South Philly Mob Associate Daniel “Cozzy” Castelli stepped before Judge Barclay Surrick in federal court Thursday afternoon to plead guilty to drug and racketeering conspiracy charges in a scheme to reclaim the Mob’s territory in Atlantic City by allegedly extorting local bookmakers and loan sharks into giving part of their business and proceeds from their business’s illegal activity to the Philly LCN.
Prosecutors have agreed to a 60-month sentence to run concurrently with a sentence for a probation violation.
The 68 year old Castelli, it was alleged, worked with rising star Captain and indicted co-conspirator Domenic Grande to take back the Philly Mob’s action in Atlantic City.
At one point federal prosecutors say Castelli told a cooperating witness he wanted to “crack” someone, to which the Mob Soldier turned informant said in part “Yeah, that’s 5 to ten.”
In June 2016, investigators say Castelli allegedly discussed the purchase of a quantity of cocaine by another individual for the LCN. “Castelli stated in substance and in part, that Castelli could get 92% pure cocaine for $38,000 from co-defendant Daniel Malatesta.”
Prosecutors went on to say Castelli conspired with the late Kenny Arabia and others known to the grand jury to distribute cocaine. Arabia sold 55 grams of coke to an undercover law enforcement officer on July 8, 2016.
Castelli was also charged with Hobbs Act Extortion along with one-time Mob Underboss Steven Mazzone, Grande and Arabia. The FBI said Castelli and the others used threats of violence as well as fear of physical and economic harm to demand a thing of value from a New Jersey loan shark as a condition to allow the person to continue his illegal loan sharking operation.
Castelli was also charged with conspiracy to distribute controlled substances druing a two-year period from 2016-2018 along with Grande, convicted Mob Soldier Joseph “Joey Electric”Servidio, admitted drug dealer Victor DeLuca, Arabia as well as Carl Chianese, Malatesta, Daniel Bucceroni and John Michael Payne, who remains behind bars, held without bail.
Castelli is scheduled to be sentenced before Judge Surrick in the Spring.
Here is a portion of Castelli’s change of plea agreement with the government:
The investigation revealed through, among other means, the use of cooperating witnesses
who engaged in recorded conversations with the defendant and others, that defendant Daniel
Castelli was an associate of the LCN who worked “under” Steven Mazzone and engaged in
criminal conduct along with LCN members and other associates. Castelli through the course of
the investigation was shown to have engaged in a pattern of drug trafficking, extortion, and in the
collection of unlawful debts, among other offenses, on behalf of and in furtherance of the LCN’s
criminal activities. Specifically, Daniel Castelli, as an associate of Steven Mazzone and other
LCN members, was tasked with, among other things, working with Domenic Grande, Kenneth
Arabia, Daniel Malatesta, Daniel Bucceroni, and other LCN members and associates to engage
in drug trafficking, and working with Mazzone, Grande, and Arabia and other LCN members
and associates to engage in extortion and the collection of unlawful debts.
During the period of the conspiracy, Castelli and Arabia made usurious and extortionate
loans to various loan borrowers. Castelli and Arabia paid a percentage of the proceeds from these
loans to Steven Mazzone. On or about November 24, 2015, Grande instructed Person #5 to work
with Castelli and Arabia to reclaim territory in Atlantic City by extorting local bookmakers and
loansharks into partnering with the Philadelphia LCN.
Beginning in the Spring of 2016, a Confidential Source (CS) and an Undercover Agent
(UC) with the Federal Bureau of Investigation (FBI) engaged in a series of recorded meetings
with Domenic Grande, Kenneth Arabia, Daniel Castelli, Daniel Malatesta, and Daniel Bucceroni
regarding an effort to obtain and distribute one kilogram of cocaine.
In June 2016, the CS and UC had a recorded meeting with Daniel Castelli and Kenneth
Arabia regarding the supply of a kilogram of cocaine. In the meeting Castelli, stated that he
could obtain a kilogram of pure cocaine, for “38”, meaning $38,000, and that he could obtain “as
many as we want.” Castelli informed the CS and the UC that he was being supplied cocaine by
Daniel Malatesta and that Malatesta was suppling the cocaine to Castelli at cost, meaning
without a profit for Malatesta, but that Malatesta would be a partner in any ensuing sales.
Castelli stated, “Yeah, but he’s paying that. That’s what Danny’s paying. Danny’s paying so he’s
got to be a partner.”
On June 25, 2016, the UC recorded a phone call with Arabia. During this call, Arabia
indicated that he “had the stuff” (a reference to the kilogram) and that he was ready to give the
UC a sample of cocaine.
On June 28, 2016, the CS, Arabia, and Castelli traveled to a restaurant in Media,
Pennsylvania to meet with Malatesta. The CS recorded the meeting which was surveilled by the
FBI. Upon arriving at the restaurant, the CS, Arabia, and Castelli were directed by a hostess to
where Malatesta was seated. The CS and Malatesta had not met before and Malatesta was heard
on the recording introducing himself to the CS as “Danny Malatesta.” Castelli was then heard
commenting to the CS that Malatesta was “a great guy. He’s like us” and Arabia then said, “He’s
friends with all our friends.” The CS, Castelli, Malatesta, and Arabia then had a discussion
regarding the potential cocaine transaction, making numerous references to “it”, “the whole
thing”, prices, and the fact that they should not use phones. Malatesta stated, “No fucking
phones.” When the group discussed prices, Arabia said that if they were paying “38”, they
should try to get “48” in the sale of the cocaine so they could split the profit four ways (the CS,
Malatesta, Castelli, and Arabia). Malatesta agreed with this, stating that “48” ($48,000) is the
“right number” but it’s “high if they’re buying bulk.” Malatesta went on to say that they’re
paying “33” in California, so “38 is the right number for here.”
On July 4, 2016, the CS met with Grande in Atlantic City, New Jersey and recorded the
conversation. During the course of the conversation, the CS brought up the cocaine deal, saying
that he was going to make “a move,” that he wouldn’t take anything from point A to point B, and
wanted to distance himself. Grande responded, “Right.” The CS went on to say that he hadn’t
done anything yet but that he was close on “Medellin” (a reference to cocaine). Grande lowered
his voice and responded, “You got to be careful.” The conversation continued and the CS stated,
“He gets the bricks. He has a guy that gets them.” The CS said that he wouldn’t do anything
without Grande knowing. The CS also said that he told “them” to give him a sample and asked
what Grande wanted him to do. Grande responded, “I just want you to be careful.” Later in the
conversation, the CS stated that with “this other thing, I’m taking my time. I won’t make a move
without checking with you.” Grande responded by telling the CS to “do what you got to do”
meaning that the CS has Grande’s approval to conduct drug dealing.
On July 8, 2016, the UC met with the CS and Arabia at a business in Ventnor, New
Jersey. The meeting was set up by the UC and was recorded. After initially meeting at the
business, the UC and Arabia departed together in Arabia’s vehicle and traveled to Mrs. B’s
Furniture Outlet, located at 915 Atlantic Avenue in Atlantic City, New Jersey – a business
owned and operated by Daniel Bucceroni. Upon arriving at this location, Arabia and the UC
entered and Arabia introduced the UC to Bucceroni (“this is Danny.”). Bucceroni then stated,
“You need that things?” Arabia then responded, “Yeah.” The UC and Arabia then went into the
back office and Bucceroni produced a cardboard box that contained approximately one kilogram
of cocaine. Arabia then said, to Bucceroni, “You got a spoon in there? A hard spoon?”
Bucceroni responded, “yeah,” and then retrieved a spoon and handed it to Arabia. Arabia then
used it to scoop approximately 58 grams of cocaine into a plastic bag, weighed it on a scale, and
gave it to the UC. The UC then paid Arabia $2,500. Arabia and the UC then departed the
business and returned to Ventnor. Once in Ventnor, the UC departed with the cocaine. After
Arabia and the UC left Bucceroni’s store, Bucceroni continued to store the remainder of the
cocaine in his business for Arabia.
The substance purchased by the UC was subsequently tested by the Drug Enforcement
Administration and determined to be 55.7 grams of cocaine, a Schedule II controlled substance.
This memorandum sets forth only the essential facts that would need to be proved to
establish the elements of the offenses to which the defendant is pleading guilty.
