Peeping Feds

Nicodemo "Nicky" Scarfo Jr. was the kind of mobster who sent snickers instead of shivers up a debtor's spine. More at home with a laptop than a gun, Nicky was a far cry from the thuggish brute so often depicted in the movies and was reportedly the inspiration for the young hothead mobster Christopher Moltasanti on The Sopranos. Nicky Jr. was the son of one of the most notorious mob bosses in history, Nicodemo "Nicky" Scarfo Sr. The elder Scarfo took the Philadelphia mob from its heyday in the 1970s and dragged it into an intra-family war that left more than half the made guys in the family dead by the end of the 1980s. That's when Scarfo Sr. was sentenced to life in prison for racketeering and murder and Nicky Jr., after being wounded in an assassination attempt, set his sights on the greener pastures of Newark, N.J.

In June 2000, Nicky Scarfo Jr. was arrested by the FBI on charges of loan sharking and gambling. The feds gathered the evidence by using a key logger installed on Scarfo's computer that recorded every keystroke he made, giving them access to his encrypted files where he allegedly kept gambling records. The defense was ready to put the technology and methods employed by the FBI on trial until the Sept. 11 attacks and subsequent anti-terrorism legislation changed everything.

While the new U.S. law doesn't specifically mention the key logger system, the government will be getting even greater power in using other high-tech snooping devices and expanding their reach into the electronic world. Some say it's a necessary evil to combat the threat of terrorism, while others are dismayed at the civil rights and privacy implications.

Nicky Scarfo Jr. began his New Jersey operations after a masked gunman wielding a 9mm machine pistol on the evening of Oct. 31, 1989, shot Nicky Jr., sending bullets through his chest face and arms. The reign of Scarfo Sr. was over and the unidentified gunman was sending a message to the younger Scarfo to get out of town. Upon his release from the hospital Nicky Jr. relocated to Newark, where he lived under the protection of the Jersey branch of the Philadelphia Bruno-Scarfo family.

Steve Lenehan, a former mobster who has since left his life of crime after sending away more than 30 New Jersey and New York gangsters, remembers Nicky Jr. "I got to know him fairly well when he first came to North Jersey. He was pretty banged up, emotionally as well as physically, but he was treated like the royal crown prince." He adds: " I thought he was a pretty nice and polite guy. It was obvious he was trying to put some things together."

Scarfo had always been into computers. When he was ambushed in 1989, he was carrying his trusted laptop instead of a gun. When he relocated to Newark, he found himself caught up in a massive crackdown on the mob in Jersey and spent a good deal of the 1990s in prison for conspiracy, public violation and gun possession. He was released in July of 1998 and walked away from the Bruno-Scarfo family and aligned himself with the Gambino crime family, based out of New York.

Nicky Jr. began a large-scale bookmaking and loan-sharking operation under the auspices of Nicholas Mitarotonda, the Gambino family's capo in New Jersey. By February 1999, a series of convictions put away Mitarotonda and Nicky's immediate boss, Andrew Knapick Jr. Scarfo then took over the small crew and their bookmaking and loan-sharking operations.

Using an encryption program, PGP (Pretty Good Privacy), Scarfo kept all the records of the business on his office computer. For a mobster, keeping permanent computer records is not the usual mode.

Steve Lenehan has his own take on Scarfo's methods. "High tech record-keeping? Leaves too many trails; smart guys get rid of what they can after everyone's paid. All records should be coded, but that isn't foolproof either. Keep as much as you can in your head."

With all Scarfo's precautions, however, the FBI was watching. They had previously seized Scarfo's computer that January, when Knapik was still on the streets, but were unable to crack any of Scarfo's encrypted files. Instead of destroying them and moving on to another venture, Scarfo kept the business going and the FBI decided they needed a new tactic to get at the files.

They submitted an affidavit to a judge, arguing that the only way to get into the files was to find out what Scarfo's password was. The best way to access the password would be to install a key logger on his computer. The logger would record every keystroke Scarfo made on his computer and enable the FBI to figure out the password and enter the encrypted files.