Texas Men Sentenced in Racketeering Conspiracy Involving Nicky Scarfo Jr.

Two Texas men who were convicted along with a member and an associate of the Lucchese organized crime family of La Cosa Nostra (LCN) were sentenced for their respective roles in a racketeering conspiracy and related offenses, U.S. Attorney Paul J. Fishman announced on Thursday.

William Maxwell, 56, of Houston, Texas, was sentenced to 20 years in prison. His brother, John Maxwell, 63, of Dallas, Texas, was sentenced to 10 years in prison. They are each subject to three years supervised release and must repay $14 million in restitution.

The Maxwells, along with Nicodemo S. Scarfo, 50, of Galloway, New Jersey, and Salvatore Pelullo, 48, of Philadelphia, were convicted in July 2014 of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice, after a six-month trial.

Scarfo and Pelullo were each sentenced to 30 years in prison earlier this week.

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.