US Court Order Forfeits Property in RICO and Fraud Case

2005R01468/HW/PWG/gr
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA,
v.
NICODEMO S. SCARFO
a/k/a "Nicky,"
a/k/a "Nick,"
a/k/a "Cousin,"
a/k/a "Junior,"
a/k/a "Nick Promo,"
a/k/a "Mr. Apple,"
a/k/a "Mr. Macintosh"
Defendant.
Criminal No. 11-740 (RBK)
Hon. Robert B. Kugler, U.S.D.J.
FINAL ORDER OF FORFEITURE (AS
TO SPECIFIC PROPERTY) AND
ORDER OF FORFEITURE
(MONEY JUDGMENT)
The Indictment and the Jury Verdict
WHEREAS, on October 26, 2011, the grand jury returned a twenty-five
count Indictment, Crim. No. 11-740 (the "Indictment") against, among others,
defendants Nicodemo S. Scarfo, Salvatore Pelullo, William Maxwell, and John
Maxwell (collectively "the defendants"); and
WHEREAS, the defendants were charged in the Indictment with, among
other offenses, RICO conspiracy, in violation of 18 U.S.C. § 1962 (Count One);
securities fraud conspiracy, in violation of 18 U.S.C. § 371 (Count Two); wire
fraud conspiracy, in violation of 18 U.S.C. § 1349 (Count Three); sixteen counts
of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (Counts Four through
Nineteen); and conspiracy to commit money laundering, in violation of 18
U.S.C. § 1956(h) (Count Twenty); and
Case 1:11-cr-00740-RBK Document 1372 Filed 09/06/16 Page 1 of 20 PageID: 44680

WHEREAS, on July 3, 2014, ajury sitting in the United States District
Court, District of New Jersey, found the defendants guilty of each of Counts
One through Twenty, among others; and
Statutory Bases for Forfeiture
WHEREAS, pursuant to 18 U.S.C. § 1963(a), a person convicted of an
offense in violation of 18 U.S.C. § 1962 (RICO Conspiracy) shall forfeit to the
United States of America:
a. any interest acquired or maintained in violation of section 1962;
b. any interest in, security of, claim against, or property or
contractual right of any kind affording a source of influence over, any
enterprise which the defendant[s] established, operated, controlled, conducted,
or participated in the conduct of, in violation of section 1962; and
c. any property constituting, or derived from, any proceeds obtained,
directly or indirectly, from racketeering activity in violation of 1962; and
WHEREAS, pursuant to 18 U.S.C. § 981(a)(l)(C) and 28 U.S.C. § 2461(c),
a person convicted of an offense in violation of 18 U.S.C. §§ 371 (Securities
Fraud Conspiracy), 1343 (Wire Fraud), or 1349 (Wire Fraud Conspiracy) shall
forfeit to the United States any property, real or personal, which constitutes or
is derived from proceeds traceable to the commission of the offense; and
WHEREAS, pursuant to 18 U.S.C. § 982(a)(l), the court, in imposing
sentence on a person convicted of an offense in violation of 18 U.S.C. § 1956(h)
(Money Laundering Conspiracy), shall order that person to forfeit to the United
2

States any property, real or personal, involved in such offense, and any
property traceable to such property; and
RICO Conspiracy
WHEREAS, on July 3, 2014, based upon the connection of the property
with the offense charged in Count One of the indictment, the trial jury found,
beyond a reasonable doubt, the defendants' interests in each of the following
items subject to forfeiture as (a) an interest acquired or maintained in violation
of 18 U.S.C. § 1962; (b) an interest in, security of, claim against, or property or
contractual right of any kind affording a source of influence over a racketeering
enterprise; and/ or (c) property constituting or derived from any proceeds
obtained, directly or indirectly, from racketeering activity in violation of 18
U.S.C. § 1962, and subject to forfeiture to the United States pursuant to 18
U.S.C. § 1963(a):
a. One Falcon vessel, bearing Vessel Identification Number 1040201,
Hull Number FLNTPL83Al96;
b. One Mitsubishi model MU-2B-60 turbo-propeller aircraft, bearing
Serial Number 1562 S.A., and Federal Aviation Administration
Registration Mark (N-Number) 1164F;
c. One Bentley automobile, model Continental GT Convertible, Vehicle
Identification Number SCBDR33W37C044370;
d. One Audi automobile, Model A6, Vehicle Identification Number
WAUEV74F77N023428;
e. One ladies 18 carat white gold ring with a princess cut diamond
weighing approximately 2.01 carats;
f. One ladies 14 carat white gold bracelet with approximately 100
brilliant cut diamonds;
3

g. Contents of customer account 15624, held in the name of Learned
Associates of North America, LLC, at Audi of Willow Grove, located in
Willow Grove, Pennsylvania, and consisting of a $10,000 deposit for
an Audi R8 automobile;
h. Contents of Bank of America account# 003810121435;
L Contents of Bank of America account# 003810201818;
J. Contents of Bank of America account# 381001250963;
k. Contents of Bank of America account# 3810121383;
1. Contents of Bank of America account# 004796252676;
m. Contents of Commerce Bank NA account# 7855143017;
n. Contents of Commerce Bank NA account# 0369406087;
o. Contents of Commerce Bank NA account# 0368847216;
p. Contents of Commerce Bank NA account# 368965174;
q. Contents of Guaranty Bank account# 380-3113939;
r. Contents of Guaranty Bank account# 380-3520463;
s. Contents of Guaranty Bank account# 380-3113954;
t. Contents of Guaranty Bank account# 380-6056481;
u. FirstPlus Financial Group, Inc., stock certificate number Cl7216
representing 200,000 shares of common stock issued to Seven Hills
Management LLC, dated November 14, 2007;
v. FirstPlus Financial Group, Inc., stock certificate number Cl7214
w. FirstPlus Financial Group, Inc., stock certificate number Cl7234
Management LLC, dated January 31, 2008;
4

t '
x. FirstPlus Financial Group, Inc., stock certificate number Cl7217
representing 200,000 shares of common stock issued to Learned
Associates of North America LLC, dated November 14, 2007;
y. FirstPlus Financial Group, Inc., stock certificate number Cl7215
Associates of North America LLC, dated November 14, 2007; and
z. FirstPlus Financial Group, Inc., stock certificate number Cl7235
Associates of North America LLC, dated January 31, 2008; and
Securities Fraud Conspiracy, Wire Fraud Conspiracy, and Wire Fraud
with the offenses charged in Counts Two through Nineteen of the Indictment,
the trial jury found, by the preponderance of the evidence, the defendants'
interests in each of the following items subject to forfeiture as property, real or
personal, which constitutes or is derived from proceeds traceable to the
commission of a violation of 18 U.S.C. §§ 371, 1343, or 1349 and subject to
forfeiture pursuant to 18 U.S.C. § 98l(a)(l)(C) and 28 U.S.C. § 246l(c):
b. One Mitsubishi model MU-28-60 turbo-propeller aircraft, bearing
Registration Mark (N-Number) l 164F;
WAUEV74F77N023428;
5

t. Contents of Guaranty Bank account# 380-6056481;
u. FirstPlus Financial Group, Inc., stock certificate number Cl 7216
w. FirstPlus Financial Group, Inc., stock certificate number Cl 7234
6

y. FirstPlus Financial Group, Inc., stock certificate number Cl7215
z. FirstPlus Financial Group, Inc., stock certificate number Cl7235
aa. $4,327 in United States currency seized from 9 Hartford Drive, Egg
Harbor Township, New Jersey, on May 8, 2008; and
Money Laundering Conspiracy
with the offense charged in Count Twenty of the Indictment, the trial jury
found, based on the preponderance of the evidence, the defendants' interests in
each of the following items subject to forfeiture as property involved in an
offense in violation of 18 U.S.C. § 1956, or traceable to such property, and
therefore subject to forfeiture to the United States pursuant to 18 U.S.C. §
982(a)(l):
Registration Mark (N-Number) l164F;
WAUEV74F77N023428;
7

L Contents of Bank of America account# 003810201818;
t. Contents of Guaranty Bank account# 380-6056481; and
aa. $4,327 in United States currency seized from 9 Hartford Drive, Egg
Harbor Township, New Jersey, on May 8, 2008; and
WHEREAS, the execution of warrants to seize the contents of account
numbers 0369406087 and 368965174 at Commerce Bank, N.A. (identified
8

above as items (n) and (p)), revealed that these accounts contained no funds;
and
WHEREAS, the United States received $450,000.00 as a substitute res
representing insurance proceeds in lieu of one Falcon vessel, bearing Vessel
Identification Number 1040201, Hull Number FLNTPL83A196 (the "substitute
res
"
); and
Forfeiture Money Judgment
WHEREAS, based upon the evidence introduced at trial and the
preponderance of the evidence, the United States was also entitled to a
forfeiture money judgment in the amount of $12,000,000 (the "Forfeiture
Money Judgment"), which represents (a) property constituting or derived from
any proceeds obtained, directly or indirectly, from racketeering activity or
unlawful debt collection, in violation of 18 U.S.C. § 1962, and subject to
forfeiture pursuant to 18 U.S.C. § 1963(a), as alleged in Count One of the
Indictment; (b) property, real or personal, which constitutes or is derived from
proceeds traceable to the commission of a violation of 18 U.S.C. §§ 371, 1343,
and 1349, and subject to forfeiture to the United States pursuant to 18 U.S.C.
§ 981(a)(l)(C) and 28 U.S.C. § 2461(c) and (1), as alleged in Counts Two
through Nineteen of the Indictment; and (c) property, real or personal, involved
in or traceable to a violation of 18 U.S.C. § 1956(h), and subject to forfeiture to
the United States pursuant to 18 U.S.C. § 982(a)(l), as alleged in Count 20 of
the Indictment; and
9

WHEREAS, the defendants were held jointly and severally liable for the
Forfeiture Money Judgment; and
WHEREAS, in addition to the forfeiture of the above listed specific
properties, the defendants were ordered to forfeit to the United States any and
all tax refunds, accounts receivable, monetary claims and disbursements, or
debts owed to each of the defendants, resulting from their criminal activity up
to the full satisfaction of the $12,000,000 money judgment for which they are
jointly and severally liable; and
Substitute Property
WHEREAS, pursuant to the Indictment, the United States was also
entitled, pursuant to 21 U.S.C. § 853(p), as incorporated by 18 U.S.C. § 982(b),
28 U.S.C. § 2461(c), and 18 U.S.C. § 1963(m), to seek forfeiture of any other
property of the defendants up to the value of the property described above, if
the specific properties listed above or any portion thereof, as a result of any act
or omission of any of the defendants:
(a) cannot be located upon the exercise of due diligence;
(b) has been transferred or sold to, or deposited with, a third
party;
(c) has been placed beyond the jurisdiction of the court;
(d) has been substantially diminished in value; or
(e) has been commingled with other property which cannot be
divided without difficulty; and
10

WHEREAS, on or about July 28, 2015, the Court entered a Preliminary
Order of Forfeiture (as to Specific Property) and Order of Forfeiture (Money
Judgment) ordering, inter alia, that:
1. Consistent with the verdict of the jury, the following property is
subject to forfeiture pursuant to 18 U.S.C. § 1963(a), 18 U.S.C. § 981(a)(l)(C)
and 28 U.S.C. § 2461(c), and 18 U.S.C. § 982(a)(l) (collectively the "Specific
Property"):
a. $450,000.00 as a substitute res representing insurance proceeds in
lieu of one Falcon vessel, bearing Vessel Identification Number
1040201, Hull Number FLNTPL83A196;
Registration Mark (N-Number) 1164F;
WAUEV74F77N023428;
g. Contents of customer account 15624 held in the name of Learned
h. $9,717.37 previously contained in Bank of America account#
003810121435;
i. $460.64 previously contained in Bank of America account#
003810201818;
11

j. $3,309.28 previously contained in Bank of America account#
381001250963;
k. $702.93 previously contained in Bank of America account#
3810121383;
1. $1,796.64 previously contained in Bank of America account#
004796252676;
m. $1,764.19 previously contained in Commerce Bank, N.A. account#
7855143017;
n. $231.20 previously contained in Commerce Bank, N.A. account#
0368847216;
o. $655.81 previously contained in Guaranty Bank account# 380-
3113939;
p. $197.61 previously contained in Guaranty Bank account# 380-
3520463;
q. $764.99 previously contained in Guaranty Bank account# 380-
3113954;
r. $503.24 previously contained in Guaranty Bank account# 380-
6056481;
s. FirstPlus Financial Group, Inc., stock certificate number Cl7216
t. FirstPlus Financial Group, Inc., stock certificate number Cl 7214
u. FirstPlus Financial Group, Inc., stock certificate number Cl 7234
12

w. FirstPlus Financial Group, Inc., stock certificate number Cl7215
y. $4,327 in United States currency seized from 9 Hartford Drive, Egg
Harbor Township, New Jersey, on May 8, 2008;
2. All of defendant Nicodemo S. Scarfo's right, title, and interest in
the Specific Property was forfeited to the United States, for disposition in
accordance with law, pursuant to 18 U.S.C. § 1963(a), 18 U.S.C. § 98l(a)(l)(C)
and 28 U.S.C. § 246l(c), and 18 U.S.C. § 982(a)(l);
3. Pursuant to 18 U.S.C. § 1963(a), 18 U.S.C. § 98l(a)(l)(C) and 28
U.S.C. § 2461, 18 U.S.C. § 982(a)(l), and Rule 32.2(b)(l) of the Federal Rules of
Criminal Procedure, and based on the evidence presented by the Government
at trial, the Government had proven by the requisite standard, namely beyond
a reasonable doubt as to 18 U.S.C. § l963(a) and by the preponderance of the
evidence as to 18 U.S.C. § 98l(a)(l)(C) and 28 U.S.C. § 2461 and 18 U.S.C. §
982(a)(l), that defendant Nicodemo S. Scarfo was liable for a personal money
judgment, in the amount of $12,000,000, representing (a) property constituting
or derived from any proceeds obtained, directly or indirectly, from racketeering
activity or unlawful debt collection, in violation of 18 U.S.C. § 1962, and
subject to forfeiture pursuant to 18 U.S.C. § l963(a), as alleged in Count One
of the Indictment; (b) property, real or personal, which constitutes or is derived
from proceeds traceable to the commission of a violation of 18 U.S.C. §§ 371,
13

1343, and 1349, and subject to forfeiture to the United States pursuant to 18
U.S.C. § 98l(a)(l)(C) and 28 U.S.C. § 246l(c), as alleged in Counts Two through
Nineteen of the Indictment; and (c) property, real or personal, involved in or
traceable to a violation of 18 U.S.C. § 1956(h), and subject to forfeiture to the·
United States pursuant to 18 U.S.C. § 982(a)(l), as alleged in Count 20 of the
Indictment;
4. A money judgment in the amount of $12,000,000 in United States
currency would be, and thereby was, entered against defendant Nicodemo S.
Scarfo, (the "Forfeiture Money Judgment") at which time the money judgment
portion of the forfeiture became final, pursuant to Rule 32.2(b)(4) of the Federal
Rules of Criminal Procedure;
5. The defendants shall be jointly and severally liable for the
satisfaction of the Forfeiture Money Judgment;
6. Defendant Nicodemo S. Scarfo shall forfeit to the United States any
and all tax refunds, accounts receivable, monetary claims and disbursements,
or debts owed to him that resulted from the defendants' criminal activity up to
the full satisfaction of the $12,000,0000 money judgment, for which defendant
Nicodemo S. Scarfo is jointly and severally liable;
7. Any person other than the defendant and his convicted
codefendants, asserting an interest in the Specific Property would be required
to file a petition with this Court for a hearing to adjudicate the validity of the
petitioner's alleged interest in the property within 30 days of the final
publication of notice or of receipt of actual notice;
14

8. Upon adjudication of all third party interests, the Court would
enter a Final Order of Forfeiture pursuant to 21 U.S.C. § 853(n) in which all
interests in the Specific Property would be addressed; and
9. Any forfeited money and the net proceeds derived from the sale of
any Specific Property would be applied to the Forfeiture Money Judgment until
the Forfeiture Money Judgment is satisfied in full; and
WHEREAS, pursuant to 21 U.S.C. § 853(n)(l), 18 U.S.C. § 1963(1)(1), and
Rule 32.2(b)(6) of the Federal Rules of Criminal Procedure, a Notice of
Forfeiture with respect to the Specific Property was posted on an official
government internet site, namely www.forfeiture.gov, beginning on August 21,
2015, and running for thirty consecutive days through September 19, 2015, as
permitted by Rule G(4)(a)(iv)(C) of the Supplemental Rules for Admiralty or
Maritime Claims and Asset Forfeiture Actions. Proof of publication was filed
with the Court on or about May 3, 2016; and
WHEREAS, the published notice explained that any person asserting a
legal interest in the Specific Property was required to file a petition with the
Court within sixty (60) days from the first day of publication of the notice on
the government internet site, and that if no such petitions were filed, following
the expiration of the period for the filing of such petitions, the United States
would have clear title to the Forfeited Property, in accordance with
Supplemental Rule G(5)(a)(ii)(B); and
WHEREAS, pursuant to 21 U.S.C. § 853(n)(7) and Rule 32.2(c)(2) of the
Federal Rules of Criminal Procedure, the United States shall have clear title to
15

any forfeited property where no petitions for a hearing to contest the forfeiture
have been filed within sixty (60) days after the first day of publication on an
official internet government forfeiture site and no timely petitions were filed by
persons who were sent direct notice of the forfeiture, in accordance with the
procedures prescribed in Supplemental Rule G(5)(a)(ii)(B); and
WHEREAS, no petitions were filed or made in this action as to the
Specific Property, no other parties have appeared to contest the action as to the
Specific Property to date, and the statutory time periods in which to do so have
expired; and
WHEREAS, pursuant to 21 U.S.C. § 853(n)(7) and Rule 32.2(c)(2) of the
Federal Rules of Criminal Procedure, the United States is therefore entitled to
have clear title to the Specific Property and to warrant good title to any
subsequent purchaser or transferee; and
WHEREAS, Rule 32.2(c)(l) of the Federal Rules of Criminal Procedure
provides that no ancillary proceeding is required to the extent that the
forfeiture consists of a money judgment; and
WHEREAS, the United States has elected not to pursue the forfeiture of
one Audi automobile, Model A6, Vehicle Identification Number
WAUEV74F77N023428 and shall instead return this vehicle to lienholder JP
Morgan Chase Auto Finance;
WHEREAS, the United States will not pursue forfeiture of the following
properties which have been determined to have no value:
16

I. FirstPlus Financial Group, Inc., stock certificate number Cl7216
representing 200,000 shares of common stock issued to Seven
Hills Management LLC, dated November 14, 2007;
II. FirstPlus Financial Group, Inc., stock certificate number C17214
Hills Management LLC, dated November 14, 2007;
iii. FirstPlus Financial Group, Inc., stock certificate number Cl7234
Hills Management LLC, dated January 31, 2008;
iv. FirstPlus Financial Group, Inc., stock certificate number C 17217
VI. FirstPlus Financial Group, Inc., stock certificate number Cl7235
WHEREAS, good and sufficient cause has been shown,
It is hereby ORDERED, ADJUDGED, AND DECREED:
THAT all right, title and interest in the following property is hereby
forfeited, pursuant to 18 U.S.C. § 1963(a), 18 U.S.C. § 98l(a)(l)(C) and 28
U.S.C. § 2461(c), and 18 U.S.C. § 982(a)(l), to the United States of America for
disposition according to law:
a. $450,000.00 as a substitute res representing insurance proceeds in
lieu of one Falcon vessel, bearing Vessel Identification Number
1040201, Hull Number FLNTPL83A196;
b. One Mitsubishi model MU-28-60 turbo-propeller aircraft, bearing
Registration Mark (N-Number) l164F;
17

d. One ladies 18 carat white gold ring with a princess cut diamond
e. One ladies 14 carat white gold bracelet with approximately 100
f. Contents of customer account 15624 held in the name of Learned
g. $9,717.37 previously contained in Bank of America account#
003810121435;
h. $460.64 previously contained in Bank of America account#
003810201818;
I. $3,309.28 previously contained in Bank of America account#
381001250963;
J. $702.93 previously contained in Bank of America account#
3810121383;
k. $1,796.64 previously contained in Bank of America account#
004796252676;
1. $1,764.19 previously contained in Commerce Bank, N.A. account#
7855143017;
m. $231.20 previously contained in Commerce Bank, N.A. account#
0368847216;
n. $655.81 previously contained in Guaranty Bank account# 380-
3113939;
o. $197.61 previously contained in Guaranty Bank account# 380-
3520463;
p. $764.99 previously contained in Guaranty Bank account# 380-
3113954;
18

q. $503.24 previously contained in Guaranty Bank account# 380-
6056481; and
r. $4,327 in United States currency seized from 9 Hartford Drive, Egg
Harbor Township, New Jersey, on May 8, 2008;
(collectively, the "Forfeited Property")
and no right, title or interest in the Forfeited Property shall exist in any other
party.
IT IS FURTHER ORDERED that the Forfeited Property, including the
proceeds from the sale of any of the Forfeited Property, will be applied to the
Money Judgment.
IT IS FURTHER ORDERED that, pursuant to Rule 32.2(b)(3) of the
Federal Rules of Criminal Procedure, upon entry of this Order, the United
States Attorney's Office is authorized to conduct any discovery needed to
identify, locate, or dispose of property to satisfy the Money Judgment,
including depositions, interrogatories, requests for production of documents
and the issuance of subpoenas.
IT IS FURTHER ORDERED that the United States may move at any
time, pursuant to Rule 32.2(e) of the Federal Rules of Criminal Procedure and
21 U.S.C. § 853(p), to amend this Order of Forfeiture to include substitute
property having a value not to exceed $12,000,000 in United States currency,
less the value of the Forfeited Property, to satisfy the Money Judgment in whole
or in part.
IT IS FURTHER ORDERED that all payments on the Money Judgment
shall be made by postal money order, bank or certified check, made payable, in
19

this instance to the United States Marshals Service, and delivered to the United
States Attorney's Office, District of New Jersey, Attn: Asset Forfeiture and
Money Laundering Unit, 970 Broad Street, 7th Floor, Newark, New Jersey
07102, and shall indicate the Defendant's name and case number on the face
of the check.
IT IS FURTHER ORDERED that upon execution of this Final Order of
Forfeiture, and pursuant to 21 U.S.C. § 853, the United States Marshals
Service shall be authorized to deposit the Forfeited Property into the
Department of Justice Assets Forfeiture Fund, and the United States shall have
clear title to such Forfeited Property.
IT IS FURTHER ORDERED that the United States District Court,
District of New Jersey, shall retain jurisdiction to enforce this Order, and to
amend it as necessary, pursuant to Rule 32.2(e) of the Federal Rules of
Criminal Procedure and 21 U.S.C. § 853(p).
IT IS FURTHER ORDERED that the Clerk of the Court is directed to
enter a money judgment against the defendant Nicodemo S. Scarfo in favor of
the United States in the amount of $12,000,000.
,..
ORDERED this t. day of � ' 2016.
HONORABLE ROBERT B. KUGLER
United States District Judge
20

US Court Order Forfeits Property in RICO and Fraud Case

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