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

Wednesday, July 29, 2015

Scarfo Jr gets 30 years in prison for hostile corporate takeover

It was a hostile takeover with mob overtones.

And in federal court today, the son of a reputed Philadelphia-area crime family boss was sentenced to 30 years in prison for his role in a scheme to take control of a publicly traded mortgage company and loot $12 million from shareholders.

Nicodemo Scarfo Jr., 50, of Galloway—son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo—was convicted in July 2014 on more than 20 counts of mail, bank and wire fraud and racketeering conspiracy in connection with a white-collar scheme to loot Texas-based First Plus Financial.

The shakedown, said authorities, allowed Scarfo and associate Salvatore Pelullo to buy weapons, ammunition, a Bentley, an airplane, a house, expensive jewelry and a $850,000 yacht named "Priceless."

Federal prosecutors had charged Scarfo along with 12 others of using threats of violence to take over the board of the company, and then forced it buy shell companies they owned so they could plunder its assets.

"Scarfo and his crew gave new meaning to the term 'corporate takeover,' pushing out the legitimate leadership of a publicly traded company and then looting it," said U.S. Attorney Paul Fishman. "They used false SEC filings, phony consulting agreements and more traditional mob methods to steal $12 million from the company's shareholders. That's a risk that investors should never have to take."

U.S. Attorney Paul Fishman in 2011 announcing the arrests of Scarfo and others in the mob takeover of FirstPlus Financial Group.

Five other defendants—Cory Leshner, Howard Drossner, John Parisi, Todd Stark and Scarfo's wife, Lisa Murray-Scarfo—have pleaded pleaded guilty to various charges related to their roles in the conspiracy.

Scarfo's father was also named as a co-conspirator, but not brought to trial.

According to court filings, board members of FirstPlus were told by Scarfo and Pelullo to "shut up and step aside."

The scheme began in April 2007, when prosecutors said Scarfo, Pelullo and others targeted FirstPlus Financial Group, pushing out FPFG's management and board of directors. They brought in William Maxell, 56, of Houston, a Texas attorney who was designated "special counsel," and his brother, John Maxwell, 63, of Dallas, who became the new CEO.

"If you ever rat, your wives will be [expletive] ... and your kids will be sold off as prostitutes," Pelullo allegedly told one board member after the takeover, according to the indictment. He told another, according to authorities: "Don't [expletive] with me."

The company is now defunct.

During the months-long trial in Camden, defense attorneys argued that FirstPlus went under because of the poor economy, and argued that the government invoked that shadow of Scarfo's family and his mob ties to make him and the others look guilty.

In the sentence handed down by U.S. District Judge Robert B. Kugler, Scarfo was also ordered to forfeit his interest in certain properties and to pay $14 million in restitution.

The Maxwell brothers, along with Pelullo were convicted as well in the case and are scheduled to be sentenced later this week.

Scarfo, meanwhile, still faces trial in an unrelated gambling case. He was among 34 Lucchese members and associates charged in 2010 by the state Attorney General with allegedly running the crime family's underground sports gambling operation involving billions of dollars in illegal wagers.



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