Scarfo codefendant seeks judge's recusal in fraud trial

Salvatore Pelullo, the Elkins Park businessman charged with Nicodemo S. Scarfo in a $12 million financial fraud case.
Salvatore Pelullo, the Elkins Park businessman charged with Nicodemo S. Scarfo in a $12 million financial fraud case.
Posted: July 28, 2012

Reputed mob associate Salvatore Pelullo, a key figure in a multimillion-dollar fraud case, says U.S. District Judge Robert Kugler should step down as trial judge because of bias and demonstrated "favoritism" toward the government.

Among the examples cited by the wannabe wiseguy?

Pelullo said the judge failed to wish him a happy birthday.

In an affidavit that is part of the motion asking the judge to recuse himself, Pelullo said that during a break in a pretrial hearing in March, Kugler inquired about the health of Assistant U.S. Attorney Lisa Page, a prosecutor in the case who had recently had a baby. Pelullo noted that Kugler asked other prosecutors "to pass on your good wishes."

Conversely, Pelullo said, "you had all my information and did not wish me a happy birthday."

Pelullo's birthday was in April.

Pelullo, 45, acknowledged that the comparison "sounds ridiculous," but said it underscored his perception that he would not get a fair trial before Kugler.

The judge has given no indication when he will rule on the request. The motion was filed Wednesday, a few hours after federal prosecutors asked for the court to order a "mental competency" test for Pelullo.

Pelullo and mobster Nicodemo Scarfo are accused of orchestrating the takeover and looting of FirstPlus Financial, a Texas-based mortgage company. The government alleges that the two siphoned more than $12 million out of the company through a series of phony business deals and bogus consulting contracts.

The charges are based on a lengthy FBI investigation that began in 2007 and concluded with a 25-count indictment handed up in October. Ten others, including several lawyers and an accountant, have also been charged.

Pelullo's motion asking Kugler to recuse himself has at least temporarily derailed the already slow-moving pretrial proceedings.

The trial is not expected to begin until some time next year and could take from four to six months.

A status conference Thursday was quickly adjourned by Kugler, who put all pretrial proceedings on hold while he considers the motion.

In the affidavit, Pelullo accused Kugler of acting as "the government's interpreter" during legal arguments and said that "leaves an impression of bias or prejudice." He also said the judge applied different standards in determining who should be free on bail.

Pelullo and Scarfo, 46, have been denied bail. All the other defendants have been freed pending trial.

Troy Archie, Pelullo's court-appointed attorney, argued that Kugler's knowledge of the case prior to the indictment raised questions about his impartiality.

Kugler signed several of the wiretap authorizations required by the FBI during its investigation. Court documents indicate that the evidence in the case includes 8,500 conversations secretly recorded over a two-year period.

In signing the authorizations and in reviewing FBI affidavits that were part of the wiretap applications, Archie argued, Kugler gained information about the case and about Pelullo that could influence his future rulings.

Archie also contended that Kugler did not fully disclose to defense attorneys his pre-indictment involvement and said that "this failure is alone sufficient to establish that his impartiality might reasonably be questioned."

Prosecutors have 30 days to respond to the recusal motion.

In a separate filing earlier Wednesday, Assistant U.S. Attorney Steven D'Aguanno asked Kugler to order a "psychiatric and psychological examination" of Pelullo.

Among other things, the prosecutor cited complaints from Pelullo and his lawyer that medications Pelullo is receiving in the Federal Detention Center in Philadelphia "have rendered him 'unable to reasonably assist counsel in trial preparation.' "

In an earlier motion seeking bail and house arrest, Archie had said his client took prescription medication for depression, mood stabilization, and anxiety.

The motion included a letter from one of Pelullo's doctors indicating that Pelullo had "a history of . . . substance abuse," that he was bipolar, and that he suffered from mood swings and erratic behavior.


Contact George Anastasia at 856-779-3846 or ganastasia@phillynews.com.

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