U.S. v. Gotti
| Citation | 155 F.3d 144 |
| Decision Date | 08 September 1998 |
| Docket Number | No. 98-1159,98-1159 |
| Parties | UNITED STATES of America, Appellant, v. John A. GOTTI, also known as John, Jr., also known as Junior; Mario Antonicelli, also known as Little Mario; Gregory DePalma, also known as Greg, also known as Ron; Vincent Zollo, also known as Vinny; Defendants-Appellees, Louis Ricco, also known as Louie Bracciole, also known as Louie Brash; Craig DePalma; Michael Sergio, also known as Mikey Hop, also known as Hop; Stephen Sergio, also known as Sigmund the Sea Monster; Dominick Loiacono, also known as the Butcher; Leonard Minuto, Sr., also known as Cliff, also known as the Turtle; Steven Fortunato, also known as Guappo; Peter Forchetti, also known as Fat Pete, also known as Jonesie; Anthony Plomitallo, also known as Anthony the Carpenter; William R. Marshall, also known as Willie; Robert Sanseverino, also known as Bobby Sans; Christian Binnie, also known as Chris; John Forcelli, also known as Bart; Marco Barros; Michael Zambouros, also known as Michael Z.; Salvatore Locascio, also known as Tore; Angelo Prisco; John Sialiano, also known as Goombah Johnnie; Dennis McLain, also known as Denny, Defendants. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Bart G. Van De Weghe, Assistant United States Attorney (Mary Jo White, United States Attorney for the Southern District of New York, New York City; Sharon Cohen Levin and Robert E. Rice, Assistant United States Attorneys, of counsel), for Appellant.
Gerald L. Shargel, New York City (Sarita Kedia, of counsel), for Appellee John A. Gotti.
Before: WINTER, Chief Judge, POOLER, Circuit Judge, and DORSEY, 1 District Judge.
On January 20, 1998, a New York grand jury indicted the 23 defendants in this case and charged them in 60 counts with violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. The indictment alleges that defendants participated in a racketeering enterprise known as the Gambino Family and engaged in extortion, fraud, loansharking, money laundering, obstruction of justice, and illegal gambling, among other unlawful activities. The indictment alleges that defendants' The indictment seeks forfeiture of assets linked to defendants' racketeering activities, including the cash proceeds of those activities, pursuant to 18 U.S.C. § 1963(a)(1), (2), and (3). In addition, in the event that any of the specified assets become unavailable for forfeiture, the indictment seeks forfeiture of substitute assets, which are any other property of defendants up to the value of the forfeitable property. 18 U.S.C. § 1963(m). The indictment identifies as substitute assets various parcels of real property, money in bank accounts, interest in corporations, and automobiles.
racketeering activities generated as much as $20 million in cash.
On January 20, 1998, following return of the indictment, the United States District Court for the Southern District of New York (Brieant, J.), granted the government's application pursuant to 18 U.S.C. § 1963(d)(1)(A) for a post-indictment, pretrial restraining order. The restraining order prohibited the transfer or dissipation without government approval of 19 of defendants' assets, which would be forfeitable upon their conviction, and the prohibition also covered substitute assets that could be taken in the event that directly forfeitable assets were unavailable. On February 10, 1998, defendant John A. Gotti moved to vacate the part of the restraining order that pertained to substitute assets. Defendants Mario Antonicelli, Craig DePalma, and Vincent Zollo subsequently joined in that motion. Judge Parker granted the motions and vacated the restraining order insofar as it pertained to substitute assets. See United States v. Gotti, 996 F.Supp. 321 (S.D.N.Y.1998). The United States now appeals.
On appeal, the United States argues that the post-indictment, pretrial restraint of substitute assets is permitted where, as here, the government has shown that directly forfeitable assets will be unavailable. The government argues that Section 1963(d)(1)(A) sweeps broadly and allows pretrial restraint of any property that "would, in the event of conviction, be subject to forfeiture under this section." 18 U.S.C. § 1963(d)(1)(A). The government also argues that the individual provisions of Section 1963 should not be read in isolation. According to appellant, finding that the pretrial restraint provisions of Section 1963(d)(1) pertain to substitute assets is the only way to effectuate the statute's purpose as a whole, which is to secure the availability of forfeitable assets upon conviction. Defendants argue that the statute's clear and unambiguous pretrial restraint provisions refer only to directly forfeitable property and that if Congress had intended to authorize the pretrial restraint of substitute assets, it would have done so explicitly. We review de novo the district court's finding that Section 1963(d)(1)(A) does not authorize the pretrial restraint of substitute assets, a purely legal issue of statutory interpretation. See Perry v. Dowling, 95 F.3d 231, 235 (2d Cir.1996) (citing White v. Shalala, 7 F.3d 296, 299 (2d Cir.1993)).
The RICO forfeiture provisions were intended to provide "new weapons of unprecedented scope for an assault upon organized crime and its economic roots" by providing "enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime." Russello v. United States, 464 U.S. 16, 26-27, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983) (citing Pub.L. No. 91-452, 84 Stat. 922, 923 (1970)) (quotations omitted). In that vein, pursuant to the terms of 18 U.S.C. § 1963(a), any person who violates any provision of 18 U.S.C. § 1962 by engaging directly or indirectly in racketeering activity or the collection of unlawful debt, shall forfeit to the United States:
(1) any interest the person has acquired or maintained in violation of section 1962;
(2) any--
(A) interest in;
(B) security of;
(C) claim against; or
(D) property or contractual right of any kind affording a source of influence over; any enterprise which the person has established, operated, controlled, conducted, or participated in the conduct of, in violation of section 1962; and
(3) any property constituting, or derived from, any proceeds which the person obtained directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962.
18 U.S.C. § 1963(a). To the extent that assets linked to a defendant's racketeering activity are unavailable for forfeiture as a result of any act or omission of the defendant, other substitute assets of the defendant may, in certain circumstances, be forfeited in an amount up to the value of the directly forfeitable assets. 18 U.S.C. § 1963(m). In addition, in order to preserve forfeitable assets pending trial, upon application of the United States, a court may
enter a restraining order or injunction, require the execution of a satisfactory performance bond, or take any other action to preserve the availability of property described in subsection (a) for forfeiture under this section--
(A) upon the filing of an indictment or information charging a violation of section 1962 of this chapter and alleging that the property with respect to which the order is sought would, in the event of conviction, be subject to forfeiture under this section.
18 U.S.C. § 1963(d)(1)(A). The question presented by this appeal is whether 18 U.S.C. § 1963(d)(1)(A) also authorizes the post-indictment, pretrial restraint of substitute assets even though it only mentions directly forfeitable "subsection (a)" assets in its text.
The district court concluded that Section 1963(d)(1)(A) "does not, on its face, authorize a restraint on substitute assets" and further stated that:
[t]he government is quite correct that in RICO cases where large amounts of cash proceeds are allegedly produced by racketeering activities, the forfeiture of substitute assets is crucial to furthering the remedial purpose of the statute and that the unavailability of pre-trial restraint of substitute assets would mean that, in some cases, assets ultimately subject to forfeiture could be dissipated, transferred, or otherwise made unavailable for forfeiture. The government might be better able to preserve assets for post-trial forfeiture if § 1963 authorized the pre-trial restraint of substitute assets. But, on our reading of the statute, that is not the policy that Congress has embraced, as evidenced by the language it chose to use.
Gotti, 996 F.Supp. at 323, 325.
Neither the Supreme Court nor this Court has directly addressed this issue, and the various district and circuit courts that have decided it have reached different conclusions. Compare United States v. Riley, 78 F.3d 367, 371 (8th Cir.1996) (); In re Assets of Martin, 1 F.3d 1351, 1359 (3d Cir.1993) (same); and United States v. Floyd, 992 F.2d 498, 502 (5th Cir.1993) () with In re Assets of Billman, 915 F.2d 916, 921 (4th Cir.1990) (), cert. denied, 500 U.S. 952, 111 S.Ct. 2258, 114 L.Ed.2d 711 (1991). Moreover, courts that have considered this issue question whether this Court's decision in United States v. Regan, 858 F.2d 115 (2d Cir.1988), authorizes the pretrial restraint of substitute assets, and the parties offer conflicting interpretations of Regan. We conclude that Regan must be restricted to its particular facts and that 18 U.S.C. § 1963(d)(1)(A) does not authorize the pretrial restraint of substitute assets.
In Regan, this Court faced the question of whether a pretrial restraining order entered under 18 U.S.C. § 1963(d)(1)(A) may be...
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