Joey Merlino may have caught a break.
The flamboyant boss of the Philadelphia mob was arrested in August in a sweeping federal investigation that targeted members of six different mob families.
The feds say Merlino was one of three mob leaders coordinating the actions of an “East Coast LCN Enterprise.”
The “details” are laid out in a 32-page, four-count indictment handed up by a federal grand jury in New York. Problem is, there aren’t a lot of details. The indictment is, as Merlino’s long-time attorney Edwin Jacobs Jr. said, “broad and general in nature.”
Maybe that’s by design.
Maybe there will be more information made public as the case moves forward.
Maybe there will be superseding indictments that put skin on the bones of what is a skeletal document, particularly when it comes to “Skinny Joey.”
Or maybe the indictment—and this is where the break for Merlino lies—was a rush job, one that the U.S. Attorney’s Office for the Southern District of New York insisted on bringing despite the objections of law enforcement agencies in Florida and in Philadelphia.
The case against Joey Merlino may be the latest example of organized crime and disorganized law enforcement.
“They didn’t need to charge him,” said one Philadelphia-based law enforcement source. “They could have waited. There were other things going on.”
Those other things include investigations into the current activities of Merlino’s top Philadelphia and South Jersey operatives, and a continuing look at four mob murders that authorities have long hoped to tie to the Merlino organization.
None of that, of course, matters to federal law enforcement officials in Manhattan where the current case was brought. And that’s the problem. There are those in the law enforcement community here and in Florida who will privately tell you that New York acted like the 500-pound gorilla in the current case. The feds in Manhattan forgot, or perhaps never learned, the lessons that are crucial in kindergarten.
Play nice. Share. Take turns.
The FBI and the U.S. Attorney’s Offices have long been perceived by local and state law enforcement agencies as smug and arrogant. But the feds have the resources to make big cases, and so, local police departments, county prosecutors’ offices and state police usually go along for the common good.
But in this instance, it was the feds in New York freezing out their fellow federal agencies in two other jurisdictions.
It is hard to believe, but there are sources who say it was only after the indictment was made public and Merlino was arrested on August 4, that law enforcement agencies in Philadelphia and Florida were made aware of hundreds of secretly recorded conversations made by a cooperating witness and an undercover FBI agent working the case.
What’s more, they say, it appears that the cooperating witness—identified as Genovese mob associate John Rubeo—wore a body wire and recorded conversations with Merlino in Florida, while continuing to report to the FBI in New York. You would think that the Miami office of the FBI would have been given a piece of that action since Rubeo was working in its jurisdiction.
There’s a reason the Southern District of New York is referred to in law enforcement circles as the Sovereign District of New York.
“They don’t play by the rules,” said one law enforcement veteran.
The conversations, in New York, at the Jersey Shore and in Florida, provide an inside look at what Skinny Joey was up to. Those conversations may have been relevant to what investigators in Philadelphia and Florida were working on. Merlino, while living in Florida, was a frequent visitor to Philadelphia. All the while, he was talking with the wired-up cooperating witness. Federal investigators in Miami and Philadelphia should have been privy to those conversations.
There were meetings with other members of the Philadelphia mob in New York and in New Jersey. In a memo filed after Merlino’s arrest, the feds said Merlino was working to rebuild the Philadelphia crime family. If there were tapes, or surveillance photos, to support that claim, you can be sure that the Philadelphia office of the FBI and the U.S. Attorney’s Office for the Eastern District of Pennsylvania would have been interested in knowing what was going on while it was going on, not a year or two after the fact.
That same prosecutorial memo says the criminal activities being investigated stretched from Massachusetts to Florida, and included activities in Philadelphia.
The indictment, however, makes no mention of any alleged crime committed in Philadelphia. Is there more to come?
There’s a hearing in the case scheduled for October 31. Maybe the charges will be expanded by then. Or maybe some Philadelphia wiseguys who were at a mob Christmas party in New York, and at one or two gatherings at the Jersey Shore, also caught a break on this one.
Merlino’s name lends a certain cache to the indictment. He and mob capos Pasquale “Patsy” Parrello and Eugene “Rooster” O’Nofrio were identified as the leaders of the criminal enterprise.
In all, 46 mob members and associates were charged. They were, authorities said, tied to the Genovese, Gambino, Lucchese and Bonanno crime families in New York and the Philadelphia mob. There are allegations of assault, extortion, arson, gambling and loan sharking, as well as medical insurance fraud.
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Merlino is charged in the gambling and fraud portions of the indictment. Federal authorities at first argued that he, like Genovese capos Parrello and O’Nofrio, should have been denied bail. But in a curious development, when the bail hearing was held in Florida a few days after the arrests, the feds backed off.
New York didn’t bother to send anyone down to Florida for the hearing, and instead left local federal prosecutors to explain the change of heart. Merlino was described as a danger to the community, and a risk of flight in the original memo seeking to keep him behind bars. What changed in the five days between the filing of the memo and the actual hearing?
Merlino is now free on $5 million bail. He was released after his wife and two associates posted real estate to support the bail bond.
Just as curious is the addition of two Merlino business associates, Brad Sirkin and Wayne Kreisberg, as defendants in the New York case. Sirkin and Kreisberg are charged with racketeering conspiracy, the overarching crime in the New York indictment.
The feds say the two Florida-based businessmen worked with Merlino in a medical insurance fraud scam involving a compound cream ointment used to treat aches and pains.
Compound creams have been described by insurance fraud publications as the “snake oil” of the 21st century. It’s a highly expensive snake oil. And it has been the focus of ongoing investigations throughout the country where insurance providers have been bilked out of tens of millions of dollars.
The scam, as outlined in other cases, involves bribes paid to doctors to write prescriptions for medical compound creams that a pharmaceutical company creates. The company then charges the medical insurer for the creams. The “patients,” like the doctors, are in on the scam. A tube of the cream can often cost $5,000 to $10,000. The key is setting up and controlling the company that manufactures the cream. Authorities contend that Sirkin and Kreisberg did just that.
The interesting thing about Sirkin and Kreisberg is that a few days after the New York indictment was made public, the U.S. Attorney’s Office in Tampa announced that Sirkin, Kreisberg and five others had been indicted on insurance fraud and money-laundering charges in an elaborate compound cream scheme that generated $157 million in what authorities say were phony medical insurance reimbursements.
Everyone involved has pleaded not guilty and has denied the charges. Kreisberg, in a brief phone conversation, said he hadn’t done anything wrong and neither had Merlino.
The New York indictment offers no specifics about the medical insurance fraud. The Tampa indictment, on the other hand, provides chapter and verse, a detailed account listing the names and addresses of companies that were set up, who controlled them and the flow of money through those organizations.
The companies controlled by Sirkin and Kreisberg were based in the Boca Raton and Ft. Lauderdale areas. That is where Merlino lived and did business.
It sounds as if Sirkin and Kreisberg have been charged with the same offense in two different indictments. It looks as if the feds in New York added them to the case there in order to bring the insurance fraud charge against Merlino. If, in fact, the indictments focus on the same or related scams, the better question is why wasn’t Merlino a defendant in the more serious Tampa fraud case?
Organized crime, disorganized law enforcement may be the only way to answer that question.