Auction fetches $180,000 for Fleas - Local group buys site. The club owed more than $1 million in back taxes

Fleas may no longer be an endangered species in Easton.

The city's Order of Fleas Club, once the center of a multimillion dollar illegal gambling operation, could continue operating, according to the group that bought the property and its parking lot Tuesday morning at an Internal Revenue Service auction.

It could mark a turning point for the Fleas club which has struggled since the 2004 bust.

The IRS had put the South Side club up for sale after the club failed to pay its federal taxes. The auction sheet provided by the IRS lists $1.09 million in tax liens against the two properties.

Minutes before the auction began, six men, one of them a club member, decided to pool their money. They set up a limited liability corporation called QPE and each kicked in $30,000. The initials come from a joke made by their attorney, Raymond DeRaymond. It stands for "Quickest Partnership Ever."

The six men are: Steve Miga and Richard Mayer, both of Bethlehem; Nat Amato and Michael Glovas, both of Williams Township; and brothers Eric and Tony Malinowski from New Jersey.

The auction happened almost as quickly as the partnership came together. Eileen Foy, an IRS property appraisal and liquidation specialist, stood on the back porch of the building and read the rules for the auction. The bidding, opening at $300,000, didn't find any takers until $110,000, and eventually ended at $180,000.

Club leaders have said they, at the very least, would like to continue using the building, even leasing it from the new owners. The partners who bought the property said they will try to work with the Fleas club to keep it running. QPE still needs to meet with club members to work out the details, Glovas said.

"We're thinking positive. It's not all cut and dry," Glovas said.

"It's a sound building and it's been a great club," Amato said. Although he now lives in Williams Township, Amato said he hails from the South Side and has a lifetime membership with the Fleas. He said this could allow the club to get past the federal prosecution from 2004.

"I've always felt that's not a reflection on the general membership," Amato said.

In 2004, two Fleas Club officers, Russell Hixon and James Durnin, received six-month federal prison sentences for a kickback scheme involving a vending machine company.

Hixon and Durnin received $1,000 a week from Anthony Hanni and Habouk Shumar, owners of Downtown Amusements and M&M Amusement. The companies provided video poker machines for the club.

In addition to the kickbacks, Hanni and Shumar also gave Hixon and Durnin $10,000 "gifts" twice each year. Over the course of nine years, members fed tens of millions of dollars into the 15 machines, netting the club $8.4 million, which was laundered through various bank accounts.

Hanni and Shumar, who both had previous gambling convictions, served a respective 24 and 33 months in prison.

Now, the club at 601 Reynolds St. is looking to the future, said Bill Lucey, a 25-year member who attended the auction. With more residential development on the South Side, he said the Fleas hope to attract younger members. They've begun allowing members' wives to attend, something that was prohibited before the gambling bust.

The club has struggled with decreasing membership and a temporary loss of its liquor license, which it has since regained.

Lucey said club members could still try to come up with the money to purchase the properties, although they'd also have to pay off all back taxes.They have 180 days before the sale is final.

"It's not over yet," Lucey said. "It starts anew now."

The partners who bought the property don't have that worry, Amato said. In addition to the sale price, they'll need to pay off roughly $55,000 in county property tax.

"Everything else is kind of washed away," Amato said.