"This was organized crime moving from the back alley to the boardroom," added Michael Ward, the special agent in charge of the FBI's Newark office.
Scarfo, Pelullo, and 11 others were named in the 25-count indictment, which details maneuvers that began in April 2007 when they allegedly took secret control of the company's board of directors.
The schemes included FirstPlus' purchase of shell companies, set up by Scarfo and Pelullo, for exorbitant prices. Cash also was taken from the firm in the form of bogus consultant fees paid to Scarfo, Pelullo, and others.
Scarfo's wife, Lisa Murray-Scarfo, 32; his cousin and business partner John Parisi, 50; his longtime defense attorney, Donald Manno, 65; four other lawyers; and an accountant also were indicted.
The lawyers and accountant allegedly helped Scarfo and Pelullo avoid detection from banking and securities regulators or aided them in laundering money.
Fishman described the operation as "complicated and layered" and said the lawyers and accountant assisted in "the takeover and looting of FirstPlus."
Scarfo's father, Nicodemo D. Scarfo, and New York mob boss Vittorio Amuso were named as unindicted coconspirators. Both are serving lengthy sentences at a federal detention center in Atlanta.
The indictment alleges that the criminal enterprise set up by the younger Scarfo and Pelullo had ties to the Lucchese crime family formerly headed by Amuso. The younger Scarfo has been described as a "made," or formally initiated, member of the group.
The indictment alleges that Pelullo and Scarfo were behind-the-scenes decision-makers at FirstPlus, who used a "figurehead board of directors" to do their bidding.
Once Scarfo and Pelullo took control, authorities allege, the firm paid a million dollars in cash and offered several million shares of stock for companies Pelullo and Scarfo had set up in Philadelphia and Atlantic County.
Pelullo and Scarfo also received lucrative consultant contracts, the indictment alleges. Scarfo allegedly received $33,000 a month for a consultant job that required little or no work.
The indictment detailed the lavish lifestyle of the two defendants, who bought an $850,000 yacht they christened "Priceless" and used to cruise the Bahamas.
Pelullo purchased a Bentley worth $216,963. Scarfo treated himself to an Audi valued at more than $100,000; bought a home for $715,000; purchased a condo for $170,000; was making monthly payments of more than $3,000 for the home where his ex-wife lived. He also spent more than $30,000 on an engagement ring and tennis bracelet for Murray-Scarfo.
Authorities allege that Scarfo and Pelullo had free use of a corporate jet purchased by FirstPlus.
After vacationing in the Bahamas on their yacht, the indictment alleges, they used the plane to fly to Atlanta where they visited the elder Scarfo in prison, and then flew to Atlantic City for a lavish FirstPlus Christmas party in December 2007.
Twelve of the defendants in the case were arrested Tuesday. Todd Stark, an Ocean City, N.J., resident charged with a weapons offense, is expected to surrender Wednesday, authorities said.
Eight defendants appeared in U.S. District Court in Camden for initial hearings.
Scarfo was ordered held without bail pending an arraignment and detention hearing scheduled for Friday. The others, including his wife, were released on bail.
In addition to Manno, of Medford, the lawyers charged in the case are Gary McCarthy, 56, of Berwyn; David Adler, 64, of Chappaqua, N.Y.; and Cory Leshner, 28, of West Reading, Pa.
Howard Drossner, 50, of Ambler, is the accountant named in the indictment.
They pleaded not guilty.
Pelullo was arrested in Miami and is awaiting a hearing. Former company officials John Maxwell and William Handley were arrested in Texas. Handley was freed on bail. Maxwell, the former CEO of FirstPlus, and his brother, William, a lawyer who served as special counsel to FirstPlus, were being held pending hearings.
William Maxwell was charged with taking $3.5 million in legal fees for little work and with passing $1.5 million to Scarfo and Pelullo as consultant contracts.
FirstPlus filed for bankruptcy more than a year ago, with stockholders angrily challenging the roles the Maxwells and Handley had played in the company's demise.
Maxwell and his brother have repeatedly denied any impropriety.
Assistant U.S. Attorney Steven D'Aguanno, who oversaw the investigation, indicated Tuesday that the prosecution would seek to keep Scarfo and Pelullo held without bail, arguing they are flight risks and a danger to the community.
Scarfo, who is under indictment in Morris County on a state racketeering-gambling case linked to the Lucchese crime family, said little during his brief appearance.
Scarfo also is charged with weapons offenses. He has two convictions in a mob-linked gambling case and is prohibited from owning a gun.
Dressed in sweatpants and a sweatshirt, his wrists and ankles in shackles, Scarfo said Tuesday that he would ask for a court-appointed attorney, indicating that he had no assets and just $125 in a checking account.
That financial picture was in sharp contrast to the millions authorities allege he and Pelullo took from FirstPlus.
According to Fishman, there was a "second phase" to their scheme. The federal prosecutor said authorities believed Pelullo and Scarfo planned to "pump up" the value of FirstPlus stock before selling the millions of shares they had obtained.
They would then collapse the company, he said.
"That was their exit strategy," Fishman said. "We had a different exit strategy."
Contact staff writer George Anastasia at 856-779-3846