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Wednesday, September 9, 2015
Nicodemo "Nicky" Scarfo Jr. And other Lucchese Crime Family Members And Associates Given Lengthy Prison Terms
The U.S. Justice Department released the below information:
In a world inhabited by international cyber criminals and violent terrorists, it would be easy to think of La Cosa Nostra—the Mafia—as a throwback to a bygone era. But a recent New Jersey case involving the Lucchese crime family is proof that traditional organized crime can still be a potent threat.
Members and associates of the Lucchese organized crime family—one of the families traditionally associated with La Cosa Nostra (LCN)—were recently sentenced to lengthy prison terms in New Jersey for a financial fraud scheme that illegally netted millions of dollars.
Nicodemo “Nicky” Scarfo, Jr., whose imprisoned father was an LCN crime boss in Philadelphia, was sentenced in July to 30 years in prison for racketeering, securities and wire fraud, and other charges related to the 2007 illegal takeover of FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas. His associate, Salvatore Pelullo, also received a 30-year term. Brothers William and John Maxwell received 20- and 10-year terms, respectively.
“Essentially, Scarfo and Pelullo used extortion and other illegal means to gain control of the company,” said Special Agent Joe Gilson, who investigated the case from the FBI’s Atlantic City Resident Agency in New Jersey. “And then they systematically looted the company.”
FPFG, once a billion-dollar financial organization that specialized in mortgages, had filed for bankruptcy. The company was dormant, said Special Agent Bill Hyland, who assisted in the investigation, “but still had assets, thanks to the continued proceeds from all the mortgages it had financed.”
In 2007, Pelullo and Scarfo used threats and other tactics to intimidate and remove FPFG’s management and board of directors. They were replaced with Mafia associates, including the Maxwell brothers—William was named special counsel to FPFG, while John became the company’s CEO.
“Within several weeks of gaining control,” Gilson said, “Pelullo and Scarfo had lined their pockets with $7 million. Before they were arrested in 2011, more than $12 million was illegally funneled to them—money that rightfully belonged to the company’s stockholders.
The investigation revealed that between 2007 and 2008, Scarfo received $33,000 per month from FPFG as a “consultant”—at a time when he was on home detention in New Jersey for violating his parole from a previous conviction. The money was being paid to a shell company controlled by Scarfo. Pelullo, using a different shell company, had a similar deal. With their ill-gotten gains, the mobsters purchased an airplane, a yacht, and expensive jewelry.
“Complicated financial crimes are not normally the strong suit of LCN,” Gilson noted. But Pelullo, who had two previous federal fraud convictions, “was a persuasive con man. He could maintain an air of legitimacy, but behind the scenes everything was a fraud.”
Using a variety of investigative techniques, including a court-ordered wiretap (monitored by retired FBI agents, some of whom had helped put Scarfo’s father behind bars), investigators unraveled the scam with the help of federal partners including the Department of Labor and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. During the more than five-year investigation, a million pages of paper documents were analyzed and the contents of more than 100 computers were searched.
Scarfo, Pelullo, the Maxwells, and others associated with the fraud were convicted in 2014. “We feel great that our team was able to put a stop to these crimes and bring the subjects to justice,” Gilson said. “The FBI remains vigilant against all types of organized crime, including LCN.”
Note: The FBI released the above photo of a plane Scarfo and Pelulllo purchased with some of the millions they illegally siphoned from FirstPlus. Note To U.S. U.S. Justice Department: People who speak Italian better than I do tell me that the criminal organization is called Cosa Nostra ("Our Thing") and not La Cosa Nostra ("The Our Thing," which makes no sense).
Paul Davis is a writer who covers crime. He has written extensively about organized crime, street crime, sex crime, cyber crime, drug crime, white collar crime, crime fiction, crime prevention, espionage and terrorism. His 'On Crime' column appears weekly in the Washington Times. He is also a regular contributor to Counterterrorism magazine. His work has also appeared in the Philadelphia Inquirer, Philadelphia Daily News and other newspapers, magazines and online publications. As a writer, he has attended police academy training, gone out on patrol with police officers, accompanied detectives as they worked cases, accompanied narcotics officers on drug raids, observed criminal court proceedings and visited jails and prisons. He has covered street riots, mob wars and murder investigations. Paul Davis' online "Crime Beat" column offers his Q&As with cops, crooks, crime writers and others. Paul Davis has been a student of crime since he was a 12-year-old aspiring writer growing up in South Philadelphia. He enlisted in the U.S. Navy when he was 17 in 1970 and served on the aircraft carrier USS Kitty Hawk during the Vietnam War. He also served two years on the Navy harbor tugboat USS Saugus at the U.S. nuclear submarine base at Holy Loch, Scotland. Following his Navy service, he performed security work as a Defense Department civilian and he later became a full-time writer. Paul Davis' On Crime and Crime Beat columns, crime fiction and magazine and newspaper pieces can be read on this website. His full bio can be read by clicking on the above photo.