Report: DeNaples probe looked at sale of Katrina-damaged trucks

March 2, 2008 1:30:49 PM PST
Before granting a casino license to a businessman now accused of lying about his alleged mob ties, state officials investigated whether he had illegally resold trucks that suffered flood damage in Hurricane Katrina, a newspaper reported. Officials eventually determined no wrongdoing by Louis DeNaples, owner of the Mount Airy Casino Resort. But a report by The Morning Call of Allentown found that the title for at least one of the resold vehicles did not have the required declaration of flood damage.

Richard Rothstein told the newspaper that he bought a truck from DeNaples' auto dealership in December 2005. Its engine caught fire three months later, and mechanics told him the rig had suffered flood damage. They found dead salamanders and mud behind the dashboard, he said.

That spawned an investigation by gaming officials, state police and the FBI into whether it was a case of "title washing," a felony in which dealers buy flood-damaged vehicles and sell them in other states without disclosing the damage.

DeNaples currently faces charges of lying to state gaming regulators about his alleged mob ties. DeNaples, who has denied the accusations, was awarded a casino license in December 2006.

DeNaples spokesman Kevin Feeley said there was no evidence that the trucks were "bought or sold in any improper way or titled in any improper way." He maintained that the trucks were not "salvage vehicles, no matter what is said."

The FBI found no federal offenses, but referred the case to state police because vehicle titling is a state matter. Police did not return the newspaper's calls.

The Pennsylvania Gaming Control Board also learned about the case and referred it to the Department of State in fall 2006.

"We had suspicions it might be something," said Tad Decker, the former gaming board chairman. "But it turned out not to be an issue."

The Department of State, which licenses auto dealers, found that there were "no fraudulent representations" by DeNaples.

"The purchasers were aware that the vehicles were damaged in a flood," department spokeswoman Catherine Ennis said in a statement.

The newspaper, however, reported that the title for Rothstein's truck did not have a "W" on it that would denote it had suffered flood damage. A spokeswoman for the Pennsylvania Department of Transportation declined comment.

The trucks, which had been leased by Air Products and Chemicals of Trexlertown, were parked at a facility in New Orleans when Katrina struck. The leasing company then asked Air Products to help find someone to buy them as salvage. DeNaples offered $180,000 for all 30.

"Our sales documents clearly identified the trucks as being water-damaged," said Art George, an Air Products spokesman.

Thirty years ago, DeNaples pleaded no contest to defrauding the federal government of more than $500,000 for cleanup work related to Hurricane Agnes.

Information from: The Morning Call,