BEDFORD'S INTRODUCTION

BEDFORD'S INTRODUCTION
In allegedly attempting to avoid "the appearance of any impropriety," the commission caused a great impropriety by denying a license to Bedford based largely on the feudal concept of guilt by association (or inheritance), which the U.S. Supreme Court long ago condemned as "philosophy alien to the traditions of a free society and the First Amendment itself. The commission branded Bedford's principals with the imprint of 'organized crime,' a notion so inflammatory, especially to Americans of Italian decent, that the mere mention of it is sufficient to destroy instantly any reputation and stigmatize a person for life."
ALLEGED TIES TO ORGANIZED CRIME
The commission: "The mere appearance of connection and involvement of Ambrosia Coal and Construction Co. [and other family-owned businesses] with organized crime and the ownership of the ground upon which Bedford intends to construct the project reflects negatively upon the racing industry and is therefore inconsistent with the best interests of racing."
Bedford's response: The "connections" to organized crime date back to loans made in the 1980s by Carmen Shick's grandfather, Carmen Ambrosia, to reported members of organized crime. "The commission ... rationalized that the sins of the grandfather somehow forever poisoned not only the grandchildren but all they have worked hard to preserve."
Bedford's competitor, Valley View Downs, should be subject to the same "logic": The director of Valley View's parent company was the former president of the Sands in Las Vegas, a hotel built by notorious mobster Myer Lansky. Other descendants of reputed mobsters have been granted legitimate gaming licenses, such as Pansy Ho, the daughter of Stanley Ho, a Chinese organized-crime figure. Pansy Ho has partnered with MGM Mirage for a Nevada casino deal.
POISONED PROPERTY
The commission: Ambrosia, along with his wife, acquired most, if not all of the land upon which Bedford intended to build the proposed facility. At worst, the accumulation of those reserves or those companies have direct ties or dealings with organized crime.
Bedford's response: Even under the worst scenario painted, the loans and alleged ties between Ambrosia and members of organized crime did not occur until the mid-to-late 1980s. The property which makes up the project was acquired as much as four decades before any questionable transactions or loans.
LOANS BY CARMEN AMBROSIA
The commission: In November 1985, Ambrosia, through Ambrosia Coal and Construction, loaned $4 million for a project known as Garita Hotel in Puerto Rico to organized-crime figures Lenine "Lenny" Strollo of Canfield, Pasquale "Pat" Ferrucio of Canton and George Malizia, formerly of New Castle. Ambrosia also loaned $200,000 at 12 percent interest to Liberty Vending in Canton, owned by Ferrucio and his son. The commission was concerned that funds were commingled between Ambrosia Coal and other family companies when this loan was made and that the family might commingle funds with Bedford Downs as well. In February 1992, Ambrosia Coal loaned $140,000 at 10 percent interest to Sansea, which was controlled by Malizia. The money was used to buy Sharkey's Lounge in Campbell, Ohio.
Bedford: Carmen Shick, after the death of his grandfather, initiated legal action against those organized-crime figures to recover the funds owed to Ambrosia Coal. The action has lasted 12 years and is ongoing. Ambrosia Coal has recovered $750,000 from Green Isle Partners, a third party involved in the deal. There is no evidence that the $4 million loaned in 1985 generated any profit, and Ambrosia was never paid (hence the continuing litigation). The money loaned for Garita was borrowed from People's Bank of Western Pennsylvania by Ambrosia companies through documented loans.
Liberty Vending: There was no commingling of funds involved with the Liberty Vending loan, and a partial repayment was made to New Castle Lime and Stone, the Ambrosia family company that made the loan. Attempts to collect the rest of the debt were unsuccessful.
Sharkey's Lounge: Ambrosia Coal in 1992 sold Sharkey's Lounge through a company named AMRKC Enterprises Inc., of which Carmen Ambrosia was president, to Sansea Inc. for $140,000 at 10 percent interest. Sansea was affiliated with Malizia and Strollo. Shick made several attempts through Ohio counsel to collect the debt.
When Shick assumed management of his grandfather's companies in June 1992, he stopped the practice started by his grandfather of loaning money.
But he was faced with a variety of challenges: Within three weeks of Aug. 12, 1992, demand upon Sansea (for repayment) and before any action could be taken on that letter, People's Bank notified the Ambrosia companies that it was unilaterally liquidating $6.2 million of their CDs. This virtually put them out of business because it made it impossible to obtain necessary bonds needed as insurance for their work. Shick was in litigation with the bank for nine years before an $8 million settlement was reached. At that time, Shick also started litigation on the Garita deal. But the commission, "using only hindsight and innuendo," penalizes him "because he made the business decision to allocate his resources to collect, for example, several million dollars from Malizia and Strollo at the risk of postponing a $140,000 claim against a company controlled by Malizia on a property that was already secured by a mortgage," the petition states.
FINANCING
The commission questioned Bedford's financing through Merrill Lynch because its letter of promised financing for $175 million had more stipulations than the letter its competitor, Valley View Downs, had from its backers, Bear Sterns. Shick's petition states that only about one-third of all projects presented to Merrill Lynch receive letters of promised financing. The conditions set in the letter are standard for Merrill Lynch, and Merrill Lynch has never not funded a project after it has reached that stage of the financing process, the petition states.
Source: Bedford Downs petition