Trial set in unusual white-collar mob case

January 4, 2014

In many ways, it’s your run-of-the-mill white-collar case. But this one has a mob twist.

The son of a reputed Philadelphia-area Mafia boss and six others are scheduled to be tried starting this week on charges including racketeering. But the government says Nicodemo S. Scarfo and his co-defendants used threats of harm to take over the board of FirstPlus Financial Group, an Irving, Tex.-based publicly traded mortgage company, and then had the company buy shell companies they owned so they could take out the assets. The company is now defunct.

In court filings, the government said the conspirators plundered $12 million in less than a year, buying homes, weapons, ammunition, a plane, luxury cars, jewelry and an $850,000 yacht they named “Priceless.”

Michael Riley, the attorney for Scarfo — the son of imprisoned Philadelphia and southern New Jersey crime-family boss Nicodemo D. “Little Nicky” Scarfo — said part of his argument is that it’s not a mob case at all.

“What spices it up is the organized-crime allegations,” Riley said. “We can’t defend the case and say Nick Scarfo is not and has never been associated with the mob.” But he said his client had scant involvement with the business deals at the heart of the case.

Government lawyers declined to give interviews. In the indictment, they draw a connection with the mob. They say money raised in the crooked business deal was intended to pay Scarfo’s dues as a made member of the Lucchese crime family, with whom his father — who was listed as an unindicted co-conspirator — allegedly formed an alliance decades ago.

Riley says he’ll try to poke holes in the theory that money was going to the New York-based Lucchese operation. “Not a single dollar is unaccounted for,” he said.

Thirteen people were indicted in October 2011. Six, including Scarfo’s wife, who admitted a role in mortgage fraud, have pleaded guilty.

One who pleaded guilty, Cory Leshner, is expected to testify at the trial, set to begin Wednesday in U.S. District Court in Camden and last three months or so. The jury was selected last year.

The defendants who remain besides Scarfo include Salvatore Pelullo, a reputed mob associate previously convicted of bank fraud and who authorities said ran the business takeover.

Others are brothers John and William Maxwell, former FirstPlus executives, and two lawyers accused of aiding the alleged scheme. All have pleaded not guilty.

Michael Huff, who is representing William Maxwell, said his client did not do anything wrong as special counsel for the board of directors that took over the firm.

“He was doing his job,” Huff said. “He was hired by the corporation to help with any legal matters that might come up with the transition from one board of directors to another board of directors.”

A lawyer for Pelullo did not return a call. The lawyer for John Maxwell, who served as FirstPlus president and chief executive, declined to comment.

— Associated Press

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