Theme from The Godfather played after mobsters staged corporate takeover
It was mood music for a corporate takeover.
A few hours after a rowdy shareholders meeting formalized
what federal authorities allege was Salvatore Pelullo's secret takeover of
FirstPlus Financial, Pelullo hosted a celebratory dinner for company officers
and members of the board of directors at a posh steakhouse in Dallas.
As he sat at the head of a long table in a private dining
room at DelFrisco's on that night in October 2007, a violinist serenaded Pelullo repeatedly with the same song, said
Robert O'Neal, then chairman of the board and president of FirstPlus.
O'Neal, testifying for the prosecution at the racketeering
trial of Pelullo, mobster Nicodemo S. Scarfo and five other defendants, said
the song was all too familiar and somewhat ominous.
"It was the theme from The Godfather," he said in
response to a question from Assistant U.S. Attorney Adam Small.
O'Neal was the second FirstPlus official to take the stand
in the now month-old trial. Among other things, he told the jury that his
signature had been forged on at least two company documents authorizing the
$1.8 million purchase of a financial company.
That purchase was one a several gambits the government
alleges Pelullo and Scarfo orchestrated after taking behind the scenes control
of FirstPlus in June 2007. The racketeering indictment alleges that Scarfo and
Pelullo siphoned $12 million out of the struggling, Texas-based mortgage
company, using the funds to support high flying lifestyles that included
expensive cars, lavish homes and a yacht they christened "Priceless."
Scarfo, 47, has been identified as a member of the Lucchese
crime family in North Jersey. He is the son of jailed Philadelphia mob boss
Nicodemo D. "Little Nicky" Scarfo. Pelullo, 45, of Elkins Park, has
been identified as a mob associate.
O'Neal, a chiropractor from Beaumont, Tx., said he was
brought into FirstPlus by William Maxwell, an attorney and friend who had been
named special counsel to FirstPlus. Maxwell's brother John was the CEO of the
company. The Maxwell brothers are co-defendants in the case along with three
other attorneys, including Donald Manno of Cherry Hill, Scarfo's longtime
defense attorney.
O'Neal is expected back on the stand when the trial resumes
Thursday. Court is in recess tomorrow.
Earlier today David Roberts, another former FirstPlus
official, completed his fourth day on the witness stand. Roberts testified that
he was threatened by Pelullo and that while Pelullo was listed only as a
"consultant," he was in fact the person running the company.
"What was said was what was done," Roberts said of
Pelullo.
Roberts said Pelullo used fear and intimidation, including
allusions to his mob connections, to bully him and others in the company. In
earlier testimony, he told the jury that shortly after taking control of
FirstPlus Pelullo warned Roberts and the Maxwell brothers that if they ever
cooperated with the government, "our wives would be raped by niggers and
our children would be sold as prostitutes."
Roberts, who said he had two daughters aged three and five,
said he was frightened by the threat and decided, "I wasn't going to be a
problem. I was going to do what I had to do."
During cross-examination, defense attorneys challenged
Roberts' credibility and motives for cooperating, pointing out among other
things, that he had lied on his resume -- Roberts conceded that he had
"embellished" -- and that he borrowed $38,000 from Pelullo even while
claiming he feared him.
Roberts served as secretary of the company and was a member
of the board of directors from the summer of 2007 until early in 2008. He was
also vice president of a FirstPlus subsidiary. He said he earned an annual
salary of $150,000.
The FBI first questioned him in September 2008, he said,
about six months after his job had been terminated. He said he wasn't surprised
to get a visit from federal investigators because he had had concerns about the
way FirstPlus was operating.
"From the inside it did not look like what I envisioned
a public company would look like," he said.
O'Neal told a similar story about the way FirstPlus was run.
He said he was brought into the company by William Maxwell and that Pelullo was
introduced as a "consultant." He said he was unaware that Pelullo had
two prior convictions for fraud, facts that would have impacted his decision to
get involved.
He said William Maxwell later boasted about a legal appeal
he was working on for "Little Nicky" who he later learned was jailed
Philadelphia mob boss Nicodemo D. Scarfo. The elder Scarfo, 83, has been jailed
since 1988 on racketeering and murder charges. He is serving a 55-year sentence.
Testimony and evidence introduced at the trial has included
records of Pelullo and the younger Scarfo visiting the mob boss in prison in
Atlanta and taped phone conversations from prison in which Scarfo and his son
discuss what the government alleges was the FirstPlus takeover.
O'Neal said he twice traveled to the Philadelphia - South
Jersey area with William Maxwell. On both
occasions, he said, they met with Sal Pelullo and on one
occasion they went to an Italian restaurant where he was introduced to the
younger Scarfo.
Maxwell, he said, pointed to Scarfo who was standing in
front of the restaurant and said, "He's the man. He's the money."
O'Neal said he assumed Scarfo was "the Godfather."
O'Neal said after he became president of FirstPlus he was
"very concerned about the leadership of the company." He said William
Maxwell assured him that Pelullo would not be involved in the operations, but
O'Neal said that assurance was hollow and that Pelullo remained very active in
the decision making process. O'Neal said he opted to resign early in 2008,
claiming he did not have the time to commit to the job as president.
In fact, he said, he lied about why he wanted to step down.
His real reason, he said, was his concern about organized crime.
"I didn't want to make anyone mad," he said.
"I just wanted to get out."
On cross-examination by Scarfo's lawyer, Michael Riley,
O'Neal admitted that anything he knew about the Mafia came from movies and news
reports. He said he had had very little contact with Italian-Americans in
Texas.
Throughout the trial, the defense has hammered away at two
themes -- FirstPlus was a failing company that floundered not because of
fraudulent business deals, but because of its weak financial position; and the
introduction of the spectre of organized crime into the case is an attempt by
the government to sensationalize and hype an otherwise complicated and boring
story of a financial collapse.
Returning to the dinner at DelFrisco's and The Godfather
music, Riley asked O'Neal if it would be unusual to hear Mexican music being
played in a Mexican restaurant. He also asked him if his perceptions of Pelullo
and Scarfo weren't clouded by "the stereotype that Italian-Americans"
from the northeast part of the United States were Mafia.
Isn't that the same, Riley asked, as northerners who believe
everyone from Texas "wears a cowboy hat, drives a pickup truck and has
cows?"
O'Neal said it wasn't just The Godfather theme, but
"the way it was done."
"He was playing it directly to Mr. Pelullo," said
O'Neal, adding that the violinist played the theme
three or four times in succession. He also said John
Maxwell's two sons, one in high school and the other in college, acted as
"body guards" for Pelullo, accompanying him whenever he got up from
the table.
Riley asked incredulously if O'Neal wanted the jury to
believe that "two boys, one in college and the other in high school"
where providing security for a Mafia figure? O'Neal struggled with the answer,
but said that's what it seemed like to him.
While not part of today's testimony, other government
documents and records indicate that the October 2007 shareholder's meeting was
the focal point of the takeover of FirstPlus. The government alleges that
Pelullo threatened officials to get shareholder votes in line and used
intimidation to thwart a rival group of shareholders who opposed the new board
of directors that the government said Pelullo had put in place.
The dinner at DelFrisco's was to celebrate the victory, but
O'Neal said he was taken aback as were other company officials who attended.
As a final question, Riley asked O'Neal, "Do you wear a
cowboy hat, drive a pickup truck and have cows?"
"Two out of three," said the witness.
http://www.bigtrial.net/2014/02/jurors-hear-of-serenade-for-takeover.html#SzP6WcIMedlFeWtm.99
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