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

Saturday, July 28, 2012

Defendants raise fair trial issue in Scarfo Jr case

Nicodemo S. Scarfo in a Morris County courtroom.
Arguing that the taint of organized crime will deny them a fair trial, six defendants who are charged along with mobster Nicodemo Scarfo in a multimillion-dollar fraud case don't want to be sitting at the defense table with the South Jersey wiseguy when a jury begins deliberating their fates.
The defendants, charged in what authorities allege was a racketeering scheme in which more than $12 million was taken from FirstPlus Financial, a beleaguered Texas mortgage company, have filed severance motions asking to be tried separately.
"La Cosa Nostra allegations could have a highly prejudicial effect," an attorney for Gary McCarthy argued in a motion for severance filed last month , adding that the allegations of mob connections created the risk a jury would find defendants "guilty by association rather than by real evidence."
McCarthy, 53, a New York City tax and estate planning lawyer, is one of 13 defendants charged in the 25-count indictment handed up in November. Authorities allege that McCarthy helped set up companies and business transactions that were part of a racketeering scheme.
He and the other defendants charged in the scheme have pleaded not guilty.
Prosecutors are expected to oppose the requests for severance. Their reply brief is due next week.
Authorities allege that Scarfo, 46, and mob associate Salvatore Pelullo, 44, took control of the FirstPlus board of directors in 2007 and used phony business deals and bogus consulting contracts to siphon millions out of the company.
The money was used to finance a lavish lifestyle for Scarfo and Pelullo that included the purchase of an $850,000 luxury yacht, a $715,000 home, expensive automobiles, including a Bentley valued at $217,000 and an Audi worth more than $100,000, and free use of the company's corporate jet to travel around the country.
Most of the severance motions suggest Pelullo; Scarfo, the son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo; and several other defendants who were part of the day-to-day decision making at FirstPlus should be tried first.
Those defendants would include John Maxwell, 59, who was the company's chief executive officer, and Maxwell's brother William, 52, a lawyer who did extensive work for the company.
William Maxwell is charged with taking $3.5 million in legal fees for little work and passing $1.5 million on to Scarfo and Pelullo through consulting contracts.
Scarfo and Pelullo were charged with using their ties to the Lucchese crime family to force their way into FirstPlus in 2007 and of resorting to intimidation to advance their scheme.
They are also tied to what McCarthy's lawyer described as an "arsenal of weapons" that has nothing to do with the charges McCarthy and several other defendants face.
During a series of raids in May 2008, the FBI found three handguns, two rifles, a shotgun, and more than 2,500 rounds of ammunition on the yacht, two handguns in Pelullo's home, and another handgun in Scarfo's home.
As convicted felons, Pelullo and Scarfo are prohibited from having guns or ammunition.
McCarthy's lawyer also argued that if all the defendants were tried at the same time, the trial would last "many, many months" and the jury would be hard-pressed to distinguish among the multiple charges and the layers of evidence.
"A monster trial such as this would create an exceedingly high danger that [McCarthy], a defendant more on the periphery of this case . . . will be crushed beneath the weight of the government's case against other defendants named in more counts and charged in more conspiracies," he argued.
Evidence includes "8,500 recorded conversations, one million hard-copy documents, and tens of millions of electronic files," according to the severance motion.
The trial is expected to take four to six months.
Other defendants who have asked for severance include David Adler, 64, a New York lawyer who handled SEC filings for FirstPlus; Howard Drossner, 50, an Ambler accountant who handled financial records; William Handley, 61, described as a "long-time friend" of Pelullo's who became chief financial officer of FirstPlus after the alleged secret takeover; Donald Manno, 65, Scarfo's long-time Cherry Hill defense attorney; and John Parisi, 50, Scarfo's cousin, who authorities allege managed one of the New Jersey straw companies Scarfo and Pelullo set up to loot FirstPlus. In his severance motion, Drossner's lawyer argued that "sensational and inflammatory allegations" about the mob would deny him a fair trial.
Scarfo and Pelullo are the only defendants being held without bail.
Other defendants include Scarfo's wife, Lisa Murray-Scarfo, 32, who is charged with bank fraud in connection with what authorities allege was a scheme by Scarfo to illegally obtain a $500,000 mortgage on a $715,000 house in Egg Harbor Township, Atlantic County.
The Scarfos gave up that house shortly after they and the other defendants were arrested in November. Murray-Scarfo and Todd Stark, 43, were the only defendants not charged with racketeering conspiracy.
Stark, of Ocean City, pleaded guilty to a weapons offense last month and awaits sentencing.
He faces a guideline range of 12 to 18 months, according to his lawyer. Scarfo and Pelullo face the stiffest potential sentences if convicted. Both are looking at 30 years to life.



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