Nicodemo Scarfo, 49, of Galloway and Salvatore Pelullo, 47, of Philadelphia were convicted of all counts against them the Justice Department announced on Thursday.
Scarfo, who is believed to be a member of the Lucchese oranized crime family, and Pelullo, an associate of the crime family, were convicted of racketeering conspiracy, securities fraud, wire, fraud, bank fraud, extortion, money laundering and obstruction of justice.
Brothers William and John Maxwell of Texas were also convicted.
The convictions come after the jury deliberated for two weeks following a six-month trial.
"Today, four people stand
convicted for giving new meaning to ‘corporate takeover’ – looting a publicly
traded company to benefit their criminal enterprise,” U.S. Attorney Paul J. Fishman
said in a press release. “The defendants stole more than $12 million from shareholders through
rampant self-dealing, fraudulent SEC filings and intimidation. The public should
not have to worry that the interests of shareholders are being subverted to
benefit organized crime or for other corrupt ends."
According to the Justice Department, Scarfo, Pelullo and others took over FirstPlus Financial Group, which is based in Texas, in April of 2007 by threatening economic harm. They were able to take over the company and replace the board of directors.
Salvatore Pelullo and their cohorts used threats of physical and economic harm
to take over a publicly traded financial firm, then callously and
systematically looted the company out of millions of dollars to buy luxury
items for themselves,” Assistant Attorney General Leslie R. Caldwell said in a press release. “As a result
of today’s guilty verdict, this mafia member and his conspirators now face
substantial prison sentences."
Sentencing for Pelullo is scheduled for Oct. 21. Scarfo faces sentencing on Oct. 22. The Maxwell brothers will be sentenced the next day.