United States v. King, Case No. CR–13–0063–F
| Court | United States District Courts. 10th Circuit. Western District of Oklahoma |
| Writing for the Court | STEPHEN P. FRIOT, UNITED STATES DISTRICT JUDGE |
| Citation | 231 F.Supp.3d 872 |
| Parties | UNITED STATES of America, Plaintiff, v. (1) Bartice A. "Luke" KING, (8) Kory Elwin Koralewski, (24) Paul Francis Tucker, (27) Leon Mark Moran, (29) Luis Robles, (52) Zapt Electrical Sales, Inc., (58) Rodger Vanpelt Bramley and (59) Kelley Ward Diebner, Defendants. |
| Docket Number | Case No. CR–13–0063–F |
| Decision Date | 06 March 2017 |
231 F.Supp.3d 872
UNITED STATES of America, Plaintiff,
v.
(1) Bartice A. "Luke" KING, (8) Kory Elwin Koralewski, (24) Paul Francis Tucker, (27) Leon Mark Moran, (29) Luis Robles, (52) Zapt Electrical Sales, Inc., (58) Rodger Vanpelt Bramley and (59) Kelley Ward Diebner, Defendants.
Case No. CR–13–0063–F
United States District Court, W.D. Oklahoma.
Signed March 6, 2017
Travis D. Smith, John S. Han, Robert Don Evans, Jr., Scott E. Williams, Wilson D. McGarry, US Attorney's Office, Oklahoma City, OK, Robin L. Sommer, US Attorney's Office, Wichita, KS, for Plaintiff.
Nathan J. Mays, The Law Offices of Nathan J. Mays PC, Dan B. Gerson, Houston, TX, John D. Cline, Law Office of John D. Cline, Anthony J. Brass, Law Office of Anthony Brass, San Francisco, CA, Robert M. Goldstein, Law Office of Robert Goldstein, Boston, MA, Daniel Brodersen, Brodersen Law Firm, Orlando, FL, Juan Chardiet, Juan Chardiet Attorney at Law, McLean, VA, Craig D. Corgan, Craig Corgan Attorney at Law, Yukon, OK, James D. Henderson, The Law Office of James D. Henderson, Jr., Santa Monica, CA,
Michael W. Noland, Noland Defense Firm, Joseph G. Shannonhouse, IV, Shannonhouse Law Offices PLLC, Derek H. Ross, Robert G. McCampbell, Fellers Snider Blankenship Bailey & Tippens, Michael D. McBride, McBride Law Firm, Seth A. Day, Susanna M. Gattoni, Hall Estill, Ronald L. Wallace, The Wallace Law Firm, Andre B. Caldwell, Anthony J. Hendricks, Crowe & Dunlevy, Matthew C. Kane, Ryan Whaley Coldiron Shandy PC, J. Patrick Quillian, J. Patrick Quillian PC, Robert L. Johnston, Law Office of Robert L. Johnston, Lance B. Phillips, Lance B Phillips PC, Paul A. Lacy, Federal Public Defender, Michael S. Johnson, Law Office of Michael S. Johnson, Troy R. Cowin, Lopez Johnson Armenta, David B. Autry, Robert S. Jackson, Perry W. Hudson, Oklahoma City, OK, Alain J. Ifrah, David S. Yellin, Ifrah PLLC, Washington, DC, Ronald Eugene Jenkins, Jenkins & Kling PC, St. Louis, MO, H. Manuel Hernandez, H. Manuel Hernandez PA, Longwood, FL, Michael W. Nielsen, Nielsen Law Firm, Winter Springs, FL, Gordon D. Jones, Jones & Hawley PC, Birmingham, AL, Jerry W. Biesel, Dallas, TX, Steve T. Jumes, Varghese Summersett & Smith, Fort Worth, TX, for Defendants.
MEMORANDUM OPINION AND ORDER re: FORFEITURE
STEPHEN P. FRIOT, UNITED STATES DISTRICT JUDGE
Table of Contents
I. Introduction...881
A. The Criminal Charges...882
B. The Trials and Convictions...883
C. The Moving Papers and Evidentiary Hearing...884
II. Authority for Forfeiture...886
A. Forfeiture Procedures...886
B. General Principles...887
C. Forfeitures Based on RICO Conspiracy Convictions...891
D. Forfeitures Based on Convictions for Operation of Illegal Gambling Business...894
E. Forfeitures Based on Money Laundering Conspiracy Convictions...895
F. Forfeiture Based on a Facilitation Theory...897
III. The Excessive Fines Clause...899
IV. Burden of Proof...905
A. The Government's Burden...905
B. The Defendants' Burden...907
V. The Exclusionary Rule...908
VI. Tracing, Tainting, Commingling and Extrapolation...910
A. Tracing, Tainting and Commingling...910
B. Extrapolation...915
VII. Notice of the Government's Intent to Seek Money Judgment...916
VIII. Overview of the Government's Forfeiture Case...917
A. The Government's Forfeiture Brief (doc. no. 1999)...917
1. King...918
2. Koralewski...919
3. Tucker...919
4. Moran...920
5. Robles...920
6. Bramley...920
7. Diebner...920
B. The Government's Presentation at the Forfeiture Trial...920
IX. Findings of Fact...922
A. Introduction...922
B. Viability of the Government's Characterization of Funds Allegedly Laundered...924
1. Preliminary Matters...924
2. Sources of Deposits and Nature of Activities Generating the Funds...927
3. Money Laundering Total...948
4. A Brief Digression...949
C. Viability of the Government's Proposed Direct Attributions and Extrapolations...951
1. General Nature of the Government's Proposed Direct Attributions and Extrapolations...951
2. Extrapolation Based on Legendz Payouts to Bettors through Global Data Payment Services...954
3. The Government's Proposed Extrapolations and Direct Attributions re: Proceeds Attributable to Individual Agents and Runners...955
a. Terry Campbell...955
b. Ralph Hernandez...957
c. Kelly Diebner...960
d. Christopher Tanner...965
e. Michael Lawhorn...966
f. Joseph Barry...970
g. Paul Tucker...970
h. Bruce Middlebrook...972
i. Rodger Bramley...974
j. Paul Wilson...976
k. Leon Moran...977
l. Joseph McFadden...981
m. David Ross...983
n. Kory Koralewski...983
o. Luis Robles...993
4. Conclusion as to the Government's Proposed Extrapolations and Direct Attributions...994
D. Viability of the Government's Contention that all Forfeiture Defendants, Regardless of their Respective Degrees of Participation in the Legendz Enterprise, Should be Subjected to a Forfeiture Money Judgment in the Same Amount...995
E. Findings Specific to King...996
1. Forfeiture of Specific Assets...996
2. Forfeiture Money Judgment...999
F. Findings Specific to Koralewski...999
1. Forfeiture of Specific Assets...999
2. Forfeiture Money Judgment...1001
G. Findings Specific to Tucker...1001
1. Forfeiture of Specific Assets...1001
2. Forfeiture Money Judgment...1001
H. Findings Specific to Moran...1006
1. Forfeiture of Specific Assets...1006
2. Forfeiture Money Judgment...1006
I. Findings Specific to Robles...1008
1. Forfeiture of Specific Assets...1008
2. Forfeiture Money Judgment...1008
J. Findings Specific to Bramley...1009
1. Forfeiture of Specific Assets...1009
2. Forfeiture Money Judgment...1012
K. Findings Specific to Dieber...1013
1. Forfeiture of Specific Assets...1013
2. Forfeiture Money Judgment...1013
L. Summary of Forfeiture–Related Findings...1014
X. Forfeiture–Related Sanctions Against the United States...1015
XI. Conclusion...1022
I. Introduction
The government moves for preliminary orders of forfeiture against the defendants Bartice A. "Luke" King,1 Kory Elwin Koralewski, Paul Francis Tucker, Leon Mark Moran, Luis Robles, Zapt Electrical Sales Inc., Rodger Vanpelt Bramley and Kelley
Ward Diebner. This order refers to these parties, other than Zapt,2 as "the forfeiture defendants."3
The government seeks forfeiture of specific assets as well as a forfeiture money judgment. See generally, Rule 32.2(b), Fed.R.Crim.P. (procedures for entering a preliminary order of forfeiture). As for the forfeiture money judgment, the government now seeks a judgment in the amount of $231,432,686.73 against the forfeiture defendants. (In the last of the four jury trials that were held in this case, an FBI witness maintained, repeatedly, that the government actually seeks $1 billion by way of forfeiture. Oct. Tr. 2074, 2077, 2114–14.4 )
These forfeiture proceedings are, to put it mildly, contested.
The findings of fact in this order are based on the evidence presented at the four jury trials which were held in this case, as well as the James hearings and the nonjury trial which was addressed exclusively to forfeiture issues—all of which generated 11,368 pages of trial transcript.
A. The Criminal Charges
The original Indictment in this case was returned on March 20, 2013. It alleged a ten-year conspiracy period for the two conspiracy counts. Doc. no. 1, at 18, 47.5 As of the date of the Indictment, there was about a nine-year overlap between the ten-year duration of the conspiracy and the duration of the government's investigation of that conspiracy.
The original Indictment charged fifty-seven defendants, including six of the eight forfeiture defendants now before the court (King, Koralewski, Moran, Robles, Tucker and Zapt). Doc. no. 1. The Indictment charged: Count 1, a racketeering (RICO) conspiracy in violation of 18 U.S.C. § 1962(d) ; Count 2, operation of an illegal gambling business in violation of 18 U.S.C. § 1955 ; and Count 3, conspiring in violation of 18 U.S.C. § 1956(h) to commit money laundering under 18 U.S.C. §§ 1956 and 1957. The Indictment included forfeiture allegations stating the government's intent to seek criminal forfeiture of at least $1,000,000,000.00 as well as specific items of real and personal property.
On August 16, 2013, the United States filed a Bill of Particulars for Forfeiture of Property, giving notice to defendants King, Tucker and Moran (and other defendants not involved in these forfeiture proceedings), that the United States was seeking forfeiture of additional specific property listed in the Bill of Particulars. Doc. no. 346.
On August 21, 2013, a grand jury...
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State v. Jouppi, A-13147
...would deprive defendant, who had a ninth-grade education and no meaningful employment history, of livelihood); United States v. King, 231 F.Supp.3d 872, 1007-14 (W.D. Okla. 2017) (limiting forfeiture amounts for several defendants because of considerations like low net worth, work-related d......
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THE BURDENS OF THE EXCESSIVE FINES CLAUSE.
...show unconstitutionality of a forfeiture); United States v. Cheeseman, 600 F.3d 270,283 (3d Cir. 2010) (same); United States v. King, 231 F. Supp. 3d 872,907-08 (W.D. Okla. 2017) (citing Fogg, 666 F.3d at 18-19) (stating the burden on both financial effect and the ultimate question of exces......
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United States v. Hallinan, CRIMINAL ACTION NO. 16-130-01
...to warrant forfeiture (quoting United States v. Parcel of Property, 337 F.3d 225, 233 (2d Cir. 2003)); United States v. King, 231 F. Supp. 3d 872, 1010-11 (W.D. Okla. 2017) (finding that defendant's sporadic use of his house toPage 39 "take care of some [illegal bookkeeping]-related busines......
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United States v. Young, Criminal No. 17-cr-083 (KBJ)
...arise (and are expressed) when the government undertakes the calculation of forfeitable proceeds. See, e.g., United States v. King , 231 F.Supp.3d 872, 918 (W.D. Okla. 2017) ("[T]he government is not entitled to run up the forfeiture score by double counting."); United States v. McKay , 506......
-
State v. Jouppi, A-13147
...would deprive defendant, who had a ninth-grade education and no meaningful employment history, of livelihood); United States v. King, 231 F.Supp.3d 872, 1007-14 (W.D. Okla. 2017) (limiting forfeiture amounts for several defendants because of considerations like low net worth, work-related d......
-
United States v. Hallinan, CRIMINAL ACTION NO. 16-130-01
...to warrant forfeiture (quoting United States v. Parcel of Property, 337 F.3d 225, 233 (2d Cir. 2003)); United States v. King, 231 F. Supp. 3d 872, 1010-11 (W.D. Okla. 2017) (finding that defendant's sporadic use of his house toPage 39 "take care of some [illegal bookkeeping]-related busines......
-
United States v. Young, Criminal No. 17-cr-083 (KBJ)
...arise (and are expressed) when the government undertakes the calculation of forfeitable proceeds. See, e.g., United States v. King , 231 F.Supp.3d 872, 918 (W.D. Okla. 2017) ("[T]he government is not entitled to run up the forfeiture score by double counting."); United States v. McKay , 506......
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United States v. -t_T-297,638.00 in U.S. Currency, No. 4:16-CV-254
...forfeiture of "[a]ny property, including money, used in violation of [section 1955]." 18 U.S.C. § 1955(d); see United States v. King, 231 F. Supp. 3d 872, 894 (W.D. Okla. 2017). Section 981(a)(1)(C) allows for the forfeiture of "[a]ny property, real or personal, which constitutes or is deri......
-
THE BURDENS OF THE EXCESSIVE FINES CLAUSE.
...show unconstitutionality of a forfeiture); United States v. Cheeseman, 600 F.3d 270,283 (3d Cir. 2010) (same); United States v. King, 231 F. Supp. 3d 872,907-08 (W.D. Okla. 2017) (citing Fogg, 666 F.3d at 18-19) (stating the burden on both financial effect and the ultimate question of exces......