AG targets illegal Mon Valley gambling ring, 16 people charged
By Jason Cato
Published: Thursday, Sept. 5, 2013, 11:54 a.m.
A low-key illegal gambling investigation focused on a McKeesport coffee shop blossomed into the bust of a million-dollar operation headed by a linchpin nicknamed “Porky” and involving Mon Valley police officers, a Frank Sinatra impersonator and a man with ties to a Pittsburgh crime family.
Attorney General Kathleen Kane announced on Thursday the arrests of 16 people involved in the suspected gambling ring resulting from a two-year investigation. District Judge Thomas Caulfield arraigned all the defendants and released them on non-monetary bonds.
At the center of the investigation is Ronald “Porky” Melocchi Sr., 54, of West Newton. Investigators initially became interested in illegal gambling at the Coffee Pot, a defunct business Melocchi owned in McKeesport, court documents state.
“Ronald Melocchi was known to law enforcement as a vendor of illegal vending machines,” prosecutors wrote in a grand jury presentment. “What was unknown was the size of his operation.”
By the end of their investigation, agents with the attorney general's organized crime unit and state police in December seized 354 video gambling machines from about 70 locations supplied by Melocchi's Glassport-based Back Alley Vending. They also uncovered a numbers racket and sports betting operation reaching across Allegheny, Fayette, Washington and Westmoreland counties. Authorities seized more than $1 million in cash.
Melocchi is charged with two counts of conspiracy and corrupt organization, and one count each of dealing in proceeds of illegal activity, criminal use of a communication facility, lotteries, pool selling and bookmaking.
Neither he nor his attorney, Bruce Carsia, returned calls seeking comment.
“This was not a mom-and-pop operation,” said Kane spokesman Joe Peters. “You see the magnitude before you even begin to comprehend the impact on families and other areas. It snowballs into other crimes.”
Among those charged was Forward police Chief Mark Holtzman, 57, who was hired in January. Holtzman serves on the McKeesport Area school board.
Prosecutors said Holtzman took over running Melocchi's Coffee Pot in August 2012.
A message left at Holtzman's McKeesport house was not returned. Officials with the school district and Forward could not comment on his status.
Holtzman retired from the McKeesport police in 2011. Two other retired McKeesport officers — Ronald Prest, 65, of White Oak and Arthur Pero, 56, of McKeesport — were charged, as was Daniel Carr, 55, who serves on McKeesport City Council and owns Viking Restaurant and Lounge, where investigators said they seized 16 video gambling machines in two raids.
“I don't even know why I am here,” Carr said as he entered Caulfield's Forest Hills courtroom. He declined to answer questions about the gambling machines before leaving.
Neither Prest nor Pero could be reached for comment.
James Cerqua, 57, of Clairton, who serves on that city's municipal authority board, also declined to comment after his arraignment. Investigators said he helped secure two bowling alley locations for the illegal gambling operation.
Robert H. Bogesdorfer, 67, of Irwin — better known as a Sinatra impersonator who goes by the stage name Bo Wagner — hung up when reached by telephone.
Jeffrey Risha, 59, of Belle Vernon found himself facing illegal gambling accusations from state prosecutors for at least the third time, according to court records.
His attorney, James Davis of Uniontown, declined to comment on the current charges or his client's past.
“That would not be appropriate,” Davis said.
An informant working with state police said he was introduced to Risha, accused of being a bookmaker who took sports wagers, as part of the investigation.
The state attorney general's office in 2001 charged Risha with gambling offenses related to an operation tied to Thomas “Sonny” Ciancutti, a member of the Western Pennsylvania crime family headed by the late Michael Genovese. Prosecutors said Risha was a key Ciancutti aide who oversaw the organization's sports book and illegal lottery operations in Fayette County. He lived in Uniontown at the time.
Mark Novakovich faces one count that he allowed illegal gambling machines to be placed inside Twin Oaks Lounge, his White Oak business.
“I feel like I'm a small minnow in a large pond,” said Novakovich, 55, of White Oak. “We're in a business just trying to make a dollar. We're not trying to get rich.”
In March 2011, an undercover state trooper visited the Coffee Pot and saw video poker machines in the back as well as a manager making payouts to players, court papers state.
The investigation widened once investigators discovered the connection with Back Alley Vending and saw a number of “collectors” regularly visiting other businesses known as “stops” to collect Melocchi's cut, the documents said. In some instances that was 40 percent of the take, but usually it was half, court papers detailed.
Some business owners testified before a grand jury that they were paid up to $5,000 to allow placement of the machines, which were labeled “For amusement only” but never were played just for fun, one witness testified.
Business owners told the grand jury that they made between $75 and $1,000 per week from the machines, court papers state.
Melocchi's federal tax returns showed gross receipts at Back Alley Vending of more than $300,000 from 2010-12, according to court papers, but a former employee estimated only 30 percent came from legitimate business leases of jukeboxes, pool tables and video games.
In October, investigators wiretapped Melocchi's cell phone and in December used sealed search warrants to raid 70 businesses — mostly bars but also bowling alleys, coffee shops, restaurants, private clubs and convenience stores.
A few locations not targeted moved their machines to the curb after the raid and called police to have them removed, court papers state.
The more than 300 video poker and slot machines confiscated are similar to casino machines except for “knock-off” switches and other accounting devices associated with illegal gambling and which make them unlawful. All of the machines were found in municipalities that charge fees to license such devices presumed to be legal.
Canonsburg, Glassport and West Mifflin each charge $500 per machine, prosecutors said. McKeesport charged $240 for up to two machines, $1,500 for four and an additional $250 for each machine after that.
Jason Cato is a staff writer for Trib Total Media. He can be reached at 412-320-7936 or firstname.lastname@example.org.
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