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12 N.J.A.R. 149

Gaming Enforcement, Div. of v. Bayshore Rebar, Inc./Joseph N. Merlino
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Citation: 12 N.J.A.R. 149
Decision Date: 1989
Synopsis: The Division of Gaming Enforcement filed a complaint with the Casino Control Commission seeking disqualification of respondent Bayshore Rebar, Inc. from doing business with casino licensees and revocation of its vendor registration because of alleged connections with organized crime. In addition, the Division objected to Bayshore's application for licensure as a casino service industry. The matters were transmitted for hearing to the Office of Administrative Law, where the application case was consolidated with the complaint. (Hearing on a third matter involving criminal charges pending against respon- dent Joseph Merlino was deferred.) Joseph Merlino, who was president and sole owner of Bayshore when the Division's original complaint was filed, is the son of Law- rence Merlino, a career criminal offender and associate of organized crime boss Nicodemo Scarfo. At the time of the hearing, Joseph Merlino was vice-president and an employee of Bayshore. His mother, Phyllis Mistie Merlino, was president of the company, which operated out of the family home. Lawrence Merlino is not associated with Bayshore, but the Division alleged he may have helped the company obtain construction jobs from casino licensees. The administrative law judge assigned to the case identified the main issue as whether the Division had proved that Bayshore and its officers were associated wih organized crime in such a manner as to be inimical to the policies of the Casino Control Act. Respondent argued that the relationship between Bayshore and Lawrence Merlino was only a family connection, not an inimical business relationship. The administrative law judge concluded, however, that there was ample evidence of Lawrence Merlino's involvement with Bayshore to justify disqualification under N.J.S.A. 5:12-86f. Because of the dis- qualification, the judge also concluded that Bayshore's application for a casino service industry license must be denied. Upon review, this initial decision was adopted by the Casino Control Commission. In discussing the application of section 86f, the Commission noted that an association is inimical if it presents the danger of influence or control over a casino-related business by an organized crime figure. There need not be evidence of actual criminal behavior by the associate. The Commission concluded that the nature and quality of the association between Bayshore and Lawrence Merlino created a sufficient risk that Merlino might exercise influence over Bayshore. As to the father-son relationship, the Commission said disqualification of the father does not alone disqualify the son. How- ever, the family relationship cannot be used to shield an inimical relationship from regulatory scrutiny. In this case, there was sufficient evidence that the relationship between Joseph Merlino and his father consisted of more than an innocuous family association. Accordingly, the Commission ordered Bayshore disqualified and its application for a casino service industry license was denied. In addition, Bayshore's qualifters--Joseph Merlino and Phyllis Mistie Merlino--were also disqualified. Stephen J. Cirillo, Deputy Attorney Gerneral, and Julia McClure, Deputy Attorney General, for petitioner (W. Cary Edwards, At- torney General of New Jersey, attorney) Francis J. Hartmann, Esq., and Charles H. Nugent, Jr., Esq. for respondent
Rule(s) Cited: 19:41-3.2(a)2 19:43-1.2 19:43-1.3 19:48-1.1 
Statute(s) Cited: 5:12-86f 5:12-92 
Citation Tracker modified-Casino Cont. Com'n; dismissed-App. Div., A4250-SS-T2, 6/28/89 (unreported) [Updated through 1991]