The elder Merlino, 73, had spent the last quarter-century behind bars. The federal Bureau of Prisons listed his potential release date as August 2016.
Local attorney Joseph Santaguida confirmed Merlino's death but offered little other information Tuesday. He said simply that Merlino had been "sick for a while."
He said he did not know about any funeral arrangements.
"They're waiting for the body to be shipped back," he said.
Merlino's death comes amid the region's biggest mob trial in years: Current Philadelphia boss Joseph "Uncle Joe" Ligambi and six other defendants are facing federal racketeering charges. The trial was on break Tuesday.
Prosecutors in that case filed documents asserting that Joseph Merlino remained at the top of the Philadelphia mob's organization chart. The court papers described Ligambi as "acting boss" and suggested that Merlino had been running the crime family while serving a 12-year prison sentence.
Joseph Merlino was released from federal prison to a Florida halfway house in March 2011. He is barred from associating with organized-crime figures during his three-year supervised release.
His attorney, Edwin Jacobs Jr., said last year that Merlino planned to remain in Florida - far from the temptations of his former life. Jacobs also represents Ligambi.
Salvatore Merlino rose through the crime family to become underboss to Nicodemo "Little Nicky" Scarfo in the 1980s. Salvatore Merlino even served for a time as acting boss while Scarfo was jailed on a weapons violation.
Salvatore Merlino and his brother, Lawrence "Yogi" Merlino, were convicted of racketeering in 1988.
Lawrence Merlino became a cooperating witness and died in the witness-protection program in 2001.
Salvatore Merlino was serving a 45-year sentence when he died at a low-security prison in Fort Worth.
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