1621-1 Royale Group mimnsimommilemmommwmmi
•
Pg 7 of 18
4 of 283, 2 Terms
mh JUDGES ORDER A NEW TRIAL FOR PELULLO 05/13/1992
THE MIAMI HERALD
Copyright (c) 1992, The Miami Herald
DATE: Wednesday, May 13, 1992 EDITION: FINAL
SECTION: BUSINESS PAGE: 3C LENGTH: 51 lines
SOURCE/CREDIT LINE: ASSOCIATED PRESS
DATELINE: PHILADELPHIA
JUDGES ORDER A NEW TRIAL FOR PELULLO
A federal appeals court Tuesday ordered a new trial for Miami Beach
developer and Pennsylvania businessman Leonard Pelullo, who was convicted of
defrauding the country's largest savings and loans and one of his own
companies of $2.2 million.
Pelullo, who once owned several Art Deco hotels in Miami Beach, was
sentenced on Aug. 30 to 24 years in jail, which he began serving immediately.
He was also ordered to pay a $4.4 million fine and $2.2 million in
restitution.
The Third U.S. Circuit Court of Appeals found that the lower court had
wrongly allowed bank documents and summaries prepared by an FBI agent to be
admitted as evidence.
A three-judge panel unanimously ruled that this evidence was hearsay, and
the government failed to satisfy any of the requirements that can be used to
justify the admission of hearsay.
"We conclude that these errors were not harmless, and therefore we must
reverse the convictions on all counts except count 54," Circuit Judge Morton
I. Greenberg wrote in the 68- page opinion.
On this count, for mail fraud, the judges said they were "satisfied that
any error was harmless."
Through his Miami Beach company, the Royale Group, Pelullo once
controlled several Miami Beach Art Deco hotels: the Cavalier, Cardozo,
Carlyle, Leslie and The Victor. The hotels were tied up in foreclosure and
bankruptcy,proceedings for nearly three years. In April, a group headed by
Dacra Cos. , the South Beach real estate development and construction company,
was named the winning bid in a sealed-bid auction.
In his trial, Pelullo was convicted of 49 counts of wire fraud and one
count of racketeering. He was acquitted of five additional counts of wire
fraud.
The government alleged that Pelullo masterminded a conspiracy to divert
money that had been borrowed from the failed American Savings & Loan of
Stockton, Calif., ostensibly to renovate his Art Deco hotels. American had
loaned the money to the Royale Group. Some of the money was used to buy a
horse farm in Chester.County, Pa., and a sheep ranch in Montana, prosecutors
said.
Pelullo was convicted of taking $114,000 from a Royale subsidiary to
repay a loan shark, who had sought the assistance of Nicodemo Scarfo and
Philip Leonetti, who were then boss and underboss of the Philadelphia mob.
At his trial, Pelullo argued he legitimately earned the money he kept
from American Savings & Loan.
Pelullo's lawyer, Michael Ryan Barrett of Cincinnati, did not immediately
return a message left on his home answering machine Tuesday.