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The day Peter Castellana Jr. hired a group of former federal prosecutors to investigate his own company was also the day he told his father to stop coming to work.
That decision was probably the most painful ever made by the 35-year-old chief executive of Western Beef Inc., the 17-store publicly traded supermarket chain that he and his brothers inherited from their father.
But it shows just how far a new generation of Italian-American owners at Ridgewood, Queens-based Western Beef will go in an attempt to clear their name. Though the Castellanas have in the last 20 years built a $300 million supermarket company with profits that far exceed industry norms, Western Beef remains haunted by its past, especially by allegations of the elder Mr. Castellana's organized crime links.
The stories of mob ties, along with a history of other troubles, have made it difficult for this niche player serving lower-income shoppers to meet its expansion goals. Investment banking firms have closed their doors on Western Beef. Major law and accounting firms won't serve it. The company's stock remains depressed at levels half of what comparable supermarkets command.
"Everywhere I turn I have doors shut in my face," says the younger Mr. Castellana.
He has tried defensive measures--hiring public relations firms, meeting with journalists who have referred to Western Beef's alleged mob links--all without much success. Mr. Castellana says The New York Times cost the company its 13-year-old relationship with European American Bank in 1992 in a story criticizing Sen. Alfonse D'Amato for "helping out people of questionable character."
Exasperated, early last month Mr. Castellana effectively fired his...