Updated news on the Gambino, Genovese, Bonanno, Lucchese and Colombo Organized Crime Families of New York City.

Sunday, January 5, 2014

Scarfo Jr finally heads to trial in white collar crime case

In many ways, it's your run-of-the-mill white-collar case. But this one has a mob twist.

The son of a reputed Philadelphia-area Mafia boss and six others are scheduled to be tried starting this week on charges including the usual stuff — racketeering. But the government says Nicodemo S. Scarfo and his co-defendants, used threats of harm to take over the board of FirstPlus Financial Group, an Irving, Texas-based publicly traded mortgage company, and then had the company buy shell companies they owned so they could take out the assets. The company is now defunct.

In court filings, the government said the conspirators plundered $12 million in less than a year, buying homes, weapons, ammunition, a plane, luxury cars, jewelry and an $850,000 yacht they named "Priceless."

Michael Riley, the lawyer for Scarfo, who is the son of imprisoned Philadelphia and southern New Jersey crime family boss Nicodemo D. "Little Nicky" Scarfo, said part of his argument is that it's not a mob case at all.

"What spices it up is the organized crime allegations," Riley said. "We can't defend the case and say Nick Scarfo is not and has never been associated with the mob."

But he said his client had scant involvement with the business deals at the heart of the case.

Government lawyers declined to give interviews. But in the indictment, they do draw a connection with the mob. They say money raised in the crooked business deal was intended to pay Scarfo's dues as a made member of the Lucchese crime family, with whom his father — who was listed as an unindicted coconspirator — allegedly formed an alliance decades ago.

Riley says he'll try to poke holes in the theory that the money was going to the New York-based Lucchese operation. "Not a single dollar is unaccounted for," he said.

Thirteen people were indicted in October 2011. Six, including Scarfo's wife, who admitted a role in mortgage fraud, have since pleaded guilty.

One who pleaded guilty, Cory Leshner, is expected to testify during the trial, set to begin Wednesday in U.S. District Court in Camden and last three months or so. The jury was selected last year.

The defendants who remain besides Scarfo include Salvatore Pelullo, a reputed mob associate who has a previous conviction for bank fraud and whom authorities said ran the business takeover.

Others are brothers John and William Maxwell, who were executives in FirstPlus, and two lawyers accused of helping the alleged scheme. All have pleaded not guilty.

Michael Huff, who is representing William Maxwell, said he did not do anything wrong as special counsel for the board of directors that took over the firm.

"He was doing his job," Huff said. "He was hired by the corporation to help with any legal matters that might come up with the transition from one board of directors to another board of directors."

A lawyer for Pelullo did not return a call. The lawyer for John Maxwell, who served as FirstPlus CEO and President, declined to comment.



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