claims
for a year, after which the Board's Office of Enforcement
Counsel (OEC) filed an enforcement action seeking to revoke
Sonic Services' Registration. (Id.) According to
the enforcement action, BIE's investigation revealed that
Sonic Services, through Giammarino, had associations with
members of organized crime and, therefore, is not a suitable
party for a registration pursuant to Section 1202(b)(23) of
the Act, 4 Pa. C.S. § 1202(b)(23), and Sections
421a.1(h)-(i) and 421a.2(a)(4) of the Board's
regulations, 58 Pa. Code §§ 421a.1(h)-(i) and
421a.2(a)(4).  (Id. at 7-8.)
Board's Office of Hearings and Appeals (OHA) conducted a
hearing on this matter on May 15, 2018, after which Hearing
Officer Jay Lantzy issued a Report and Recommendation
(Recommended Report), concluding that OEC "failed to
prove by a preponderance of the evidence that
Giammarino's associations make Sonic Services unsuitable
for a [r]egistration." (Id. at 697.) OEC filed
exceptions to the Hearing Officer's Recommended Report,
arguing that the evidence OEC presented clearly established
that Giammarino's associations made Sonic Services
unsuitable for a registration. (Id. at 786.) On
October 31, 2018, at a public meeting before the Board, the
Board permitted Sonic Services and OEC to present briefly
their oral arguments concerning this matter. (Id. at
787.) During a public meeting on November 28, 2018, the Board
voted to grant the relief requested in OEC's enforcement
action and revoke Sonic Services' Registration.
(Id. at 784.) On December 7, 2018, the Board issued
findings of fact and conclusions of law in support of its
adjudication. (Id. at 785-805.)
Board's relevant findings of fact reveal that in 1996,
Giammarino's mother and Giammarino's stepfather, John
Brescio (Brescio), reopened Lombardi's, a historic
pizzeria located in the Little Italy section of New York
City. (Id. at 787-88.) Lombardi's is owned by
the corporate entity Pizza of 32 Spring Street, Inc.
(Id. at 788.) Giammarino's mother was the sole
shareholder of Pizza of 32 Spring Street, Inc. until her
death. (Id.) Brescio is a reputed captain in the
Genovese crime family with at least seven criminal
convictions prior to 1986. (Id.) In making that
finding, the Board relied, in part, upon testimony from an
investigator for the Waterfront Commission of New York Harbor
that Brescio was, and continues to be, affiliated with
organized crime. (Id.) From 1988 to 1998, Sonic
Services only sold and installed security, intercom,
telephone, and music systems. (Id. at 787.) In 1998,
Giammarino transitioned Sonic Services away from selling and
installing technological systems and into the restaurant
industry by opening a second Lombardi's location in
Philadelphia. (Id. at 788.) In 2004, Giammarino
closed the Lombardi's in Philadelphia and began managing
the New York location. (Id.)
2011, Giammarino's mother died intestate, leaving
ownership in Pizza of 32 Spring Street, Inc. to Brescio.
(Id. at 789.) The next year, Brescio transferred his
ownership of Pizza of 32 Spring Street, Inc. to JBJV Trust
(Trust), which is now the sole shareholder of Pizza of 32
Spring Street, Inc. (Id.) In forming the trust,
Brescio named Giammarino as the sole beneficiary.
(Id.) Brescio retained the power to appoint
additional beneficiaries and replace the trust protector,
who, under the terms of the Trust, may replace the trustee
and veto investment decisions. (Id.) Furthermore,
the trustee must obtain approval from the trust protector for
investments larger than $15, 000. (Id.) Peter
Cordua, who has served as Giammarino's accountant and as
the accountant for Pizza of 32 Spring Street, Inc., is the
sole trustee for the Trust. (Id.) Giammarino also
serves as the President of Pizza of 32 Spring Street, Inc.
(Id.) After transferring his ownership interest in
Pizza of 32 Spring Street, Inc., Brescio represented to the
media that he owned Lombardi's. (Id.)
Lombardi's employees also named Brescio as the owner of
Lombardi's in a lawsuit against the pizzeria in 2006.
2014, Parx officials became interested in adding new dining
options to their casino and met with Joseph DeSimone
(DeSimone), a frequent customer at the casino, to discuss
DeSimone's contacts in New York City's restaurant
industry. (Id. at 790.) Unbeknownst to Parx
officials at the time, DeSimone had multiple criminal
convictions, was a reputed member of the Bruno/Scarfo crime
family, and went by the street name "Joe Fudge."
(Id.) Paul Greco, the General Manager of Parx,
introduced DeSimone to the other Parx officials.
(Id.) DeSimone later introduced the Parx officials
to John DeLutro (DeLutro), who owned Caffé Palermo, a
pastry shop in the Little Italy section of New York City.
(Id.) Weeks later, the Parx officials travelled to
Caffé Palermo to meet with DeLutro. (Id.)
After the meeting, DeLutro took the officials to
Lombardi's where Brescio gave the officials a tour of the
restaurant and served them pizzas. (Id.) Based on
the success of the meetings, the Parx officials decided to
offer Caffé Palermo and Lombardi's the opportunity
to set up establishments at the casino. (Id.) Chief
Executive Officer for Parx, Anthony Ricci (Ricci), contacted
DeLutro to express interest in having Caffé Palermo
and Lombardi's on site at Parx's casino.
(Id.) DeLutro expressed Ricci's interest to
Giammarino, who managed the Lombardi's in New York City,
and Giammarino expressed that he had no interest in having a
close business relationship with DeLutro. (Id. at
791.) DeLutro and Giammarino were acquainted with each other
since they operated businesses near to each other in Little
Italy, but, according to Giammarino, the two men only had
approximately six interactions with each other throughout
their years of acquaintance. (Id.) Parx soon after
discovered that DeLutro had two drug-related criminal
convictions, was a reputed member of the Gambino crime
family, and was known by his street name "Baby
John." (Id.) After learning of DeLutro's
criminal history, Parx no longer had interest in any business
dealings with DeLutro or Caffé Palermo. (Id.)
and Giammarino met, apparently for the first time, in 2015.
(Id. at 792.) At that time, DeSimone informed
Giammarino that the Parx officials were still interested in
having Lombardi's at their casino and offered to set up a
meeting between Giammarino and the officials. (Id.)
At that time, Giammarino operated three pizzerias: two
Gennaro's Tomato Pie locations in Philadelphia and
Lombardi's in New York City. (Id.) That same
year-in 2015-DeSimone introduced Giammarino to Parx's
General Manager, Paul Greco, after which Giammarino and Parx
entered into business negotiations in order to place a
Lombardi's location at the casino. (Id.) During
the negotiations, Giammarino expressed that DeSimone would
not be his business partner in the enterprise but that he
would pay DeSimone a finder's fee. (Id.) On
April 28, 2016, Sonic Services contracted with Parx to assist
in establishing a pizzeria at the casino. (Id.)
According to the agreement, Parx staff would run the pizzeria
and Sonic Services, through Giammarino, would aid in design,
management, recipes, recruitment, and other related services.
(Id.) Subsequently, on February 1, 2017, Pizza of 32
Spring Street, Inc. entered into a consulting and marketing
agreement with Brescio's entity, F&J Solutions.
December 21, 2017, after BIE received information concerning
Giammarino's alleged ties to organized crime and after
conducting a year-long investigation into those claims, OEC
filed its enforcement action. (Id. at 794.) As a
result of OEC's filing, Parx officials evicted DeSimone
from its establishment, terminated its agreement with Sonic
Services, paid to Sonic Services $155, 000 for, inter
alia, services rendered, and returned all artwork or
images related to Lombardi's that Sonic Services had
loaned to Parx pursuant to its agreement with Sonic Services.
(Id.) On February 20, 2018, Giammarino, through
Pizza of 32 Spring Street, Inc., terminated the consulting
and marketing agreement with Brescio's entity, F&J
Solutions. (Id.) The next month, on March 13, 2018,
Brescio irrevocably relinquished all retained rights related
to the Trust. (Id.)
25, 2018, at the hearing before the Hearing Officer,
Giammarino testified that his interactions with Brescio, his
stepfather, have been very limited since his mother's
death. (Id. at 793.) Brescio also had no role in
managing Lombardi's since Giammarino took over managing
the pizzeria in 2004. (Id.) When asked why Brescio
would hold himself out to be the owner of Lombardi's,
Giammarino stated: "I mean, my wife says she's the
owner of my business. My son says the same thing. I said the
same thing about [the] New York [location] even before I was
in this position. We're a family. I mean, people - you
know, people - you're proud. You brag."
(Id.) Giammarino later admitted that he allowed
Brescio to "handle the media" for Lombardi's.
(Id.) Brescio, however, had no part in the agreement
between Sonic Services and Parx. (Id.) Thereafter,
at the October 31, 2018 public meeting before the Board,
Giammarino opted to address the Board personally instead of
permitting his counsel to present oral argument.
(Id.) In doing so, Giammarino stated, in relevant
ii. "In 2004, my mother wanted to retire and my
stepfather . . . at the time was having some trouble with his
heart and they asked me to take the place over."
iii. "I took the place over and the only thing that I
let [Brescio] . . . continue to do was handle media which is
something he did during the whole time that he was
iv. "In 2011, my mother passed away, I then became
President of [Pizza of 32 Spring Street, Inc.] and I
continued with that same relationship with him . . . in a
more of like a part-time few hours a month type
. . . .
vi. "He had no managerial duties, nothing at all. It was
just these-these media appearances because that was what he
was doing over the years."
. . . .
ii. "I don't socialize with the guy. I don't
have any business dealings with him, all I do is go to work
and I run the business."
. . . .
iv. "[The association with m]y stepfather was the only
one that's ...