Galloway Mobster's Conviction Upheld After Losing Appeal

NEWARK, NJ — A federal appeals court upheld the convictions and sentences of a member and an associate of the Lucchese organized crime family and two Texas brothers on racketeering conspiracy and related offenses, U.S. Attorney Philip R. Sellinger said.

Nicodemo S. Scarfo, 57, of Galloway, New Jersey, a member of the Lucchese organized crime family of La Cosa Nostra (LCN), and Salvatore Pelullo, 55, of Philadelphia, an associate of the Lucchese and Philadelphia LCN families, were previously convicted on July 3, 2014, of all the counts against them, Sellinger said.

Two others, William Maxwell, 63, of Houston, Texas, and his brother, John Maxwell, 70, of Irving, Texas, were also convicted, Sellinger said.

The defendants challenged "almost every aspect of their prosecutions" in the consolidated appeal, Sellinger said.

A three-judge panel of the U.S. Court of Appeals for the Third Circuit affirmed all the convictions and sentences, except for the forfeiture portion of John Maxwell's sentence, in a precedential, 169-page opinion, Sellinger said. The forfeiture matter was remanded to the District Court to determine what share he should pay, Sellinger said.

The four were convicted for using extortionate threats to take control of FirstPlus Financial Group, a publicly held mortgage company based in Dallas, and subsequently looted the company, which caused a loss of more than $14 million and left more than 1,000 shareholders with now-worthless investments, Sellinger said.

Scarfo and Pelullo were both sentenced to 30 years in prison, while William Maxwell was sentenced to 20 years in prison and John Maxwell was sentenced to 10 years in prison, Sellinger said.

The appellate court decision affirmed the jury's guilty verdict of all the underlying crimes and prison sentences. The crimes included participating in a Racketeering Influenced Corrupt Organization conspiracy, conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering and firearms offenses, Sellinger said. The decision was written by Circuit Judge Kent A. Jordan and joined by Circuit Judges Thomas L. Ambro and Stephanos Bibas.

The government was represented on appeal by Assistant U.S. Attorneys Norman Gross and Sabrina Comizzoli of the Appeals Division and Bruce P. Keller, Special Counsel to the U.S. Attorney.