U.S. v. SACCOCCIA

62 F. Supp.2d 539 (1999) | Cited 0 times | D. Rhode Island | August 24, 1999

MEMORANDUM AND ORDER

The government has moved to forfeit eighty-three (83) bars ofgold pursuant to a criminal forfeiture judgment against StephenA. Saccoccia. For reasons hereinafter stated, the government'smotion is granted.

Background

In 1993, Saccoccia was convicted of RICO conspiracy and variousmoney laundering offenses arising out of a scheme to laundermoney obtained from illegal drug trafficking. See generallyUnited States v. Saccoccia, 58 F.3d 754 (1st Cir. 1995). Thecriminal judgment of conviction required Saccoccia to forfeit$136 million representing the proceeds of his criminal activity.Some of Saccoccia's convicted co-conspirators also were orderedto forfeit portions of the proceeds. See United States v.Saccoccia, 823 F. Supp. 994 (D.R.I. 1993), aff'd, 58 F.3d 754(1st Cir. 1995). Since most, if not all, of the money derivedfrom the laundering scheme had been wired to Colombian drugdealers or deposited in foreign banks, an order was enteredallowing the government to seek forfeiture of substitute assetsbelonging to the defendants. See United States v. Hurley,63 F.3d 1, 23-24 (1st Cir. 1995); Saccoccia 58 F.3d at 783.

The government has filed an affidavit stating that, to date, ithas forfeited approximately $3 million in assets belonging to thedefendants and that proceedings to forfeit additional assetsworth approximately $8 million are pending in several Europeancountries. (Scully Aff. ¶ 3.) The property that is the subject ofthis forfeiture motion consists of eighty-three (83) bars ofgold, valued at approximately $2.1 million, that were buried orotherwise secreted at the home of Saccoccia's mother.

Saccoccia's objections to the forfeiture motion may besummarized as follows:

1. Forty (40) of the gold bars are not forfeitable because Saccoccia claims no ownership interest in them.

2. The Court should "suppress" the forty-three (43) bars in which Saccoccia does assert an ownership interest on the ground that the government learned of them by deposing David Saucier without affording Saccoccia an opportunity to be present thereby violating a previous order of this Court.

3. That the Court should defer ruling on the forfeiture motion until a § 2255 motion filed by Saccoccia has been decided.

4. That the Court should defer ruling on the forfeiture motion until Saccoccia is able to conduct discovery regarding assets already forfeited by the government because the value of any such assets would reduce his forfeiture liability.

Discussion

I. Ownership of the Gold Bars

RICO's "substitution of assets" provision allows for theforfeiture of any "property of the defendant."18 U.S.C. § 1963(m) (emphasis added). Saccoccia argues that, because he doesnot claim any property interest in forty (40) of the gold bars,these bars are not his property; and, therefore, they are notsubject to the forfeiture order against him. However, there is noneed to consider that argument because Saccoccia's disclaimerdeprives him of standing to contest the forfeiture of these bars.See United States v. $191,910.00 in U.S. Currency,16 F.3d 1051, 1057 (9th Cir. 1994); see also United States v. 500Delaware St., Tonawanda, New York, 868 F. Supp. 513, 518(W.D.N.Y. 1994) ("a claimant must establish that he has asufficient interest in the property to give him Article IIIstanding to contest the forfeiture"), aff'd, 113 F.3d 310 (2dCir. 1997).

II. "Suppression" of the Gold Bars

On January 19, 1996, this Court entered an order requiring thegovernment to afford Saccoccia an opportunity to be present atany depositions conducted in connection with the forfeitureproceedings. See United States v. Saccoccia, 913 F. Supp. 129(D.R.I. 1996). Several days later, the government noticed thedeposition of David Saucier, Saccoccia's brother-in-law, and senta copy of the notice to Saccoccia. Hours before Saucier'sdeposition was scheduled to begin, Saucier and his counsel metwith the United States Attorney and Saucier apparently told thegovernment about the gold bars hidden at Saccoccia's mother'shome.

Saccoccia asserts that the government's meeting with Saucierviolated the Court's order; and that, as a sanction for theviolation, the Court should "suppress" the gold bars (i.e.,prevent the government from forfeiting them). Saccoccia arguesthat since the meeting was precipitated by the notice ofdeposition, he had a right to be present.

This argument, too, may be disposed of summarily. This Courtpreviously denied Saccoccia's motion to hold the government incontempt of the January 19 order. In so doing, the Court observedthat the order merely entitles Saccoccia to be present at"depositions" and does not confer on him the right to be presentwhen a witness voluntarily agrees to be interviewed. (See June6, 1997, Tr. at 9-11.) The fact that Saucier's willingness tomeet with the government may have been prompted by the prospectof being deposed does not convert the interview into adeposition. Accordingly, the meeting with Saucier did not violatethe January 19 order.

III. Pendency of § 2255 Motion

Saccoccia offers no reason why the pendency of his § 2255motion should preclude forfeiture of the gold bars. Nor is theCourt able to divine such a reason.

Even the pendency of a direct appeal does not stay execution ona forfeiture judgment. See Hurley, 63 F.3d at 23. While entryof a notice of appeal generally "divests the district court ofjurisdiction to adjudicate any matters related to the appeal," a"district court retains authority to decide matters notinconsistent with the pendency of the appeal" such as awards ofattorneys' fees, acts in aid of execution of a judgment that hasnot been stayed and substitution of assets orders in criminalforfeiture cases. Id. (quoting United States v. Distasio,820 F.2d 20, 23 (1st Cir. 1987)).

There is even less reason for staying execution on a forfeiturejudgment where, as here, the judgment has become final.Saccoccia's conviction became final when it was affirmed by theCourt of Appeals and the Supreme Court denied certiorari. Thefact that Saccoccia's § 2255 motion collaterally attacks theconviction does not strip the conviction of its finality orprevent the government from executing on the forfeiture orderthat is part of the judgment of conviction. Otherwise, aconvicted defendant could frustrate, indefinitely, any efforts toenforce a judgment against him simply by filing a § 2255 motion.

IV. Entitlement to Discovery

Saccoccia's final argument is more difficult to decipherbecause it takes different forms in the various memoranda filedby counsel. The gist of the argument appears to be that theforfeiture judgment against Saccoccia must be reduced by anyamounts already forfeited by his indicted and unindictedco-conspirators, and that Saccoccia is entitled to conductdiscovery for the purpose of determining whether any suchforfeitures have occurred.

A. Credit for Amounts Forfeited by Others

In determining the extent to which Saccoccia is entitled tocredit for amounts that the government may have forfeited fromothers, a distinction must be drawn between amounts forfeitedfrom un indicted co-conspirators (i.e., the Colombian druglords) and amounts forfeited from those co-conspirators who wereindicted and convicted (i.e., his co-defendants).

Judgments of forfeiture were entered only against Saccoccia andhis co-defendants. The amount of the judgment against eachdefendant reflects the "proceeds obtained" by that defendant andhow much of the proceeds obtained by other members of theconspiracy were reasonably foreseeable by that defendant. SeeSaccoccia, 823 F. Supp. 994. Thus, the forfeiture judgmentsagainst Stephen and Donna Saccoccia were for the entire $136million in proceeds and the judgments against the remainingdefendants were for lesser amounts. The fact that the defendantsmay have transmitted some of the proceeds or other sums tounindicted co-conspirators had no bearing on the calculation ofthose judgments.

Each defendant is liable for the full amount of the forfeiturejudgment entered against him or her, but "[t]he government cancollect its $136 million only once." Hurley, 63 F.3d at 23.Accordingly, the amount that Saccoccia is required to forfeitmust be reduced by amounts already forfeited by his co-defendantspursuant to the forfeiture judgments entered against them in thiscase.1

On the other hand, Saccoccia is not entitled to credit for anyamounts that may have been forfeited by un indictedco-conspirators. Since no forfeiture judgments were enteredagainst the unindicted Colombian drug lords, they do not share inSaccoccia's liability under the $136 million forfeiture judgment.Moreover, any amounts that might have been forfeited bythose individuals could not have been forfeited pursuant to thatjudgment. Accordingly, even assuming, arguendo, that thegovernment has forfeited amounts belonging to unindictedco-conspirators, those amounts would not reduce Saccoccia'sliability for the judgment entered against him in this case; and,therefore, discovery regarding any such forfeitures would serveno purpose.

B. Need for Discovery

Whether action on the government's forfeiture motion should bedeferred in order to afford Saccoccia an opportunity to conductdiscovery with respect to amounts that might have been forfeitedby co-defendants depends upon the likelihood that discovery wouldlead to relevant evidence. The burden of establishing such alikelihood rests upon Saccoccia. In this case, no such showinghas been made.

On the contrary, there are a number of reasons why it appearshighly unlikely that discovery would yield any information thatmight affect disposition of the government's motion.

In support of its forfeiture motion, the government has filedan affidavit by special agent Michael Scully of the FBI. Scully'saffidavit states that he has been involved in the investigationand prosecution of the defendants since its inception. (ScullyAff. ¶ 1.) It further states that the government already hasforfeited approximately $3 million worth of assets belonging tothe defendants and that the forfeiture of additional assets worthapproximately $8 million that were seized in several Europeancountries is pending. (Id. ¶ 3.)

Saccoccia argues that the affidavit should be stricken becauseit is not based on Scully's personal knowledge. However, thatargument fails for two reasons.

First, Saccoccia fails to cite any requirement that evidencepresented during the course of proceedings in aid of execution ofa judgment must be based upon first-hand knowledge. Although theFederal Rules of Evidence do not address this precise issue, theyexpressly state that they are inapplicable to a number ofanalogous "miscellaneous proceedings," including sentencings.See Fed.R.Evid. 1101(d)(3).

More importantly, Scully's affidavit indicates that he has beeninvolved in the investigation and prosecution since itsinception. Thus, he would be in a good position to know thefacts, and the information in the affidavit would appear to bereliable.

Moreover, Saccoccia, himself, almost certainly would be awareof any additional amounts that might have been forfeited.Saccoccia presumably knows what assets belong to him and his wifeand where they are located. Thus, it would be a relatively simplematter for him to determine whether any of them are missing.

Although Saccoccia may not be as familiar with thecodefendants' assets, they appear to be non-existent. Most of theco-defendants were determined to be indigent and were representedby counsel appointed pursuant to the Criminal Justice Act,18 U.S.C. § 3006A.

In any event, it is difficult to see how assets belonging toSaccoccia or his convicted co-conspirators could have beenforfeited pursuant to the forfeiture judgments entered in thiscase without Saccoccia's knowledge. In his supplementalmemorandum, Saccoccia makes the bald assertion that thegovernment could have seized the defendants' property withoutthis Court's knowledge by registering the forfeiture judgments inother states. However, he fails to explain how that could beaccomplished without his knowledge and the knowledge of thisCourt.

The implausibility of Saccoccia's speculation regardingpossible undisclosed forfeitures is underscored by the fact thatsuch forfeitures would have to exceed $122.9 million in order toaffect disposition of the motion presently before the Court. Asalready noted, the judgment against Saccoccia is in the amount of$136 million and the government acknowledges that it has alreadyforfeited or is seeking to forfeit $11 million worth of assetsbelonging to Saccoccia, leaving a deficiency of $125 million.Since the gold bars, in question, are valued at only $2.1million, the undisclosed forfeitures imagined by Saccoccia wouldhave to exceed $122.9 million in order to affect the government'sright to forfeit them.

For reasons already stated, it is highly unlikely thatforfeitures of that magnitude could have been made, at leastwithout Saccoccia's knowledge. Consequently, there is nosufficient reason to defer ruling on the government's motionwhile Saccoccia engages in discovery. In this respect, thesituation is similar to a request for discovery, pursuant toFed.R.Civ.P. 56(f), prior to responding to a summary judgmentmotion. The party making such a request must show that there is"a plausible basis to believe that discoverable materials existthat would likely raise a genuine issue of material fact." OrtizCameron v. Drug Enforcement Admin., 959 F. Supp. 92, 94 (D.P.R.1997), aff'd, 139 F.3d 4 (1st Cir. 1998); accord ResolutionTrust Corp. v. North Bridge Assocs., Inc., 22 F.3d 1198, 1203(1st Cir. 1994). Here, Saccoccia has failed to provide any reasonfor believing that discovery would produce any informationrelevant to the instant motion.

Conclusion

For all of the foregoing reasons, the government's motion toforfeit the 83 gold bars is granted.

IT IS SO ORDERED.

1. Assets belonging to the convicted co-defendants that mayhave been forfeited for reasons unrelated to the forfeiturejudgments in this case would not reduce Saccoccia's liabilitybecause the shared liability encompasses only the $136 millionfor which these defendants are jointly responsible as a result ofthe conspiracy for which they were convicted.

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