Pizza chain La Porchetta's thin crust of respectability hides a darker truth
When the founder of the La Porchetta pizza chain, Rocco Pantaleo was subjected to extortion threats from Carlton standover man Alphonse Gangitano, he could have just paid up.
It was the mid 1990s and the notorious underworld figure, known as the Black Prince of Lygon Street, was threatening violence if he wasn't given a slice of the profits.
The threats were credible; Gangitano had gunned down an associate at a St Kilda house party during an argument over a personal slight, walking free from a murder charge after eyewitnesses fled overseas rather than testify.
But Pantaleo refused to pay.
La Porchetta founder Rocco Pantaleo Photo: Paul Rovere
Instead, the Calabrian-born restaurateur reached out for help to L'Onorata Societa – the Honoured Society – a secretive Mafia group with a powerful place in Australian organised crime.
One of those who came to Pantaleo's rescue was Francesco "Mad Frank" Madafferi, a fugitive mafioso from Italy alleged in a 1998 confidential police report to be a member of an Australian-based "crime family involved in blackmail, extortion and murder".
There's a hierarchy in the underworld and the Black Prince was outranked by a criminal fraternity with links back to the Mafia clans of Calabria, known as the 'Ndràngheta.
"Alphonse was extreme cocky, but he was bit of a plastic gangster. He would have known he was up against something he couldn't handle," says Detective Inspector Andrew Gustke, who investigated and interviewed Gangitano for the murder of Gregory Workman.
Since it was transplanted by Calabrian immigrants in the early 20th century, the Honoured Society had been "protecting" – and preying – on Australia's ethnic Italian community from strongholds in Melbourne, Sydney and Griffith, NSW.
The organisation has established deep connections in both legitimate and criminal enterprises, including drug trafficking and extortion rackets in the agriculture and hospitality industries.
Alphonse Gangitano.
Gangitano was warned off, and in 1998, he would be gunned down for unknown reasons, although he had no shortage of enemies.
But Pantaleo would never be free of the consequences of his decision.
Tony Madafferi.
The La Porchetta system
Today, the La Porchetta brand is synonymous with its founder's rags-to-riches immigrant story, a successful modern franchise business still in touch with its roots.
Pantaleo and fellow Italian immigrant Felice Nania had opened the first La Porchetta in Carlton North in 1985 and the brand had thrived as franchised outlets sprung up across the country.
Convicted drug trafficker Frank Madafferi. Photo: Paul Rovere
"La Porchetta's family traditions play a role in every aspect of the business: the preparation of our authentic recipes, the warm welcome shown to each customer and the respect given to every employee," marketing materials say.
There are now 38 outlets in Australia and New Zealand owned by hardworking franchisees, often recent immigrants themselves, who have paid handsomely to buy into one of the nation's most recognisable restaurant brands.
Tony Madafferi in his fruit and veg store..
That is the public face of the franchising business.
Behind the corporate facade is La Porchetta Holdings Pty Ltd, which has been part-owned since 2010 by investment companies controlled by families that police allege include senior organised crime figures linked to the Honoured Society.
Rocco Pantaleo's funeral service in April 2010
The company owns La Porchetta's franchise licensing and distribution businesses, as well as the trademarked motto: "Eat Live Love – Italian".
Prominent among the owners is Antonio "Tony" Madafferi, the Calabrian-born grocer at the centre of the lobster dinner affair involving Opposition Leader Matthew Guy.
Victoria Police allege Mr Madafferi has "substantial and close involvement with serious criminal conduct, including drug importation, murder and extortion", according to court documents.
Mr Madafferi is a "known associate of prominent criminal entities and persons who have a history of significant criminal conduct that includes money laundering and drug trafficking," a sworn affidavit from Detective Superintendent Peter Brigham says.
These alleged associations led to Mr Madafferi being banned from Crown Casino and Victorian racing venues.
Mr Madafferi has never been convicted of a crime and denies any wrongdoing or association with organised crime.
A Madafferi family company owns a 5 per cent share in La Porchetta Holdings Pty.
The same-sized stake is held by the family of Mr Madafferi's brother, Francesco, the man who warned off Gangitano.
Francesco Madafferi is currently serving a 10-year sentence for his role trafficking 77,000 ecstasy pills in co-operation with a wider criminal syndicate involving Melbourne and Griffith-based cells of the Honoured Society and the 'Ndràngheta in Italy.
This group was responsible for what was then the world's largest ecstasy bust in 2007, more than four tonnes of pills worth $440 million that were smuggled to Melbourne inside cans of tomatoes.
The man nicknamed "Mad Frank", who is attempting to have his 2014 drug conviction overturned on the grounds of mental incapacity, has a legendary temper and convictions in Italy for "Mafia conspiracy", attempted murder, kidnapping, extortion, weapons and drug offences.
While awaiting trial on the trafficking charges, Frank bashed an associate on the street for badmouthing him, spitting on his victim as a sign of contempt.
Police also suspect he ordered drive-by shootings of businesses belonging to those seen to oppose or disrespect him.
Another co-owner linked to the Honoured Society is Michael Manariti, a butcher and former La Porchetta franchisee who was sentenced to more than nine years jail in 2010 for trafficking ecstasy, cocaine and methamphetamine.
Manariti transferred his shareholding to his father in 2014.
The three families – two branches of the Madafferis and the Manaritis – currently account for a 15 per cent stake in La Porchetta Holdings Pty.
How this came to be leads back to Rocco Pantaleo's decision to call on the Honoured Society for help.
New partners
By the time of Gangitano's extortion bid in the mid-1990s, La Porchetta had grown from a shop front in Carlton North into a network of more than a dozen restaurants.
Pantaleo was realising plans to make the chain a national and then international player, a period of aggressive expansion that saw dozens of legitimate restaurateurs flock to join the group.
While most of the franchises have been owned by hard-working families, Pantaleo also opened the door to infiltration by criminal entities.
Frank Madafferi initially received protection payments for turning away Gangitano, money Pantaleo handed over on the sly.
But other underworld-linked players and their relatives also became La Porchetta franchisees, like Michael Manariti.
They also invested in properties used by the chain as restaurant locations in Melbourne and Sydney.
(Fairfax Media has not named the outlets because many have been taken over by unrelated operators).
"Rocco always had connections in that world, but his decision to invite them in made him beholden," an underworld source says.
"Rocco was the boss on paper and the face of La Porchetta, but he didn't call all the shots, not when it came to the interests of those who were part of the crew."
And some learned that crossing these interests could have disturbing consequences.
One restaurant operator was sent pictures of his children anonymously during a bitter financial dispute with Pantaleo. No direct threat was made, but the message was clear.
Pantaleo also hinted at his connections. "Rocky would start to talk about something, but I said I don't want to know anything please," a former restaurateur says.
"Partly it was bragging, partly it was preparing to push you around, partly it was his huge ego. Rocky was bigger than life, like you were in the presence of a big star."
Pantaleo was certainly no angel, infamous for a volatile temper and an arrogant disregard for personal and professional boundaries.
One source says Pantaleo was tied to a chair and beaten bloody for disrespecting a mafia-linked associate whose property he damaged in a fit of rage.
In 1996, Pantaleo shot and killed a man who had bashed the restaurateur for sexually assaulting a teenage waitress.
Pantaleo was fined $10,000 for indecent assault for the incident in 1996, but he walked free over the shooting after claiming self defence.
So it's not surprising Pantaleo's personal judgment was rated poorly, and for some who worked with him, Pantaleo's business decisions seemed downright bizarre.
Franchise operations are often required to source supplies from headquarters, a strategy that ensures consistency and quality across the chain.
Pantaleo enforced the rule even though it was a major burden for some interstate outlets, which had to transport food and alcohol up to 2000 kilometres from Melbourne.
"It made absolutely no sense. [They] had to spend hundreds of dollars to ship stock that could have been purchased from suppliers in the same city," a source close to Pantaleo says.
Despite the growing pains, by 2010 Pantaleo had turned La Porchetta into an 80-outlet chain in Australia, New Zealand and Indonesia.
Then, in March that year, the 53-year-old was killed in a traffic collision.
His death would spark a major restructuring inside the La Porchetta business and, ultimately, if inadvertently, reveal its alleged connections to organised crime.
New owners
At the time he died, the La Porchetta trademark, franchise licensing and distribution businesses were owned by Pantaleo and Mr Nania, his founding partner.
Sara Pantaleo, Rocco's sister, became chief executive after the accident.
But behind the scenes a major change began when a new company, La Porchetta Holdings Pty, took control of the business in a deal worth at least $4.61 million, according to corporate records.
The Pantaleo and Nania families retained a 70 per cent ownership in the company; the rest was split among six other entities, including a 15 per cent shareholding to the Manariti family and two branches of the Madafferi family.
At this stage, Michael Manariti had been convicted of drug trafficking but would remain a shareholder for another three years.
Frank Madafferi was awaiting trial, but had transferred control of his investment company to his wife in 2009 after being arrested.
The reality that families of major suspected and convicted criminals now part-owned one of the country's most recognisable restaurant chains simply passed without public notice.
But 2014 would prove to be a watershed year, one that could have delivered a windfall to the La Porchetta group but ended in the exposure of damaging information.
In August 2014, ASX-listed Retail Food Group, which owns franchise chains Crust, Gloria Jean's and Brumby's, announced it would buy La Porchetta's franchising system for $16.3 million.
The mooted deal entered what is known as the "due-diligence" process, where La Porchetta's records were opened to the buyers for analysis.
RFG pulled out of the deal three months later, providing scant detail on what went wrong.
"RFG advises that the foregoing condition (satisfactory completion of due diligence) has not been satisfied," it announced to the ASX.
RFG has not responded to requests to explain why the deal collapsed.
However, La Porchetta had been under pressure from a host of new competitors in the pizza business, with the franchise network contracting from more than 90 outlets at its peak to fewer than 40 today.
In March 2014, the alleged link between La Porchetta and the Honoured Society also finally made headlines.
Fairfax Media journalists Nick McKenzie and Richard Baker began publishing a series of stories based on confidential police reports that revealed the extent of influence wielded by the Honoured Society and naming its suspected head Tony Madafferi and his involvement in La Porchetta.
Mr Madafferi, who refused to comment for this story, has previously sued Fairfax Media for defamation and tried, unsuccessfully, to obtain the identity of the journalists' sources.
He is now fighting a legal battle to have his ban from the casino overturned, maintaining he is a businessman unfairly slandered by the police and media.
La Porchetta chief executive Sara Pantaleo did not respond to a request for comment when contacted this week. .
In 2014, in the wake of the original news stories, lawyers for the chain denied Mr Madafferi had "any interest in La Porchetta that could amount to 'ownership' of our clients' business".
It was a strange claim given the shareholding is detailed in documents filed with the Australian Securities and Investment Commission.
It costs a lot to become part of the La Porchetta brand. Franchisees spend $600,000 to buy an outlet and pay another $60,000 in marketing, management, and product supply fees to headquarters each year.
For the vast majority, La Porchetta Holdings Pty is just a name on the paperwork.
Source:
http://www.smh.com.au/victoria/pizz...ity-hides-a-darker-truth-20170926-gyot31.html
