Decided to start a new thread on the Scarfo Jr - Pelullo fraud trial.

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Wednesday, January 29, 2014


Anastasia Wants To Get Off The Witness List


By Ralph Cipriano
for Bigtrial.net

George Anastasia would prefer to cover Salvatore Pelullo's fraud trial as a reporter, rather than having to testify as a witness in the case.

Pelullo's lawyer, however, has placed the veteran crime reporter on a potential witness list. And because potential witnesses are barred from being in the courtroom, Anastasia has been prevented from reporting on the United States of America v. Salvatore L. Pelullo et al.

Today, however, a lawyer for Anastasia filed a motion for a protective order, seeking to knock the reporter off the witness list. A hearing is scheduled for 4:30 p.m. tomorrow in Camden before U.S. District Court Judge Robert Kugler.

"J. Michael Farrrell, defense counsel for defendant Salvatore Pelullo, has listed award-winning reporter George Anastasia as a potential witness for the defense for the apparent purpose of preventing Mr. Anastasia from lawfully reporting about this trial," wrote Maxwell S. Kennerly of The Beasley Firm in a 10-page motion filed today.

"Any information that Mr. Anastasia possesses is the result of his news gathering activities," Kennerly wrote. "Mr. Anastasia does not possess any first-hand knowledge relevant to this case; he merely reported about the ongoing developments in articles that he penned for The Philadelphia Inquirer from the time search warrants were executed in the spring of 2008 until he left the paper in October 2012 ... Since leaving The Inquirer, Mr. Anastasia has been reporting on criminal trials on the website bigtrial.net."


"It's an important first-amendment issue," Anastasia said. "Anybody could manipulate the system by doing this. You could keep a reporter from covering a story if you didn't want him to cover it. All you have to is put him on the witness list."


Pelullo, an Elkins Park businessman, is one of seven defendants in the federal fraud case being tried at the Camden County Courthouse. The most notorious defendant is mobster Nicodemo S. Scarfo, the son of jailed former Philadelphia mob boss Nicodemo "Little Nicky" Scarfo.

The government alleges that Scarfo and Pelullo orchestrated the systematic looting of a Texas-based mortgage company, FirstPlus Financial, by secretly taking control of the board of directors in June 2007. Over the next 10 months, authorities allege, Scarfo and Pelullo helped themselves to $12 million. The money was spent to purchase luxury items such as an $800,000 yacht named "Priceless," a $200,000 Bentley, and a $200,000 downpayment on a $700,000 home in Egg Harbor Township.


In a previous big trial story, Anastasia laid out his differences with Pelullo and his lawyer:


On a personal note, I may not be able to cover the rest of the FirstPlus trial because Salvatore Pelullo has listed me as a potential witness and witnesses are not permitted in the courtroom during testimony ...

Pelullo's second attorney, J. Michael Farrell, would not say why I might be called and said he was reluctant to discuss the issue with me because I might tell the prosecution. In a brief discussion during the morning break, Farrell would offer not further explanation. I have never discussed the case with Pelullo's lawyers and am hard pressed to understand why I would be called as a witness ...

I told him, 'You don't want me on the stand.' He called that a `threat' and said I would remain on the list.

Everything I know about this case has appeared in stories that I wrote for The Philadelphia Inquirer from the time search warrants were executed in the spring of 2008 until I left the paper in October 2012. I have probably written more about the alleged scam than anyone else.

But what I could provide as a witness for the defense is baffling ...

In his motion, Kennerly said the courts are usually protective of a reporter's First Amendment rights.

"Both this Court and the Third Circuit Court of Appeals have firmly held that news reporters enjoy under the First Amendment a qualified privilege for news gathering activities," Kennerly wrote. It's a "privilege premised on the principle that compelled production 'can constitute a significant intrusion into the news gathering and editorial processes' and 'may substantially undercut the public policy favoring the free flow of information to the public.'"

"Aditonally, New Jersey statutory law expressly confers a privilege on any person engaging in news gathering activities," Kennerly wrote. "George Anastasia is considered a news reporter as defined by New Jersey statutory law and any information that he possesses is subject to this reporter's privilege."

To overcome a reporter's qualified privilege, Kennerly writes, Pelullo's lawyer has to demonstrate that he tried to get this information from other sources, that the information is only available through the journalist and his sources, and finally, that the information sought is crucial to the case.

"Since defendants have failed to show that any testimony they expect Mr. Anastasia to provide meets any of the criteria necessary to overcome his newsperson's privilege, he must be removed from the witness list," Kennerly concluded.


http://www.bigtrial.net/2014/01/anastasia-wants-to-get-off-witness-list.html

Do you know what Scafo's defense will be?? He seems pretty screwed with his hand in the cookie jar...

He seems pretty screwed to me too...and he still has that other trial in NJ with the Lucchese's to deal with.

Theres been pretty much no coverage of the Scarfo/Pelullo fraud trial in Camden. I'm not sure what the status of it is. Is the trial under way? Or are they just ruling on different motions now? Anyone know?

I think the trial in Camden started according to this report:

http://articles.philly.com/2014-01-10/news/46033765_1_pelullo-and-scarfo-nicodemo-scarfo-jr-jurors

But I may be wrong I'm just a watcher on anything in the north, only know what I've read (which makes me pretty useless lol)

I remember reading that article but then...nothing. All coverage stopped. George Anastasia isn't the only crime reporter in town...you would think someone would cover the damn trial.

It's on-going on bloomberg, mostly figuring out what can be admitted as evidence and motions about who can testify at this point.

George A's motion is here:
http://www.filedropper.com/usavscarfoetal866

Thanks Nicky.

G-carlo the main ones have started like stated above .The rest of them don't start till april...

Judge rules longtime Philadelphia mob reporter can cover Scarfo Jr trial


A veteran reporter who has covered organized crime in Philadelphia and South Jersey for more than 40 years will be permitted to watch a white-collar mob trial, despite his name appearing on the witness list, a judge ruled Thursday.

George Anastasia, who wrote for the Inquirer until October 2012, was put on the defense's witness list in State vs. Scarfo et al, a federal case alleging reputed mobster Nicodemo Scarfo (son of jailed Philadelphia mob boss Nicky Scarfo Jr.) and an associate, Salvatore Pelullo, along with several attorneys, orchestrated a massive racketeering scheme netting them millions.

Anastasia had planned to report on the case for BigTrial.net but has been blocked from entering the courtroom since the beginning of the month because his name was on the potential witness list. The defense had requested that potential witnesses be sequestered.

On Thursday, Judge Robert Kugler granted a motion to end Anastasia's sequestration.

"Frankly, I'm not convinced at all that Mr. Anastasia has any admissible evidence," Kugler said.

In 40 years, Anastasia said, he's never been put on a witness list.

"It's a First Amendment issue; it sets a precedent," Anastasia said. "It could mean for any trial, an attorney or a defendant knows a reporter who, for whatever reason, they don't want to report on a case, they can just put them on the witness list."

The case charges Scarfo, Pelullo and lawyers Gary McCarthy, David Adler, Donald Manno, and John and William Maxwell in a 25-count indictment alleging that they defrauded shareholders of the Texas-based FirstPlus financial mortgage company out of $12 million.

Defense attorneys have argued that the company was ill-fated from the start and there was no financial impropriety. They also say references to the mafia are a distraction technique used by the government.

Pelullo's attorney J. Michael Farrell said he wanted Anastasia to testify that he never linked Pelullo to organized crime in a published article until the indictment in the FirstPlus case came out.

Farrell, whose voice rose to a shout at some points during his motion, said such testimony would help refute the government's claim that Pelullo was a mob associate.

"The fact that he did not (mention him prior to 2006) makes the fact that he is not an associate more likely," Farrell said.

"How do you know any of that?" Kulger asked. "How do you know that Mr. Anastasia has never before received information linking your client to organized crime?"

"I'll take that risk," Farrell said.

"You're not going to get to take that risk," Kulger said.

Anastasia's attorney, Maxwell Kennerly, said a database search of articles could easily produce the same information Farrell was seeking and was not grounds for Anastasia's testimony.

"Any information that Mr. Anastasia possesses is the result of his news-gathering activities," Kennerly said, adding that he would likely oppose any subpoenas under First Amendment privilege rights granted to journalists.

Courts have long upheld a reporter's right to cover legal proceedings, and in New Jersey, shield laws protect journalists from revealing confidential sources.

The trial, which is expected to last up to three months, is in its fourth week.

On Thursday, David Roberts, who worked with Pellulo to acquire FirstPlus, testified about how Pelullo, in conjunction with attorney William Maxwell, sent threatening letters to board members asking them to step down.

The initial strategy was to purchase enough stock to acquire the bankrupt company, Roberts said, but when the group couldn't come up with the money, Pelullo and others turned to threats and blackmail.

The letters, drafted four days before the takeover in June 2007, included allegations of sexual assault, financial impropriety, and threats of calling federal authorities to report them.

At a celebratory dinner after the old board had been dismantled and a new one taken the helm, Roberts - who was made a new board member - said Pelullo took him outside and told him, "I just made you a millionaire."

Roberts said that a few weeks later, Pelullo's tone changed dramatically when he threatened him, as well as John and William Maxwell, also defendants in the case.

"He said that if we ever rat, our wives will be (expletive) by (expletive), and our children will be sold off as prostitutes," Roberts said.

For Roberts, who thoughts went to his daughters, who were 3 and 5 at the time, it was a jarring statement.

"I was upset and terrified but my decisions were, I was following whatever needed to be done" for the company, he said.

http://www.philly.com/philly/news/new_je...QzwRL6BS1MDP.99

Nicky has the other trial with the Lucchese gambling ring coming up too, right? 2014 isn't gonna be a good year for Jr...

To me that's the biggest nail in the coffin. If any juror has kids and thinks "Hey they could have threatened me like that too" then these guys are royally screwed.

They already are (screwed) I don't see them getting off easy on this. I wonder what his mob lawyer donald manno is gonna get or might even decided to cooperate during the length of the trial I don't think a defense attorney wants to do hard time.

I haven't seen all of the evidence against him but I think that he has a better chance of getting off than Scarfo or Pelullo have. If he cooperated it would KILL his practice. He would lose all status that he has.

Snakes, the gambling trial is a NJ trial rather than a fed trial, making it a nightmare to actually look up. My guess is you actually would have to got to the courhouse to get anything interesting.


As for the fed trial, this might be interesting to some of you:
http://www.docdroid.net/8q3r/usa-v-scarfo-et-al-docket-no-.pdf.html

Tons of conversations between Nick Jr and Nick Sr.

Excellent...thanks Nicky.

Ahhh, thanks a lot for this, Nick.

It's a 7 Volume series of probable cause affidavits, search warrants, FBI reports. Pretty cool. I'm not a criminal lawyer, but the amount of transcripts from wired lines in this case is pretty remarkable. And juries much prefer those wires to convicted felon rats.

Great find Nicky. After reading it I am wondering who CS#1 is. I'm going to read through it again, does anyone have any ideas?

This is a real crime worth taking a shot at. Fuck bangin around south philly for a few bucks. Unfortunately the Feds got em dead to rights. Little Nicky thanks for posting that link.

Interesting that Scarfo went to Joey Chang Jr to try to recruit him. Isnt Joey Chang in pretty bad shape? I didn't realize he was even capable of getting back into the life?

TUESDAY, FEBRUARY 11, 2014

Jurors Hear Of Serenade For A Takeover
By George Anastasia
For Bigtrial.net

It was mood music for a corporate takeover.

A few hours after a rowdy shareholders meeting formalized what federal authorities allege was Salvatore Pelullo's secret takeover of FirstPlus Financial, Pelullo hosted a celebratory dinner for company officers and members of the board of directors at a posh steakhouse in Dallas.

As he sat at the head of a long table in a private dining room at DelFrisco's on that night in October 2007, a violinist serenaded Pelullo repeatedly with the same song, said Robert O'Neal, then chairman of the board and president of FirstPlus.

O'Neal, testifying for the prosecution at the racketeering trial of Pelullo, mobster Nicodemo S. Scarfo and five other defendants, said the song was all too familiar and somewhat ominous.

"It was the theme from The Godfather," he said in response to a question from Assistant U.S. Attorney Adam Small.

O'Neal was the second FirstPlus official to take the stand in the now month-old trial. Among other things, he told the jury that his signature had been forged on at least two company documents authorizing the $1.8 million purchase of a financial company.

That purchase was one a several gambits the government alleges Pelullo and Scarfo orchestrated after taking behind the scenes control of FirstPlus in June 2007. The racketeering indictment alleges that Scarfo and Pelullo siphoned $12 million out of the struggling, Texas-based mortgage company, using the funds to support high flying lifestyles that included expensive cars, lavish homes and a yacht they christened "Priceless."

Scarfo, 47, has been identified as a member of the Lucchese crime family in North Jersey. He is the son of jailed Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo. Pelullo, 45, of Elkins Park, has been identified as a mob associate.


O'Neal, a chiropractor from Beaumont, Tx., said he was brought into FirstPlus by William Maxwell, an attorney and friend who had been named special counsel to FirstPlus. Maxwell's brother John was the CEO of the company. The Maxwell brothers are co-defendants in the case along with three other attorneys, including Donald Manno of Cherry Hill, Scarfo's longtime defense attorney.

O'Neal is expected back on the stand when the trial resumes Thursday. Court is in recess tomorrow.

Earlier today David Roberts, another former FirstPlus official, completed his fourth day on the witness stand. Roberts testified that he was threatened by Pelullo and that while Pelullo was listed only as a "consultant," he was in fact the person running the company.

"What was said was what was done," Roberts said of Pelullo.

Roberts said Pelullo used fear and intimidation, including allusions to his mob connections, to bully him and others in the company. In earlier testimony, he told the jury that shortly after taking control of FirstPlus Pelullo warned Roberts and the Maxwell brothers that if they ever cooperated with the government, "our wives would be raped by ni**ers and his children would be sold as prostitutes."

Roberts, who said he had two daughters aged three and five, said he was frightened by the threat and decided, "I wasn't going to be a problem. I was going to do what I had to do."

During cross-examination, defense attorneys hammered away at Roberts' credibility and motives for cooperating, pointing out among other things, that he had lied on his resume -- Roberts conceded that he had "embellished" -- and that he borrowed $38,000 from Pelullo even while claiming he feared him.

Roberts served as secretary of the company and was a member of the board of directors from the summer of 2007 until early in 2008. He was also vice president of a FirstPlus subsidiary. He said he earned an annual salary of $150,000.

The FBI first questions him in September 2008, he said, about six months after his job had been terminated. He said he wasn't surprised to get a visit from federal investigators because he had had concerns about the way FirstPlus was operating.

"From the inside it did not look like what I envisioned a public company would look like," he said.

O'Neal told a similar story about the way FirstPlus was run. He said he was brought into the company by William Maxwell and introduced to Pelullo as a "consultant." He said he was unaware that Pelullo had two prior convictions for fraud, facts that would have impacted his decision to get involved.

He said William Maxwell later boasted about criminal appeal work he was going to do for "Little Nicky" who he later learned was jailed Philadelphia mob boss Nicodemo D. Scarfo. The elder Scarfo has been jailed since 1988 on racketeering and murder charges for which he was sentenced to 55 years in prison.

Testimony and evidence introduced at the trial has records of Pelullo and the younger Scarfo visiting the mob boss in prison in Atlanta and taped phone conversations from prison in which Scarfo and his son discuss what the government alleges was the FirstPlus takeover.

O'Neal said he twice traveled to the Philadelphia - South Jersey area with William Maxwell. On both
occasions, he said, they met with Sal Pelullo and on one occasion they went to an Italian restaurant where he was introduced to the younger Scarfo.

Maxwell, he said, pointed to Scarfo who was standing in front of the restaurant and said, "He's the man. He's the money." O'Neal said he assumed Scarfo was "the Godfather."

O'Neal said after he became president of FirstPlus he was "very concerned about the leadership of the company." He said William Maxwell assured him that Pelullo would not be involved in the operations, but O'Neal said that assurance was hollow and that Pelullo remained very active in the decision making process. O'Neal said he opted to resign early in 2008, claiming he did not have the time to commit to the job as president.

In fact, he said, he lied about why he wanted to step down. His real reason, he said, was his concern about organized crime.

"I didn't want to make anyone mad," he said. "I just wanted to get out."

On cross-examination by Scarfo's lawyer, Michael Riley, O'Neal admitted that anything he knew about the Mafia came from movies and news reports. He said he had had very little contact with Italian-Americans in Texas.

Throughout the trial, the defense has hammered away at two themes -- FirstPlus was a failing company that floundered not because of fraudulent business deals, but because of its weak financial position; and the introduction of the spectre of organized crime into the case is an attempt by the government to sensationalize and hype an otherwise complicated and boring story of a financial collapse.

Returning to the dinner at DelFrisco's and The Godfather music, Riley asked O'Neal if it would be unusual to hear Mexican music being played in a Mexican restaurant. He also asked him if his perceptions of Pelullo and Scarfo weren't clouded by "the stereotype that Italian-Americans" from the northeast part of the United States were Mafia.

Isn't that the same, Riley asked, as northerners who believe everyone from Texas "wears a cowboy hat, drives a pickup truck and has cows."

O'Neal said it wasn't just The Godfather theme, but "the way it was done."

"He was playing it directly to Mr. Pelullo," said O'Neal, adding that the violinist played the theme three or four times in succession. He also said John Maxwell's two sons, one in high school and the other in college, acted as "body guards" for Pelullo, accompanying him whenever he got up from the table.

Riley asked incredulously if O'Neal wanted the jury to believe that "two boys, one in college and the other in high school" where providing security for a Mafia figure? O'Neal struggled with the answer, but said that's what he seemed like to him.

While not part of today's testimony, other government documents and records indicate that the October 2007 shareholder's meeting was the focal point of the takeover of FirstPlus. The government alleges that Pelullo threatened officials to get shareholder votes in line and used intimidation to thwart a rival group of shareholders who opposed the new board of directors that the government said Pelullo had put in place.

The dinner at DelFrisco's was to celebrate the victory, but O'Neal said he was taken aback as were other company officials who attended.

As a final question, Riley asked O'Neal, "Do you wear a cowboy hat, drive a pickup truck and have cows?"

"Two out of three," said the witness.

George Anastasia can be contacted at George@bigtrial.net.

Read more at http://www.bigtrial.net/2014/02/jurors-hear-of-serenade-for-takeover.html#r9MKXhHXfbUKmF8M.99

Thanks Del...about time we got an update on this trial. I was wondering what the hell was going on with it.

Thanks buddy.

This pelullo seems like a major jagoff.

Tuesday, February 25, 2014


Scarfo Family's Troubled History Now Part Of FirstPlus Trial


By George Anastasia
For Bigtrial.net

He was nearly killed in one of the most infamous gangland shootings in the violent history of the Philadelphia mob.

His older brother has changed his name to get out from under the family stigma.

A younger brother tried to commit suicide for the same reason and has been comatose for 25 years.

That's part of the depressing personal history of Nicodemo S. Scarfo, a story that has made its way into testimony in the now seven-week old racketeering and fraud trial playing out in federal district court in Camden.

Scarfo, 47, is the lead defendant in the case. He and Salvatore Pelullo, a 45-year-old Mafia wannabe, are charged with orchestrating the secret takeover of a Texas mortgage company in 2007 and then ripping it off to the tune of $12 million.

But folded into the testimony about corporate structure, SEC filings and lawyerly dull diligence, the anonymously chosen jury panel of 18 (six are alternates) has also been getting a primer of the turbulent history of the local mob.

Scarfo and his jailed father, Nicodemo D. "Little Nicky" Scarfo, are at the center of that story.

"You're aware, aren't you, that he was shot in 1989 and almost killed?" Scarfo's lawyer, Michael Riley, asked his client's probation officer, Sharon O'Brien as she testified earlier today.

O'Brien, who is due back on the stand when the trial resumes tomorrow, said she was. One can assume the jury is also aware since this was not the first time Riley has mentioned the Halloween night shooting at Dante&Luigi's Restaurant that left the younger Scarfo with six bullet holes in his body.

Both the defense and the prosecution have used elements of the bloody Scarfo family saga to underscore their positions in the trial.

Riley has masterfully laid out the defense claim that prosecutors have used the spectre of organized crime to sensationalize and prop up fraud allegations that have little, if any, foundation. He has also told the jury that his client has been targeted by law enforcement -- often unjustly -- for most of his adult life because he shares the same name with his infamous father.

Little Nicky Scarfo is considered one of the most violent mob bosses in the history of the American Mafia and has been described by some prosecutors as a "psychopath" with a disturbing penchant for violence.

Prosecutors have painted Scarfo and Pelullo as corporate gangsters who used strong arm Mafia tactics, including threats of violence, to take over FirstPlus Financial and then, in a classic mob play, bust the joint out.

Ironically, it is Pelullo, on secretly recorded conversations picked up on FBI wiretaps, who has made most of those threats and who has talked like a B-movie bad guy. Scarfo's story, however, is the wheel around which the mob allegations spin.

It could be months before the jury is asked to sort it all out. Scarfo and Pelullo, both convicted felons, could face prison sentences of 30 years or more if convicted. Five other defendants, including four attorneys and the former CEO of FirstPlus are also on trial.

Scarfo's father, Little Nicky, and Lucchese crime family boss Vittorio "Vic" Amuso have been identified as unindicted co-conspirators in the case. Testimony and evidence has included details of visits Scarfo and Pelullo made to a federal prison in Atlanta where Scarfo was serving a 55-year term on racketeering and murder charges.

The elder Scarfo, 84, has a parole date of 2033, meaning he will probably die in jail. From testimony and evidence offered by the prosecution, he has been portrayed as a sounding board and cheerleader for what authorities say was the plan to takeover and loot FirstPlus.

He also warned his son about problems in the New Jersey underworld, describing several key members of the Lucchese family with whom the young Scarfo was associated as "rats" who should be avoided.

A letter Scarfo wrote to his son from prison in January 2008 -- about the same time the FirstPlus scam was unfolding according to authorities -- was introduced as evidence earlier in the trial. Attached to the letter, according to testimony, were court documents related to a wiretap affidavit and transcript from a 1999 federal investigation of organized crime figures.

The targets of that probe apparently included brothers Michael and Martin Taccetta and several members of the Perna family, fathers and sons, all of whom were members or associates of the Lucchese organization.

"My dear Son," Scarfo wrote, "hold on to these 39 pages for the future. Review them. Tacettas and Pernas are rats and the younger ones are glorified rats by proxy. And who knows how far they will go in the future. As far as I'm concerned, they're all lying rats.
"Love, Dad xxoo"

"Hardly a Hallmark card, is it," Riley quipped when cross-examining a federal prison official about the letter.

Donald Manno, a former Scarfo lawyer who is a co-defendant in the case, described the note as an attempt "by an old man" to "protect his son as best he could." Manno, who is representing himself, asked the same prison official the question that Riley posed to the probation officer today.

"You're aware that the son was shot seven timse, almost killed, by enemies of the father...you're aware of that?" Manno asked.

There has been no detailed explanation of what led Scarfo to make the allegation about the Taccettas and Pernas. The Taccetta brothers have been jailed on federal racketeering charges and on murder charges tied to a state case in Toms River involving the bludgeoning death of a video poker machine operator with golf clubs.

Martin Taccetta, released from prison a few years ago, is under indictment in Morris County in a pending state racketeering gambling case that includes 30 other mob members and associates, including the younger Scarfo and four members of the Perna family.

Michael Taccetta is due to be released from federal custody shortly.

One underworld source, while not discounting the possibility that some of those individuals mentioned by Scarfo may be cooperating, added that Scarfo, in jail since 1987, "is delusional. He thinks everybody's a rat."

The letter and bits and pieces of the overlapping mob connections are part of the intriguing back story that the jury in the FirstPlus case has been hearing. The jury also was shown a letter from the elder Scarfo to Pelullo and one from Amuso to the younger Scarfo congratulating him on being remarried.

Scarfo's marital problems were also part of the testimony today. He divorced his first wife in February 2007 and married his current wife on Valentine's Day of that year. His wife, Lisa Murray-Scarfo, was indicted in the FirstPlus case and has pleaded guilty to a mortgage fraud charge linked to the couple's purchase of a $715,000 home in Egg Harbor Township.

The down payment for that home came from money siphoned out of FirstPlus, authorities allege, and the mortgage itself was arranged through companies the government has linked to the scam.

O'Brien, the probation officer, was asked about two of those companies today, Global Net and Learned Associates and Scarfo's ties to them. O'Brien said she never determined exactly what the relationship was, but said her office was aware of the ongoing FBI investigation into FirstPlus and did not want to jeopardize it by raising questions with Scarfo.

Evidence introduced at the trial indicates that at the time Scarfo completed his three years of probation under O'Brien's supervision in March 2007 he was being paid $33,000-a-month as a consultant for Seven Hills Management, a Pelullo-backed company that authorities allege was also part of the scam. Scarfo also told O'Brien that he was about to begin working a second job for William Maxwell, a Texas lawyer whose brother John was the CEO of FirstPlus.

William Maxwell was special counsel to FirstPlus at the time. The Maxwell brothers are co-defendants in the ongoing trial. A letter from Maxwell indicated that he was going to pay Scarfo $150,000-a-year to develop business contacts and identify companies that could be purchased in New Jersey. The job also included a car, cell phone and business expenses.

"An opportunity like this is one I can build a tremendous career on," Scarfo said in a note to O'Brien about the job offer. The government alleges the salary from Maxwell and the consulting fee from Seven Hills were part of the scam and ways to funnel money from FirstPlus to Scarfo.

O'Brien said that Scarfo never fully disclosed his finances to the probation department, as he was required to do under the terms of his supervised release. She also said he lied to her by denying he had had contact with convicted felons and organized crime figures, two other prohibitions.

Personal details of Scarfo's life were also part of her testimony. She told the jury that before moving, Scarfo was living in Ventnor with his first wife, his daughter, his mother and his (comatose) brother.

Later, after divorcing and remarrying, she said Scarfo made a point of asking her to come and see his new baby. His second wife gave birth of a baby boy a few months after they were married on Valentine's Day 2007, she said.

O'Brien said Scarfo proudly told her he had named the enfant "Nicodemo Scarfo 3d."


http://www.bigtrial.net/2014/02/scarfo-familys-troubled-history-now.html

Aren't they both currently locked up in state prisons?

Yea they are both locked up in state prison. One is due to be released soon but this is obviously bad reporting.

I expected better from GA.

CAMDEN Defense attorneys in a federal racketeering case against reputed mobsters Wednesday attacked the prosecution's theory, using the testimony of a key government witness who offered insight into the alleged fraudulent takeover of a financial services company.


Cory Leshner, the witness who pleaded guilty in September for his role in the takeover of Texas-based FirstPlus Financial Group, testified in U.S. District Court in Camden that alleged mob associate Salvatore Pelullo launched several business ventures five months before Pelullo knew the financial services firm existed.

Pelullo's attorney said that contradicted the government's theory that Pelullo created the companies with the intent of taking over FirstPlus and defrauding its investors.

Prosecutors say Pelullo, along with reputed mobster Nicodemo Scarfo Jr. and others, acquired the entities in 2007 as part of a scheme to defraud FirstPlus' investors and loot the publicly traded company of millions of dollars.


Prosecutors describe 47-year-old Pelullo - a top associate to Scarfo, son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo - as the de facto chief executive of FirstPlus.

In a 25-count indictment handed down in October 2011, prosecutors said Leshner worked for Scarfo and Pelullo and was responsible for day-to-day tasks at FirstPlus, including managing bank and credit accounts to conceal the source of money pilfered by the mob.

Pelullo's attorney, Michael Farrell, told jurors Wednesday that Leshner took a plea deal of five years in prison so he could avoid the 100 years laid out in the indictment.

Leshner, 30, a Pennsylvania lawyer with a wife and child, said the prospect of less jail time "played a role in my decision, but was not a primary factor."

Rather, Leshner said, "my conscience had caught up with me."

He said he used to be close with Pelullo, though. "I thought of Mr. Pelullo as a father figure," Leshner said, "and he thought of me as a son."

He added: "I was proud being with Sal. He made me feel good about myself. He's a vivacious guy. He makes you believe what he's saying, makes you believe you're a part of it."

The trial, which began in January, is scheduled to continue Thursday.



aseidman@phillynews.com

856-779-3846 @AndrewSeidman

Saturday, March 8, 2014

Defendant Jailed For Contempt In Fraud Case
By George Anastasia
For Bigtrial.net

The judge didn't think it was funny.

But apparently some of the defendants did.

As a result, one of them has ended up in jail. John Maxwell, the former CEO of FirstPlus Financial and a defendant in an ongoing racketeering fraud trial, was cited for contempt of court, had his bail revoked and was carted off to the Federal Detention Center in Philadelphia Thursday. He's been a "guest" at the federal facility ever since, joining co-defendants Nicodemo S. Scarfo and Salvatore Pelullo who have been denied bail and have been jailed since their arrests in November 2011.

Maxwell was apparently laughing during the cross-examination of Cory Leshner, a former top business associate of Pelullo's who has emerged as a key prosecution witness in the now two-month old trial. Leshner will be back on the stand when the trial resumes Monday.

Maxwell will be back at the defense table along with Scarfo, Pelullo and four other co-defendants, including Maxwell's brother William, a lawyer who was special counsel to FirstPlus while the alleged $12 million fraud took place. The other four defendants are free on bail.

Whether Judge Robert Kugler lifts the contempt order and reinstates bail for John Maxwell is an open question. Maxwell's court-appointed lawyer, Mark Catanzaro said he plans to ask Kugler to reconsider. Catanzaro said his client was "in shock" when Kugler lowered the boom.
The judge, however, said he was tired to warning the defendants about their comportment during the trial.

In a one-page contempt order filed Thursday, Kugler wrote that "Defendant, despite numerous warnings, caused an audible outburst in the court in the presence of the jury. No lesser sanction than revocation of bail would be sufficient to prevent further violations of the court's order. Defendant is in contempt of court."

The latest dustup occurred Thursday afternoon shortly before the trial recessed for the week. (There have been no Friday trial sessions.). Leshner was being cross-examined by Michael Riley, Scarfo's attorney, who had asked a series of questions about Pelullo and his split personality. Pelullo has been described as full of bravado and arrogance, but also as someone who could be kind and generous.

The trial includes several references to Pelullo making threats and Riley was asking about one in which Pelullo allegedly threatened to choke someone. Leshner said he had heard Pelullo make those kinds of comments, but had never seen him actually assault anyone. It was during that question-and-answer examination that several co-defendants apparently broke out laughing, according to a transcript of the court session that day.

With that, Kugler ordered the jurors to leave the courtroom. When they had been removed, he looked over at the defense table and asked, "Would you like to spend the next few nights in jail gentlemen because you think it's that funny?"

Since Scarfo and Pelullo are already in jail, the question was obviously addressed to some of the other defendants. Catanzaro said his client was not the only defendant laughing, but was apparently the one that Kugler saw.

While it sounds like something out of a Junior High School home room, the consequence were more severe than after school detention.

"How many more warnings is it going to take to get your attention that I'm not going to put up with this nonsense?" Kugler asked.

On Feb. 26, shortly after Leshner took the stand for the first time, Kugler issued a similar warning to Pelullo who was apparently smirking and laughing as Leshner described how Pelullo had introduced him to Scarfo at a barbecue in Ventnor on Memorial Day in 2006.

Based on the transcript, it's impossible to tell what brought on the laughter. Leshner had told the jury that Pelullo introduced Scarfo as "Nick Promo." Later, Leshner said, he learned Scarfo's real identify. Again, Kugler abruptly ordered the jurors to leave the courtroom.

Then he lit into Pelullo, asking him, "You want to keep laughing, Mr. Pelullo? You think this is funny?"

Kugler said he had warned Pelullo during pre-trial hearings and at the start of the trial that boisterous behavior would not be tolerated. He said Pelullo's conduct, "laughing out loud" at the witness "so that everybody could hear him" was not acceptable. He noted that Pelullo is already in jail and, since his attorney is court-appointed, apparently has no money. A fine, the judge said, would not have any impact.

The only recourse, he said, was to ban him from the courtroom. Presumably Pelullo would follow the proceedings from a closed circuit TV monitor in another room were that to happen.

It didn't come to that, however. After a five-minute recess, one of Pelullo's two court-appointed attorneys, Michael Farrell, apologized for his client, telling the judge there was no "malice" in his actions.

Kugler sounded less than satisfied, but relented on punishing the defendant.

"Mr. Pelullo, if you can't control yourself we have people who will," the judge said. "I will tolerate not another sound out of you...You will be barred and that will be it."

Pelullo then told the judge, "I apologize your honor...Thank you, your honor."

Described as a brash and arrogant businessman prior to his arrest, Pelullo didn't change after he was jailed. He has had a rocky relationship with the judge from the start. Among other things, he has chided Kugler on blog postings from prison, questioning his integrity and honesty, challenging the order that he be held without bail and implying that the judge is a second prosecutor in the case.

Kugler is a no-nonsense jurist who has handled some of the toughest and more complicated cases to come through the federal courthouse in Camden. Among others, he presided over the Fort Dix Five terrorism trial, a marathon proceeding that attracted national attention. Several of the court-appointed attorneys in the FirstPlus case, including Riley, Michael Huff, who represents William Maxwell, and Troy Archie, another Pelullo lawyer, were court-appointed defense attorneys in that proceeding as well.

Leshner's lawyer, Rocco Cipparone Jr., was also in the Fort Dix case.

John Maxwell may have paid a price for the actions of several defendants that brought Kugler to the boiling point.

"I don't think Mr. Maxwell was the only one," Catanzaro said while asking Kugler to reconsider his contempt order and the revocation of bail. But the judge would not budge. And, he added, "a similar fate awaits other people who violate my orders."

George Anastasia can be contacted at George@bigtrial.net.

Leshner's lawyer Rocco is a great lawyer and good guy. It's funny how they mention him at the end as representing the Fort Dix guys. When I went to my first consultation with him I asked who his most notable client was and he said he represented some of the Fort Dix guys. I was like "didn't they get life?" Lol, he was like no "life plus thirty years" , hahaha alright sign me right up guy! He did an amazing job though worth every dollar.

Saturday, March 8, 2014


Bentley, A Yacht And Piles of Cash; A Key Witness Describes The Lavish Lifestyle Of Salvatore Pelullo

By George Anastasia
For Bigtrial.net

He's been on the witness stand for a week and during that time he's offered the jury a behind-the-scenes look at what authorities allege was the $12 million ripoff of FirstPlus Financial.

He's admitted to falsifying records, padding expense accounts and "moving money around" to make it appear as if it came from or was going to legitimate business deals.

He sailed on the $850,000 yacht that was bought with cash from the scam, he said. He arranged some of the paperwork for the purchase of a $217,000 Bentley Continental GT that also figures in the fraud. He fabricated records to make a $40,000 trip to Europe appear like a business expense. And he set up "sideways accounts" that allowed his boss to funnel money to two mistresses.

Those were just some of the things that he saw and did while working for Salvatore Pelullo before, during and after the takeover of FirstPlus, a troubled Texas-based mortgage company, said Cory Leshner, who described himself as Pelullo's "personal assistant."

"I thought of Mr. Pelullo as a father figure," Leshner told the jury. "And he thought of me as a son." And that, he said at another point, "made me feel proud...I was willing to do whatever he asked."



Salvatore Pelullo with Nicodemo "Little Nicky" Scarfo

Leshner, who has pleaded guilty to a conspiracy charge and faces up to five years in prison, is due
back on the stand when the trial resumes tomorrow.

Dressed in a suit and tie, his voice clear, his comments concise, the burly 31-year-old first took the stand on Feb. 26 and quickly emerged as a key witness in the now two-month-old trial; the first "insider" to provide details about what the FBI and federal prosecutors allege was a blatant money grab orchestrated by Pelullo, 46, and Nicodemo S. Scarfo, 48, the son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo.

The two are charged with secretly taking control of FirstPlus Financial in June of 2007 and siphoning $12 million out of the company to support their lavish lifestyles.

Leshner told the jury he landed a part-time job with a Pelullo company while still an undergraduate at West Chester University (where, ironically, he would earn a degree in criminal justice). He went to work fulltime for the Elkins Park wheeler dealer after graduating in 2006. One of 13 defendants originally indicted in the case, he pleaded guilty last year and agreed to cooperate. Five other defendants, including Scarfo's wife Lisa Murray-Scarfo, also have pleaded guilty but have not become witnesses for the government.

In addition to Pelullo and Scarfo, the defendants on trial include John Maxwell, the former CEO of First Plus, Maxwell's brother, William, who was special counsel to the company, and three other lawyers, David Adler, Gary McCarthy and Donald Manno.

From the witness stand, Leshner has fleshed out the allegations contained in a 107-page, 24-count indictment handed up in November 2011. The indictment capped a five-year federal investigation. The government alleges that in the summer of 2007 Pelullo and Scarfo orchestrated the takeover of FirstPlus Financial, a foundering Texas-based mortgage company, and exercised behind-the-scenes control, setting up business deals from which they reaped staggering benefits.

By October of that year, Leshner told the jury, they had gotten $7 million out of the company. Most of the money came from the purchase -- at grossly inflated and overvalued prices -- of companies that Pelullo and Scarfo had set up in the Philadelphia and South Jersey area and through "consulting fees" paid to Pelullo and Scarfo through front companies they secretly controlled.

He said that while there was paperwork and a labyrinth of companies through which the cash sometimes traveled, the marching orders were simple. "It was," he said, "how much money can we get to Mr. Pelullo and how fast."

Leshner said he was first introduced to Scarfo at a barbecue on Memorial Day 2006 in Ventnor. At the time, he said Pelullo introduced him as "Nick Promo." Leshner said he quickly learned who Scarfo really was and knew of his mob connections.

"I grew up in the Philadelphia area," he said.

He also told the jury that most of his dealings were with Pelullo who, through evidence and testimony, has been portrayed as more of a gangster than Scarfo. Brash, arrogant and quick to threaten and intimidate, Pelullo is the one whose wiretapped rants have provided the government with the foundation for many of its allegations.

Leshner said he saw a different side of Pelullo at first, describing him as a hard charging and determined businessman who rightly boasted of having become a millionaire in his mid 20s without having a high school degree. Scarfo, on the other hand, fit the image of a "computer nerd" that others have also applied to him.

Leshner told the jury that the money taken out of FirstPlus was used to finance Pelullo's lavish lifestyle, a lifestyle, he said, that Pelullo was already living before the move on the Texas mortgage company.

But, he added, "it became more lavish after June 2007."

Leshner said his father went to work for Pelullo around 2005 when Pelullo owned a company that cleaned and maintained buildings. Leshner said he was hired while still in college and that he rose from being a laborer and gofer to personal assistant and, eventually, the vice president of Seven Hills Management, one of the Pelullo companies tied to the FirstPlus fraud.

One of his first jobs after graduating from West Chester in December 2006, he said, was to maintain Pelullo's condo in Miami and to serve as a gofer and assistant there. The jury saw photos of the condo which overlooked a marina. There was a pool table in one room, art work on most of the walls and rooms decorated with thick, rich furniture and brassy chandeliers. There also was a Ferrari parked in the condo garage, he said.

Pelullo, according to Leshner, moved between Philadelphia, Miami and Dallas once the FirstPlus scheme was launched. Originally, he said, Pelullo thought he could finance the takeover through the



purchase of company stock, but when that proved impossible -- there was a "poison pill" provision in the company by-laws that would thwart any hostile takeover, Leshner said Pelullo told him -- the plan changed to getting control of the board of directors.

By June 2007, Leshner said, Pelullo and Scarfo had behind-the-scenes control of the board and the money started to flow out to them. Evidence introduced earlier in the trial also indicates that both Pelullo and Scarfo communicated by telephone with jailed mob boss "Little Nicky" Scarfo and visited him in a federal prison in Atlanta where he is serving a 55-year sentence for racketeering and murder.

Scarfo, 84, and Vittorio "Vic" Amuso, 80, the boss of the Lucchese crime family, were inmates together in Atlanta. Both are named as unindicted co-conspirators in the FirstPlus fraud indictment.

The layered scheming that Leshner described involved, among other things, a $100,000-a-month consulting contract for Seven Hills that was arranged by William Maxwell, then special counsel to FirstPlus. Leshner said Pelullo frequently referred to himself as "the consultant" and frankly admitted that while he was calling the shots, he could never appear as an officer or a member of the board of directors of FirstPlus because he had two prior fraud convictions.

Seven Hills in turn arranged to funnel $33,000-a-monthy to Learned Associates, a Scarfo front, Leshner said. He said he did not know of any consulting work Scarfo did and said that Pelullo, rather than consulting, was actually running FirstPlus.

Leshner's testimony also focused on the lifestyles that the money bought.


"Trips to Europe, dinners, casinos, just kind of whatever he wanted to do, he did" on the FirstPlus dime, Leshner said of Pelullo.

Pelullo bought a Bentley, he said, at F.C. Kerbeck in Palmyra, and drove it to a Fourth of July party in Ventnor. He then had the car, a black, 2006 Continental GT model, shipped to Florida. On another occasion, he said, Pelullo showed up one day and told him, "I'm buying a boat."



It turned out to be an 83-foot pleasure yacht named "Priceless." While arranging a loan proved impossible, Leshner said, the purchase was eventually negotiated for cash that came from FirstPlus. The boat cost $850,000. With taxes, the total was $901,125, he added.

The listed owner was P.S. Charters and while their names never showed up on any documents, the yacht belonged to Pelullo and Scarfo, he said.

Leshner was on board for the maiden voyage that in retrospect might have been an omen of what was to come. He said he, Pelullo and William Maxwell, along with their girlfriends and two other FirstPlus employees, Cole Maxwell, the 20-something son of John Maxwell, and Todd Stark, described as head of security and entertainment for Pelullo, were on board for what was to be a six-hour cruise from Miami to the Bahamas.

But one of the yacht's two engines blew out and 21 hours later the yacht limped into port in Nassau with its electricity malfunctioning and its plumbing not working. The group, with the exception of Cole Maxwell who didn't have his passport and had to stay on the boat, spent several nights at the Atlantis Hotel -- the bill was $12,300, Leshner said -- then flew back to Miami. Maxwell stayed till the boat was repaired and sailed back with the yacht's captain.

One thing the younger Maxwell did bring along, said Leshner, was an arsenal of weapons. One of the charges in the indictment focuses on the possession of guns by Scarfo and Pelullo, both convicted felons who are prohibited from owning firearms.

Shortly before they set sail from Miami, Leshner testified, Cole Maxwell showed up with a "bag of guns." Later, Leshner said, he was with Pelullo in Pelullo's master bedroom on the yacht as he sorted out the weaponry and gave a gun to each man on board.

The indictment lists the arsenal which included two rifles, a 12-gauge shotgun, a Sig Sauer 9mm pistol, a Taurus .38 caliber revolver, a Taurus .22 caliber pistol, approximately 2,500 rounds of ammunition for the rifles and seventeen additional boxes of bullets.

While the guns were never fired, Leshner said it was all hands -- armed -- on deck as the yacht struggled through open waters with a dead engine and another boat approaching. Leshner offered no further details, but another source familiar with the incident said Pelullo and the others feared pirates
and believed their show of force scared off a possible intruder that night.

Leshner also described how he doctored expense account items so that a trip to Europe taken by Pelullo could be paid for through his FirstPlus consulting arrangement. The sham, he said, was that Pelullo was researching possible investment opportunities in the cosmetics trade.

"I researched on line different places in the areas which Sal visited and said that he was there to research cosmetics at these different places," Leshner explained.

When Assistant U.S. Attorney Steven D'Aguanno, the lead prosecutor in the case, asked if Pelullo in fact that been to any of those locations, Leshner said, "No." When he was asked who told him to come up with the false information, Leshner replied, "Sal."

Pelullo was nearly cited for contempt while laughing at Leshner when he first took the stand on Feb. 26 and John Maxwell was, in fact, cited and jailed for laughing at Leshner on March 6 (see earlier FirstPlus story posted March 8).

Leshner also said that on Pelullo's orders he set up "sideways accounts" through which thousands of dollars in cash were funneled to two women, identified as Cajmoun and Nadjmer. The women, one whom worked in the FirstPlus office in Irving, Tx, were Pelullo's mistresses, Leshner said. Pelullo later divorced his wife and married Nadjmer, who was also known as Sabrina, he added.

The relationships were rocky, he told the jury.

"Mr. Pelullo would often get fed up with the two of them for any number of reasons and would break if off with them only to start it back up soon thereafter," he said.

Scarfo also had a direct line into the FirstPlus cash stream, Leshner told the jury. He said Scarfo leased an Audi S6 for $1,200-a-month as a company expense. And Pelullo and others helped arrange the down payment and mortgage for a $715,000 home Scarfo and his second wife purchased in Egg Harbor Township after the FirstPlus takeover.

Leshner attended law school at night while working for FirstPlus and continued after the FirstPlus financial bubble burst following a raid by the FBI in May 2008 that targeted dozens of locations and individuals. When the FBI came to his door, Leshner said, "I was scared to death...I was deathly afraid."

But he said that for the next five years, through the indictment and up until the eve of the trial, he espoused the same "party line" that Pelullo and his co-defendants are basing their defense on: the collapse of FirstPlus was simply a business deal gone bad and the money spent buying companies and paying for consulting fees were legitimate expenses that were part of a failed venture.

Leshner said he earned his law degree from Widener University Law School and passed the bar in Pennsylvania. His law career was short lived, however. He voluntarily agreed to be disbarred after cutting his deal with the government and pleading guilty last year. Under the terms of that plea agreement, he said, he faces five years in prison, substantially less, the defense has pointed out, than the 20 years he was facing if convicted at trial.

During cross-examination, Michael Farrell, the more boisterous of Pelullo's two court-appointed defense attorneys, hammered away at Leshner's motivation and credibility. He alleged that Leshner and his girlfriend, who subsequently became his wife, falsified information on a mortgage application for a home in Reading in 2007.

Wasn't that the same thing Leshner was accusing Pelullo and Scarfo of doing, Farrell asked?

Farrell also repeatedly asked Leshner about his reasons for joining the prosecution "team" and adopting the government's "party line," implying that Leshner was saying whatever the government wanted to hear in order to live up to a plea deal he negotiated to cut his own criminal liability.

"I didn't join anybody's team," Leshner said, adding, "I couldn't deal with the party line of Mr. Pelullo. My conscience caught up to me."

Married and with a young daughter, Leshner said he expects to be sentenced to jail.

"I pleaded guilty because I am guilty," he said in response to a question from D'Aguanno. "I couldn't keep up the explanation and the party line that I had been fed from the time I worked for Mr. Pelullo...I'm going to have to look my daughter in the eye and explain to her that when you do something wrong you stand up and face the consequences and you learn from it."

http://www.bigtrial.net/2014/03/a-bentley-yacht-and-piles-of-cash-key.html#more

nice pic of scarfo, probably one of the most recent pics of him out there.

These guys were really eating good compared to.a lot of these city guys.

these guys are gone for life

I think with the sentencing guide lines they cant get more then 15yrs. shit what Martha stewart did was probably 100 times worse. I think scarfo beats acouple of charges if I was a juror I would be snoozing threw a lot of this. I don't even know why they bring up lcn or mafia when these trials happen all the time around the usa. scarfo did good to insulate himself from thee witnesses using his causin pelluo as the bag man his screwed. but really with them opening shell companies in philly and south jersey you think the philly mob would want to know what the hells up they had to see or here about them rolling in Bentleys and shit. there was one article were scarfo told pelluo to be carfefull parting in philly cause they didn't recognize him, I think that means they had no respect for him or his boss scarfo.

What is Pelullo's record? Scarfo Jr is a convicted felon several times over and is looking at more then 15 years with his priors.

Yea right are you kidding? Maybe 10-15 years but that's definitely not life when your 46 years old

Actually, they are both facing 30 to life. Not saying they will get that but who knows…..

I know that Pelullo's relatives were with the Philly family. This has got to be his father or Uncle (there are three Pelullos brothers: Leonard, Peter, and Arthur). I guess the apple doesn't fall far from the tree.

http://articles.philly.com/1996-11-09/ne...eonetti-pension

we'll see what happens...would you agree 30 or more is life?

Not to mention scarfo jr has another trial hanging over his head. Hes done.

The guy said Pelullo was a gangster and Scarfo Jr was a computer nerd lol. No wonder the Lucchese guys in Jersey don't respect Jr.

Cheech and delacroce you're right, my mistake, well see what happens

My take on that would be that Scarfo is a gangster and pellulo is the nerd.

If these guys weren't as stupid as they sound they would have hid a majority of the money. A Bently and a 850K Yacht isn't exactly "low key"

If anyone is interested in how they come up with the sentences:
http://www.ussc.gov/Guidelines/2013_Guidelines/Manual_PDF/index.cfm



Scaro's charges are:
1 NICODEMO S. SCARFO Pending 18:1962(d) RICO CONSPIRACY (1)
1 NICODEMO S. SCARFO Pending 18:371 SECURITIES FRAUD CONSPIRACY (2)
1 NICODEMO S. SCARFO Pending 18:1349 WIRE FRAUD CONSPIRACY (3)
1 NICODEMO S. SCARFO Pending 18:1343 WIRE FRAUD (Consulting and Legal Services Payments) (4-16)
1 NICODEMO S. SCARFO Pending 18:1343 WIRE FRAUD (Acquisition Payments) (17-19)
1 NICODEMO S. SCARFO Pending 18:1956(h) CONSPIRACY TO COMMIT MONEY LAUNDERING (20)
1 NICODEMO S. SCARFO Pending 18:1349 CONSPIRACY TO COMMIT BANK FRAUD (21)
1 NICODEMO S. SCARFO Pending 18:371 CONSPIRACY TO MAKE FALSE STATEMENTS IN CONNECTION WITH LOAN APPLICATION (22)
1 NICODEMO S. SCARFO Pending 18:1512(k) CONSPIRACY TO OBSTRUCT JUSTICE (23)
1 NICODEMO S. SCARFO Pending 18:371 CONSPIRACY TO SELL OR TRANSFER FIREARM AND AMMUNITION TO A PROHIBITED PERSON, OR POSSESS A FIREARM BY A CONVICTED FELON (24)
1 NICODEMO S. SCARFO Pending 18:922(g)(1) FELON IN POSSESSION OF A FIREARM (25)

I remember reading when they raided scarfos house the found a gun or 2 ain't Noway around beating that for such a smart guy he should have had his wife her firearm permit that's auto 10 for him maybe the judge runs stuff concurrent. Can't blame him with the philly papers saying he gonna make a move to take over philly you need guns bet that was never the case bet he just wanted to pouch some of his dads old guys into the luchess and grab south jersey cause when he was capo of the jersey crew went they all based like 2 3 hours north of a.c.

It is bad" and anyone i talk to they are so worried" that someone has a wire ,or they are with Philly or with NY it is crazy.

I was speaking to someone out side there house and they had there head on a swivel" It is partly true what is being put out there no one is saying it but they are acting it.

I am not saying that it is as bad as the news is putting out there but the usual suspect's are not acting normal...

serp I like reading your post but I don't don't know what the hell your getting at. you know nj, and my question is scarfo jr is down near a.c. and he was capo of the jersey crew for alittle while. what I read about the luchese jersey crew (pernas and taccesttas) is there all around the suburbs of Newark isn't that like a 2 hour drive down or up to scarfo area. I think he was trying to make the crew expend all over the state north and south and that's why uncle joe had the sitdown with the gambinos. and how about all scarfo sending his son all the federal paperwork on the pernas and taccetas calling them rats he really puts his kid in a bad spot. now the jersey luchese hate him and no one really knows if the philly guys like him or not. always thought it was kinda cheap of joe merlino to shoot him, he wasn't even a made guy. it was his father who demoted his dad. I bet crea had to put a new capo over the jersey guys cause theres a lot of them and there all under indictments still.

I was talking about the guys that hang with him on and off, they are walking on egg shells cos of that stuff.I can talk around it but cant say it,I know u know what i mean.But i don't know if it is as bad as the news is saying cos no one will speak....

Yes he was taken down u know this and there is a recording of the young Pernas saying stuff.Don't know if it what the r saing he was put down for,or did Crea get wind of it and crush it all and lil Vick, all cos what may or may not have been about to happen. Don't know just talk ,but is sure is sounding that way now..
I said it last year but i did not know it was that bad.

Pmac :we know he was a big big earner why just out of the blue would anyone push that away and knock him down . things that make you think, had to be a bigger reason then what was herd on tape.

Serp what are you saying man, like if you had to sum it up into cliff notes?

No clue what he is saying. It's like trying to read backwards

Okay I am going to take a shot in the dark here, but I think what he is trying to say is that Nicky Jr. must have gotten his stripes pulled for more reasons, other than what was heard on the Perna tapes. I think he means that with all the money Scarfo Jr. was making you would think they would have let him stay on as capo.

Maybe it was because Scarfo Sr, Scarfo Jr, and Vic Amuso were not sharing any of the money being brought in from FirstPlus with the rest of the family? I do not know this is just what my understanding of what serpiente is saying. I am probably wrong but who knows.

It is widely know Steve Crea hates Scarfo Jr, realizes that he is a shit-can scion that was made for purely political reasons. Vic liked both scarfos but wanted to kill his best earner (steve). Then again we all know how Vic's reign ended. I'm sure to some extent being a amuso loyalist doesn't help his cause.

These sort of trials are not good for a family that Crea has kept relatively stable and out of the headlines for extented period.

Thanks LittleNicky that makes sense. If Steven Crea hated Scarfo Jr. why in the world would he keep him on as a capo. Scarfo Jr. is lucky its not 20-30 years ago. He probably would have been killed. As Chin gigante said, we do not break our captains, we kill them.

On another note in Scarfo Jr's trial, you would have thought that a guy that is clearly not a complete dummy like Scarfo Jr. would known better than to spend all that money. I mean Scarfo Jr. knows the Feds have always had a hard on for him and his father. If he had not made the large purchases, then I am not sure the Feds would have had much of a case against him (at least it would have been harder to prove). Scarfo Jr. and his cheerleader Pellulo will be lucky to ever get out of prison if they get convicted

Former CEO: Scarfo group made false accusations to seize firm

March 27, 2014 7:00 PM

CAMDEN In more than three hours of testimony spread over two days, the former chief executive of a mortgage company said that a group allegedly led by reputed mobsters made false accusations to seize control of his firm.


Dan Phillips, 64, was CEO of Texas-based FirstPlus Financial Group until 2007, when he and the company's board of directors relinquished control to an investment group.

That group, prosecutors said, was made up of lawyers and other individuals working under the direction of Nicodemo Scarfo Jr., son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo, and alleged mob associate Salvatore Pelullo.

The two men allegedly made millions through the company unlawfully, spending the money on luxury cars and a yacht, among other things, prosecutors said.

Pelullo devised the plan, with a man named William Maxwell, to take over FirstPlus, prosecutors said.

The plan called for making false allegations and threatening a lawsuit against a board member of FirstPlus, forcing that person to use his influence and persuade the board to give up control of the company, prosecutors said.

Prosecutors cited a letter Wednesday as evidence of such allegations.

The letter was allegedly written by Jack Draper, who at one point worked with Phillips at the company. The letter accused Phillips of using the company as his "personal checkbook."

Phillips, who denied the allegation, said he believed someone other than Draper wrote the letter. That someone, Phillips alleged to jurors, was Maxwell, who authorities said was working with Pelullo and Scarfo to take over the company.

Maxwell's brother, John, became CEO of the company after the takeover, prosecutors say.

Draper "just wasn't capable of drafting a letter like this," Phillips said, citing the detail.

Phillips also recalled one of the first times he met Pelullo, to whom he was introduced by one of the Maxwell brothers, he said.

Phillips, in court, said that Pelullo accused him of being "asleep at the wheel" and told him that the takeover of FirstPlus would not be happening if Phillips was on top of things.

Phillips said that he eventually talked to company board members and that they decided to give up control of the company.

On Thursday, defense attorneys questioned the stability of FirstPlus before that moment, pointing to Phillips' affairs with coworkers as a sign of its fragility.

Mark Catanzaro, the attorney for John Maxwell, named two of the three women with whom Phillips admitted having affairs. "The third one, you can't even remember her name, correct?" Catanzaro said.

Phillips said he could not.

"Is that your idea of a professional atmosphere?" Catanzaro asked.

After being ordered by the judge to answer, Phillips replied, "It's not professional, no."

Michael Farrell, the attorney for Pelullo, repeatedly asked Phillips whether he was physically harmed by Pelullo. Each time, Phillips replied, "No."

The trial began in January and is expected to last at least through April.


Read more at http://www.philly.com/philly/news/local/...sSJUj7AqbxxL.99

At Scarfo trial, each side invokes mob to press its case

Julia Terruso, Inquirer Staff Writer

CAMDEN - The meeting at a North Jersey bar was convened to set things straight. Contrary to rumors bouncing around the Philadelphia-New Jersey mob world, Pete "The Crumb" Caprio did not have a hit out on Nicodemo S. Scarfo, son of the jailed, infamous mob boss.

"If it was so, I said youda been gone a long time ago," said Caprio to an associate in a secretly taped conversation of the meeting.

The February 2000 recording - by mob associate and government informant Philip "Philly Fay" Casale - was played for jurors and dissected by attorneys Thursday in Scarfo's FirstPlus mortgage fraud trial, well into its fourth month.

In the case, before U.S. District Judge Robert Kugler in Camden, Scarfo and an associate, Salvatore Pelullo, along with lawyers and corporate partners, are charged with taking over the Texas-based FirstPlus Financial mortgage company and looting its shareholders of $12 million.

On Thursday, as an expert on the mob testified, both the prosecution and the defense invoked organized crime allegations to support their positions, and a revelation emerged about the notorious Halloween attempt on Scarfo's life 20 years ago.

The defendants are charged with racketeering, extortion, fraud, money laundering and obstruction. Scarfo and Pelullo also face RICO charges for alleged mob ties and extortion.

The government says the FirstPlus shakedown was a mob enterprise led by Scarfo, who it says is a made member of the Lucchese crime family.

His attorney, Michael Riley, says the government is invoking Scarfo's incarcerated mobster father, Nicodemo "Little Nicky" Scarfo, to portray the son as more involved in organized crime than he was and to make a bad business deal seem illegal.

Riley said Thursday his client's family has been maligned for years because of the Scarfo name. One of his brothers changed his name and another tried to commit suicide, spent 25 years in a comatose state, and died last month.

On Thursday, jurors accustomed to hearing testimony about SEC filings and bank documents listened to FBI Special Agent Kenneth Terracciano give them a primer on mob structure and rules, and explain Scarfo's relationship to a cast of characters with nicknames such as "Joey electric" and "Beeps."

Terracciano, with crew-cut white hair and a slight North Jersey accent, said he had worked on organized crime for about 10 of his 19 years with the FBI.

Scarfo's father ran the Philadelphia mob from 1982 until he was convicted of racketeering and eight counts of murder in 1988. Trouble came to the younger Scarfo, Terracciano said, on Halloween 1989, when a masked gunman interrupted him at dinner at Dante & Luigi's in Philadelphia by shooting him eight times, nearly killing him.

The case has gone unsolved, but on the stand, Terracciano told jurors he believed the shooter was Joey Merlino, son of Salvatore "Chuckie" Merlino and the alleged current mob boss of Philadelphia.

Terracciano said "Chuckie" Merlino "had a beef" with the older Scarfo at the time, stemming from an internal struggle over control of the family.

Speculation has surrounded Joey Merlino - who denies involvement and has never been charged - but no one in authority had publicly pointed the finger at him until Thursday, Riley noted.

"You told this jury and everyone else that wants to listen for the first time since 1989 that Mr. Merlino shot Mr. Scarfo?" Riley pressed Terracciano.

"He gave his opinion, he said what he said," Judge Kugler interjected.

Following the attempt on his life, Scarfo moved to North Jersey where his father had set him up with the Newark crew of the Philadelphia Lucchese family for protection, Terracciano said. "He remained in Northern Jersey and ultimately became a member," he said.

Less than 10 years later, FBI agents warned Scarfo about threats to his life, this time from Peter Caprio, whom Terracciano described as a known killer and fellow member of the family.

On Feb. 18, 2000, Caprio and a wired Casale met at a diner before heading to the bar to see Scarfo. In the recording of their conversation, Caprio and Casale, along with others, are heard discussing how little they know about Scarfo, inquiring about his body type, age, line of work, and whether anyone had seen him since he was shot.

Riley highlighted the dialogue to distance Scarfo from the mobsters.

"These guys who worked with the father for many years and knew the father when he was running the streets for the family, don't have any idea who he (the younger Scarfo) is, what he looks like, what he does or how old he is," Riley said.

With the jury sent out, Assistant U.S. Attorney Steven D'Aguanno argued that one reason the younger Scarfo was not on the mobsters' radar could have been that he was in and out of prison in the 1990s on racketeering charges - something he said should be presented to the jury. He said Riley had opened up that time frame in question.

The six other defense attorneys, otherwise mostly silent, objected one by one, starting with Barry Gross, attorney for David Adler, a New York-based lawyer who is among the accused. Gross said allowing such testimony could taint the six defendants with no organized crime ties.

Ultimately the judge did not permit the testimony to be presented to the jurors.

Prison telephone records of conversations between the elder Scarfo and his son, played to the jury earlier in the trial, appeared to provide a stronger mob connection in the case:

"Honest to God we're a good six to ten months off from being able to help everybody," Scarfo tells his father, allegedly referring to crime associates, in a phone conversation from 2007.

In another jail conversation in 2007, following the dismantling of the former FirstPlus board of directors, Pelullo tells Scarfo's father, "We crushed them. . . . It was all upon your direction. . . . The only people that can (expletive) it up now is us."

Read more at ↓http://www.philly.com/philly/news/new_j ... SLsWtcQ.99

At Scarfo trial, each side invokes mob to press its case
CAMDEN - The meeting at a North Jersey bar was convened to set things straight. Contrary to rumors bouncing around the Philadelphia-New Jersey mob world, Pete "The Crumb" Caprio did not have a hit out on Nicodemo S. Scarfo, son of the jailed, infamous mob boss.

wow this is going into the 4 month of trial wat a snooz fest. all this mob talk and the case has nothing to do with the lcn except 1 made guy who never threaten anyone or beat anyone bet this case has a screwed up outcome. its in Camden federal court aint that like the poorest place around bet the judge hasn't seen a case that didn't involve crack murder dope slanging in yrs. probably goes easy on scarfo.

Here's the Latest:

Friday, April 18, 2014
Prosecutors and defense lawyers invoke the mafia during Scarfo trial


The meeting at a North Jersey bar was convened to set things straight. Contrary to rumors bouncing around the Philadelphia-New Jersey mob world, Pete "the Crumb" Caprio did not have a hit out on Nicodemo S. Scarfo, son of the jailed, infamous mob boss.

"If it was so, I said you would have been gone a long time ago," said Caprio to an associate in a secretly taped conversation of the meeting.

The February 2000 recording - by mob associate and government informant Philip "Philly Fay" Casale - was played for jurors and dissected by lawyers Thursday in Scarfo's FirstPlus mortgage fraud trial, well into its fourth month.

In the case, before U.S. District Judge Robert Kugler in Camden, Scarfo and an associate, Salvatore Pelullo, along with lawyers and corporate partners, are charged with taking over the Texas-based FirstPlus Financial mortgage company and looting its shareholders of $12 million.

On Thursday, as a prosecution expert on the mob testified, both the prosecution and the defense invoked organized crime allegations to support their positions, and a revelation emerged about the notorious Halloween attempt on Scarfo's life 20 years ago.

The defendants are charged with racketeering, extortion, fraud, money laundering, and obstruction. Scarfo and Pelullo also face RICO charges, accused of having alleged mob ties and of extortion.

The government says the FirstPlus shakedown was a mob enterprise led by Scarfo, who it says is a made member of the Lucchese crime family.

His lawyer, Michael Riley, says the government is invoking Scarfo's incarcerated mobster father, Nicodemo "Little Nicky" Scarfo, to portray the son as more involved in organized crime than he was and to make a bad business deal seem illegal.

Riley said Thursday that his client's family has been maligned for years because of the Scarfo name. One of his brothers changed his name and another tried to commit suicide.

On Thursday, jurors who had grown accustomed to hearing testimony about SEC filings and bank documents listened to FBI Special Agent Kenneth Terracciano give them a primer on mob structure and rules, and explain Scarfo's relationship to a cast of characters with nicknames such as "Joey Electric" and "Beeps."

Terracciano, with crew-cut white hair and a slight North Jersey accent, said he had worked on organized crime for about 10 of his 19 years with the FBI.

Scarfo's father ran the Philadelphia mob from 1982 until he was convicted of racketeering and eight counts of murder in 1988. Trouble came to the younger Scarfo, Terracciano said, on Halloween 1989, when a masked gunman interrupted him at dinner at Dante's & Luigi's in South Philadelphia and shot him eight times, nearly killing him.

The case has gone unsolved, but on the stand, Terracciano told jurors he believed the gunman was Joey Merlino, son of Salvatore "Chuckie" Merlino and the alleged current mob boss of Philadelphia.

Terracciano said Salvatore Merlino "had a beef" with the older Scarfo at the time, stemming from an internal struggle over control of the family.

Speculation has surrounded Joey Merlino - who denies involvement and has never been charged - but no one in authority had publicly pointed the finger at him until Thursday, Riley noted.

"You told this jury and everyone else that wants to listen for the first time since 1989 that Mr. Merlino shot Mr. Scarfo?" Riley pressed Terracciano.

"He gave his opinion, he said what he said," Kugler interjected.

Following the attempt on his life, Scarfo moved to North Jersey, where his father had set him up with the Newark crew of the Lucchese family for protection, Terracciano said. "He remained in Northern Jersey and ultimately became a member," he said.

Less than 10 years later, FBI agents warned Scarfo about threats to his life, this time from Peter Caprio, whom Terracciano described as a known killer and fellow member of the family.

On Feb. 18, 2000, Caprio and Casale, who was wearing a wire, met at a diner before heading to the bar to see Scarfo. In the recording of their conversation, Caprio and Casale, along with others, are heard discussing how little they know about Scarfo, inquiring about his body type, age, line of work, and whether anyone had seen him since he was shot.

Riley highlighted the dialogue to distance Scarfo from the mobsters.

"These guys, who worked with the father for many years and knew the father when he was running the streets for the family, don't have any idea who [the younger Scarfo] is, what he looks like, what he does or how old he is," Riley said.

With the jury sent out of the room, Assistant U.S. Attorney Steven D'Aguanno argued that one reason the younger Scarfo was not on the mobsters' radar could have been that he was in and out of prison in the 1990s on racketeering charges - something he said should be presented to the jury. He said Riley had opened up that time frame in question.

The six other defense lawyers, otherwise mostly silent, objected one by one, starting with Barry Gross, lawyer for David Adler, a New York-based lawyer who is among the accused. Gross said allowing such testimony could taint the six defendants with no organized crime ties.

Ultimately the judge did not permit the testimony to be presented to the jurors.

Prison telephone records of conversations between the elder Scarfo and his son, played to the jury earlier in the trial, appeared to provide a stronger mob connection in the case:

"Honest to God, we're a good six to 10 months off from being able to help everybody," Scarfo tells his father, allegedly referring to crime associates, in a phone conversation from 2007.

In another jail conversation in 2007, following the dismantling of the former FirstPlus board of directors, Pelullo tells Scarfo's father, "We crushed them. . . . It was all upon your direction. . . . The only people that can [obscenity] it up now is us."

http://www.fivefamiliesnyc.com/2014_04_01_archive.html

Lucchese associate asks for mistrial after being ejected from courtroom
A reputed Lucchese crime syndicate associate on Monday sought a mistrial in his prosecution for allegedly draining $12 million from a mortgage lender and forcing its bankruptcy, claiming a New Jersey federal judge infringed his rights and tainted the jury by ejecting him from court.

Salvatore Pelullo filed a motion on Monday asking the court to declare a mistrial in the prosecution of his alleged role in the extortionate takeover of FirstPlus Financial Group, a Texas mortgage lender. Pelullo has been unable to attend his own trial for a month, following an order from U.S. District Court Judge Robert B. Kugler barring Pelullo from the courtroom after he made several outbursts that may have been audible to the jury.

Pelullo said in his filing that by expelling him from the courtroom, Kugler violated his Fifth Amendment right to due process and Sixth Amendment right to be assisted by an attorney and tried by an impartial jury. The judge’s decision was unwarranted, according to the brief, because Pelullo’s “outbursts” were merely his attempts to confer with counsel and were not significantly disruptive to the proceedings.

“Although it is undisputed that Mr. Pelullo made a comment concerning government witness Ken Stein's veracity, it is equally undisputed that he made this comment in the course of conferring with counsel during the course of trial, a right guaranteed by the Sixth Amendment,” the brief said.

“In response to Ken Stein's testimony regarding the receipt of certain information, Mr. Pelullo informed his counsel that Mr. Stein was lying, which was information that counsel could only learn from Mr. Pelullo. In short, Mr. Pelullo was assisting his counsel in the precise manner that a defendant is supposed to do during the course of a trial.”

Pelullo also pushed back against federal prosecutors’ claim that his comments were audible to the jury. According to the brief, Pelullo’s remarks were not audible to Kugler or the court reporter, and are inaudible on an audio recording of the proceedings.

The brief also said jurors have seen Pelullo in his prison clothes, prejudicing them against him and precluding a fair, impartial trial.

Oral argument has been requested, but is not yet scheduled, according to court filings.

Kugler banished Pelullo from the courtroom last month after Pelullo said, “That’s a lie,” as Stein, a government witness, testified. According to court filings, Assistant U.S. Attorney Steven D’Aguanno alerted the court that he heard the comment and said he saw a juror look in Pelullo’s direction after the comment was made. Three U.S. Marshals later reported to the court having heard the same comment.

Pelullo had already been warned about his outbursts following another incident in late February, in which Pelullo laughed loudly while another witness testified. Kugler warned Pelullo that he would be booted from the courtroom if there were further incidents.

J. Michael Farrell and Troy A. Archie, Pelullo’s attorneys, quickly filed a motion asking Kugler to allow their client back in to the courtroom, arguing that removing Pelullo from court for the remainder of his trial violates his constitutional rights, and effectively punishes him for suffering from bipolar disorder, which is to blame for Pelullo’s outbursts. The attorneys also assured the court that Pelullo would curtail his behavior going forward, but Kugler denied the motion.

Pelullo’s attorneys did not immediately respond to requests for comment on Wednesday.

According to an October 2011 indictment, Pelullo worked with fellow reputed Lucchese family member Nicodemo Scarfo to seize control of Beaumont, Texas-based FirstPlus by intimidating its board of directors into approving new board members handpicked by and under the influence of Pelullo and Scarfo. Following the takeover, the board approved multimillion-dollar acquisitions of companies owned by Pelullo and Scarfo that were grossly overvalued and essentially worthless, authorities said.

FirstPlus investors meanwhile were in the dark about the company's financial situation, thanks to false and misleading U.S. Securities and Exchange Commission filings, prosecutors said. They had little indication anything was wrong until the company's announcement in June 2009 that it had initiated Chapter 11 proceedings in the Northern District of Texas.

Pelullo faces 25 charges, including racketeering conspiracy, securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice.

Kugler denied a motion to dismiss the case late last month, ruling Pelullo and Scarfo failed to prove prosecutors withheld evidence that might have proved their innocence and violated the scope of warrants when they seized various electronic records during a May 2008 raid.

Pelullo is represented by J. Michael Farrell and Troy A. Archie.

The case is U.S. v. Scarfo et al., case number 1:11-cr-00740, in the U.S. District Court for the District of New Jersey.

http://www.law360.com/articles/528851/lucchese-associate-asks-for-mistrial-due-to-court-ejection

I wonder what Phil Leonetti is thinking of all of this. Being that his cousin never listened to him about getting out of the life.

first time I can ever think of a big trial with so called mob guys were the guy life is on the line from another room. sal must have made some points with the jury in the d.a.s eyes that they asked for him to be gone from the room I starting to think its gonna be a crazy tommy shots trial outcome. maybe scarfo walks ain't Camden like the blackest place in nj. maybe the jury isn't so favorable to the prosecutor s.

read gangland today some pretty cool pics of vic amuso and scarfo together. guess them to are real close. vic amuso rites to nicky jr nowonder all the luchese hate him. vic and scarfo don't look like they aged from 30yrs ago what a crazy couple.

wonder how he got the pics. theres a pic of scarfo with taccetta who he writes to his son him and his brother are rats and sends him 39 pages of paper work. if the paper work is true them guys are gonna be shelved. but some bogus paperwork got capo al Bruno whacked, the gov said they made a mistake. scarfos the man guys more costa nostra then sonny fran.

So True. Sonny Franz didn't appear to have a problem with someone taking his kid out. I think Scarfo would do the work on his own kid. LOL.

From Ed Scarpo's blog today-

Scarfo FirstPlus Co-Defendant Sought Mistrial, Was Denied

The most recent news available for the FirstPlus Financial bust-out, according to court records, is that U.S. District Judge Robert B. Kugler declined to dismiss a host of charges -- including racketeering conspiracy, securities fraud, wire fraud, mail fraud, bank fraud, extortion and money laundering -- against Nicodemo Scarfo and Salvatore Pelullo.

On April 22, Pelullo filed a motion asking the court to declare a mistrial in the prosecution of his alleged role in the extortionate takeover of FirstPlus Financial Group, a Texas mortgage lender. Pelullo has been unable to attend his own trial for a month, following an order from U.S. District Court Judge Robert B. Kugler barring Pelullo from the courtroom after he made several outbursts that may have been audible to the jury.

Pelullo said in his filing that by expelling him from the courtroom, Kugler violated his Fifth Amendment right to due process and Sixth Amendment right to be assisted by an attorney and tried by an impartial jury. The judge’s decision was unwarranted, according to the brief, because Pelullo’s “outbursts” were merely his attempts to confer with counsel and were not significantly disruptive to the proceedings.

“Although it is undisputed that Mr. Pelullo made a comment concerning government witness Ken Stein's veracity, it is equally undisputed that he made this comment in the course of conferring with counsel during the course of trial, a right guaranteed by the Sixth Amendment,” the brief said.

“In response to Ken Stein's testimony regarding the receipt of certain information, Mr. Pelullo informed his counsel that Mr. Stein was lying, which was information that counsel could only learn from Mr. Pelullo. In short, Mr. Pelullo was assisting his counsel in the precise manner that a defendant is supposed to do during the course of a trial.”

Pelullo also pushed back against federal prosecutors’ claim that his comments were audible to the jury. According to the brief, Pelullo’s remarks were not audible to Kugler or the court reporter, and are inaudible on an audio recording of the proceedings.

The brief also said jurors have seen Pelullo in his prison clothes, prejudicing them against him and precluding a fair, impartial trial.

Oral argument has been requested, but is not yet scheduled, according to court filings.

Kugler banished Pelullo from the courtroom last month after Pelullo said, “That’s a lie,” as Stein, a government witness, testified. According to court filings, Assistant U.S. Attorney Steven D’Aguanno alerted the court that he heard the comment and said he saw a juror look in Pelullo’s direction after the comment was made. Three U.S. Marshals later reported to the court having heard the same comment.

Pelullo had already been warned about his outbursts following another incident in late February, in which Pelullo laughed loudly while another witness testified. Kugler warned Pelullo that he would be booted from the courtroom if there were further incidents.

J. Michael Farrell and Troy A. Archie, Pelullo’s attorneys, quickly filed a motion asking Kugler to allow their client back in to the courtroom, arguing that removing Pelullo from court for the remainder of his trial violates his constitutional rights, and effectively punishes him for suffering from bipolar disorder, which is to blame for Pelullo’s outbursts. The attorneys also assured the court that Pelullo would curtail his behavior going forward, but Kugler denied the motion.

Pelullo’s attorneys did not immediately respond to requests for comment on Wednesday.

According to an October 2011 indictment, Pelullo worked with fellow reputed Lucchese family member Nicodemo Scarfo to seize control of Beaumont, Texas-based FirstPlus by intimidating its board of directors into approving new board members handpicked by and under the influence of Pelullo and Scarfo. Following the takeover, the board approved multimillion-dollar acquisitions of companies owned by Pelullo and Scarfo that were grossly overvalued and essentially worthless, authorities said.

FirstPlus investors meanwhile were in the dark about the company's financial situation, thanks to false and misleading U.S. Securities and Exchange Commission filings, prosecutors said. They had little indication anything was wrong until the company's announcement in June 2009 that it had initiated Chapter 11 proceedings in the Northern District of Texas.

Pelullo faces 25 charges, including racketeering conspiracy, securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice.

Kugler denied a motion to dismiss the case late last month, ruling Pelullo and Scarfo failed to prove prosecutors withheld evidence that might have proved their innocence and violated the scope of warrants when they seized various electronic records during a May 2008 raid.

Pelullo is represented by J. Michael Farrell and Troy A. Archie.

The case is U.S. v. Scarfo et al., case number 1:11-cr-00740, in the U.S. District Court for the District of New Jersey.

well we know by at least 2007(operation heat bust) scarfo jr. had been bumped down to soldier and replaced by ralph perna, and that was well before Crea had officially taken over the reigns from Amuso. that just goes to show the wanning influence Amuso had on the street years before he actually stepped aside.

TUESDAY, JUNE 3, 2014

Closing Arguments Due In FirstPlus Fraud Trial
By George Anastasia
For Bigtrial.net

Closing arguments are expected to begin tomorrow morning in the multi-million dollar fraud trial of mobster Nicodemo S. Scarfo, his business partner Salvatore Pelullo and five co-defendants.

Assistant U.S. Attorney Steven D'Aguanno is scheduled to address the jury after Judge Robert Kugler completes a lengthy explanation of the laws that apply in the case. Kugler began his jury charge today and spoke for about three hours. He will likely spend another hour before turning the case over to the prosecution for its final arguments.

The complicated case revolves around allegations that Scarfo, 48, and Pelullo, 46, secretly took control of FirstPlus Financial, a troubled Texas mortgage company, in 2007 and then systematically siphoned nearly $12 million from the firm throughout phony business deals and bogus consulting contracts.

The sixteen member jury panel (four are alternates) have heard nearly five months of testimony and have seen thousands of pieces of evidence that the prosecution says lays out the fraud in exacting detail. But the defense, in an argument that is expected to be repeated again and again during closings, has said that the government has overstated and sensationalized the evidence and that the failure of FirstPlus was a result of a poor economy, not fraud and criminality.

Scarfo's mob connections, he is the son of jailed Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo, added yet another twist to the story. The defense claims the spectre of organized crime was thrown into the case -- among the witnesses was a former FBI organized crime specialist -- in order to hype an otherwise drab business story built around tedious financial statements and laborious SEC filings.

But the prosecution has alleged -- and has used wiretapped conversations to support its contention -- that Pelullo and Scarfo used threats and intimidation to wrest control of FirstPlus in the summer of 2007. Pelullo, who was a behind-the-scenes consultant to FirstPlus, orchestrated the takeover, according to the government, and resorted to verbal threats to advance the scheme which included sitting a new board of directors in October 2007 that answered directly to Pelullo and Scarfo.

Pelullo has been described as a mob associate and a mob wannabe. He has two prior fraud convictions.

Scarfo, who has convictions for racketeering and gambling, was identified as a made member of the Luchese crime family and a one-time capo, or captain, in that organization. Testimony has also included details about an attempted mob hit on Halloween night in 1989 in which Scarfo was shot and nearly killed.

His lawyer, Michael Riley, has told the jury that his client has been targeted not for anything he has done, but for who he is. His name and his father's infamous reputation nearly got him killed, Riley said while implying that those same factors were key elements in the government's decision to charge him in the current case.

Also on trial are former FirstPlus CEO John Maxwell, Maxwell's brother William, a lawyer who worked for FirstPlus, and attorneys David Adler, Gary McCarthy and Donald Manno. Manno, who was Scarfo's criminal defense attorney for years, has represented himself during the trial.

The case, which began in January, has included testimony for several former company insiders, including Cory Leshner whose stint on the witness stand provided some of the most damaging testimony. Leshner is one of six co-defendants indicted along with Scarfo and the others who pleaded guilty. He is the only one to testify for the government. Scarfo's wife, Lisa Murray-Scarfo and his cousin, John Parisi, also entered guilty pleas. Leshner, Parisi and Murray-Scarfo have not been sentenced.

The evidence introduced during the trial broke the defense into three sections.

Scarfo, Pelullo and the Maxwell brothers were portrayed as the most actively involved in the systematic looting of the company. Much of the cash funneled as consulting fees to companies controlled by Scarfo and Pelullo went through William Maxwell, who was on a $300,000 monthly retainer to First Plus.

Two of the other lawyers, Adler and McCarthy, were tied to what the government alleges were failures to properly account for business dealings with the SEC or other government regulators. Manno was tied to fraud allegations centered primarily on an escrow account that the government alleges was set up to allow Scarfo and his wife to purchase a $715,000 home outside of Atlantic City.

The home was one of several lavish purchases allegedly financed with cash taken from FirstPlus. The government also alleged that Scarfo and Pelullo purchased an $850,000 yacht (named Priceless), a company jet and luxury automobiles. Pelullo spent $217,000 on a black, 2006 Bentley Continental GT, according to testimony. Scarfo leased an Audi S6 for $1,200-a-month on the company's dime, authorities allege.

The FirstPlus investigation became public in May 2008 when the FBI staged a series of coordinated raids in Philadelphia, South Jersey, Miami -- where Pelullo had a condo and where the yacht was docked -- and Irving, TX, where FirstPlus was based.

More than three years later, in November 2011, a federal grand jury in Camden handed up a 107-page, 24-count indictment outlining the charges in the case. Scarfo's 84-year-old father and another jailed mob leader, Vittorio "Vic" Amuso, 80, were named unindicted co-conspirators. Amuso was the boss of the Luchese crime family. He is serving a life sentence. The elder Scarfo is serving a 55-year term for murder and racketeering. His earliest release date, according to prison records, is 2033 when he will be 103 years old.

Kugler has dismissed a handful of counts during the course of the trial, but none of the major charges. The closing arguments are expected to last several days (the jury does not sit on Fridays). D'Aguanno's closing could run into Thursday. Scarfo's attorney is expected to offer the first defense closing, followed by lawyers for Pelullo, the Maxwell brothers, Adler, McCarthy and then Manno.

Under the rules of federal criminal trials, the prosecution will then get the last word, offering a rebuttal closing. Jury deliberations are expected to begin late next week at the earliest. Scarfo and Pelullo face the stiffest potential sentences, 30 years to life.

George Anastasia can be contacted at George@bigtrial.net.

Read more at http://www.bigtrial.net/2014/06/closing-arguments-due-in-firstplus.html#rA5rQEuRH7gj6djT.99

Best Friends Til The End! Besties Selfie hahah

Who was the Jersey capo before Scarfo? And WAS Scarfo the capo in charge of Ralph Perna?

Nice pic steve-o

Robert Caravaggio.

Bucky

saw this after, yup

Was Scarfo in charge of Perna before Perna got bumped up?

I would imagine so.

WEDNESDAY, JUNE 4, 2014

Layers Of An Onion Define Multi-Million Dollar FirstPlus Fraud
By George Anastasia
For Bigtrial.net

A federal prosecutor used mobster Nicodemo S. Scarfo's own words today to describe the alleged takeover and looting of a Texas-based mortgage company that is at the heart of what authorities charge was a $12 million scam orchestrated by Scarfo and his business partner Salvatore Pelullo.

"Layers upon layers, like an onion," Scarfo, 48, said in a secretly recorded telephone conversation with Pelullo, 46, that was picked up on an FBI wiretap back in 2007 as authorities contend the takeover of FirstPlus Financial was unfolding.

For nearly three hours today, Assistant U.S. Attorney Stephen D'Aguanno, the lead prosecutor, detailed the allegations in the racketeering conspiracy case against Scarfo, Pelullo and five co-defendants. D'Aguanno said underneath those layers of the onion -- false SEC filings, phony stockholder reports, bogus consulting contracts and fraudulent business purchases and expenses -- was the financial scam that poured millions into the pockets of the two lead defendants.

"They're joined at the hip, from their criminal activities to their alleged business activities," D'Aguanno said of Scarfo and Pelullo, who frequently referred to each other as cousins even though there was no blood relationship.

D'Aguanno called Pelullo the "de-facto" head of FirstPlus Financial. He said Pelullo "controlled" the company and that he "reported" to Scarfo. Both men had lucrative consulting contracts once they secretly took control of the company's board of directors in the summer of 2007, the prosecutor alleged.

Co-defendant William Maxwell, a lawyer on a retainer of $100,000-a-month to FirstPlus, helped set up those consulting agreements with Seven Hills Management, Pelullo's company, and Learned Associates, Scarfo's front, according to the prosecution.

Pelullo had a contract similar to Maxwell's that paid him $100,000-a-month. Scarfo's contract called for $33,000-a-month. He later had another contract with Maxwell for $150,000-a-year, the prosecutor said.

None of those deals were ever disclosed in SEC filings or reported to company shareholders, said D'Aguanno who then asked the jury a question that he repeated again and again - "Why?"

The answer, he said, was because the deals were part of a massive fraud set up by Scarfo and Pelullo, both of whom had criminal records that would have had to have been disclosed had their names been listed on company filings.

Pelullo has two prior fraud convictions and was cited in the past for lying to the SEC, D'Aguanno said. Scarfo has two prior convictions linked to organized crime gambling and racketeering cases.

D'Aguanno is expected to continue his closing argument when the trial resumes tomorrow. He will then be followed by the seven defense attorneys who will also address the jury. First up is Michael Farrell, one of two court-appointed attorneys representing Pelullo. Farrell, a high energy litigator with a loud and aggressive courtroom style, is expected to take three or four hours to present his closing.

With no court on Friday, the other closings will likely resume on Monday and last most of the week before jury deliberations can begin.

The defense, as it has throughout the five-month old trial, is expected to argue that the failures of FirstPlus were not caused by fraud, but by a poor economy. Defense attorneys have also argued that the government has interjected the presence of organized crime in the case to sensationalize what would otherwise be mundane financial charges that have little basis in fact. They also have contended that any chance FirstPlus had of succeeding ended when the FBI staged a series of raids in May 2008, seizing company records and assets.

D'Aguanno told the jury that the criminal enterprise at the heart of the FirstPlus fraud was not the mob, but the Scarfo-Pelullo organization. He said, however, that both men used the reputation of organized crime to bolster the threats and extortion that allowed them to take over the company in the summer of 2007.

Scarfo's father, jailed Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo, and Vittorio "Vic" Amuso, the jailed leader of the Luchese crime family, were named as unindicted co-conspirators in the case. The elder Scarfo exercised "influence and control" of his son and Pelullo, D'Aguanno said, adding that both mob leaders -- even though they were in jail -- were to share in the financial benefits of the takeover.

Scarfo Sr. and Amuso were fellow inmates at a federal prison in Atlanta in 2007. Pelullo and Scarfo Jr. visited the elder Scarfo several times and discussed the FirstPlus takeover with him, D'Aguanno charged. Scarfo Jr. has been identified as a made member of the Luchese organization.

D'Aguanno also said a prison conversation between the two Scarfos in which they mentioned taking care of "Uncle Vic" was a coded reference to Amuso and his potential share in the looting.

Scarfo Jr. was on probation at the time the fraud unfolded, D'Aguanno said. He said that Pelullo, William Maxwell and Donald Manno, a co-defendant and longtime criminal attorney for Scarfo, were part of a scheme to lie to the probation department about Scarfo's associations and job opportunities in an fraudulent attempt to have his probation restrictions lifted.

If Scarfo had gainful, legitimate employment as a consultant for FirstPlus, why not just tell that to the probation department, D'Aguanno asked? The reason, he said, was that that disclosure might have led to government inquiries into what he was doing and disclosed his relationship with Pelullo.

Ironically, D'Aguanno said, authorities were already investigating those connections while Scarfo and the others tried to hide them.

Other defendants in the case include William Maxwell's brother, John, who was the CEO of FirstPlus after the alleged takeover and attorneys David Adler and Gary McCarthy who handled business and SEC filings for the company.

D'Aguanno opened his remarks by playing a tape for the jury in which Scarfo and Pelullo laughed and joked about the untimely passing of J.D. Draper, a FirstPlus insider who authorities said helped the two plan the behind-the-scenes takeover.

Draper, who was named compliance officer of the company, died unexpectedly of a heart attack in December 2007. On the tape, Scarfo and Pelullo mockingly talk about how they are broken up by his passing.

D'Aguanno said Draper was one of the few insiders who knew all the details of the scam and his passing eliminated any concerns on the part of Pelullo or Scarfo that he might turn on them and go to authorities.

"I'm crushed, tears are coming to my eyes," Pelullo said on the tape which was played twice during the trial and a third time today.

After more mock comments about sorrow and condolences, Scarfo told Pelullo that Draper's death was "one thing I know you can't take credit for."

But the government contends that Pelullo, in secretly recorded conversation and in emails, took credit for nearly everything else that brought him and Scarfo behind-the-scenes control of the company. And all of it, D'Aguanno said today, was based on fraud.

George Anastasia can be contacted at George@bigtrial.net.

Read more at http://www.bigtrial.net/2014/06/layers-of-onion-define-multi-million.html#z8ssUGKIhm3trFIC.99

Technically yes but i doubt any of those guys respected him.

Mafia Smoke, No Fire In Fraud Case, Pelullo's Lawyer Says

By George Anastasia
For Bigtrial.net

He wasn't a gangster. He was a turnaround expert.

And if the government had just left him alone, Salvatore Pelullo would have turned FirstPlus Financial, a struggling Texas mortgage company, into a profitable business enterprise.

Do the math!

That was the message, accompanied by nearly 100 slides and a heavy mixture of passion and sarcasm, that Pelullo's lawyer, Michael Farrell delivered to a federal jury today in a highly charged summation that offered a decidedly different view of the testimony and evidence from the one presented by the prosecution during the five-month trial.

The government, Farrell said repeatedly, failed to back up its charge that Pelullo and mobster Nicodemo S. Scarfo looted the company after secretly taking control of its board of directors in the summer of 2007.

"The government never gave these people a chance and they want you to convict them of crimes," said Farrell, the first of seven defense attorneys to offer closing arguments. Farrell will be back in front of the jury when the trial resumes Monday. He is expected to take most of the day to complete his summation.

"This is a guy with a track record of immense business success," Farrell said of his client, pointing to businesses Pelullo had started in the past, to a newspaper article identifying him as one of the top 40 businessmen under 40 and personal financial records that listed properties and assets that at times exceeded $1 million.

Farrell described Pelullo, 46, as a high school dropout with intuitive business acumen who had developed a "business model" for taking distressed companies and turning them into successful operations. He was, Farrell added, a "risk taker" who had run afoul of the law in the past. Pelullo has two prior fraud convictions.

But the defense attorney, contradicting a major premise in the prosecution's case, said there was never any attempt to hide Pelullo's role as a consultant to FirstPlus or to defraud the company.

"Loot the company?" he nearly shouted at one point. "They were trying to grow the company."

Farrell's summation came after Assistant U.S. Attorney Stephen D'Aguanno wrapped up nearly six hours of closing arguments shortly after the lunch break today. D'Aguanno described Pelullo as the "central figure" in a scam built around "a fraudulent set of legal and consulting agreements."

He said Pelullo and Scarfo use fear, intimidation and the reputation of the mob and their links to it to advance a scheme that netted them millions while running the company into the ground. Both Pelullo and Scarfo, through companies they controlled, had consulting contracts with FirstPlus. A third defendant, lawyer William Maxwell, had a legal contract with the firm.

Maxwell was being paid $100,000-a-month plus expenses. The government contends he set up consulting contracts for Pelullo, at $100,000-a-month, and Scarfo, at $33,000-a-month, as part of an insider move to siphon cash out of the company.

Other defendants on trial are Maxwell's brother, John, the CEO of FirstPlus, and lawyers David Adler, Gary McCarthy and Donald Manno.

Using slides and charts that flashed on large screens around the courtroom, Farrell challenged the goverment's contention that after Pelullo and Scarfo took control of the company board of directors, its assets dropped from about $11 million to $1,700. In fact, he contended, companies that were purchased by FirstPlus had tangible value of millions and were not the straw entities that the prosecution alleges.

The purchases -- the government has charged that Pelullo and Scarfo controlled most of the companies that FirstPlus bought -- were part of a plan to turn the company around, part of a business model that Pelullo had developed and used successfully over the years.

Farrell also chided D'Aguanno and FBI Agent Joe Gilson, the lead investigator in the case. The defense attorney implied that the two law enforcement officials lacked the financial background and training to accurately assess what was taking place.

He said the FBI targeted Scarfo, the son of jailed Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo, because of his suspected mob ties. The younger Scarfo was on probation in 2007 after serving more than three years in prison for a conviction in an orgnaized crime gambling case. He has another conviction for racketeering.

The organized crime investigation into Scarfo, dubbed "Son Block," morphed into a probe of white collar corruption, Farrell said, and went off track because the government didn't understand the financial world.

The government "wants you to believe Scarfo was a mobster," Farrell told the jury. The evidence and testimony indicate he was "a computer nerd," the lawyer said.

Both Pelullo and Scarfo had criminal records and were cognizant of the fact that those records could create problems with government regulators and shareholders. But neither attempted, as the government alleges, to hide their involvement as consultant to the company, he said.

"They had strikes against them," he said of their criminal pasts. "They had obstacles. But they believed they could succeed."

Returning to another theme that has been part of the defense throughout the trial, Farrell said a series of FBI raids in May 2008 in which FirstPlus records were seized and Pelullo and Scarfo were identified as targets thwarted any attempt for the company to succeed. It wasn't fraud, but the government's actions, he argued, that deep sixed FirstPlus Financial.

He urged the jury not to buy into the government's arguments.

"They believe you'll convict solely because of the Mafia smoke," he said. But it's smoke, he said, with "no fire."

George Anastasia can be contacted at George@bigtrial.net.

I love how another guys lawyer calls scarfo a computer nerd. he must just keep his face down stairing at a paper.that's a first.

I don't see how they can convict here. Verdict should be in soon.

I completely disagree. They're both done in my opinion.

Should be interesting to see which one of these two flips - if not both - although I don't know what Pelulio would have that the coppers wanted but Scarfo is a different story - imagine how Nick Scarfo Sr. would react to his son turning?

He'd fucking kill himself!

we will see

really? always respect posts but did you read the indictment?

these guys are cooked

Was there concrete financial evidence? Besides them collecting a salary? I'm honestly a little unsure, at work right now. Like what exactly do they have on a scarfo?

I didn't.read the indictment btw, maybe I take a look tonight while I.watch the game

Imagine that huh! You're quite the optimist there guy. Maybe you should go join Fox 29 news with your buddy Dave there guy!

I guarantee they are done. They have hundred of hours of tapes (including pelullo talking to scarfo sr), an extensive and obvious financial record, about 10 cooperating witnesses. You are lunatic if you think this anything less than guilty and 20-30 year bid for jr.

Let's not forget these two knuckleheads are felons that were caught with a bunch of guns. I remember reading Scarfo had a semi in his house and that they had a cache of weapons on their yacht. I'm curious to see the indictment who got charged for that, that alone with jr's priors he'll get 10 years

That would be interesting to see. What do you all think the likelihood of Scarfo Jr. flipping would be? And Pellulo?

Absolutely, Nicky. Assuming they find him guilty, and I think they will, the sentencing guidelines call for Scarfo to get upwards of 20 plus years.

Judges rarely go outside the Federal Guidlines for predicate felons. And the judge isn't going to go outside those guidelines for someone named Scarfo. Not in a million years.

Definitely don't see Scarfo flipping. Don't know much about Pelullo though. Seems like a wanna-be that may not have much to give as far as mob related dirt. I'm guessing they both take a cpl long bids and fade into the sunset