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Scarfo son, 33 others face racketeering charges

By George Anastasia and Mike Newall

Philadelphia Inquirer Staff Writers

TRENTON - Nicodemo S. Scarfo, the son of jailed Philadelphia mob boss Nicodemo "Little Nicky" Scarfo, was indicted on racketeering and gambling charges Friday for his alleged role in what New Jersey authorities charge was a $2 billion, international sports-betting operation.

Scarfo, 44, was one of 34 reputed members or associates of the New York-based Lucchese crime family named in the indictment announced by the state Attorney General's Office.

Joseph DiNapoli and Matthew Madonna, reputed leaders of the crime family, headed a gambling operation that generated about $2.2 billion in bets over 15 months, the indictment charged.

The bets were funneled through Internet websites to a wire room in Costa Rica, according to authorities who said gamblers used passwords to gain access.

"Records showed that one high-rolling gambler wagered more than $2 million in a two-month period," according to a statement issued by Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor.

The indictment was based on an investigation dubbed "Operation Heat" conducted by the Division of Criminal Justice. The gambling charges covered a period beginning in August 2006.

Most of those named in the indictment originally were arrested in December 2007. Scarfo was mentioned prominently in an affidavit outlining the case at that time but was not charged. He was one of three new defendants added to the case.

James Leonard Jr., one of Scarfo's attorneys, said Friday that he was "stunned" that Scarfo had been charged.

"Perhaps they're trying to add some sizzle to the indictment," said Leonard, who said Scarfo was arrested Friday afternoon at his home in Smithville, Atlantic County, and taken to the Morris County Jail.

Leonard said he expected a bail hearing to take place early next week. He declined to comment on the specific charges.

Donald Manno, another Scarfo lawyer, called the arrest "a cheap shot," noting that authorities were aware that a bail hearing would not be scheduled until after the weekend and that his client would have to be held in jail as a result.

Scarfo is also the target of a federal fraud investigation being conducted by the U.S. Attorney's Office in Camden. Manno's law office in Cherry Hill was raided by the FBI in that case, which focuses on millions of dollars of financial transactions by a Texas-based firm, FirstPlus Financial, in which Scarfo allegedly had a behind-the-scenes interest.

Scarfo, who has two prior gambling convictions, was charged with racketeering, conspiracy, and gambling offenses in the Operation Heat indictment.

The case included more than a dozen other charges including allegations of extortion, aggravated assault, money-laundering, and drug dealing.

Among other things, authorities allege that several members of the Lucchese organization conspired with members of a Bloods street gang to smuggle drugs and cell phones into East Jersey State Prison in Woodbridge.

A former prison guard was among those charged in that section of the indictment.

"It is troubling to see this unconventional alliance between traditional organized crime and street gangs," Dow said at a news conference to announce the indictment.

"However, it is indicative of something we have always known about organized crime: If there is illicit money to be made through a criminal activity, sooner or later organized crime is going to engage in the activity," she said.

The case includes hundreds of secretly recorded conversations stemming from telephone wiretaps and electronic listening devices planted in cars and other locations.

Investigators also surveilled a mob "making" ceremony and recorded conversations afterward in which members discussed mob protocol and internal workings of the organization.

Those conversations included discussions about how leaders of the Lucchese organization decided in 2007 to replace Scarfo as a capo, or captain, of the crime family because of media attention suggesting that he was plotting to take control of the Philadelphia-South Jersey criminal organization once headed by his jailed father.

Nicodemo D. "Little Nicky" Scarfo, 81, is serving a 55-year prison term on federal racketeering charges.

The elder Scarfo, according to law enforcement affidavits, arranged from prison for his son to become a member of the Lucchese organization after a failed assassination attempt on the younger Scarfo in South Philadelphia in 1989.

He was dining with two associates at Dante & Luigi's restaurant on Halloween night when a gunman wearing a mask and carrying a trick-or-treat bag walked up to his table, pulled a machine pistol out of the bag, and shot him six times.

The shooting was viewed in underworld circles as payback from disgruntled members of the Philadelphia crime family who held the elder Scarfo responsible for a series of murders and prosecutions that decimated the organization in the 1980s.

The younger Scarfo soon went into hiding in North Jersey.

At the time of the hit, his father was serving in the same federal prison as Lucchese boss Vittorio "Vic" Amuso. The elder Scarfo, according to law enforcement documents, asked Amuso to put his son under the protection of that crime family.

The younger Scarfo eventually became a made member of the organization and, after serving two prison sentences on gambling charges, returned to South Jersey as a capo.

His subsequent demotion, mentioned on taped conversations, could prove to be beneficial in the pending case.

Scarfo's replacement as capo, Ralph V. Perna, was charged Friday with the same offenses as Scarfo but also was named in a count charging him with being a leader of organized crime, an offense that could add 10 years to any term he would receive if convicted.