Stephen Saccoccia, Donna Saccoccia, Anthony DeMarco, Vincent Hurley, James Saccoccio, Kenneth Saccoccio, Stanley Cerilla, Stephen Pizzo, and Carlo DeMarco have been convicted of a variety of offenses stemming from what the indictment describes as a conspiracy to launder more than $ 136 million derived from the illegal sale of narcotics. All of the defendants were found guilty of RICO conspiracy violations under 18 U.S.C. § 1962(d). In addition, most of the defendants were found guilty of one or more related substantive offenses, namely, filing false currency transaction reports (CTR's) in violation of 31 U.S.C. § 5324(2); structuring cash transactions with financial institutions in violation of 31 U.S.C. § 5324(3); engaging in monetary transactions in criminally derived property in violation of 18 U.S.C. § 1957; money laundering in violation of 18 U.S.C. § 1956; and/or Travel Act violations under 18 U.S.C. § 1952.
In entering judgment under Federal Rule of Criminal Procedure 32(b), the Court is now called upon to determine what "property" each defendant should be required to forfeit pursuant to 18 U.S.C. §§ 1963(a) and/or 982. 1" In making that determination, the Court must construe those statutes and make findings regarding the respective roles of the defendants in the offenses of conviction.
BURDEN OF PROOF
Before reciting its findings of fact, the Court feels compelled to make mention of the uncertainty regarding the standard of proof applicable to criminal forfeiture determinations. See United States v. Ofchinick, 883 F.2d 1172, 1177 n.1 (3rd Cir. 1989), cert. denied sub nom., DeLucia v. United States, 493 U.S. 1034, 107 L. Ed. 2d 769, 110 S. Ct. 753 (1990). On the one hand, there is no question that criminal forfeiture is imposed as a sanction against a defendant. S. Rep. No. 225, 98th Cong., 2d Sess., 191, 193 (1984), reprinted in, 1984 U.S. Code Cong. & Admin. News 3182, 3376. See also United States v. Cauble, 706 F.2d 1322, 1349 (5th Cir. 1983), cert. denied, 465 U.S. 1005, 79 L. Ed. 2d 229, 104 S. Ct. 996 (1984) ("The RICO forfeiture is in personam: a punishment imposed on a guilty defendant."). "It goes only to the penalty imposed rather than to the individual's criminal liability." United States v. Caporale, 806 F.2d 1487, 1508 (11th Cir. 1986), cert. denied, 483 U.S. 1021, 97 L. Ed. 2d 763, 107 S. Ct. 3265 (1987). Thus, criminal forfeiture is part of the sentencing process and not an element of the crime itself. United States v. Horak, 833 F.2d 1235, 1246 (7th Cir. 1987). Accordingly, it has been held that due process does not require application of the beyond a reasonable doubt standard. United States v. Elgersma, 971 F.2d 690, 694 (11th Cir. 1992).
On the other hand, neither § 1963(a) nor § 982 provide any explicit guidance as to what standard of proof Congress intended to apply under those statutes. Moreover, those cases touching on the issue generally do so without explanation. See, e.g., United States v. Cauble, 706 F.2d 1322 (5th Cir. 1983), cert. denied, 465 U.S. 1005, 79 L. Ed. 2d 229, 104 S. Ct. 996 (1984); United States v. Horak, 833 F.2d 1235 (7th Cir. 1987).
One notable exception is United States v. Pryba, 674 F. Supp. 1518 (E.D. Va. 1987). There, the court held that, under RICO, proof beyond a reasonable doubt was required. The court noted that Congress had provided for a preponderance of the evidence standard in other statutes and concluded that "by choosing not to use the same language in § 1963(a) Congress has invited the inference that the reasonable doubt standard should be employed throughout a RICO proceeding except where there is explicit provision otherwise." Id. at 1521. Furthermore, the Pryba court pointed out that:
There is no requirement in RICO that the quilt or innocence phase of the trial be bifurcated from the forfeiture phase. Often the phases are tried together. . . . Surely there can be no question that the reasonable doubt standard applies to the first phase. Almost as free from doubt is the inference that had Congress intended a different standard to apply, it would have recognized and addressed the practical difficulties involved in applying different proof standards to interrelated issues in the same proceeding.
Id. at 1521 (citations omitted).
In this case, the Court need not address the burden of proof issue because the government does not dispute that the beyond a reasonable doubt standard should be applied. Hopefully, Congress or the Supreme Court will provide definitive guidance on the subject before it becomes a pivotal issue in too many cases.
Between 1986 and his arrest in November, 1991, Stephen Saccoccia was the de facto owner and manager of several corporations ostensibly engaged in the business of buying, selling, and refining gold and other precious metals in Rhode Island, New York and California. The remaining defendants were employed at various times and in various capacities by Saccoccia and/or his corporations, and they acted pursuant to Saccoccia's instructions. In fact, much of the "business" in which the defendants were engaged consisted of "laundering" the proceeds of illegal narcotics sales for a Colombian drug cartel and its agents including Duvan Arboleda, Fernando Duenas, and Raoul Escobar.
Stephen Saccoccia's money laundering activities began in 1987 when he caused cash received from Arboleda to be delivered to Barry Slomovitz, another money launderer in New York. Slomovitz used the cash to covertly purchase gold that he resold on the open market. The amounts realized from those sales were wired to bank accounts maintained by two of Saccoccia's corporations, Trend Precious Metals ("Trend") in Cranston, Rhode Island, and International Metal Marketing ("IMM") in Los Angeles, California. In order to create the appearance that the funds transferred were derived from legitimate business transactions, Stephen and Donna Saccoccia caused phony invoices to be issued to Slomovitz falsely indicating that the amounts wired to Trend and IMM were payments for gold purchases.
By 1990, Saccoccia's money laundering enterprise had expanded, and he began operating independently from Slomovitz. Cash received from Arboleda, Duenas, or Escobar was delivered to the defendants in New York City in a variety of ways. Sometimes Vincent Hurley or Anthony DeMarco met couriers at prearranged locations. On other occasions, couriers delivered the cash to one of Trend's New York offices. In one instance during August, 1991, $ 3 million was delivered to Stephen and Donna Saccoccia's apartment in Manhattan.
The cash was delivered in amounts that generally ranged from $ 50,000.00 to $ 500,000.00 and consisted of large numbers of small denomination bills carried in gym bags or luggage. The cash usually was counted by Stephen Saccoccia, Donna Saccoccia, and/or Richard Gizzarelli, an unindicted co-conspirator. Occasionally, they were assisted by Anthony DeMarco, Vincent Hurley, and David Izzi, an indicted co-conspirator.
After the cash was counted, some of it was sent to Trend or Saccoccia Coin Company ("Saccoccia Coin"), another one of Saccoccia's Rhode Island companies. The remainder was sent to IMM in Los Angeles. Initially, the cash sent to Rhode Island was shipped via Loomis or Brinks armored cars. However, when Saccoccia became concerned that law enforcement authorities might be monitoring those shipments, he arranged to have the cash transported to Cranston, Rhode Island by Richard Gizzarelli, Anthony DeMarco, Carlo DeMarco, Vincent Hurley, and David Izzi. Usually, Gizzarelli and one of the defendants drove from New York to a rendezvous point in Connecticut where they transferred the cash to Izzi and two of the other defendants who brought it back to Rhode Island. When the cash arrived at Trend or Saccoccia Coin, it was counted again by Vincent Hurley, David Izzi, Carlo DeMarco, Anthony DeMarco, Kenneth Saccoccio, James Saccoccio, Stanley Cerilla and/or Stephen Pizzo and divided into packets that usually contained less than $ 10,000.00 each. The packets, then, were taken to a number of different banks and used to purchase cashier's checks payable to Trend. In that way, the defendants circumvented the currency transaction reporting requirements of 31 U.S.C. § 5313 which required financial institutions to file reports containing the identities of persons engaging in cash transactions involving more than $ 10,000.00. n2 When cashier's checks for more than $ 10,000.00 were purchased, they generally were made payable to corporations nominally controlled by Anthony DeMarco even though the defendants knew that the cash actually belonged to Saccoccia. The amount of the checks purchased in this fashion by each defendant was as follows: Name Time Period Amount James Saccoccio March 23, 1990 to $ 2,993,445.00 October 29, 1990 Kenneth Saccoccio March 1, 1990 to $ 11,258,955.00 May 28, 1991 Anthony DeMarco March 6, 1990 to $ 11,250,985.79 August 7, 1991 David Izzi April 6, 1990 to $ 11,952,715.00 August 22, 1991 Total $ 37,456,100.79