By George Anastasia
The sentencing of mobster Nicodemo S. Scarfo and three co-defendant convicted of looting a Texas mortgage company has been put off for the third time while a judge decides whether information in a modern day slave labor case should have been turned over to the defense prior to the trial.
Scarfo, 49, was scheduled to be sentenced this morning for his role in the secret takeover of FirstPlus Financial back in 2007. Co-defendant and alleged mastermind of the scam, Salvatore Pelullo, 47, was scheduled to be sentenced yesterday. Both sentencings, along with those of co-defendant brothers John and William Maxwell, have been pushed back to July in order to give Judge Robert Kugler a chance to rule on 11th hour motions from the defense camp seeking to overturn the convictions.
Lawyers for Scarfo and Pelullo have argued that the prosecution withheld information about a separate investigation that could have provided ammunition to discredit government witnesses in the FirstPlus case.
"The government withheld evidence that was demonstrably relevant in the (FirstPlus) trial," Scarfo's lawyer, Michael Riley wrote in a motion filed last month. The result, Riley contends, "cut deeply into the guarantee of due process and gravely impaired the basic function of the court."
Prosecutors, in a response brief filed yesterday, argued that the motions were "nothing more than last ditch efforts" by the defense to "forestall their well deserved sentences."
The motions focus on a racketeering case in Philadelphia in which five Ukrainian brothers were charged with bringing workers from the Ukraine into the United States illegally and then forcing the them to work for little or no pay for cleaning service companies the brothers controlled.
The Philadelphia-based operation was the target of a federal investigation that resulted in the convictions of the organizers, including brothers Omelyan and Stepan Botsvynyuk. Omelyan, 52, was sentenced to life plus 20 years on racketeering and extortion charges.
Testimony at his four-week trial indicated he beat, threatened and sexually assault workers while forcing then to live in housing he provided and working six- and seven-day weeks with little or no pay. The government contended the workers were told they had to work off debts of from $10,000 to $50,000, the cost of bringing them to the United States.
Two of the cleaning companies controlled by the Botsvynyuk brothers -- A-Plus Cleaning and U.S. Cleaning -- at one time shared offices with cleaning companies owned by Pelullo. The Botsvynyuk companies did contract work for major department stores, including Wal-Mart, Target and Safeway.
There was no evidence indicating that those stores were aware of the "enslaved labor" situation that the investigation uncovered. But there were indications that during the investigation, Pelullo was picked up on surveillance and that possible links to his cleaning companies were explored.
Riley, Scarfo's lawyer, said in a telephone interview yesterday that the defense should have been provided with details about that probe and any overlap with the FirstPlus investigation. Riley said he was particularly interested in any links in the two investigations to Corey Leshner, a key Pelullo associate who emerged as a star prosecution witness during the trial.
Leshner had worked at Pelullo's industrial cleaning company before taking part in the FirstPlus operation. Riley said he would have liked to have had the opportunity to ask Leshner what he knew about the slave labor operation when he was on the witness stand.
"The information would have served the defense as potent impeachment ammunition in discrediting various government witnesses," Riley wrote in his motion.
In a response motion filed yesterday, Assistant U.S. Attorney Norman Gross, said that none of the charges in the slave labor case "are remotely related" to the charges in the FirstPlus case and that there was no relevant overlap in the investigations.
"Nothing in the Botsvynyuk documents suggests that Leshner had any involvement" in any of the slave labor crimes, Gross wrote, adding that Scarfo's arguments are "built on a foundation of sand" and that "Scarfo's contention that he could have tarred Leshner with the Botsvynyuk brush is merely wishful thinking."
Gross called the defense arguments the legal equivalent of a Hail Mary pass, a desperate effort with time running out to alter the inevitable. Scarfo and Pelullo, both with prior federal convictions, are looking at potential 30-year sentences. The Maxwell brothers -- John served as CEO of FirstPlus and William was private counsel to the firm -- are looking at less time because neither has a criminal record.
The government alleged that Scarfo and Pelullo took behind-the-scenes control of FirstPlus in 2007 and that the Maxwell brothers help facilitate the siphoning of more than $12 million out of the company's coffers through bogus business deals, inflated consulting contracts and exorbitant purchases and expenses.
Judge Kugler has been given the FBI documents from the slave labor case cited by Pelullo's lawyers to review privately prior to a hearing next month. Scarfo's request to be permitted to subpoena documents from the that case "is the epitome of a fishing expedition," Gross argued, and should be denied.
Neither Pelullo nor Scarfo were implicated in any way in the slave labor case, Gross wrote, adding that Scarfo's attempt to make that point somehow relevant to the FirstPlus conviction is disingenuous.
"One might also say that the Government has failed to uncover evidence that Scarfo is responsible for the disappearance of Jimmy Hoffa," Gross wrote. "But that does not undermine one whit the evidence of Scarfo's guilt in this case."
George Anastasia can be reached at George@bigtrial.net.