Opinion
No. 00 CR 342-1
September 17, 2001
MEMORANDUM OPINION AND ORDER
Six of the defendants entered blind pleas of guilty. Two of them, Frank Adamo and Donald F. Scalise, contest the government's forfeiture calculations and filed memoranda. One of them, Carl Dote, joined in these motions and, on the day of sentencing, it was decided that the forfeiture determination respecting Carl Dote should be delayed and that it should be governed by the rulings on the two motions.
Scalise contends that the forfeiture (in his case the government seeks $119,982) is cruel and unusual punishment, given his present and prospective economic circumstances. Possibly, his contention might have merit if the government sought to forfeit substantial assets, only a small portion of which were tainted. See United States v. Sarbello, 985 F.2d 716, 717-18 (3rd Cir. 1993). But, here the forfeiture is solely of illegal proceeds. The motion is denied.
Adamo's dispute is with the calculation of the amount. He first contends that the amount should be zero because the enterprise ultimately failed. That does not mean, however, that it did not garner illegal proceeds while it was in operation. But how much? Trying to come up with a figure may be largely an academic exercise because it appears unlikely that the defendants have the capability to come up with any substantial amounts. Nevertheless, we are directed to try to do so.
The government relies on recorded conversations from six weeks of a 130 week period, which indicate a total result of $25,708. It then extrapolates that six week "window" to the entire period, arriving at a corrected figure of $546,715 for the entire period. Adamo attacks that figure on two grounds. One is that it ignores the amounts paid to agents as their share of the proceeds or "splits," which in some instances were as much as 75% of the proceeds. The other is that it ignores the expenses of the enterprise, which include clerk salaries, telephones and the like.
But the agents clearly were members of the enterprise and we think the clerks must be described as members as well, even if they did not personally share in the profits, and, therefore, what was paid to them cannot be considered as expenses. See United States v. Masters, 924 F.2d 1362, 1370 (7th Cir. 1991). Obviously, there were expenses, amounts paid to providers who were in no sense connected to the enterprise. Rent, telephone charges, and utilities readily come to mind. There is, however, no evidence of what those expenses might have been. The government's proof of the illegal proceeds is itself, however, a rather loose estimate, and we think it appropriate in those circumstances to recognize some estimate, indeed guess, as an offset. We believe $500 a week is a reasonable figure for an enterprise of this magnitude. Accordingly, we reduce the government's 130 week figure by $65,000, arriving at a total figure of $481,715. Since Carl Dote was a member of the enterprise for only 28 weeks, his forfeiture amount is $103,754.