U.S. v. Speed Joyeros, S.A., 00 CR 960(JBW).

• Decision Date: 09 May 2002
• Docket Number: No. 00 CR 960(JBW).,00 CR 960(JBW).
• Citation: 204 F.Supp.2d 412
• Parties: UNITED STATES, Plaintiff, v. SPEED JOYEROS, S.A,; Argento Vivo, S.A.; Yardena Hebroni a/k/a Yardena Hevroni; and Eliahu Mizrahi, Defendants.
• Court: U.S. District Court — Eastern District of New York

204 F.Supp.2d 412

UNITED STATES, Plaintiff, v. SPEED JOYEROS, S.A,; Argento Vivo, S.A.; Yardena Hebroni a/k/a Yardena Hevroni; and Eliahu Mizrahi, Defendants.

No. 00 CR 960(JBW).

United States District Court, E.D. New York.

May 9, 2002.

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John Roth, Chief, Narcotics & Dangerous Drug Section, United States Department of Justice, Washington, DC, By Laurel Loomis, Esq., Eric Snyder, Esq., Armando Bonilla, Esq., Alan Vinegrad, United States Attorney, Eastern District of New York, By David Goldberg, Esq., Claire Kedeshian, Esq., for United States.

Larry Silverman, Esq., New York, for Defendants Hebroni and Speed Joyeros, S.A.

Roger Adler, New York, for defendant Hebroni, appointed by the court pursuant to the Criminal Justice Act, 18 U.S.C. § 3006A.

Vivian Shevitz, South Salem, NY, for defendant Argento Vivo, S.A.

MEMORANDUM, ORDER, AND JUDGMENT

WEINSTEIN, Senior District Court J.

                Table of Contents
                  I. Introduction ................................................................ 417
                 II. Facts ....................................................................... 418
                     A. Background ............................................................... 418
                     B. Procedural History ....................................................... 419
                III. Law ......................................................................... 422
                     A. Conflicts of Interest .................................................... 422
                     B. Plea Bargains ............................................................ 422
                        1. Plea Bargaining and Coercion .......................................... 422
                        2. Competency to Plead ................................................... 426
                        3. Changes in the Criminal Justice System ................................ 427
                     C. Bail ..................................................................... 434
                

                        1. Law Governing Bail ..................................................... 434
                        2. History of Bail Reform ................................................. 434
                        3. Constitutional Requirements ............................................ 437
                        4. Use of Pretrial Services ............................................... 438
                     D. Speedy Trial .............................................................. 438
                        1. Constitutional Aspects ................................................. 438
                        2. Statutes and Rules ..................................................... 439
                     E. Sentencing ................................................................ 439
                        1. Departure .............................................................. 439
                           a. Destruction of Livelihood ........................................... 440
                           b. Stress of Pretrial Incarceration .................................... 441
                        2. Fine ................................................................... 442
                        3. Credit for Good Behavior ............................................... 443
                        4. Supervised Release ..................................................... 443
                 IV. Application of Law to Facts .................................................. 444
                     A. Defendant's Ability to Plead .............................................. 444
                     B. Conflicts of Interest ..................................................... 444
                     C. Sentencing ................................................................ 445
                        1. Calculation of offense level ........................................... 445
                        2. Departure .............................................................. 445
                        3. Credit for time served and for good behavior ........................... 446
                        4. Supervised Release ..................................................... 446
                  V. Conclusion ................................................................... 446
                Appendix 1: Types of Sentencing Departure by Year ................................. 446
                Appendix 2: Disposition of Federal Criminal Defendants, National .................. 448
                Appendix 3: Disposition of Federal Criminal Defendants, Eastern District of New
                  York ............................................................................ 450
                

I. Introduction

The questions posed are whether acceptance of a plea of guilty and a departure downward in sentencing were appropriate in this substantial money laundering case. Serious factual and legal issues are presented by evidence of the defendant's long pretrial incarceration under onerous conditions, the government's control over funding for her counsel and the threat of much greater punishment without a plea.

This case illustrates the danger of due process violations by intensive pressure on defendants to plead guilty because of lengthy pretrial incarcerations and the offer of advantageous deals for lesser terms of imprisonment. The stick and carrot — largely controlled by prosecutors — produces a danger of excessive coercion of a defendant and undue pressures on defense counsel to avoid trial. It requires particularly close supervision by the court to ensure voluntariness of the plea. In evaluating the need for sentencing departures the unusual tensions some defendants face while in custody awaiting trial also necessitate consideration.

The virtual elimination of federal criminal trials, substituting administrative decisions not to prosecute or pleas of guilty, has substantially changed our federal criminal law system. Increased prosecutorial discretion and power have raised the percent of guilty pleas from 86% of all federal convictions in 1971 to 95% in 2001. Discretion not to prosecute is widely exercised. Enhancement of control of sentencing by the prosecutor as a result of sentencing guidelines and minimum sentences has increased the government's power to coerce defendants. There has been a change from the paradigmatic concept of investigation and accusation by the government of almost all persons believed to have committed crimes, trial by jury with a strong role for defense counsel, and discretion in sentencing by the court, to a system sharply reducing the role of defense counsel, the jury and the judge, and whatever protections they can afford a defendant.

Defendant Hebroni and codefendants were charged with using jewelry businesses in Panama to launder some $10,000,000 of drug money. The prosecution was controlled by the Narcotics and Dangerous Drugs section of the United States Department of Justice, from Washington, D.C., rather than by the district's United States Attorney.

After lengthy pre-trial proceedings, drawn out over a period of more than a year and a half largely because of failure of the government to produce the huge amount of documents seized by the government of Panama; successive grants of bail by the trial court which were overturned on appeal; and strong government opposition to payment of defense counsel from defendant's known assets, all of which had been seized; defendant and the government entered into a plea agreement. It required defendant to be incarcerated for a term of somewhere between 33 and 41 months under the guidelines, and to give up all her assets. Without such an agreement, upon conviction she would have faced a prison sentence of 151 to 188 months and possibly more, based on a level of 34 or higher. See U.S. Sentencing Guidelines Manual §§ 2S1.1(b)(1) & 2S1.1(b)(2)(I) (2001) (hereinafter "Guidelines Manual").

The court entertained doubts about 1) defendant's capacity and desire to sign the plea agreement and 2) a possible conflict of interest of defense counsel in recommending a plea. Accordingly, the defendant was ordered to undergo a psychiatric evaluation to determine her fitness. Additional defense counsel was appointed to ensure that defendant's rights were fully protected and that she was being appropriately advised.

Ultimately defendant's plea was accepted by the court. While defendant agreed not to seek a downward departure, the agreement did not limit the court's independent authority to consider such a departure. On the basis of the presentence report, briefs by both sides and sentencing hearings, the court departed downward 2 levels and sentenced the defendant to a total of 27 months in prison and forfeiture of all her personal and business assets, a fine, and a term of supervised release of three years, during which time defendant may not engage in the jewelry or rare metals business, nor conduct any business in Panama.

II. Facts

A. Background

Defendant Hebroni is a citizen of Israel domiciled in Panama. She is forty-nine years old and recently widowed. Her immediate family is her 6-year-old son, now a resident of Israel, who was conceived after many years of medical intervention. Defendant appears to be an intelligent woman, though physically frail.

The court was presented with no admissible evidence. From the contentions of government counsel and concessions by defendant, the facts can be briefly summarized as follows:

Co-defendant Speed Joyeros, S.A., is a jewelry business fully owned by defendant Hebroni. Speed Joyeros, S.A., engaged in the sale of gold and silver jewelry and precious metals to many retail and wholesale customers throughout Central and South America and in Europe and the Middle East. Defendant's business was among the most successful jewelry businesses in the Colon, Panama Free Zone, with revenues of $155 million in 1998 and $105 million in 1999.

She received cash, checks and electronic money transfers in a money laundering scheme. A primary modus was to sell jewelry to drug lords, knowing that it was being paid for with drug money, thus allowing them to convert dirty money into glistening clean jewelry. Financial institutions in the United States and other countries were employed in these conversions.

Co-defendant Argento Vivo S.A. is a corporation controlled by d...