30-year term for Scarfo in fraud case

Reputed mobster Nicodemo Scarfo Jr. - son of former Philadelphia mob boss "Little Nicky" - will remain in prison for decades, following in his father's footsteps.

On Tuesday, U.S. District Judge Robert Kugler sentenced Scarfo to 30 years for the "iron fist" control he used to extort money from a bank. The judge noted that Scarfo's conviction for racketeering, conspiracy, and related offenses was his fifth, and the second in the federal system. Scarfo was convicted last summer. Three others convicted also face sentencing this week.

"They stole every dollar they could get their hands on," Kugler said. "It got so bad that they had to take a loan out to pay employees."

Scarfo and the others used millions that they stole to buy an $850,000 yacht, a luxury home, a Bentley, and expensive jewelry.

In addition to three decades behind bars, Scarfo was ordered to pay more than $14 million in restitution for money that Assistant U.S. Attorney Steven D'Aguanno said was stolen from the Texas-based First Plus Financial, also to benefit the Lucchese crime family.

Scarfo, 50, of Galloway, N.J., and the others were convicted after a six-month trial for the fraud that authorities said they operated from South Jersey.

Prosecutors convinced the jury that Scarfo, known as "Mr. Macintosh" for his computer-savvy crimes, and Salvatore Pelullo, 48, of Philadelphia, took control of First Plus. The two allegedly dismantled the bank's board of directors and put in their own people to run the scam. By May of 2008, millions had been siphoned through consulting contracts.

The government used wiretaps, documents, and electronic files to prosecute. Four other defendants pleaded guilty to charges before the trial, including Scarfo's cousin John Parisi; Scarfo's wife, Lisa Marie; a West Reading, Pa., lawyer, Cory Leshner; and Howard Drossner, an associate of Pelullo's.

On Tuesday, Scarfo's attorney, Mike Riley, suggested the bank scam did not result in permanent damage to victims. The judge disputed that.

Kugler said stockholders lost because the thefts forced the company into bankruptcy.

Asked whether he wanted to address the court, Scarfo responded, "No thank you, your honor."

Apparently unfazed by the long sentence, Scarfo smiled as he was escorted out of the courtroom by federal marshals. There were no family members who spoke on his behalf. Officials said Scarfo has a 7-year-old son and a 14-year-old daughter.

D'Aguanno argued for the long sentence to serve as a deterrent to others, and to stop Scarfo, who he said has spent most of his adult life in jail, on probation, or committing crimes.

In 1988, Scarfo served time for assault, in 1993 for racketeering, in 1996 for illegal possession of a knife, and in 2002 for bookmaking.

He was paroled in 2005 and while on supervised release began the First Plus Financial scam, collecting $33,000 plus expenses a month as a consultant, D'Aguanno said. There was no indication, D'Aguanno said, that Scarfo did any legitimate work.

D'Aguanno told Kugler that Scarfo was trained as a mob man by his father, Nicodemo Sr., who is serving a 55-year sentence on unrelated racketeering charges.

In a battle to control the Philadelphia mob after Scarfo Sr. was sent to prison, his son was shot several times. Joey Merlino took control in Philadelphia, and Scarfo later started working with the Lucchese crime family in South Jersey, D'Aguanno said.

On Wednesday, codefendant and businessman Pelullo is scheduled for sentencing for his part in the First Plus scheme. Brothers John Maxwell, 63, First Plus Financial CEO, and William Maxwell, 56, an attorney for the company, both of Texas, are scheduled for sentencing Thursday.

In arguing for Scarfo's long sentence, D'Aguanno said Scarfo took a blood oath to remain loyal to the Mafia, and the only way out is death.

"He believes the criminal justice system is a joke," D'Aguanno said.