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Scarfo organized crime case goes to jury in New Jersey

By Daniel Kelley

PHILADELPHIA (Reuters) - A federal jury in New Jersey on Wednesday began deliberating the fate of reputed mobster Nicodemo Scarfo Jr. in an alleged organized-crime takeover of a Texas-based mortgage company.

Prosecutors say Scarfo and business partner Salvatore Pelullo used threats of violence and extortion to coerce shareholders in FirstPlus Financial Group Inc into installing a board of directors beholden to the pair.

If convicted in the racketeering case in U.S. District Court in Camden, New Jersey, the pair face 30 years in prison.  

According to prosecutors, Scarfo and Pelullo allegedly used fraudulent consulting agreements to loot $12 million from the then-publicly traded company in Irving, Texas. It later filed for bankruptcy.

A 108-page indictment said the pair used the funds to buy luxury cars, a beach house, a yacht and jewelry in a scheme that began in 2007. They were arrested in 2011.

Scarfo Jr. is the son of Nicodemo Scarfo, a reputed mob boss in Philadelphia who has been in prison since the mid-1990s. The son is a member of the Lucchese crime family, according to prosecutors.

  Thirteen people in all, including a former FirstPlus chief executive and lawyers who worked with the company, are charged with crimes ranging from helping to conceal Scarfo's involvement to lying on applications for a mortgage.

The complex trial, in which jurors heard wiretaps and viewed financial documents, has been underway since January.

Law enforcement officials have used the case to claim that organized crime has evolved from back-alley gangsters to sophisticated financial operators.

Defense attorneys have argued that the case did not amount to a criminal conspiracy and at best should have been litigated in a shareholder lawsuit.

(Editing by Ellen Wulfhorst and Susan Heavey)

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