Jerry Capeci is regarded as an expert on the mob. His website, Gang Land News, is a subscription-based website. This article was republished with permission.
By Jerry Capeci
Gang Land News
In the end, it was an offer Philadelphia mob boss Joseph (Skinny Joey) Merlino couldn’t refuse. After battling federal prosecutors to a draw in a hard-fought racketeering trial earlier this year, the flamboyant 56-year-old life-long gambler has decided that the better bet is to take a plea deal with the government for the first — and he hopes the only time — in a long and storied career of forcing the law to prove its case before a jury of his peers.
A very important reason was that the usually hard-driving prosecutors in the so-called Sovereign District of New York agreed to give Skinny Joey an amazingly sweet plea deal — a guarantee that the most severe prison term the mob boss could receive from a judge who has publicly stated that he was a major organized crime figure is two years behind bars. None of the 44 other lesser ranked wiseguys and mobs associates who copped plea deals rather than go to trial — not even the minor defendants who pleaded guilty to selling untaxed cigarettes — was allowed to plead guilty to a charge carrying a maximum sentence of two years behind bars. As Skinny Joey well knows, it could have been worse.
The gambling and fraud charges listed in the four-count indictment against him could have brought a prison sentence of 10 years given Merlino’s two prior federal convictions and his designation in the case as one of the leaders of an East Coast La Cosa Nostra Enterprise.
Despite the great deal, several sources have told Gang Land that Merlino was on the fence about taking the government’s offer. Skinny Joey, whose lawyer described him at trial as a “degenerate gambler,” wanted to go to trial again, but the thought of what a loss would have meant to his family convinced him to take the deal.
Merlino has an older daughter graduating from college in a few weeks and his younger daughter is on schedule to graduate in two years. If his sentencing falls right, he hopes to still be free for the first graduation and to have finished his latest prison term in time for the next one. His change of tune — “The only thing I’ll accept is an apology” was what he was telling associates after his mistrial — stems in part from advice from close friends, but also from his realization that he and his attorneys would not be able to present what they felt were some of their best arguments to the jury. During the trial, his lawyers were barred from playing any secretly recorded conversations in which Merlino disavowed his mob connections and in which he said he would not get involved in anything illegal.
Ruled Inadmissable
Those comments, in conversations with key government informant John (JR) Rubeo, were ruled inadmissible by Judge Richard Sullivan. Sullivan ruled the comments were self-serving and proved nothing. Merlino realized it was unlikely the judge would rule differently in a retrial. Sources say Merlino has apparently agreed to plead guilty to one gambling charge — placing bets via the Internet.
Three more serious charges, tied to medical insurance fraud and bookmaking , as well as the most serious charge, racketeering conspiracy, will be dropped, the sources say. And Merlino’s sentencing guideline range will be between 10 and 16 months, those same sources say.
He is scheduled to appear before Judge Sullivan on April 27 to enter the plea. A sentencing hearing would be scheduled sometime after that. In his prior skirmishes with the law, Skinny Joey has been convicted of an armored truck robbery and of racketeering. He was acquitted of murder, attempted murder and drug dealing charges. After his release to a halfway house in Florida in 2012, Merlino insisted that he was leaving his life of crime behind.
But federal authorities have a different perspective. They argue that despite relocating to Boca Raton, the transplanted South Philadelphia corner boy has continued to run the Philadelphia crime family. In the current case Merlino was identified as the boss of the Philadelphia branch of Cosa Nostra, an allegation he has continued to deny.
Merlino has told associates that he was unjustly targeted in the case because of his reputation and alleged standing in the underworld. He has portrayed himself as a victim of overzealous prosecutors and less than reliable mob informants who were using him as a get-out-of-jail-free card. In addition to the sweetened federal offer — and a chance to be home for both his daughters’ graduations — reports that many jurors had been leaning toward conviction likely play a role in his decision. Court room sources placed the votes at 10-2 and 9-3 for conviction on insurance fraud and bookmaking charges even though Rubeo, the prosecution’s key witness, came across as less than credible under heavy cross-examination by Merlino’s long time, Atlantic City-based lawyer, Edwin Jacobs Jr.
But as is often the case in mob trials, it was the tapes that appeared to be Merlino’s undoing. The credibility and motivation of cooperating witnesses like Rubeo can easily be challenged. JR was described by Jacobs in his opening statement to the jury as “an arch criminal,” a mob associate who began cooperating after getting jammed up in a major cocaine trafficking case that could have landed the 43-year-old in jail for life.
Rubeo cut his loses and reduced his risk by recording hundreds of conversations for the FBI. Those tapes proved damaging even though the defense raised questions about how well the FBI monitored Rubeo and how often he was able to turn his recording devices on and off. On one tape Merlino accepted a $5,000 payment from Rubeo. On another he discussed a $20,000 score. Both were linked to the medical insurance fraud charges that were built around the bogus billing of insurance companies for highly expensive compound pain creams.
The jury also heard from Wayne Kreisberg, a Florida-based businessman who was a major player in the medical insurance
fraud scam. Kreisberg , who was indicted in both New York and Tampa, pleaded guilty to conspiracy to commit racketeering and insurance fraud in a consolidated plea deal. He is to be sentenced in Tampa on April 26, one day before Merlino enters his guilty plea.
Lifetime Fraudster
Kreisberg, 41, was described by Merlino’s lawyer as a “lifetime fraudster” who operated behind the shield of more than a dozen shell companies and who has “been sued by everybody you can think of.” He admitted to making about $6 million in the compound cream scam, telling jurors that a pharmaceutical company that was part of the scheme would manufacture prescribed pain creams for about $300 and then bill insurance companies for between $5,000 and $10,000 for a month’s supply.
Doctors who were in on the scam, Kreisberg said, usually wrote prescriptions for a year’s supply. Overall, Tampa authorities alleged, Kreisberg and his Florida associates generated $157 million in phony insurance payouts.
Kreisberg testified that another member of the Florida operation told him “Joey got a piece of the business.” He also testified that he saw Merlino receiving envelopes stuffed with cash and that he paid Skinny Joey $100,000. That payment, he said, was made after Merlino claimed he had not received all the money he was promised.
Merlino has told associates that his only business dealings with Kreisberg were tied to his investment in Merlino’s, a restaurant Skinny Joey had opened in Boca Raton. Kreisberg said he had invested $95,000 in the restaurant but claimed Merlino stiffed him when the restaurant was sold. Kreisberg claimed from the witness stand that he should have received $200,000 based on his involvement in the defunct business. How much of an impact that financial testimony had on the jury is impossible to
determine.
Potentially more damaging was a tape played for the jury in which Merlino described himself and those around him as “gangsters” and another in which he and co-defendant and Genovese crime family capo Eugene (Rooster) Onofrio discussed the ease with which someone could get whacked. “It’s easy to kill somebody,” Merlino said in a conversation
that Rubeo recorded.
“It’s simple,” added Eugene (Rooster) Onofrio.
“You’re my friend,” Merlino continued. “You trust me. I tell you, `Listen, drive me home right now.’ Get you in the car. I
shoot you in the fuckin’ head and it’s over with.”
While Merlino was not charged with any acts of violence in the indictment, that conversation underscored a key point that prosecutors tried to hammer home through the trial: Merlino was a dangerous mob leader to whom tribute had to be paid.
And that, prosecutors argued and Rubeo testified, was why Merlino was on the receiving end of the fraud and gambling operations that were at the heart of the case. If Merlino follows through in two weeks, the case that was announced with much fanfare in August of 2016 will be a smashing success for the government, at least on paper, since all 45 arrested defendants will have pleaded guilty to one crime or another. But in every plea deal, the most serious charge, racketeering conspiracy, was dropped.
Hardest hit was Pasquale (Patsy) Parrello, a Genovese crime family capo who was sentenced to 84 months, six months above the suggested guidelines for three counts of conspiracy to commit extortion. There is concern in the Merlino camp that Sullivan could do the same with Skinny Joey.
At the sentencing of co-defendant Carmine Gallo, a Florida-based Merlino associate, Sullivan described Skinny Joey as a major “organized crime figure” who used “wiseguys” and “wannabe gangsters” to collect payoffs and threaten debtors who owed him money. That would indicate that it may not bode well for Merlino. But most defendants (Gallo got four months of home detention and 20 months of probation) received less than two years in prison.
Merlino is hoping he will be among that group. And as Skinny Joey, a veteran of many sentencing disputes knows, even if gets the full two years, he’ll have to do only 21 months, and still might be able to enjoy both daughters’ college graduations.
