Pipe shop is gambling front
Under immunity, Dunk says he is continuing operations
Post-Tribune (IN)
July 30, 1991
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Jeffrey Dunk has used the Ye Olde Pipe Shoppe in downtown LaPorte as a front for a variety of gambling operations for the last 20 years.
He talked about it in U.S. District Court Monday under a grant of immunity from prosecution.
He admitted he hasn't slowed down much since appearing before a federal grand jury and agreeing to testify for the prosecution against six alleged gamblers and members of the crime syndicate.
"You are gambling and running your illegal business even as we speak," said Chicago attorney Kevin E. Milner, representing Dominick "Tootsie" Palermo, 73, the alleged mob boss for gambling operations for Northwest Indiana and Chicago's south suburbs.
"Correct," Dunk said.
"Your business is going to be going on," Milner said. "That's how you make your money. Correct?"
"Correct," Dunk said.
After asking Dunk if he knew why the government isn't prosecuting him, Milner said, "You are not an Italian man, are you, sir?" a reference to the crime syndicate comprised of those of Italian descent.
Dunk said he either has or continues to make book on sporting events, print and distribute his own parlay cards, operate punch boards and pull tabs, put on Las Vegas night parties, provide a video poker machine and charge the local residents to bet on rummy games in the back room of his pipe shop.
The only legal glitch was in the early '80s when Dunk had a video poker machine provided by Peter "Cadillac Pete" Petros, one of the defendants.
Dunk, saying the machine lasted just three months, added, "The chief of police in our town didn't want it there."
Other than the flap over the poker machine, things rolled along for Dunk until the fall of 1986 when word apparently spread that his operation was growing.
Dunk said Petros tried to get a piece of his action, suggesting he had the crime syndicate to back him. When he didn't buy in, Dunk said Petros brought Anthony Leone to see him.
"He brought up the subject of a street tax," Dunk said of Leone.
"I told him in my town that was unheard of," Dunk said. "I told him I'm country-fied and he's city-fied and that's two different ways of life."
Dunk began paying Leone $400 a month in the fall of 1986. It later went to $500 monthly.
Leone, too, was charged, but is cooperating with the government and will testify later in the trial.
Leone, 50, of Valparaiso, is hoping to get a reduction in the eight-year prison term he received two years ago for operating an illegal lottery in Gary.
Dunk said that when Leone quit coming around in the fall of 1987 that he never again was asked to pay a street tax.
"You ever hear of a one-man mafia?" Milner asked.
"No sir," Dunk said.
Dunk also said Petros wasn't taken very seriously around LaPorte. He said Petros had been in a psychiatric ward in a Veteran's Administration hospital and around town was looked upon as a nuisance.
Louis Gerodemos, a longtime area gambler who has operated the Paragon restaurants in Hobart and Schererville, Alexander's in Highland and Mr. G's near Lakes of the Four Seasons, spent the morning on the witness stand.
Gerodemos, 58, too, had a grant of immunity, but avoided looking at the defendants and was reluctant to say anything against them.
Assistant U.S. Attorney Michael A. Thill had to repeatedly direct Gerodemos to his 1988 grand jury testimony in which he was more graphic about his gambling dealings.
"I don't have that much a education to remember anything," Gerodemos told Crown Point attorney John M. McGrath, who is representing Petros. "I didn't go to school. I only went second grade."
Gerodemos said Bernard "Snooky" Morgano, 54, of Valparaiso, approached him before he held four gambling parties in the basement of Mr. G's in 1987. He said Morgano told him there would be a $500 assessment per party. It later was hiked to $1,000, Gerodemos said. He said there was poker, blackjack and barbotte, a Greek dice game, at the parties.
Prior to the second party, Gerodemos said Morgano and Nicholas "Jumbo" Guzzino came to the Paragon in Hobart.
"I felt very intimidated and afraid that Guzzino accompanied Morgano to my restaurant," Gerodemos said. "I knew Guzzino was connected with the Outfit."
Guzzino, 49, of Chicago Heights, Ill., is alleged to be Palermo's top lieutenant.
Michael Mione, a retired Gary policeman, testified that Leone approached him in 1986 and asked him if he knew anyone in the vice squad at the Gary Police Department.
Mione said he gave a policeman $500, on behalf of Leone, to raid three gambling operations that were competing with Leone. Mione said the ploy was for Leone to extort protection money from his three competitors after the raids.
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