Reputed N. Jersey crime boss Merola pleads guilty

The reputed leader of a North Jersey faction of the Gambino crime family pleaded guilty to a conspiracy charge yesterday, admitting he headed an organization involved in gambling, loan-sharking, scams, and labor racketeering.

Andrew Merola, 42, a close friend and alleged criminal associate of South Jersey mob leader Nicky Scarfo Jr., entered the guilty plea during a hearing before U.S. District Judge Stanley R. Chesler in Newark.

Described as one of the highest-ranking members of the Gambino crime family in New Jersey, Merola faces up to 20 years in prison on the racketeering-conspiracy charge contained in a 30-count indictment handed up in May 2008.

Twenty-three defendants, described as members or associates of the Gambino and Lucchese crime families, were charged in the case. All but three have pleaded guilty.

Merola, of East Hanover, will remain free on $1 million bail and will be confined to house arrest pending sentencing, which has not been scheduled.

In addition to running an illegal sports-betting and loan-sharking operation, the indictment said, Merola was involved in a series of fraudulent schemes that generated tens of thousands of dollars between 2002 and 2008.

Among other things, he and several codefendants were charged with defrauding stores such as Lowe's, Home Depot, Best Buy, and Circuit City in a scam in which they used phony bar codes to purchase valuable merchandise at substantially lower prices.

The merchandise was then resold at value or returned for refunds or credit equal to the true value.

The labor-racketeering schemes included arranging for no-show or low-show jobs, and corrupting union officials and extorting bribes from companies in exchange for a guarantee that the companies could avoid collective-bargaining agreements and hire nonunion workers.

The case, developed by the New Jersey State Police, the FBI, and the Union County Prosecutor's Office, included over 39,000 wiretapped conversations, according to court documents.

Though Scarfo was not charged, the investigation included phone calls in which he and Merola were overheard discussing both business and personal matters.

A state police affidavit detailed how investigators followed Scarfo, Merola, and several other defendants in the case to meetings at some of the finer restaurants in Atlantic City, including the Palm at the Tropicana and Mia at Caesars.

Merola, who is also known as Andrew Knapik, became a close friend of Scarfo's when Scarfo moved to North Jersey after surviving a mob hit in South Philadelphia in 1989.

Scarfo is the godfather of Merola's son, according to investigators.

In a conversation wiretapped in February 2007, Merola interrupts a discussion with Scarfo about business and real estate deals to mention that his son is getting ready to make his First Communion in May.

In another conversation, Merola is overheard talking with a member of his mob crew about the status of Scarfo's father, jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo.

The elder Scarfo, convicted in 1988, is serving a 55-year sentence for murder-racketeering. He is now 80 and unlikely to be paroled.

Nevertheless, Merola argued, he should still be recognized as boss of the Philadelphia family.

"You just can't change our rules," Merola said in a conversation recorded in January 2007.