Longtime mob reporter can cover Scarfo trial, judge rules

CAMDEN A veteran reporter who has covered organized crime in Philadelphia and South Jersey for more than 40 years will be permitted to watch a white-collar mob trial despite his name's appearing on the witness list, a federal judge ruled Thursday.

George Anastasia, who wrote for The Inquirer until October 2012, was put on the defense's witness list in State v. Scarfo et al. The federal case alleges that reputed mobster Nicodemo Scarfo, son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo Jr., and an associate, Salvatore Pelullo, along with several attorneys, orchestrated a racketeering scheme netting them millions.

Anastasia had planned to report on the case for the website Big Trial but has been blocked from entering the Camden courtroom since the beginning of the month because his name was on the potential witness list. The defense had requested that potential witnesses be sequestered.

On Thursday, U.S. District Judge Robert Kugler granted a motion to end Anastasia's sequestration.

"Frankly, I'm not convinced at all that Mr. Anastasia has any admissible evidence," Kugler said.

During his career, Anastasia said, he had never been put on a witness list.

"It's a First Amendment issue; it sets a precedent," Anastasia said. "It could mean, for any trial, an attorney or a defendant knows a reporter who, for whatever reason, they don't want to report on a case, they can just put them on the witness list."

The case charges Scarfo, Pelullo, and lawyers Gary McCarthy, David Adler, Donald Manno, and John and William Maxwell in a 25-count indictment alleging that they defrauded shareholders of the Texas-based FirstPlus financial mortgage company out of $12 million.

Defense attorneys have argued that the company was ill-fated from the start and that there was no financial impropriety. They also say references to the Mafia are a distraction by the government.

Pelullo's attorney, J. Michael Farrell, said he wanted Anastasia to testify that he had never linked Pelullo to organized crime in a published article until the indictment in the FirstPlus case came out.

Farrell, whose voice rose to a shout at some points during his motion, said such testimony would help rebut the government's claim that Pelullo was a mob associate.

"The fact that he did not [mention him prior to 2006] makes the fact that he is not an associate more likely," Farrell said.

"How do you know any of that?" Kugler asked. "How do you know that Mr. Anastasia has never before received information linking your client to organized crime?"

"I'll take that risk," Farrell said.

"You're not going to get to take that risk," Kugler said.

Anastasia's attorney, Maxwell Kennerly, said a database search of articles could easily produce the information Farrell was seeking and was not grounds for Anastasia's testimony.

"Any information that Mr. Anastasia possesses is the result of his news-gathering activities," Kennerly said, adding that he would likely oppose any subpoenas under First Amendment privilege rights granted to journalists.

Courts have long upheld a reporter's right to cover legal proceedings, and in New Jersey, shield laws protect journalists from revealing confidential sources.

The trial, which is expected to last up to three months, is in its fourth week.

On Thursday, David Roberts, who worked with Pellulo to acquire FirstPlus, testified about how Pelullo, in conjunction with attorney William Maxwell, sent threatening letters to board members asking them to step down.

The initial strategy was to purchase enough stock to acquire the bankrupt company, Roberts said, but when the group couldn't come up with the money, Pelullo and others turned to threats and blackmail.

The letters, drafted four days before the takeover in June 2007, included allegations of sexual assault, financial impropriety, and threats of calling federal authorities to report them.

At a celebratory dinner after the old board had been dismantled and a new one had taken the helm, Roberts - who was made a new board member - said Pelullo took him outside and told him, "I just made you a millionaire."

Roberts said that a few weeks later, Pelullo's tone changed dramatically when he threatened him, as well as John and William Maxwell, also defendants in the case.

"He said that if we ever rat, our wives will be [expletive] by [expletive], and our children will be sold off as prostitutes," Roberts said.

For Roberts, whose thoughts went to his daughters, 3 and 5 at the time, it was a jarring statement.

"I was upset and terrified, but my decisions were, I was following whatever needed to be done" for the company, he said.