Emerald Casino rejects proposed shareholders with alleged mob ties

Maura Kelly Lannan

Friday, June 17, 2005 | 9:39 a.m.

AURORA, Ill. -- The bankrupt Emerald Casino announced Thursday it has rejected two proposed shareholders who have alleged mob ties, a main owner wants to withdraw and a member of its board of directors has resigned.

The move is intended to rid the casino of any shareholders who have been singled out by the Illinois Gaming Board and Attorney General Lisa Madigan as questionable and is part of the casino's fight to stop the state from revoking its gambling license, Emerald attorneys said.

The casino's board rejected the Sherri Boscarino Trust and Joseph Salamone as proposed investors after evidence during an ongoing license revocation hearing tied the two to organized crime earlier this month, Emerald attorneys said.

"In light of the allegations made by the attorney general and in light of the documentation that has been produced that Emerald did not know about and could not have known about when they were put down as proposed shareholders, Emerald has made a decision to specifically reject them as qualified proposed shareholders," Emerald attorney Michael Krzak said.

Also, one of Emerald's main owners, Kevin Flynn, wants to withdraw as a proposed shareholder and board of directors member Joseph McQuaid has resigned. They gave no reason for their actions, and Krzak said he did not know why the two want to split from Emerald.

The withdrawal of Boscarino, Salamone and Flynn and McQuaid's resignation has no impact on the state's attempt to revoke Emerald's license, Madigan spokeswoman Melissa Merz said.

"It has everything to do with the character of the people who allowed them to purchase stock in the first place," Merz said.

The Gaming Board, which has been trying to revoke Emerald's license since 2001, contends Flynn and his father, Donald -- who remains an investor -- lied to regulators and that Salamone and the Boscarino Trust had tied to organized crime.

The board alleges that Nick Boscarino has ties to organized crime and held a hidden interest in Emerald through a trust named after his wife, Sherri. Evidence at the revocation hearing showed that Boscarino transferred _$1.5 million -- the cost of a 1 percent share in Emerald -- to his mother, who was trustee for the trust, at about the same time the investment was made.

Other evidence showed Joseph Salamone agreed to divide his _$375,000 share in the casino in part with his brother Vito, who has been identified by the Gaming Board as having connections with organized crime.

Emerald maintains that it did not know of Boscarino's alleged involvement in the trust or Salamone's split share.

Madigan has raised concerns about Boscarino, Salamone and alleged ties to organized crime in Rosemont, a Chicago suburb near O'Hare International Airport where Emerald wanted to build a casino. To allay her concerns, Emerald proposed Thursday that the Gaming Board require Rosemont not to be involved at all with construction of the casino. Merz declined to comment on the proposal.

Rosemont attorney Bob Stephenson said the suburb has never been involved in the casino's construction, "All we do is lease the land."

Madigan's office intends to continue the revocation hearing, while Emerald maintains it should stop because a judge recently ordered the Gaming Board to renew the casino's license and allow it to relocate to Rosemont.

The Gaming Board, however, did not act on Emerald's license renewal request during its regular meeting held Thursday near the Hollywood Casino. Chairman Aaron Jaffe said the board needed more time to discuss the matter with its attorneys.

"We're not prepared to deal with it and we'll postpone that particular matter until a later date," Jaffe said.

Rosemont attorney David Goroff protested, telling Jaffe that the board was in defiance of the court order that required the license be renewed.