CAMDEN, N.J. - The son of a former Philadelphia mob boss and another reputed mob associate were convicted Thursday of federal fraud charges for taking over a Texas-based mortgage company and then plundering its assets to buy homes, luxury cars and even a yacht.
Nicodemo S. Scarfo, the son of former Philadelphia Mafia leader Nicodemo D. Scarfo, was convicted of multiple counts including racketeering conspiracy, conspiracy to commit securities fraud and wire fraud.
A second lead defendant, Salvatore Pellulo, who prosecutors said ran the business takeover, was convicted of similar charges, including racketeering conspiracy and conspiracy to commit securities fraud.
The government said Scarfo and his co-defendants used threats of harm to take over the board of publicly held FirstPlus Financial Group, an Irving, Texas-based mortgage company, and then had the company buy shell companies they owned so they could take out the assets. The company is now defunct.
Prosecutors 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." They also alleged some of the money was used to pay organized crime debt.
The government said the men conspired in 2007 to get the money from FirstPlus two ways â€” first by hiring shell companies owned by Pelullo and Scarfo as consultants, then by buying other shell companies they formed.
John and William Maxwell, brothers who were executives at FirstPlus, were found guilty Thursday of wire fraud.
Scarfo's former lawyer, Donald Manno, and two lawyers for FirstPlus, David Adler and Gary McCarthy, were also charged in the fraud case. They were acquitted of all counts.
During the trial, prosecutors played for jurors recordings that they said established that the business dealings were mob-related, including some jailhouse recordings of conversations involving the elder Scarfo in which his son and Pellulo talk about the company takeover.
In one, the younger Scarfo says, "We're a good six to 10 months off from being able to help everybody." The government said "everybody" meant crime associates.
The elder Scarfo, who was also known as "Little Nicky," led the Philadelphia Mafia until 1988 when he was convicted of racketeering and sent to prison.