Unless there are some unforeseen developments -- and in this
case that's always possible -- the hammer comes down next week in the
multi-million dollar FirstPlus Financial fraud case.
Nicodemo S. Scarfo, Salvatore Pelullo and the brothers John
and William Maxwell each have sentencing hearings before U.S. District Court
Judge Robert Kugler in the same federal courtroom in Camden where a jury
delivered guilty verdicts last year.
Scarfo, the 49-year-old son of jailed mob boss Nicodemo D.
"Little Nicky" Scarfo, is looking at a sentence that could land him
in prison for the better part of the rest of his life. The same can be said for
Pelullo, 47, described as a mob associate and with Scarfo the brains behind the
2007 takeover and looting of the Texas-based mortgage company.
The Maxwell brothers -- John the CEO of FirstPlus and
William a lawyer hired as private counsel by the firm -- were convicted of many
of the same racketeering, conspiracy and fraud counts, but with no prior
criminal convictions, they face less potential jail time. That, of course, is a
relative term. A 10-year prison sentence might be considerably less than a
30-year sentence but is little solace to the defendant serving the 10 years.
Pelullo's lawyers
have filed an eleventh hour motion asking Kugler to recuse himself from the
sentencing hearing, arguing that the judge had demonstrated preconceived
notions about Pelullo that would impact his ability to deliver a fair and
impartial sentence.
Kugler has scheduled a hearing on that issue on Tuesday, the
same day as Pelullo's sentencing hearing. This is the third time Pelullo has
asked Kugler to recuse himself from the case. The judge rejected motions in
2012 and 2013. The third time is not likely to be the charm for the sometimes
bombastic and always opinionated defendant.
Scarfo is to be sentenced Wednesday. The Maxwell brothers go
before Kugler at separate hearings on Thursday.
Kugler has already rejected motions to have the convictions
overturned, but that hasn't stopped defense attorneys from hammering away at
the same issues that will likely form the basis for ongoing appeals.
The key issue remains the introduction of organized crime
into a case that the defense contends had nothing to do with the mob. The
prosecution used mob references and alleged mob connections to prejudice the
jury and to glamorize and sensationalize an otherwise mundane financial case,
defense attorneys have argued.
In a motion filed in November, Jeremy C. Gelb, one of
Scarfo's lawyers, wrote that evidence tying organized crime to the case was
irrelevant, an "abuse of discretion" on the part of the prosecution
and created "unfair prejudice" with the jury.
Pelullo's lawyer contended that the organized crime
"evidence" was "the definition of unfair prejudice and short of
allegations of child molestation, it is difficult to even conceive of any
evidence more prejudicial."
Kugler heard similar argument before, during and after the
trial and rejected them. Prior to the start of deliberations, the judge gave
instructions to the jury that were designed to keep the organized crime issue
in perspective. The defense clearly believes that didn't work.
Assistant U.S. Attorney Steven D'Aguanno, on the other hand,
has said repeatedly that references to the mob were relevant and that the
multi-million dollar fraud was carried out in large part because of the fear
and intimidation that Pelullo used by alluding to his mob ties to Scarfo.
Wiretap conversations and the testimony of witnesses backed
the government's position, the prosecutor said. One example pointed to was a
phone conversation between Pelullo and Scarfo during the takeover in which
Pelullo emphasized that he used Scarfo's name and reputation to advance their
scheme.
Scarfo was on probation at the time following a mob-related
gambling conviction and could not travel to Texas while the takeover was being
orchestrated. But that, Pelullo said, didn't matter.
"Just because they didn't see you, I tried to enforce
that is was, you know, you behind the scenes and I was just a conduit...through
you to make sure things got done the way we planned to get them done," he
said in a conversation with Scarfo picked up on an FBI wiretap.
The defense, however, argues that the entire FirstPlus
investigation was built on a shaky foundation and that the convictions should
be overturned as a result. The position of Pelullo, Scarfo and the Maxwells
(who have joined in the motions) is that the government started out looking for
organized crime and was determined to find the mob no matter what the evidence
might show.
In fact, the defense has offered detailed information about
the origins of the probe which, they say, wasn't about a takeover of FirstPlus,
but rather an effort by the FBI to track the younger Scarfo's attempt to retake
control of the Philadelphia crime family his jailed father once headed.
That, at least, is the information contained in an FBI
affidavit that is part of the case.
In that light, Scarfo was involved in more than one power
grab when he and Pelullo took behind-the-scenes control of FirstPlus back in
2007 and siphoned more than $12 million out of the company.
At the same time, the FBI document indicates, Scarfo was
also maneuvering to re-establish himself in South Jersey and align himself with
mob figures who might support his underworld power grab.
Few details of that scenario surfaced during the FirstPlus
trial, but the jury heard that Scarfo was a member of the Lucchese crime family;
that his jailed father had set that up through Vittorio "Vic" Amuso,
the Lucchese organization boss serving time with the elder Scarfo, and that both
Scarfo Sr. and Amuso were to get a piece of the FirstPlus take.
The two aging mobsters were named unindicted co-conspirators
in the FirstPlus case.
The jury also heard that Scarfo Jr. was shot and nearly
killed on Halloween night in 1989 at Dante & Luigi's Restaurant. The
notorious mob hit, carried out by a gunman wearing a Halloween mask and
carrying his 9 mm machine pistol in a trick-or-treat bag, was the stuff of mob
movies and further prejudiced the jury, said the defense.
In contrast, defense lawyers contend that the looting of
FirstPlus was a "garden variety white collar crime" dressed up to
look like a mob bust out in order to
influence the anonymously chosen jurors weighing the charges.
Mob or no mob, at $12 million that's quite a garden.
Whatever its impact on the FirstPlus case, the affidavit
from the FBI case Agent Joseph Gilson cited by the defense offers an intriguing
look at the Philadelphia - South Jersey underworld in 2006. The affidavit was
submitted with a wiretap application and while the original thrust of the probe
was the suspected takeover of the Philadelphia mob, those wiretaps eventually
brought the feds into the FirstPlus scam.
Among other things, Gilson wrote that "Little
Nicky" Scarfo from his prison cell in Atlanta was backing his son's
attempt to wrest control of the Philadelphia crime family from then mob boss
Joseph "Uncle Joe" Ligambi, a one-time Scarfo ally and suspected
hitman.
"Scarfo Sr. has secured the backing of some of the New
York LCN Families in this attempt to take control of the Philadelphia LCN
Family and is directing his son, Scarfo Jr., in the attempted takeover,"
Gilson wrote.
While the affidavit doesn't mention which New York families
were supporting the Scarfo move, most law enforcement sources believe the
Lucchese organization, at least the faction loyal to Amuso, was backing Scarfo's play.
The younger Scarfo, who had been living in North Jersey
under the protection of the Lucchese organization, moved back to the Atlantic
City area in 2006. For a time he ran a restaurant and later got involved in the
construction business.
Rumors surfaced at the time that he was trying to recruit
local mobsters who might still be loyal to his dad whose bloody reign between
1981 and 1989 had decimated the crime family. During that period, nearly two
dozens mob members and associates were killed and nearly that same number were
indicted and sent off to prison.
The elder Scarfo is currently serving time for racketeering
and murder. His earliest parole date in 2033 when he will be 103 years old.
The brutality that was the mark of the Scarfo organization
continued after he was jailed in the late 1980s. What followed was twenty years
of wanton and often senseless violence, a bloody soap operate that often pitted
brother against brother and that undermined any stability or sense of loyalty
that might have existed.
Gilson touched on that in his 94-page affidavit, noting
that, "It's difficult to chart the history of the Philadelphia Mafia given
its frequent personnel changes caused by the violent deaths of several of its
members."
Whether the younger Scarfo had a chance to retake control of
the family is an open question. It is hard to imagine many mobsters lining up
behind him in a clash with Ligambi. The FBI affidavit said that one
confidential source indicated Scarfo had approached Joseph Ciancaglini Jr. , the son of then
jailed Scarfo family capo Joseph "Chickie" Ciancaglini. The source,
according to the affidavit, said Scarfo approached Ciancaglini and asked if
"he wanted to be with" him in a power grab.
The younger Ciancaglini "had not been active in the
affairs of the Philadelphia LCN Family since the attempt on his life (in
1993)," Gilson wrote. Joe Ciancaglini Jr. was shot and nearly killed in an
ambush orchestrated, authorities believe, by Joey Merlino and Ciancaglini's own
brother, Michael in March 1993. The shooting was part of a brutal mob struggle
between the Merlino faction and another group headed by then mob boss John
Stanfa. That summer, Michael Ciancaglini was killed in the Stanfa-Merlino war.
A third brother John was serving a federal sentence for
racketeering at the time, but later became a Merlino ally.
None of that bloody history, of course, had anything to do
with the FirstPlus takeover. And only the Dante & Luigi shooting and Scarfo's
ties to the Lucchese organization were introduced as evidence.
But federal authorities argued that the mob connections and
reputations of Scarfo and Pelullo were the driving force behind the
multi-million dollar extortion.
In his affidavit Gilson pointed out that several FirstPlus
officials were aware of the organized crime ties of Scarfo and Pelullo and that
those officials said they were intimidated and went along with the takeover out
of fear. One director, according to a source cited in the affidavit, said he
believed Pelullo was using extortion to wrest control of the company. But that
director said he would not cooperate with authorities because "he did not
want to be a rat and end up at the bottom of a lake."
That, the prosecution contends, was the role that organized
crime played in the takeover of FirstPlus and that, they argued, was justification
for the mob references that surfaced during the trial.
http://www.bigtrial.net/2015/03/a-look-at-mob-ties-to-firstplus-case-as.html#l5W9LffJIdJD1VhQ.99
