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Reputed New Jersey mobster guilty in takeover of Texas company

News Jamestown,North Dakota 58401
Jamestown Sun
Reputed New Jersey mobster guilty in takeover of Texas company
Jamestown North Dakota 121 3rd St NW 58401
PHILADELPHIA, July 3 (Reuters) - A federal jury in New Jersey on Thursday convicted reputed mobster Nicodemo Scarfo Jr. and three associates of an organized-crime takeover of a Texas-based mortgage company.

Scarfo, a reputed member of the Lucchese organized crime family, and Salvatore Pelullo were found guilty of a host of charges including racketeering, conspiracy, bank fraud, extortion and money laundering.

Scarfo Jr., 49, is the son of Nicodemo Scarfo, a reputed mob boss in Philadelphia who has been in prison since the mid-1990s.

Prosecutors said Scarfo, of GallowayNew Jersey, and Pelullo, of Philadelphia, used threats of violence and extortion to coerce shareholders of FirstPlus Financial Group Inc to install a board of directors beholden to the pair.

They were found guilty of using fraudulent consulting agreements to loot $12 million from the then-publicly traded company in IrvingTexas, which later filed for bankruptcy.

The indictment claimed they used the funds to buy luxury cars, a beach house, a yacht and jewelry in a scheme that began in 2007.

Bank fraud carries the possibility of 30 years in prison and a $1 million fine, while the racketeering, other fraud, conspiracy and obstruction of justice counts carry potential 20-year prison sentences.

Scarfo's sentencing was scheduled for Oct. 22.

The jury deliberated two weeks following a complex six-month trial before U.S. District Judge Robert Kugler in federal court in CamdenNew Jersey.

Also convicted were two Texas brothers, William Maxwell, a Houston-based attorney, and John Maxwell, who acted as the company's chief executive officer.

Three others were acquitted in the case.

Five other people, including Scarfo's wife, Lisa Murray-Scarfo, already pleaded guilty to charges stemming from the scheme.

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

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