Nicky Scarfo Jr., Sal Pelullo Each Sentenced to 30 Years in Prison

Two members of the Lucchese organized crime family of La Cosa Nostra (LCN) were sentenced to 30 years in prison for participating in a racketeering conspiracy and related offenses, U.S. Attorney Paul J. Fishman of the District New Jersey and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division said.

Nicodemo Scarfo, 50, of Galloway, and Sal Peulullo, 48, of Philadelphia, were previously convicted of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice.

They were also sentenced to five years of supervised release, pay $14 million in restitution and is forced to forfeit his interest in certain properties.

Also convicted were: William Maxwell, 56, of Houston, a Texas attorney and John Maxwell, 63, of Dallas. They are also scheduled for sentencing this week.

“Scarfo and his crew gave new meaning to the term ‘corporate takeover,’ pushing out the legitimate leadership of a publicly traded company and then looting it,” Fishman said. “They used false SEC filings, phony consulting agreements and more traditional mob methods to steal $12 million from the company’s shareholders. That’s a risk that investors should never have to take.”

“Nicodemo Scarfo and his associates tried to take La Cosa Nostra corporate, using traditional, strong-arm mob tactics to take over a publicly traded company and loot it like a personal piggy bank,” Caldwell said. “The Justice Department will fight organized crime wherever it may surface – from back alleys to public board rooms – to ensure that crime does not pay.”

According to documents filed in this case and the evidence presented at trial:

Since 1989, Scarfo has been a member of the Lucchese family. As a member, he was required to earn money and participate in the affairs of the Lucchese family.

In April 2007, Scarfo, Pelullo and others conspired to take control of FirstPlus Financial Group Inc. (FPFG), a publicly held company in Texas, by using threats of economic harm to intimidate and remove FPFG’s management and board of directors, and to replace them with people beholden to Scarfo and Pelullo, including the Maxwell brothers.

Once the takeover had occurred, FPFG’s new board of directors named William Maxwell as “special counsel” to FPFG and John Maxwell as the company’s CEO, positions that they used to funnel $12 million to themselves, Scarfo and Pelullo through fraudulent legal services and consulting agreements.

Scarfo and Pelullo used their illicit gains to fund extravagant purchases, including an $850,000 yacht, a luxury home, a Bentley automobile and thousands of dollars in jewelry.