Merlino Turns Down Plea Offer In Big Mob Case

Reprinted with permission from  Gang Land News.

By George Anastasia

Brad Sirkin has folded his cards.

The prolific, enterprising mob associate and sometime driver for Philadelphia Mafia boss Joseph (Skinny Joey) Merlino has agreed to cop a guilty plea in that sweeping but flawed racketeering conspiracy indictment in Manhattan Federal Court, and also to conspiracy to commit health care fraud in a more pointed and apparently airtight case against him and seven co-defendants in federal court in Tampa.

Merlino, on the other hand, is hanging tough and is prepared to go to trial in Manhattan where several other defendants also have opted to take deals. The insurance scam, the central charge in the Tampa case, is just a small piece of the broader New York indictment.

Sirkin, in a plea agreement filed in Florida, admitted his role in what authorities have alleged was a $157 million insurance fraud scheme that included kickbacks to doctors and pharmacist who knowingly wrote and filled bogus prescriptions for what authorities said were "compound medications, chiefly pain creams and scar creams, irrespective of medical necessity."

Sources said insurance companies were billed from $500 to $1,000 for a tube of the bogus cream with many prescriptions written with up to 10 refills. The mob was late arriving to the scam involving compound creams which have been described by insurance company investigators as the "snake oil of the 21st century" and which have, according to early investigations, generated tens of millions of dollars in fraudulent insurance reimbursements.

Sirkin, 54, who has a 1992 federal conviction for conspiracy and wire fraud, faces a maximum 10-year sentence in the Florida case and up to 20 years in New York. Under terms of the plea, the sentences are to run concurrently.  But based on sentencing guidelines, Sirkin is probably facing from four to five years in prison.

He has also been ordered to pay $2,552,309 in restitution.

Wayne Kreisberg, another Florida business associate of both Merlino and Sirkin has also cut a similar deal with the feds. Like Sirkin, Kreisberg is charged in both New York and Tampa.

Sirkin and Kreisberg have signed plea agreements and are to formally enter guilty pleas at hearings in June, according to court documents.

Four other defendants, including a doctor and pharmacist who are now cooperating with authorities, have pleaded guilty in the Tampa case.

Kreisberg and Sirkin were named along with Merlino and six of the 46 defendants in a vague, one-paragraph description that was included in the racketeering conspiracy charge in the Southern District of New York (SDNY).  

The fact that Merlino was indicted in Manhattan rather than Tampa and the fact that the New York case appears to be unraveling has lent support to law enforcement officials in Florida and Philadelphia who have complained about the way the SDNY handled the investigation.

"That's why they're called the Sovereign District of New York," one Philadelphia area law enforcement official said after the indictments were handed up back in August. That's when many investigators in Miami and Philadelphia learned for the first time the extent of the probe.

 "They don't share with anyone," said the disgruntled Philadelphia source. "They have their own set of rules."

Both jurisdictions were largely kept in the dark about the racketeering case and the fact that a cooperating witness wearing a wire was actively recording meetings with Merlino and others in Florida, New York, and New Jersey.

Sirkin and Kreisberg were businessmen who lived and operated in the Boca Raton area, as did Merlino. The SDNY indictment  charges Skinny Joey with insurance fraud and gambling offenses based in large part on recordings made by mob informant John (JR) Rubeo.

Rubeo also interacted with Sirkin, according to one source, and may have met with Kreisberg.

But the handling of recordings  made by the cooperator and the lack of supervision while Rubeo was on the streets in Florida have raised serious questions about whether the feds would be able to use much of that evidence in court. More than one observer has said that Merlino would have a more serious problem had he been indicted in Tampa for what appears to be the same medical fraud charges he is facing in New York.

As previously reported by Gang Land, two FBI agents and their supervisor are facing potential disciplinary action because of the Rubeo fiasco. What's more, as Gang Land has reported, federal prosecutors are now offering sweetened plea deals in which the racketeering conspiracy charge would be dropped in exchange for guilty pleas to the related gambling, extortion, weapons and assault charges that make up the case against most of the New York gangsters.

Earlier this month prosecutors notified Manhattan Federal Judge Richard Sullivan that a "global or near global" plea agreement has been worked out with a "substantial" number of the defendants.

No particulars were provided about the deals but prosecutors said the defendants had a May 19 deadline to accept the offers. Sources have said that Merlino has balked at any plea deal and intends to go to trial.

Merlino is described in the indictment as one of the leaders in what the feds have called "The East Coast LCN Enterprise," a designation that applies to an organization that exists only on paper and in the minds of some federal prosecutors. Mob capos Pasquale (Patsy) Parello and Eugene (Rooster) O'Nofrio share top billing with Skinny Joey.

Parrello, however, has taken a deal, pleading guilty to a superseding criminal information charging him with three counts of conspiracy to commit extortion. The deal will reportedly carry a sentence of about five years for the 72-year-old wise guy.

Sources say O'Nofrio has declined to even consider a plea offer and like Merlino, who has reportedly rejected a deal that would carry a two-year sentence, he is prepared to go to trial.  

Sirkin also has an ongoing problem with the New Jersey State Commission of Investigation which has cited him for illegally operating a landfill in Palmyra, NJ, just outside of Philadelphia.

In a scheme that the commission said underscored loopholes in New Jersey's landfill licensing process, Sirkin was able to run an operation that took in tons of construction debris and potentially carcinogenic materials instead of the grass clippings, weeds and branches that were supposed to be turned into mulch for garden ground covers under the recycling license he was using.

The operation began in 2012, about the same time authorities say Sirkin was wheeling and dealing in medical insurance fraud in Florida. He abandoned the landfill 18 months later after the SCI launched its investigation.

Among other things, the state agency linked Sirkin to an unnamed Bonanno mob capo — identified by sources as Peter (Pug) Lovaglio — who was described in an SCI report as a partner in the Palymra business. Lovaglio, a violent and volatile mobster, was sentenced to eight years in prison earlier this year for assaulting the owner of a sushi lounge on Staten Island. The restaurateur, an ex-New York City police officer, was blinded in one eye after Lovaglio smashed a cocktail glass into his face.

Sources say Lovaglio has been a "secret snitch" for several years, cooperating with the NYPD and federal authorities. As Gang Land noted last week, Lovaglio , now a protected inmate in federal custody, has begun to provide the SDNY details in several investigations, including at least one unsolved murder.  

In addition to his ties to Merlino and Lovaglio, Sirkin is related through marriage to a soldier in the Luchese crime family, according to the SCI report.  

George Anastasia can be reached at George@Bigtrial.net

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