A member of the Lucchese organized crime family of La Cosa Nostra (LCN) was sentenced today to serve 360 months in prison for participating in a racketeering conspiracy and related offenses. Three other members of the conspiracy are scheduled to be sentenced later this week.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District New Jersey made the announcement.
“Nicodemo Scarfo and his associates tried to take La Cosa Nostra corporate, using traditional, strong-arm mob tactics to take over a publicly traded company and loot it like a personal piggy bank,” said Assistant Attorney General Caldwell. “The Justice Department will fight organized crime wherever it may surface – from back alleys to public board rooms – to ensure that crime does not pay.”
“Scarfo and his crew gave new meaning to the term ‘corporate takeover,’ pushing out the legitimate leadership of a publicly traded company and then looting it,” said U.S. Attorney Fishman. “They used false SEC filings, phony consulting agreements and more traditional mob methods to steal $12 million from the company’s shareholders. That’s a risk that investors should never have to take.”
Nicodemo S. Scarfo, 50, of Galloway, New Jersey; Salvatore Pelullo, 48, of Philadelphia, an associate of the Philadelphia and Lucchese LCN families; William Maxwell, 56, of Houston, a Texas attorney; and John Maxwell, 63, of Dallas, were convicted in July 2014, after a six-month trial, of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice.
In addition to sentencing Scarfo to prison, U.S. District Judge Robert B. Kugler ordered Scarfo to forfeit his interest in certain properties and to pay restitution in the amount of approximately $14 million. Pelullo, William Maxwell and John Maxwell are scheduled to be sentenced later this week.
According to evidence presented at trial, since 1989, Scarfo has been a member of the Lucchese family. As a member, he was required to earn money and participate in the affairs of the Lucchese family.
The trial evidence showed that, in April 2007, Scarfo, Pelullo and others conspired to take control of FirstPlus Financial Group Inc. (FPFG), a publicly-held company in Texas, by using threats of economic harm to intimidate and remove FPFG’s management and board of directors, and to replace them with persons beholden to Scarfo and Pelullo, including William Maxwell and his brother, John Maxwell. The evidence introduced at trial further demonstrated that, once the takeover had occurred, FPFG’s new board of directors named William Maxwell as “special counsel” to FPFG and John Maxwell as the company’s CEO, positions that they used to funnel approximately $12 million to themselves, Scarfo and Pelullo through fraudulent legal services and consulting agreements. According to evidence presented at trial, Scarfo and Pelullo used their illicit gains to fund extravagant purchases, including an $850,000 yacht, a luxury home, a Bentley automobile and thousands of dollars in jewelry.
The indictment also named as co-conspirators Nicodemo D. Scarfo, or Scarfo Sr., the imprisoned former boss of the Philadelphia LCN family, and Vittorio Amuso, the imprisoned boss of the Lucchese LCN family. Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark and Scarfo’s wife, Lisa Murray-Scarfo – previously pleaded guilty to various charges related to their roles in the conspiracy.
The case was investigated by the FBI’s Newark, New Jersey, Division, with assistance from the U.S. Department of Labor-Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations New York Region, the FBI’s Philadelphia Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the District of New Jersey.