Start by making a “panade”. To do this, tear bread into approximately 1” sized pieces and place in a medium-sized bowl. Pour milk over bread and turn with a fork until completely coated with milk. Allow to sit for 10 minutes until milk is fully absorbed and then use your fork to mash bread until it forms a paste.
Add grated parmesan cheese, egg, garlic, parsley, onion powder, oregano, crushed red pepper (if using), nutmeg, salt, and ground pepper to panade and stir until well-combined.
Place ground meats in a separate, large bowl. Tear off about 2 Tablespoons of meat each from ground beef and ground pork and add to the panade mixture. Stir very well until well-combined.
Pour panade mixture into large bowl with remaining meat and use your hands to gently work ingredients together until completely combined. Do not over-work or your meatballs will be tough!
Scoop dough into 2-Tablespoon sized balls (I use a cookie dough scoop to make this easier) and lightly grease your hands with olive oil. Roll into a round ball (don't roll too tightly) and place on a wax paper lined plate or baking sheet until you have formed all of your meatballs.
Grab a large stockpot or enameled Dutch oven (I don’t recommend non-enameled cast-iron as it can cause a metallic taste) and add enough olive oil to completely cover the bottom of the pan so that it is ⅛-¼” deep. Heat over medium/medium-high heat until oil shimmers.
Add meatballs to the pan (I use tongs) in batches of just 3-4. Sear/cook until browned on one side, flip and cook until browned on the other side (if your meatballs are sticking, use a spatula to gently loosen them from the pan), then remove to a clean plate. Meatballs will still be pink inside, this is expected. Repeat until all meatballs have been cooked.
If you have more than about 2 Tbsp of grease left in the pot, drain excess grease (I use a ladle to remove). If you don’t have any grease left, add a splash more olive oil and allow it to heat and prepare your sauce. Do not remove caramelized/brown bits at the bottom of the pot!
Add onion to pot and cook until translucent. As the onion cooks, use your spatula to gently scrape the bottom of the pan, loosening any browned bits from the meat (don’t discard these).
Add garlic and cook, stirring, until fragrant (30 seconds).
Add crushed tomatoes, basil, sugar, oregano, salt, and pepper and stir well.
Bring sauce to a simmer and then gently place meatballs back into the pot, submerging in the sauce (it may seem like a lot of meatballs but they should all be able to be submerged into the sauce).
Cover pot and continue to simmer over low heat until meatballs are cooked through (internal temperature should reach at least 165F/75C. This usually takes about 15-20 minutes for me.
Gently stir sauce and serve alone, with a side salad, on subs, or over pasta.