Crime & Safety

Galloway's Nicky Scarfo Jr. Among 13 Charged for Racketeering

Scarfo was arrested Tuesday morning at his home in Galloway Township. His wife surrendered to authorities in Camden.

Nicodemo Scarfo Jr. was among 13 arrested arrested on Tuesday, Nov. 1, for racketeering, the U.S. Department of Justice announced Tuesday afternoon.

Scarfo was arrested Tuesday morning at his home in Galloway Township, U.S. Attorney Paul J. Fishman and Assistant Attorney General Lanny A. Breuer said. He faces 25 counts, each carrying with it anywhere between a five-year and 30-year maximum jail sentence.

They were also accused of other offenses, including the illegal takeover of a publicly traded company.

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The charges originate from the alleged extortionate takeover of FirstPlus Financial Group, a publicly held company in Texas, and the subsequent looting of the company by members of the racketeering enterprise through a series of fraudulent consulting agreements and acquisitions of involving companies owned by Scarfo and Salvatore Pelullo, according to a release from the DOJ.

Scarfo, a member of the Lucchese Family of La Costa Nostra, and Pelullo, an associate of the Lucchese and Philadelphia La Costra Nostra families, are indicted on charges of racketerring conspiracy, according to a 25-count indictment handed down in Camden federal court on Tuesday. They are charged with conduct including securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering and money laundering, and obstruction of justice.

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Scarfo's father, Nicodemo Scarfo Sr., and Vittorio Amuso are also named in the indictment, as unindicted co-conspirators. Scarfo Sr. is the imprisoned former boss of Philadelphia La Costra Nostra, and Amuso is the imprisoned former boss of the Lucchese Family.

Scarfo's wife, Lisa Murray-Scarfo, is also charged with conspiracy to commit bank fraud and making false loan statements on a loan application in securing a fraudulent mortgage to purchase a $715,000 house with funds from the racketeering enterprise's criminal activity. She was expected to surrender to authorities in Camden. Her charges carry with them 30- and five-year prison terms, respectively.

Nine other defendants are also charged with racketeering conspiracy, including securities and fraud conspiracy, wire fraud and other offenses. These defendants include attorneys William Maxwell, Cory Leshner, David Adler, Gary McCarthy and Donald Manno, as well as certified public accountant Howard Drossner.

Maxwell's brother, John Maxwell, along with William Handley and John Parisi are charged with various offenses related to the conspiracy, and Todd Stark is charged with conspiracy to provide ammunition to Scarfo Jr.'s 9mm handgun.

In addition to Scarfo Jr., Handley, Leshner, Parisi, Adler, Drossner and Manno were arrested at their homes. Pelullo was arrested in Miami, and William Maxwell was arrested at his office in Houston. McCarthy surrendered to the FBI this morning in Philadelphia.

Stark and John Maxwell have yet to be apprehended.

Sweeping arrests

The arrests were made via coordinated effort between special agents of the FBI; Department of Labor, Office of Inspector General; and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Those in custody were scheduled to appear before U.S. Magistrate Judge Anne Marie Donio in Camden Federal Court this afternoon.

According to the indictment, Scarfo Jr. is a made member of the Lucchese Family. He was made following an attempt on his life in 1989 as part of an internal power struggle for control of the Philadelphia family. As a member of the Lucchese Family, Scarfo Jr. was required to earn money and participate in the family's affairs.

Scarfo Jr. was imprisoned on unrelated charges, and upon his supervised release from prison in 2005, he was required to report to a probation officer. He participated in the affairs of what the indictment calls the "Scarfo-Pelullo Enterprises," where Scarfo was among a group who engaged in a systematic scheme to deceive and obstruct the probation department and the District Court responsible for overseeing Scarfo’s supervised release.

In 2007, Scarfo, Pelullo and William Maxwell were part of a group who devised a scheme to take over FirstPlus Financial Group through threats of physical and economic harm.

The group managed to obtain control of the company by replacing the board of directors with figurehead members who served at the will of the Scarfo-Pelullo Enterprise. William Maxwell was then named as the company's "special counsel," and he funneled millions of dollars to the enterprise through fraudulent legal services and consulting agreements, the indictments said. 

According to the indictments, the goal was to mask the true identity and nature of the control exerted over the company, while concealing the source of the money fraudulently conveyed to Scarfo and Pelullo.

The enterprise succeeded with the help of Adler, Drossner and McCarthy,who used their positions as professionals to ensure that the enterprise’s criminal activity was not revealed to law enforcement and regulatory authorities, including the U.S. Securities and Exchange Commission (SEC), according to the indictments.

As part of the effort, Manno also deceived Scarfo's probation officer.

The indictment also describes a telephone call between Pelullo and Scarfo, in which the two discuss the death of a former FirstPlus Financial Group executive. The call was intercepted by law enforcement in December 2007, and during the call, both men expressed relief at the executive's death.

As a result of their criminal activitiy, the indictments allege the accused lived a lavish lifestyle, including the purchase of an $85,000 yacht, a home for Scarfo, a Bentley for Pelullo,and thousands of dollars in jewelry for Murray-Scarfo. Meanwhile, FirstPlus Financial Group suffered a loss of at least $12 million, according to the indictments.

“According to the Indictment, the defendants gave new meaning to ‘corporate takeover’ by looting a publicly traded company to benefit their criminal enterprise,”  Fishman said in a statement. “Through rampant self dealing, fraudulent SEC filings and more traditional mob methods, the defendants allegedly stole $12 million from shareholders. Particularly in these economic times, investors should be free to invest in public companies without fear that violent criminal organizations are their puppetmasters. And the public deserves to rely with confidence on corporate officials and professionals whose positions require them to act in the best interest of shareholders, not members of organized crime.”

“The indictment alleges that Mr. Scarfo and Mr. Pelullo used economic extortion and threats of violence to seize and maintain control of a publicly traded company, successfully removing its entire existing board of directors and management,” Breuer said in the same statement. “Once in control, they allegedly used their criminal enterprise to extract millions of dollars from the company to fund their lavish lifestyles. This prosecution demonstrates the Justice Department’s resolve to root out the influence of La Cosa Nostra wherever it exists.”

“The demise of organized crime has been greatly exaggerated,” Michael B. Ward, special agent in charge of the FBI’s Newark, NJ, field office said in the statement. “Criminal activities have evolved from the back alleys to the board rooms, but the same use of physical threats and intimidation to gain leverage and loot lucrative businesses for personal gain continues to this day. In response, the charges being brought against Nicky Scarfo Jr., Sal Pelullo and others represent law enforcement’s commitment to aggressively target the illegal activity of organized crime in any commercial business or venue.”


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