Defense attorneys fight assertions against their gangster clients
He wasn't a gangster. He was a turnaround expert.
And if the government had just left him alone, Salvatore
Pelullo would have turned FirstPlus Financial, a struggling Texas mortgage
company, into a profitable business enterprise.
Do the math!
That was the message, accompanied by nearly 100 slides and a
heavy mixture of passion and sarcasm, that Pelullo's lawyer, Michael Farrell
delivered to a federal jury today in a highly charged summation that offered a
decidedly different view of the testimony and evidence from the one presented
by the prosecution during the five-month trial.
The government, Farrell said repeatedly, failed to back up
its charge that Pelullo and mobster Nicodemo S. Scarfo looted the company after
secretly taking control of its board of directors in the summer of 2007.
"The government never gave these people a chance and
they want you to convict them of crimes," said Farrell, the first of seven
defense attorneys to offer closing arguments. Farrell will be back in front of
the jury when the trial resumes Monday. He is expected to take most of the day
to complete his summation.
"This is a guy with a track record of immense business
success," Farrell said of his client, pointing to businesses Pelullo had
started in the past, to a newspaper article identifying him as one of the top
40 businessmen under 40 and personal financial records that listed properties
and assets that at times exceeded $1 million.
Farrell described Pelullo, 46, as a high school dropout with
intuitive business acumen who had developed a "business model" for
taking distressed companies and turning them into successful operations. He
was, Farrell added, a "risk taker" who had run afoul of the law in
the past. Pelullo has two prior fraud convictions.
But the defense attorney, contradicting a major premise in
the prosecution's case, said there was never any attempt to hide Pelullo's role
as a consultant to FirstPlus or to defraud the company.
"Loot the company?" he nearly shouted at one
point. "They were trying to grow the company."
Farrell's summation came after Assistant U.S. Attorney
Stephen D'Aguanno wrapped up nearly six hours of closing arguments shortly
after the lunch break today. D'Aguanno described Pelullo as the "central
figure" in a scam built around "a fraudulent set of legal and
consulting agreements."
He said Pelullo and Scarfo use fear, intimidation and the
reputation of the mob and their links to it to advance a scheme that netted
them millions while running the company into the ground. Both Pelullo and
Scarfo, through companies they controlled, had consulting contracts with
FirstPlus. A third defendant, lawyer William Maxwell, had a legal contract with
the firm.
Maxwell was being paid $100,000-a-month plus expenses. The
government contends he set up consulting contracts for Pelullo, at
$100,000-a-month, and Scarfo, at $33,000-a-month, as part of an insider move to
siphon cash out of the company.
Other defendants on trial are Maxwell's brother, John, the
CEO of FirstPlus, and lawyers David Adler, Gary McCarthy and Donald Manno.
Using slides and charts that flashed on large screens around
the courtroom, Farrell challenged the goverment's contention that after Pelullo
and Scarfo took control of the company board of directors, its assets dropped
from about $11 million to $1,700. In fact, he contended, companies that were
purchased by FirstPlus had tangible value of millions and were not the straw
entities that the prosecution alleges.
The purchases -- the government has charged that Pelullo and
Scarfo controlled most of the companies that FirstPlus bought -- were part of a
plan to turn the company around, part of a business model that Pelullo had
developed and used successfully over the years.
Farrell also chided D'Aguanno and FBI Agent Joe Gilson, the
lead investigator in the case. The defense attorney implied that the two law
enforcement officials lacked the financial background and training to
accurately assess what was taking place.
He said the FBI targeted Scarfo, the son of jailed
Philadelphia mob boss Nicodemo D. "Little Nicky" Scarfo, because of
his suspected mob ties. The younger Scarfo was on probation in 2007 after
serving more than three years in prison for a conviction in an orgnaized crime
gambling case. He has another conviction for racketeering.
The organized crime investigation into Scarfo, dubbed
"Son Block," morphed into a probe of white collar corruption, Farrell
said, and went off track because the government didn't understand the financial
world.
The government "wants you to believe Scarfo was a
mobster," Farrell told the jury. The evidence and testimony indicate he
was "a computer nerd," the lawyer said.
Both Pelullo and Scarfo had criminal records and were
cognizant of the fact that those records could create problems with government
regulators and shareholders. But neither attempted, as the government alleges,
to hide their involvement as consultant to the company, he said.
"They had strikes against them," he said of their
criminal pasts. "They had obstacles. But they believed they could
succeed."
Returning to another theme that has been part of the defense
throughout the trial, Farrell said a series of FBI raids in May 2008 in which
FirstPlus records were seized and Pelullo and Scarfo were identified as targets
thwarted any attempt for the company to succeed. It wasn't fraud, but the
government's actions, he argued, that deep sixed FirstPlus Financial.
He urged the jury not to buy into the government's
arguments.
"They believe you'll convict solely because of the
Mafia smoke," he said. But it's smoke, he said, with "no fire."
http://www.bigtrial.net/2014/06/mafia-smoke-no-fire-in-fraud-case.html#L7r8rFDUuvGvBxZr.99
0 comments:
Post a Comment