Scarfo's Cousin Gets 30-Month Term

By George Anastasia
For Bigtrial.net

Nobody wants to go to jail, but 30 months is a lot better than 30 years.

That's the bottom line for John Parisi who was sentenced this morning for his role in the FirstPlus financial fraud case.

Parisi is the cousin of Nicodemo S. Scarfo who, along with Salvatore Pelullo, was convicted last year of masterminding the $14 million ripoff of FirstPlus Financial, a Texas-based mortgage company. The government charged that Scarfo, the son of jailed mob boss Nicodemo D. "Little Nicky" Scarfo, and Pelullo, a mob wannabe, used the specter of organized crime to instill fear into FirstPlus officials and employees while secretly taking control of the company back in 2007.

Each was sentenced to 30 years in prison by Judge Robert Kugler back in July.

131

Scarfo's Wife Sentenced To Probation

Pelullo and Scarfo

By George Anastasia
For Bigtrial.net

Mrs. Scarfo won't be going to jail.

After pleading guilty to a mortgage fraud charge that was a small part of her husband's multi-million dollar looting of a Texas company, Lisa Scarfo, 36, was sentenced today to two years probation and 200 hours of community service.

"Mrs. Scarfo, good luck. I hope you get your life back together," U.S. District Court Judge Robert Kugler said after imposing the sentence during a 10-minute hearing in federal court in Camden.

Kugler cited her "limited role" in the scam orchestrated by her husband, mobster Nicodemo S. Scarfo. But the judge added that he did not doubt that she knew what she was doing when she filed false statements in a mortgage application in 2008 that allow the couple to purchase a $715,000 home in Egg Harbor Township outside of Atlantic City.   

In a statement read by her attorney, Richard Sparaco, Lisa Scarfo apologized to the court. She said she had made a "serious mistake" that had "devastated her family" and she pleaded for leniency.

Assistant U.S. Attorney Steven D'Aguanno, the lead prosecutor in the eight-year investigation, said the government did not oppose probation. Under sentencing guidelines, Mrs. Scarfo faced a maximum prison sentence of six months, according to the judge.

Her husband and his top associate, Salvatore Pelullo, were each sentenced to 30 years in prison in July after a jury convicted then of masterminding the behind-the-scenes takeover of FirstPlus Financial Group in 2007 and then systematically looting the company of $12 million.

4

Scarfo's Lawyer Points To Russian Mob In FirstPlus Case

By George Anastasia
For Bigtrial.net

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.

4

Scarfo Sentencing Postponed Again

By George Anastasia
For Bigtrial.net

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."

10

Sentencings Delayed In FirstPlus Case

By George Anastasia
For Bigtrial.net

Mobster Nicodemo S. Scarfo and his partner-in-crime Salvatore Pelullo will have to wait two more months before they find out how much time they will be spending as guests of the federal government for their convictions in the FirstPlus Financial fraud case.

Sentencings originally set for this week before U.S. District Court Judge Robert Kugler in Camden have been pushed back to June in order for authorities to have more time to prepare what are expected to be detailed pre-sentence reports.

Scarfo, 49, and Pelullo, 47, are looking at jail time in the 20- to 30-year range. Both have prior convictions which enhance the guidelines used to determine the range of sentence in federal cases.

They each were convicted of more than 20 counts in the racketeering fraud case. The government charged that the pair took behind-the-scenes control of FirstPlus in 2007 and siphoned more than $12 million out of the Texas-based mortgage company through bogus business transactions and phony consulting contracts.

1

As Sentencings Approach, A Look At Mob Ties In FirstPlus Case

By George Anastasia

Goodfellas Sal and Nicky Jr.

For Bigtrial.net

Unless there are some unforeseen developments -- and in this case that's always possible -- the hammer comes down next week in the multi-million dollar FirstPlus Financial fraud case.

Nicodemo S. Scarfo, Salvatore Pelullo and the brothers John and William Maxwell each have sentencing hearings before U.S. District Court Judge Robert Kugler in the same federal courtroom in Camden where a jury delivered guilty verdicts last year.

Scarfo, the 49-year-old son of jailed mob boss Nicodemo D. "Little Nicky" Scarfo, is looking at a sentence that could land him in prison for the better part of the rest of his life. The same can be said for Pelullo, 47, described as a mob associate and with Scarfo the brains behind the 2007 takeover and looting of the Texas-based mortgage company.

The Maxwell brothers -- John the CEO of FirstPlus and William a lawyer hired as private counsel by the firm -- were convicted of many of the same racketeering, conspiracy and fraud counts, but with no prior criminal convictions, they face less potential jail time. That, of course, is a relative term. A 10-year prison sentence might be considerably less than a 30-year sentence but is little solace to the defendant serving the 10 years.

17

Judge Losing Patience As Defense Challenges Mob References

By George Anastasia
For Bigtrial.net

Salvatore Pelulluo and Nicky Scarfo Jr. used their mob connections to intimidate and silence officials at FirstPlus Financial Group while setting up and carrying out the multi-million dollar looting of the Texas-based company, federal prosecutors contend.

And for that reason, they argue, evidence demonstrating ties to La Cosa Nostra were legitimately presented to the jury during the FirstPlus fraud trail and should not be grounds for dismissing the convictions that were delivered back in July.

Scarfo and Pelullo "allowed various FPFG officials to learn of (their) affiliation with organized crime," Assistant U.S. Attorney Steven D'Aguanno wrote in a 103-page response to a defense motion asking that the convictions be dismissed and a new trial ordered.

"That knowledge caused those officials to refrain from challenging Pelullo's and Scarfo's control of the company" and allowed Pelullo and Scarfo to carry out the "takeover and looting" of the Texas-based mortgage company, the prosecutor wrote.

U.S. District Court Judge Robert Kugler has scheduled a hearing for Friday on the defense motion and government's response. Scarfo, Pelullo and brothers John and William Maxwell, who were also convicted, are scheduled to be sentenced in January.

44

Scarfo, Pelullo, Maxwells Seek New Trial In FirstPlus Fraud Case

By George Anastasia
For Bigtrial.net

They want a do over.

And if they're granted a new trial, they don't want any mention of the mob.

That's the essence of a 72-page motion filed by lawyers for Salvatore Pelullo and joined by lawyers for Nicodemo Scarfo and brothers John and William Maxwell asking Judge Robert Kugler to overturn their convictions and order a retrial in the FirstPlus financial fraud case.

A hearing on the motion and the government's response is set for Monday. Sentencings, which were originally scheduled for Oct. 21, 22 and 23, have been moved to January for all four defendants.

83

Leonetti Rips Uncle, Says Cousin Didn't Have A Chance

By George Anastasia
For Bigtrial.net

Defense attorneys for Nicodemo S. Scarfo said repeatedly during his federal fraud trial that Scarfo,
49, was targeted for prosecution because of the reputation and notoriety of his father, jailed Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo.

The jury, of course, saw it differently, convicting the younger Scarfo of all 25 counts he faced in the looting of FirstPlus Financial, a Texas mortgage company.

But now another voice has weighed in in Scarfo's defense. It's not a defense of what he did, but rather an explanation for how he ended up where he did. And it's also a plea for some consideration from Judge Robert Kugler when he sentences Scarfo in October.

The younger Scarfo never had a chance, said his cousin, mobster-turned-government witness Philip Leonetti.

"He's really not a gangster," Leonetti, 61, said in a telephone interview with Bigtrial this week. "His father had him under his spell...I used to tell him, 'Nicky, get away from these guys.' And when he was talking to me, he would agree' But then he would talk to his father and..."

22

Don Manno Gets His Life Back

By George Anastasia
For Bigtrial.net

Don Manno sat in Seasons 52, a posh restaurant at the Cherry Hill Mall one day this week, eating a piece of salmon and talking about the future.

But the past, the immediate past, kept intruding into his conversation.

It was one week exactly from the day a jury in U.S. District Court in Camden had given him his life back. Manno was calm, relaxed and philosophical about the experience. He had beaten federal prosecutors in a grueling six-month trial in which his freedom and future as an attorney were on the line.

It shouldn't have come to that, the veteran defense attorney said.

"I think the federal prosecutors thought they were going to teach us all a lesson about how to practice law," Manno said. "I don't need them to tell me how to be a lawyer. I did nothing wrong. If a jury had questioned what I did then I might think differently. But federal prosecutors aren't going to tell me how to be a lawyer."

That was as close as Manno, 68, came to displaying any of the anger and bitterness that lingers from the FirstPlus Financial fraud case in which he was ensnarled. For the most part, he was sanguine, profusely thanking and praising his wife Rita and his grown daughters Kimberley and Rebecca for helping him through an ordeal that, he says, will make him a better lawyer.

"I think I always had the ability to relate to my clients, to understand intellectually what they were going through," he said. "But now I think I have an emotional understanding. When you get a knock on your door at six in the morning and they take you away in handcuffs, you have a different understanding of the process."

15

Scarfo, Pelullo, Maxwell Brothers Guilty In FirstPlus Trial

By George Anastasia
For Bigtrial.net

Mobster Nicodemo S. Scarfo and his business associate Salvatore Pelullo were convicted today of looting a Texas-based mortgage company of more than $12 million through a series of phony business deals and bogus consulting contracts.

Scarfo, 49, the son of jailed Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo, was described by the government as the behind-the-scenes power in the secret takeover of FirstPlus Financial in 2007.

Pelullo, 47, an Elkins Park businessman with two prior fraud convictions, was the point man in the scheme, according to authorities. A wannabe wiseguy who quoted lines from The Godfather and brought a street corner swagger to business meetings, Pelullo was accused of using threats and intimidation to force company officials to do his bidding.

The anonymous chosen jury, which deliberated for parts of 10 days over two weeks, also convicted former FirstPlus CEO John Maxwell and Maxwell's brother, William, a lawyer who worked as special counsel for FirstPlus. The jury found lawyers David Adler, Gary McCarthy and Donald Manno not guilty of the charges they faced.

20

Verdict In FirstPlus Trial, But Deliberations Continue

By George Anastasia
For Bigtrial.net

It looks like the jury has voted to convict in the FirstPlus Financial racketeering fraud trial.

But at this point we don't know which one -- or how many -- of the seven defendants have been found guilty.

Jury deliberations resumed this morning in the six-month old trial. But questions submitted by the anonymously chosen jury panel to Judge Robert Kugler last week offer some insight into the process and have given rise to speculation that the panel has voted to convict someone.

In a note sent Thursday afternoon, the last day of deliberations last week, the panel wrote: "We are unanimous on some counts, but we are  not unanimous yet on others (the word "yet" was underlined twice in the note). Are we under any time constraints to reach unanimity?"

That question, coupled with an earlier inquiry about the way to respond to the racketeering conspiracy charge, has led to speculation that the jury has voted to convict at least one and possibly more of the defendants on the principal count in the 25-count indictment. All seven defendants are charged with conspiracy.

"It doesn't look good," said one member of the defense camp last week.

Jury Deliberations Continue In Scarfo Fraud Trial

By George Anastasia
For Bigtrial.net

The jury completed a fourth day of deliberations this afternoon without reaching a verdict in the FirstPlus racketeering fraud trial of Nicodemo S. Scarfo and six co-defendants.

The anonymously chosen panel of seven women and five men is expected to return to the U.S. District Courthouse in Camden at 9 a.m. tomorrow to resume the process. The panel sent a question to Judge Robert Kugler late in the day that led to some speculation about where the panel is headed.

The question had to do with the interrogatories or predicate acts listed to support the racketeering conspiracy charge that heads the indictment. All seven defendants are charged with conspiracy. The government has to prove at least two of the predicate acts as elements of the conspiracy charge. In response to its question, the panel was told it had to be unanimous in finding two of those acts proven.

FirstPlus Trial Heading To The Jury

By George Anastasia
For Bigtrial.net

After nearly six months of testimony and more than a week of detailed and grueling closing arguments, jury deliberations are set to begin in the FirstPlus Financial racketeering fraud trial of mobster Nicodemo S. Scarfo and six co-defendants.

Donald Manno, Scarfo's former criminal defense attorney and a co-defendant in the case, completed his closing arguments this morning. Manno, who is representing himself, was the final defense attorney to address the anonymously chosen jury panel.

A rebuttal closing argument this afternoon from the prosecution completed the argument phase of the trial, setting the stage for the start of deliberations tomorrow.

Manno was detailed and highly effective yesterday afternoon when he spoke to the jury for about an hour. The one-time federal prosecutor, who referred to himself in the third person, told the jury to consider the facts and not the "diversions, distortions and false circumstantial evidence" around which the prosecution has built its case.

"Don Manno was not involved in any conspiracy," he told the jury.

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.

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.

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.

A 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."

Defendant Jailed For Contempt In Fraud Case

John [left] and William Maxwell

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.

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.

Nicky Sr.

Along with testimony about corporate structure, SEC filings and lawyerly due diligence, the anonymously chosen jury panel of 18 (six are alternates) has been getting a primer on 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 seven bullet holes in his body.