From his spare prison cell in Kentucky, former Philadelphia State Sen. Vincent J. Fumo is fighting one last high-stakes battle with federal prosecutors, and quarreling once more with former allies-turned-enemies.

When convicted of corruption charges in 2009, Fumo had a net worth of $11 million. He has paid nearly $3.5 million in restitution since then, and now the feds want an additional $800,000.

Lawyers for the onetime Democratic powerhouse are fighting the restitution increase in court. At the same time, Fumo has been dramatically reshaping his real estate portfolio - putting his fiancée or son onto numerous deeds for multimillion-dollar properties at $10 a shot.

Fumo's lawyer says he's doing this to avoid a big increase in federal gift taxes. This tax change is scheduled to take effect Jan. 1.

But federal prosecutors have been watching closely. After the former senator made fiancée Carolyn Zinni co-owner of his $2.3 million Florida house for $10 last year, prosecutors called the sale a "dubious transaction" in a court filing.

If Fumo is ordered to pay more restitution, they promised to collect "either from the fiancée's windfall or from the many other assets owned by Fumo."

Fumo also sold Zinni outright his 99 acres of farmland north of Harrisburg for $10. The land cost Fumo $515,000. For another $10, he made her half-owner of his beach-block house in Margate, N.J.

Fumo has transferred half-ownership of his 33-room Victorian in Philadelphia to his only son, Vincent E. Fumo 2d, for $10. Fumo once listed it for $6.9 million. The son was similarly added as an owner of Fumo's three-unit bayside condo in Ventnor, N.J.

The additional $800,000 sought by prosecutors may not be the only new government burden for Fumo.

The IRS is looking at having Fumo pay for illegal benefits he reaped from his frauds, sources say.

Fumo has long been known for his epic splits with supporters. That has continued while he's been behind bars.

In an interview last week, his son said Fumo still enjoys a stream of visitors, but also that it was hard for any inmate to maintain friendships and perspective.

"I think being in prison strains relationships no matter what," Vincent E. Fumo said. "I think when you're in prison, your view of anything on the outside world is obviously distorted."

Defense attorney Dennis Cogan, the leader of Fumo's team, said Zinni had remained Fumo's rock.

"The fact is," Cogan said, "that she's probably the best thing to ever happen to him."

Most recently, though, the senior Fumo has fallen out with former City Councilman Frank DiCicco, long an unshakable political comrade. "Vince and I are not on the best of terms right now," DiCicco said.

He's also locked in bitter lawsuits with two other old supporters. Mitchell Rubin, a former chairman of the Pennsylvania Turnpike Commission, is suing Fumo, seeking to recoup $175,000 he says he is owed for rebuilding the docks at the Ventnor condos.

Fumo, meanwhile, is suing ex-friend Andrew Cosenza Jr., a South Jersey restaurateur, in a struggle for control of Fumo's $256,000 campaign fund.

Fumo, 69, for two decades Philadelphia's most powerful state legislator, marked his third anniversary behind bars Aug. 31. He is serving a term of five years and one month.

He is on track for release to a halfway house next summer and with time off for good behavior, final release on Feb. 2, 2014.

A bearded Fumo appeared disheveled in federal court in Philadelphia last year when he was resentenced to an extra six months after prosecutors appealed his original 55-month term.

In resentencing Fumo, U.S. District Judge Ronald L. Buckwalter ruled that Fumo and codefendant Ruth Arnao, a former top Fumo aide, should split equally $1.6 million in restitution owed to a South Philadelphia civic organization victimized as part of Fumo's scams. Arnao was convicted with Fumo and served a year in prison.

In one last appeal, Assistant U.S. Attorneys John J. Pease and Robert A. Zauzmer, the team that investigated and convicted Fumo along with the FBI, have asked the U.S. Court of Appeals for the Third Circuit to relieve Arnao of that burden. They want Fumo to pay her share - a levy of $792,000.

The money is owed a nonprofit formerly known as Citizens' Alliance for Better Neighborhoods that Arnao once ran. Renamed the Passyunk Avenue Revitalization Corp and purged of its Fumo loyalists, the nonprofit is still cleaning sidewalks, planting trees, and nurturing storefront shops and restaurants.

But the group is now far poorer than in its heyday.

Arnao is married to Rubin, who pleaded guilty to obstructing justice in the Fumo investigation and served six months of house detention.

In their appeal, Pease and Zauzmer argue that it made no sense, both practically and as a matter of justice, to bill Arnao for the restitution.

Fumo, they said, directed the plundering of Citizens' Alliance and reaped almost all of the benefits.

In the government's legal filings, the prosecutors delve deeply into Fumo's finances,

They disclosed that Fumo had set up a trust worth $2.8 million for two of his three children, his oldest, Vincent, 43, and his youngest, daughter Allison, 22.

Fumo left his middle child, Nicole, 40, out of the trust. He and Nicole bitterly split a decade ago, and her husband was a key prosecution witness during Fumo's trial.

Fumo has reshuffled the ownership of his most valuable properties in a process that began in October 2011, three weeks before he was resentenced.

In one deal that month, Zinni paid $10 to become co-owner of Fumo's Spanish-style villa in Fort Lauderdale, Fla. This was the transaction that prosecutors called "dubious."

Six months later, the house sold for $2.3 million. The U.S. government had put a lien on the place and took $1.1 million from the sale toward Fumo's previous restitution bill. The balance of the sale, just over $1 million, went to Zinni, prosecutors said. Zinni declined comment.

Frayed friendships

When Fumo was facing his first sentencing in 2009, among those who pleaded for leniency were his friend Andy Cosenza, and his longtime political ally, Councilman DiCicco.

Now, those friendships are broken or frayed.

In DiCicco's case, a sore point has been Fumo's unsuccessful push for DiCicco to raise money for Fumo's campaign fund in Fumo's absence.

In prison e-mails made public in litigation and by prosecutors, Fumo is clearly focused on the Fumo for Senate committee.

In them, he tells Cosenza, who stepped in to run the political action committee while Fumo was behind bars, that he hoped the fund would grow fat while he was away.

"You were going to raise a few hundred thou by the time I got home," he wrote Cosenza in May 2011.

In his e-mails, the former senator repeatedly pressured Cosenza to dun DiCicco to pay money into the fund, in part to reimburse it for previous support for the councilman.

"I am VERY confident that $100K will not be a problem," Fumo wrote in September 2011.

DiCicco was less confident.

By early last year, he had decided not to seek reelection. In an interview last week, he said he hadn't felt comfortable hitting up donors for money for Fumo when he was exiting office.

As to why he didn't repay Fumo's fund, he said, "I thought I was his friend, and that money I thought was to go to candidates."

Playing hardball

In happier times, Fumo would sign off on his e-mails to Cosenza as "Big Bro"; Cosenza was "lil bro." Now they communicate via lawsuit.

In a suit brought in August, Fumo accused Cosenza and his brother, Dominic Cosenza, of self-dealing and mismanagement of the campaign committee. Dominic Cosenza is the fund's treasurer.

Andrew Cosenza dismissed Fumo's allegations as factually wrong and paranoid.

For one thing, he said, Fumo was mainly questioning money spent before Cosenza had any role in the campaign committee.

Cosenza said that when he became chairman in 2009, Fumo would approve all major spending decisions.

As Cosenza fought back recently, his court papers revealed something else: The campaign fund has paid travel costs for unnamed "political persons, including public officials," to visit Fumo in prison.

Sources say the committee paid to charter a small plane to fly the visitors to Kentucky. DiCicco said he flew on one such trip.

Playing hardball, the Cosenza brothers now say that they could bar Fumo from any role with the Fumo for Senate fund.

"While a simple glance at the PAC's name might indicate that Fumo has authority over the organization," David Jay Glassman, Dominic Cosenza's lawyer, wrote last month, Fumo "has no legitimate claim" to the $256,000 account.

According to Fumo e-mail exchanges, the former senator has wanted to tap into his campaign fund to help pay his restitution. Cosenza said that while heading the PAC, he had tried in vain to find a lawyer who would endorse using the campaign donations for that.

"While I've tried to accommodate his wishes, I in the end could not allow or be part of his plan to have these dollars reclaimed for his own personal benefit," Cosenza said. "It's not his. It's not mine, either. However, it has a purpose and I intend to see it used in that manner, not to enrich or 'reimburse' Fumo."

Airport concessions

Over the years, Cosenza donated more than $80,000 to Fumo's campaigns, staged fund-raisers for him, drummed up contributions for his defense fund, and was at his side when Fumo reported to prison.

Since they have been at war, Cosenza said, he has faced the rockiest period in his 23-year business career.

In a pair of suits filed in March, Fumo's son says Cosenza has violated the terms of deals under which the son invested $205,000 in two restaurants, one a Philly Steak & Gyro at Philadelphia International Airport.

The suit contends that Cosenza owes the son tens of thousands of dollars on the airport investment. Cosenza disputes that, saying he made all payments on time until he was sued.

In the summer, MarketPlace Development, the city's overseer of airport concessions, took steps to oust him. It said he was more than $200,000 behind in rent.

Cosenza and his lawyer, Joseph P. Grimes, are fighting back in state court, saying the rent included unjustified charges.

Cosenza also says eviction orders made little sense because they came only months after he had negotiated new leases. Cosenza has operated food stands there since 1996.

He questions whether Fumo or other political figures may have played some role in his difficulties.

"I am under siege in all my concession locations in an arbitrary piling-on," Cosenza said. "I am at wit's end with this barrage of frivolous lawsuits."

Looking back on the friendship with Fumo that goes back a dozen years, Cosenza said he is now mystified that he fell under Fumo's spell.

"The guy has a way. You only meet a couple of people like him in your lifetime - thank God," Cosenza said. "I can't explain it - whether you're seduced by the power, or whether you fear it so much."

Contact Craig R. McCoy
at 215-854-4821 or