Indiana gambling ring case tied to restaurants moves forward after 22 defendants plead not guilty

HAMMOND, Ind. - All 22 defendants charged in a sweeping federal gambling and extortion case tied to northwest Indiana restaurants pleaded not guilty Thursday during arraignments in federal court in Hammond.

The backstory:

The case, dubbed "Operation Porterhouse Parlay," centers on an alleged illegal sports betting network that federal prosecutors say operated for years out of Gino’s Steakhouse in Merrillville and Paragon Restaurant in Hobart.

Authorities allege the operation accepted bets both online and in person through gambling websites, phone calls and text messages, with bettors located across the country.

Federal prosecutors identified James Gerodemos, also known as "Jimmy the Greek," and Dean Gialamas as alleged leaders of the operation. Gerodemos had requested a delay in his arraignment after changing attorneys, but a judge ordered all 22 defendants to appear in court Thursday.

According to the 87-page federal indictment, the group is accused of running an illegal gambling business, laundering money and using threats and intimidation to collect gambling debts.

Investigators said some bettors were allowed to gamble on credit without putting money down upfront. Authorities allege problems escalated when gamblers fell behind on payments.

The indictment details several alleged threats made against bettors and their family members. In one instance, investigators said members of the organization tracked down a man in Texas and left a threatening message referencing his daughter, who attended Valparaiso University.

Federal authorities said the operation stretched far beyond northwest Indiana, with arrests carried out in multiple states, including Florida and California, as well as Puerto Rico.

What they're saying:

Retired FBI agent Ross Rice said the structure of the operation resembled traditional illegal bookmaking systems that have existed for decades.

"With this organization, there was no initial deposit," Rice said. "You make wagers based on your credibility, your apparent credit worthiness, your understanding that you're going to pay your debts if you lose. And that's where the settle up every week takes place. And that's what gets people in trouble is they start betting, they lose. They start betting more to try and recap their losses or recoup their losses, and then they get behind. And now you have a situation where they can't pay."

Restaurant's ties to sheriff

Dig deeper:

The county’s top law enforcement official, Sheriff Oscar Martinez, was a frequent customer at Gino’s.

Board of Election campaign documents dating back to 2022 show Martinez spent more than $72,000 on fundraisers, food and events there. 

The State Board of Accounts audited his office and reported Martinez misspent public funds from the sheriff’s commissary account, including $3,300 paid to Gino’s to feed employees working at the Lake County fairgrounds.

Law enforcement officials say it doesn’t look good, but Martinez is not accused of a crime.

"You have to figure out, did he know what was going on? Did he know what type of illegal activities were being conducted by the owner of these restaurants, of these businesses? And unless there's evidence to show that he did and was overlooking it, or potentially taking money to allow it to operate, then that becomes a whole different story…," Rice said. "I can assure you, if there's evidence showing that the sheriff knew about this and was looking the other way or protecting it, that will come out."