Monday, July 6, 2015
There might have been some mobsters lurking behind the FirstPlus Financial fraud case, a lawyer for lead defendant Nicodemo S. Scarfo said in legal papers filed recently, but their drink of choice would have been vodka not vino.
In an apparent attempt to distant himself from co-defendant Salvatore Pelullo -- and also get a shot at a new trial, Scarfo -- through his lawyer Michael Riley -- has argued that there was an "alternative theory" to the government's organized crime pitch in the high profile case and that he was denied the opportunity to present it.
Pelullo, an Elkins Park businessman with two prior fraud convictions and a Ukrainian-born wife, might have been kicking back funds from the multi-million dollar scam to Russian gangsters rather than Scarfo's Lucchese crime family, Riley wrote in a motion filed last month.
"In retrospect the connections to the Russian mob are far more substantial than those with Uncle Vic," Riley argued. The "Uncle Vic" reference is to Vittorio Amuso, the jailed boss of the Lucchese crime family who was named, along with Scarfo's father Nicodemo D. "Little Nicky" Scarfo, as an unindicted co-conspirator in the looting of FirstPlus, a Texas-based mortgage company.
Riley has argued that the government's failure to disclose a parallel investigation into a group of Ukrainian-born businessmen with possible ties to both Pelullo and the Russian mob denied Scarfo a chance to offer a proper defense in the high profile trial.
The government has labeled Riley's arguments and similar claims by lawyers for Pelullo in a series of post-trial, pre-sentencing motions a fishing expedition that has nothing to do with the case. Prosecutors are scheduled to reply to the defense's latest assertions by Friday. Judge Robert Kugler has scheduled a hearing for July 17.
Riley's motion cited an FBI memo in which an unnamed informant alleged that Pelullo "loans money" to Russian mobsters. The defense attorney said that information about possible links to Russian mobsters would have provided him with an "alternative theory" to the government's position that Scarfo and Pelullo were tied to the Lucchese crime family and used those connections to intimidate officials at FirstPlus and facilitate a behind-the-scenes takeover in 2007.
Authorities allege that Scarfo, 49, and Pelullo, 47, wrested control of the beleaguered mortgage company and siphoned more than $12 million out of the company through bogus business deals and phony consulting contracts.
"The government's failure to disclose the existence of another `mob' or criminal organization with which a financial obligation could have existed, barred (Scarfo's defense) from offering an alternative explanation for unaccounted monies at trial," Riley wrote.
While taking a somewhat different approach, lawyers for Pelullo have argued that the government had an obligation to turn over details of the investigation into brothers Omelyan and Stepan Botsvynyuk because the defense might have used that information to impeach prosecution witnesses and undermine the government's theory behind the FirstPlus takeover.
Two 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.
The Botsvynyuk brothers were the target of a federal "slave labor" investigation that began in 2000 and ended with their convictions in 2011 on racketeering and extortion charges. Omelyan Botsvynyuk, 52, was sentenced to life plus 20 years.
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.
Riley, Scarfo's lawyer, argued that Pelullo was at least a "subject" if not a target of the Botsvynyuk investigation and that the government had an obligation to disclose that. Riley and Pelullo's lawyer, Troy Archie, have asked for access to debriefing memos and surveillance reports tied to that case. Both lawyers have argued that information in those documents might have been used to mount a defense in the FirstPlus case and that by being denied that information the defendants were denied a fair trial.
John and William Maxwell, two brothers convicted along with Scarfo and Pelullo, have joined in the post-trial motions. John Maxwell was the CEO of FirstPlus. His brother was an attorney hired by the company. Both were convicted of helping Scarfo and Pelullo loot the company. Sentencings in the case have been put off until the end of the month.
Scarfo has another battle looming in New Jersey where he remains under indictment in a organized crime-linked bookmaking case. Dubbed "Operation Heat," the investigation focused on a multi-million dollar sports betting and loansharking operation controlled by the New Jersey branch of the Lucchese crime family.
Scarfo was one of more than 30 mobsters and mob associates indicted in the case back in 2010. Six major defendants, including one-time boss Matthew Madonna and former Scarfo allies Ralph V. Perna and his sons Joseph and John Perna, pleaded guilty last month and are to be sentenced in August or September.
To date, 12 defendants in that case have pleaded guilty. Four others have died since being indicted and 18 others, including Scarfo, are still scheduled for trial.
Scarfo is representing himself in that Morris County-based case. But with a potential sentence of 30 years to life for his FirstPlus conviction, Operation Heat is not a priority for the one-time mob scion.
"He's got more to worry about," said a source familiar with the Morris County investigation.
George Anastasia can be reached at George@bigtrial.net.