Little Nicky Scarfo Jr's Son Among 12 Arrested and Charged with Racketeering

The son of a Philadelphia mob boss, Nicodemo "Little Nicky" Scarfo Jr., and 12 others, are charged with racketeering and other offenses in an indictment handed down Tuesday morning. And Federal prosecutors say members of that mob have turned to a modern crime -- pillaging the assets of a mortgage company -- in a sign that organized crime is evolving to include more white-collar crime.

Thirteen people -- including lawyers and an accountant -- were charged in a federal indictment unsealed Tuesday. Most of them were arrested in raids throughout the morning in New Jersey, Florida and Texas.

Among them were Nicodemo S. Scarfo, the son of imprisoned Lucchese crime family boss Nicodemo D. "Little Nicky'' Scarfo, five lawyers and a certified public accountant. Eight of them were due in court Tuesday afternoon.

They face charges including racketeering, wire fraud, money laundering, false statements on a loan application, securities fraud. Maximum penalties range from five years in prison to decades. "The criminal activity is evolving,'' said Michael Ward, agent-in-charge of the FBI in Newark. "It's going from the back alleys to the boardrooms.''

Authorities say the plot started in April 2007, when the younger Scarfo and his associate Salvatore Pelullo, who has previously been convicted of financial crimes, decided to take over FirstPlus Financial Group, a publicly traded mortgage company based in Irving, Texas. Authorities said it was a company with a lot of cash but not much sophistication.

The indictment charges Scarfo and Pelullo used threats to help wrest control of the company. Pelullo is accused of telling a member of the FirstPlus' board that if he didn't go along with the plan, "your kids will be sold off as prostitutes.''

The indictment says he later told others who were charged in the scheme to get the company's board to agree to hand control to his and Scarfo's new directors -- and he wanted it done immediately. He allegedly told them: "I don't care if they're in a funeral parlor, I don't care if they're in a (expletive) hospital on a respirator, we'll send somebody there. I want their vote, I want their signature, and I want it done by the close of the day today.''

Authorities say the elder Scarfo, serving in a federal prison in Atlanta, was apprised of the plot, but that he was not charged because he's expected never to be released.

After getting control of FirstPlus, Scarfo and Pelullo are accused of having it buy shell companies they owned so they could take out money. After that, authorities said, they signed a series of consulting contracts to pay themselves even more.

In less than a year, authorities said, they took $12 million and spent it on multiple homes, including one for Scarfo's ex-wife; weapons and ammunition, a plane, an Audi, a Bentley, $30,000 in jewelry and an 83-foot, $850,000 yacht they named "Priceless.'' U.S. Attorney Paul Fishman wouldn't say exactly how authorities got onto the plot, but he said it ended with a series of raids in 2008.

Since then, FirstPlus has filed for bankruptcy, blaming the alleged criminals for wrecking the firm.

Fishman said the alleged conspirators were planning one more "piece de resistance:'' They wanted to pump up the stock price of FirstPlus and sell off the company. He said that was their exit strategy. "We had a different exit strategy.''

Thanks to NBC40

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NCAA Compared to Al Capone's Mafia

A Democratic congressman compared the NCAA to the Mafia over how it controls the lives of student athletes.

"I think they're just one of the most vicious, most ruthless organizations ever created by mankind," Illinois Rep. Bobby Rush said of the NCAA at a congressional forum on college sports Tuesday. "I think you would compare the NCAA to Al Capone and to the Mafia."

Rush made the accusations at the forum called to look at the impact of "back-room deals, payoffs and scandals" in college sports. The congressman spoke after hearing from a couple of mothers of former student-athletes who complained of ill treatment by schools after their sons suffered injuries.

"Congressman Rush obviously doesn't know the NCAA," Bob Williams, a spokesman for the organization, said in an email Tuesday night. "The NCAA and its member institutions provide over $2 billion per year in scholarships, financial assistance and academic support to student-athletes ... second only to the federal government. Student-athlete success is our mission."

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"Mafia: The Glamour of Crime" by Fien Mynendonckx

“As far back as I can remember, I wanted to be a gangster. To me, being a gangster was better than being President of the United States.“–Ray Liotta, Good Fellas

One look at the cover of Mafia: The glamour of crime and one knows it’s an important book. It’s big, it’s classy, and it’s riddled with bullet holes. Fans of gangster movies, mob movies, and The Sopranos will be indebted to their benefactors if this handsome volume finds its way to their piles of holiday gifts.

Filled with both black and white and color photos, and many two-page spreads, Mafia: The Glamour of Crime, authored by Fien Mynendonckx, is a stunning resource that mixes true-crime memories with Hollywood fantasy. There are numerous photographs of real-life mobsters and gangsters and even more stills from the most famous gangster films--The Godfather franchise, Good Fellas, Bugsy, The Untouchables, Pulp Fiction, Reservoir Dogs, Scarface and many others.

Mafia: The Glamour of Crime begins with a short introduction and then introduces “Mafia In America,” a chapter that includes the Cosa Nostra, the Irish Mob, and the Kosher Nostra. The following chapter also focuses on history, “Brief History of the Mafia in America,” which looks at a Mafia timeline that starts in 1910 and continues through 1990, finally asking “What now?”

For those unfamiliar with “consigliere,” “waste management business,” “sit-down,” “omerta,” and “Shylock,” there is a glossary that translates mob-talk into English, French and German. And really…you never know when it might come in handy.

“The Stereotype of the Gangster,” a chapter that includes “Real Gangsters,” “Gangster Actors” and “The Gangster Film” leads us into the world of entertainment, where we find “The Mafia in Hollywood.” Film buffs will think they’re in heaven when they browse through the fantastic photos (my personal favorite? A two-page spread for Good Fellas).

The book closes with chapters on the Mafia throughout the world, the reality of the Mafia, an epilogue, and clever quotes from both real-life and celluloid mobsters. Mafia: The Glamour of Crime is more a history of the Mafia on film than it is of the Mafia, and it addresses the romance that Hollywood (and other places throughout the world) has created from Mafia legends, but it is also a very satisfying scrapbook of anecdotes.

Thanks to Bob Etier

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Gangsters Expand to White-Collar Crime and Cyber Attacks

When is credit-card theft a good thing? When the culprits might otherwise be killing you.

The Federal Bureau of Investigation says national gangs like the Bloods and Crips are becoming more sophisticated, turning to white-collar financial crime and cyber attacks that threaten Corporate America and, well, everyone.

The evolving criminal schemes, which include mortgage fraud, counterfeiting, bank and credit card fraud and identity theft, are attractive because they are much less risky than traditional gang-related crimes such as murder, drug trafficking and robbery, and have the potential to yield much greater profits, according to a new national gang threat assessment from the FBI.

“In sort of a macro-sense, if they are hacking into people’s computers rather than killing them in cold blood, that’s a good thing, in some respects,” said Jonathan Armstrong, a partner at Duane Morris who practices Internet law. However, these gangs, which also include the Latin Kings, Aryan Brotherhood and Texas Syndicate, are growing in size, with membership up 30% to 1.4 million compared with 2009, and the FBI says they are becoming more dangerous.

“Gangs are more adaptable, organized, sophisticated, and opportunistic, exploiting new and advanced technology as a means to recruit, communicate discretely, target their rivals, and perpetuate their criminal activity,” the FBI said.

This heightened threat among U.S. gangs brings to light the increased volume of financial crimes and hacking seen across all industries over the last few years, which have already cost corporations, retailers and innocent people billions of dollars. “It’s an issue and I think it’s one that’s definitely accelerating,” Armstrong said. “I think we ought to be worried.”

Financial crime has picked up significantly over the last few years amid financial turmoil and technological advances. Ponzi and other high-yield investment fraud schemes surged when the Dow Jones Industrial Average plunged from a high of 14,164 in October 2007 to 6,547 in March 2009, the FBI said in its 2009 Financial Crimes Report.

While authorities have cracked down, the development of new schemes, such as securities market manipulation via cyber intrusion, has put fraud on the rise, the FBI said. From 2004 through 2009, fraud investigations increased by 33%, bringing losses associated with those schemes into the billions of dollars.

Of course, U.S. street gangs aren’t at the crux of financial crime in the U.S. just yet, which is typically led by professionals and swindlers within the banking system or high-tech cyber hackers. However, the gangs’ sophistication offers yet another impediment to authorities trying to suffocate white-collar crime and a sign these groups may continue to evolve into high-yielding complex schemes, forming much more lucrative enterprises.

Gangs such as the Bloods, Crips and La Nuestra Familia that are undertaking white-collar crime are recruiting members that possess the necessary high-tech skill sets, according to the FBI.

Some that run these criminal gangs could run corporations,” Armstrong said. “They push out less profitable businesses and build up the more profitable (ones), just as a corporation would.”

The FBI says gang members are exploiting vulnerabilities in the banking and mortgage industries for profit. They are turning to counterfeit and identity theft, using methods such as skimming to steal account numbers from ATMs or retail card readers.

Mortgage fraud is also on the rise, and gangs, such as the Gangster Disciples, are purchasing properties with the intent to receive seller assistance loans, only to retain proceeds from the loans or co mingle illicit funds through mortgage payments.

In April 2009, members of the Bloods in San Diego were charged with mortgage fraud, and in August 2010, members of the Black Guerilla Family in Maryland used pre-paid retail debit cards as virtual currency inside Maryland to buy drugs and further the gangs’ interests, according to the FBI.

“Wall Street has a brilliant system for pushing money around the world. So does organized crime,” Armstrong said, liking the underground profit-driving activities to an “underworld banking system.”

Earlier this month, authorities in New York arrested more than 100 service-sector employees in the city and dismantled five separate criminal enterprises operating out of Queens in a multi-million dollar counterfeiting scheme. New York Police Commissioner Raymond Kelly had said that while those crimes weren't holdups at gunpoint, the impact on victims was just as bad.

Robert Rebhan, a former Los Angeles Police Department officer who later directed a credit card fraud prevention program for American Express (AXP: 52.10, +0.29, +0.56%), notes that those are the kind of stunts, which are less risky and more profitable than traditional street crimes, that gangs are likely pursuing.

“If I have dirty money from a drug steal I need the underwater market to clean it up, so I might only get 20% return,” Armstrong said. “But if I can make it credit card fraud, then I can probably get better than a 20% return rate, particularly if I can use the compromised credit card to buy real goods and turn over those goods on an auction site.”

Cyber criminals typically steal a smaller amount of money from a large number of victims. Since, credit card companies and banks aren’t reporting minor counterfeiting cases to the Federal Trade Commission, it becomes the responsibility of victims.

Rebhan, who is a financial crimes expert, says 95% of those are never reported – making web-based fraud tougher to identity. “It’s not a critical step in recovering your identity - it’s a pain,” he said. “So when you hear crime is down – don’t believe that’s true of financial crimes.”

U.S street gangs are likely a ways off from operating botnets and siphoning massive funds from corporations, Rebhan said, noting the FBI is probably using “cyber crime” in a broader sense. However, criminal groups are becoming increasingly savvy and embracing advanced technology to enhance operations, according to the FBI.

Gangs are using social networking like Facebook, YouTube and Twitter to recruit new members and communicate globally and more discreetly without the proximity once needed for communication. “The proliferation of social networking websites has made gang activity more prevalent and lethal—moving gangs from the streets into cyber space,” the FBI said.

Many also use the Internet to carry out crimes such as computer hacking, cyber attacks and phishing schemes, which are used to illegally acquire personal information such as usernames, passwords and credit card information. But besides the attractive profits, gangs are also finding the web more enticing because of the less-stringent punishment faced by cyber criminals, at least compared with robbery and murder. Where a robbery can lead to a seven-year sentence, counterfeiting or identity fraud using the web could lead to just a few months of jail time, Rebhan said.

Of course, there are some exceptions, including Tien Truong Nguyen, who was sentenced last year to more than 12 years in prison for his role in a phishing scam that impacted more than 38,000 victims, and Albert Gonzalez, who was sentenced to 20 years for the Heartland Payment Systems (HPY: 21.62, +0.37, +1.74%) data breach. But for the most part, catching and punishing cyber criminals takes a certain skill set that many in law enforcement and judiciaries just don’t have yet, the experts say. Because of that, white-collar crime is slated to grow among street gangs.

“There’s no formal education given to the judiciary on cyber crimes – the jury is perplexed by these crimes and the judge is also – (they) don’t have a clue of bytes, bits or how malware is written,” Rebhan said.

Thanks to Jennifer Booton

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Jack Kennedy: Elusive Hero

A new portrait of John F. Kennedy based on interviews with those who knew him best, by Chris Matthews, bestselling Kennedy expert and host of Hardball.

By following the journey of Jack Kennedy’s life from his school days to the White House, through war and illness and his greatest triumphs, Chris Matthews brings us much closer to the man Jack Kennedy really was.

We know so much about President John F. Kennedy, yet even his wife Jacqueline described him as “that elusive man.” To MSNBC Hardball host Chris Matthews, Kennedy has long been both an avatar and a puzzle, a beacon and a conundrum. “Whenever I spot the name in print, I stop to read. Anytime I’ve ever met a person who knew him—someone who was there with JFK in real time—I crave hearing their first-person narrative.”

For years, Matthews has been collecting those stories. In Jack Kennedy: Elusive Hero, the bestselling author and Kennedy expert has woven those firsthand encounters with JFK into a great American Bildungsroman, telling the tale of how Kennedy grew from a child of privilege into a war hero and finally President of the United States, all the while coping with a life-threatening disease.

“In searching for Jack Kennedy my own way,” Matthews writes, “I found a fighting prince never free from pain, never far from trouble, never accepting the world he found, never wanting to be his father’s son. He was a far greater hero than he ever wished us to know.”

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