Preheat the oven to 375°F (190°C). Grease a 9x13-inch baking dish with olive oil and set aside.

In a large skillet over medium heat, brown the ground beef and Italian sausage until fully cooked. Drain any excess fat.

Add the chopped onion and minced garlic to the meat mixture and sauté until softened, about 3 minutes.

Stir in the crushed tomatoes, tomato paste, diced tomatoes, Italian seasoning, red pepper flakes (if using), and sugar. Season with salt and pepper to taste. Simmer for 15-20 minutes, stirring occasionally.

While the sauce is simmering, cook the lasagna noodles according to package instructions (if using uncooked noodles, skip this step). Drain and set aside.

In a medium bowl, combine the ricotta cheese, 1/2 cup of the mozzarella cheese, and 1/2 cup of the Parmesan cheese. Season with a pinch of salt and pepper.

Spread a thin layer of the meat sauce on the bottom of the greased baking dish. Layer 3 lasagna noodles on top of the sauce, followed by a portion of the ricotta mixture, some pepperoni slices, and a generous handful of mozzarella and Parmesan cheese.

Repeat the layers (meat sauce, noodles, ricotta, pepperoni, and cheeses) two more times, ending with a layer of meat sauce and the remaining mozzarella and Parmesan cheeses on top.

Cover the baking dish with aluminum foil and bake for 25 minutes. Remove the foil and bake for an additional 20 minutes, or until the cheese is golden and bubbly.

Let the lasagna cool for 10 minutes before serving. Garnish with fresh basil and extra pepperoni if desired.