The opinion of the court was delivered by: JACK B. WEINSTEIN
Defendants are thirty New York City Taxi and Limousine Commission ("Commission") inspectors who have pled guilty to extortion. They accepted bribes in exchange for overlooking defects and for certifying inspections for taxicabs that were never inspected. Some of the defendants were line inspectors who conducted the fraudulent inspections, others were senior inspectors who condoned the corruption, and yet others were supervisors who furthered the scheme by manipulating work schedules to ensure that the corrupt line inspectors were on the same inspection team. All shared in the profits.
Sentencing here involves a key objective: corruption in government agencies charged with protecting public safety must be deterred by loss of liberty to the offender. In imposing punishment the court must nevertheless consider the fact that the endemic extortion was due in large measure to incompetence of high officials in the city government, that some of the inspectors were drawn unwillingly into this cesspool of corruption and that some cooperated fully in exposing the dirty details.
All defendants have pled guilty to conspiracy to commit extortion by accepting illegal payoffs. Section 1951(a) of Title 18, the federal extortion statute, provides:
(a) Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be [guilty of a felony.]
18 U.S.C. § 1951(a). The maximum penalty for a violation of section 1951 is twenty years imprisonment, id., and a fine of $ 250,000. 18 U.S.C. § 3571 (b)(3).
The Commission was created in 1971 to improve taxi and limousine service in New York City. It is responsible for establishing standards for taxicab safety and air pollution. Its regulations require that taxicabs be inspected to ensure structural and mechanical safety and appropriate exhaust emission levels. Since 1989 all safety and emissions inspections have taken place at the Safety and Emissions Division in Woodside, Queens. An estimated 200 taxicabs are inspected at that site each day. All the inspectors worked at the Woodside facility.
Taxicabs must be inspected three times a year. Additionally, field inspectors may issue "notices of violation" to taxicabs in the street that do not conform with Commission regulations. Failure to pass inspection or to correct a violation promptly can result in the suspension of the right to operate the taxicab until the defect is repaired, resulting in a significant loss of revenue to the owner and operator.
At the time most of these inspectors were arrested, the top position in the Safety and Emissions Division was vacant. The division was run by the Assistant Commissioner for Safety and Emissions and the Deputy Director of the Safety and Emissions Division; neither of them has been prosecuted criminally. Immediately below them were defendant chief supervising inspector Nicola DeRiggi and defendants supervising inspectors Andrew Komonski and Anthony Barone. All three received bribes and participated in the extortion conspiracy. Seven senior inspectors reported to the supervising inspectors. Three of those senior inspectors participated in the payoff scheme and are defendants. Forty-four line inspectors were employed. Twenty-four of them are defendants.
Inspection lanes are equipped with computerized testing equipment. There are six inspectors on each lane. Inspectors who were receiving illegal payoffs generally worked together on one lane. The roles played by supervising inspectors DeRiggi, Komonski and Barone were critical to the success of the corruption scheme because they were responsible for assigning personnel to the various inspection lanes. Corrupt inspectors were grouped together and assigned to particular positions to facilitate the scheme. The senior inspectors were also essential to the success of the plan because they were present during the performance of the inspections, had immediate supervisory responsibility for the line inspectors and acted as conduits for payoffs to the supervising inspectors.
Methods of evading or disabling the inspection tests were devised. The inspector in position 1 was responsible for inspecting the credentials and other paperwork for the taxicab; this position offered little opportunity for illegal manipulation. The inspector in position 2 was responsible for checking the emission system of the taxicab; in order to get a false passing result, the inspector would run the taxicab for an excessive period of time before measuring the emission, or would manipulate the way the measuring probe was placed in the tailpipe. The inspector in position 3 was responsible for wheel alignment; the inspector would run the rear wheels over the test plate twice instead of running both the front and rear wheels over the plate so that the taxicab would appear to be properly aligned. The inspector at position 4 was responsible for testing headlights; the inspector would manipulate the testing apparatus until the computer registered a passing mark. The inspector at position 5 was responsible for testing brakes; the inspector would test the rear brakes twice instead of testing the front brakes which were usually in worse condition. The inspector in position 6 was responsible for visually inspecting the undercarriage of the taxicab; the inspector would ignore defects.
One inspector on a corrupt lane would serve as the "treasurer" or "banker" of the day, responsible for collecting and disbursing the payoffs. Money was divided among the six line inspectors and inspectors who directed the taxicabs to the corrupt lane.
The scheme also involved inspections designed to verify that defects cited by field inspectors had been corrected. Compliance was checked in a special lane with four inspectors. If a taxicab passed, a "condition corrected receipt" was issued. Corrupt inspectors received payoffs in exchange for issuing for receipts for taxicabs that had not been repaired and for some that had not even been brought into the Woodside facilities, referred to as "phantoms" by defendants.
There was a schedule of bribes. It cost between $ 50 and $ 100 to pass a routine inspection. Overlooking notices of violation cost less, about $ 20 per notice. Often, however, the field inspectors would find several things wrong with one taxicab and would issue multiple notices of violation resulting in bribes of $ 100 or more.
Payments were made in many ways. Cash was left in ashtrays, behind visors, between car seats, in packages of cigarettes and passed through a nearby coffee stop.
In December of 1990, the New York City Department of Investigation ("DOI") was notified by a Commission employee that taxicabs were receiving passing certifications without inspections taking place. Two months later DOI received information from a former inspector that employees were soliciting bribes in exchange for overlooking defects. The DOI's investigation lasted more than a year. It included a covert operation with the cooperation of active inspectors.
As a result of the DOI investigation and the prosecution of these defendants, Mayor Dinkins appointed an Advisory Panel to review the procedures of the Safety and Emissions Division of the Commission. The panel's report included a number of recommendations such as changes in hiring, promotion and termination procedures and enhanced training. Computerized testing has been modified to inhibit manipulation. Taxi drivers are no longer allowed in the inspection lanes. Inspection reports are now routinely reviewed by Commission officials for indications of abuse. There are random double checks of inspections. Staffing rotations are systematic. The Commission contends that it has been cooperating with DOI in identifying and correcting additional corruption hazards. See, e.g., Procedural Review of the Taxi and Limousine Commission Centralized Inspection Facility, July 1993; Letter from Paul E. Krazanoff, Assistant Corporation Counsel to court, March 22, 1994; Letter from Fidel F. Del Valle, Chairman of Commission, to court dated March 25, 1994.
There is strong evidence that taking cocaine was widespread and, as one defendant put it, "normal" among inspectors. This suggests the need for considering required testing for drugs in the future. Cf. Matter of Gary Delaraba v. Nassau County Police Department, 83 N.Y.2d 367, No. 32 (March 22, 1994); Patchogue-Medford Congress of Teachers v. Board of Education of Patchogue-Medford Union Free School District, 70 N.Y.2d 57, 70, 517 N.Y.S.2d 456, 462, 510 N.E.2d 325 (1987).
Unless city officials take corruption more seriously it is doubtful that these current changes will keep this operation clean except in the short run. Experience in this court with corruption demonstrates that the general deterrent effect of criminal sanctions is usually short-lived.
A. The Sentencing Statutes
Under the Sentencing Reform Act of 1984, sentencing is generally governed by three related statutory provisions. Section 3551 of Title 18 mandates that the court impose sentences to achieve a number of purposes listed in section 3553(a) in light of the particular case:
(a) In general. -- Except as otherwise specifically provided, a defendant who has been found guilty of an offense described in any Federal statute . . . shall be sentenced in accordance with the provisions of this chapter so as to achieve the purposes set forth in subparagraphs (A) through (D) of section 3553(a)(2) to the extent that they are applicable in light of all the circumstances of the case.
18 U.S.C. § 3551 (emphasis added).
Section 3553(a) specifies the manifold purposes of sentencing, including promoting respect for the law, achieving just punishment and general deterrence, protecting the public against recidivism and providing the defendant with rehabilitation and treatment. The section enumerates seven factors that a court must weigh when sentencing. A key provision embodies the concept of "parsimony," a principle of the American Bar Association standards for criminal justice. See American Bar Association, Standards For Criminal Justice, Chapter 18, "Sentencing Alternatives and Procedures", 18-3.2 (iii) ("Parsimony in the use of punishment is favored. The sentence imposed should therefore be the least severe sanction necessary to achieve the purposes for which it is imposed . . .") (1993). See also Richard S. Frase, Sentencing Guidelines in the States: Lessons for State and Federal Reformers, 6 Federal Sentencing Reporter 123, 124 (1993). This principle, when applied to interpretation of criminal statutes, is known as lenity. "The Court will not interpret a federal criminal statute so as to increase the penalty . . . when such an interpretation can be based on no more than a guess as to what Congress intended." United States v. Granderson, U.S. , 62 U.S.L.W. 4190, 4191 (1994) quoting Bifulco v. United States, 447 U.S. 381, 387, 65 L. Ed. 2d 205, 100 S. Ct. 2247 (1980) quoting Ladner v. United States, 358 U.S. 169, 178, 3 L. Ed. 2d 199, 79 S. Ct. 209 (1958) (inner quotation marks omitted). In the context of sentencing it requires that, to the extent practicable, the sentence be neither more nor less harsh than required to achieve the sentencing objectives appropriate for the particular case. This rule of appropriateness is incorporated explicitly in the statute as follows:
Imposition of a Sentence.
(a) Factors to be considered in imposing a sentence. --The court shall impose a sentence sufficient, but not greater than necessary, to comply with the purposes set forth in paragraph (2) of this subsection. The court, in determining the particular sentence to be imposed, shall consider [the factors set out in (1) and (2) quoted below.]
18 U.S.C. § 3553(a) (emphasis added).
Each case and each defendant must be considered in light of special circumstances and characteristics of the defendant and of the offense:
(1) the nature and the circumstances of the offense and the history and characteristics of the defendant [must be considered] . . ..
Id. (emphasis added). As already noted, the sentencing goals as specified in section 3553(a)(2) are "applicable in light of all the circumstances in the case." 18 U.S.C. § 3551(a). Repetition in section 3551(a) and 3553(a)(1) of the primacy of "circumstances" of the particular case stresses the importance of individualized sentencing.
Sentencing goals include general and specific deterrence, rehabilitation, restitution, and uniformity. The provision requires that the Sentencing Guidelines be considered as one -- but only one -- of the factors in carrying out the statutory goals. The court must take account of:
(2) the need for the sentence imposed --
(A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;
(B) to afford adequate deterrence to criminal conduct;
(C) to protect the public from further crimes of the defendant; and
(D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner;
(3) the kinds of sentences available;
(4) the kinds of sentences and the sentencing range established for the applicable category of offense committed by the applicable category of defendant as set forth in the [sentencing] guidelines . . .;
(5) any pertinent policy statement issued by the Sentencing Commission . . .;
(6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and
(7) the need to provide restitution to any victims of the offense.
Section 3553(b) of Title 18, which must be construed with the rest of section 3553, provides further direction with respect to the use of the Sentencing Guidelines. It states in relevant part:
18 U.S.C. § 3553(b). Read alone, this provision would appear to give ruling weight to the Guidelines, but, as already pointed out, such an interpretation would ignore the thrust and design of related provisions.
An analysis of how a sentencing court should apply the three provisions quoted is detailed in United States v. Concepcion, 795 F. Supp. 1262, 1275-81 (E.D.N.Y. 1992). It concludes:
As a first step, under sections 3551 and 3553(a), the court must consider how, given the circumstances of the case, the various purposes of sentencing can best be served. It is aided in this inquiry by considering whether any or all of the seven factors listed in section 3553(a) are applicable and what their relative weight should be.
As part of this first-step inquiry, courts must determine whether the Sentencing Commission's Guidelines and Policy Statements ought to control a given case to the exclusion of all other factors. In this regard, courts will tend to rely on the Guidelines where the case is typical of many like situations and is susceptible to the statistical analysis and compilation techniques used by the Commission in developing the Guidelines. See United States Sentencing Commission, Guidelines Manual 5 (Nov. 1991) ("The Commission intends the sentencing courts to treat each guideline as carving out a "heartland," a set of typical cases embodying the conduct that each guideline describes."). The experience of trial judges in determining whether a case is run-of-the-mill or presents unusual problems or local variations necessarily will inform this decision.
If the conclusion of the first-step analysis is that the Guidelines and Commission Policy Statements ought to apply to the exclusion of other factors, the court proceeds to the second step, which is to follow the directive of section 3553(b) and apply the Guidelines and Policy Statements according to their terms. In this endeavor the court will look to the published work of the Commission, seeking to construe the terms of the [applicable] Guidelines Manual to determine the appropriate Guidelines sentencing range.
The court's third step is to consider (a) the sentencing options provided, if any -- e.g., imprisonment or probation -- and (b) whether any exceptions recognized by statute or the Guidelines themselves apply -- e.g., not adequately considered aggravating or mitigating factors.
Even in a case where the court must sentence under step one because the Guidelines do not control, it will be desirable in many instances to go through steps two and three so that the court can reconsider its step one conclusion by checking it against the national averages in the closest analogous cases.
B. Applying the Analysis Required By the Statutes
1. The Goals of Sentencing In This Case
The primary goal of sentencing in this case is to deter future corruption of the staff of the Commission and other government agencies that have responsibilities to the public to enforce safety standards. There is also a need in this case to avoid unnecessary sentence disparities except on some principled ground because many of the defendants played similar roles in the scheme and have similar backgrounds. Levels of responsibility for control of the inspection lines, differences in backgrounds of defendants, degrees of participation in the fraudulent scheme and cooperation with investigators must also be considered.
The Guidelines are of marginal utility in the instant case, although they are of some use as indicators of how other courts have treated other cases of fraud. See Concepcion, 795 F. Supp. at 1271. The Guideline ranges are based primarily on statistical averages of sentences imposed in the past. The national experience with individual cases of many types of fraud is not particularly helpful in assessing the appropriate sentences for the participants in 1) a corruption scheme that took place in a municipal setting where corruption was endemic and was allowed to continue unchecked by municipal officials and 2) the prison terms required by the Guidelines would be unnecessarily destructive of defendants, their families and their communities.
The court has thoroughly explored the factual background of the crimes and of each defendant. It has carefully observed each defendant in court on repeated occasions in the company of friends, relatives, children and attorneys, and has questioned each in detail about his role in the scheme and his background. Each of the factors set out in section 3553 has been separately considered in arriving at each defendant's sentence. The sentences imposed under the particular circumstances of this case have required particular emphasis on the factors set forth in section 3553(a)(1), the nature and circumstances of the offense; section 3553(a)(2)(A), the need for the sentence to reflect the seriousness of the offense and to promote respect for the law; section 3553(a)(2)(B), the need for the sentence to afford adequate deterrence to criminal conduct; and section 3553(a)(6), the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct.
2. The Sentencing Guidelines
Even though the Guidelines are not binding in this case, the court finds it instructive to consider the Guideline ranges along with the other pertinent statutory factors. The Guidelines suggest terms of imprisonment, probation with terms and conditions, supervised release, fines, restitution and payment of costs of imprisonment or probation.
The Guideline applicable to the offense in this case is section 2E1.5 which in turn refers to section 2C1.1. That Guideline sets a base offense level of 10, Section 2C1.1(a), and requires that additional points be added if the value of the payments received, the benefit received in return for the payment or the loss to the government exceeds $ 2,000. Section 2C1.1(b). The higher the dollar value of the fraud, the higher the offense level. The offense level and the defendant's criminal history essentially determine the recommended sentence. Section 5E1.1 provides for the restitution of ill-gotten gains and section 5E1.2 contains a table for the imposition of fines corresponding to offense level.
The Guideline recommendation as calculated by the United States Probation Department for each defendant is considered in Part III(B) of this opinion. Those calculations assume that each defendant is responsible for the entire $ 208,000 gained from the fraudulent scheme. If the Guidelines as written and interpreted by probation and the government were applied to these defendants by the court, the defendants who were not in positions of authority and who played the most minor role in the scheme would be held responsible for the total amount of money received by all conspirators, not the small amounts they personally received in bribes. Since a number of the minor defendants received no 5K1.1 letter -- even though they sincerely tried to cooperate -- and the most culpable received such a letter -- being in a position to know and reveal details of the entire scheme -- the least culpable would end up with the highest prison terms. It is significant that the United States Attorney objected only to the leniency afforded the least culpable on the ground that this was the required Guideline result. This patently absurd result could not have been the Congressional plan even though, arguably, it is what the Guidelines require.
3. Departures From the Guidelines
Even in cases where the Guidelines are the primary consideration, courts may depart upward or downward from the Guideline recommendation. Section 5K1.1 provides that the court may depart from the Guidelines upon a motion from the government stating that the defendant has provided substantial assistance in the investigation or prosecution of another person. The court may also depart from the Guidelines as provided in 18 U.S.C. § 3553(b), if the court finds that aggravating or mitigating factors exist that were not adequately taken into account in the fashioning of the Guidelines. The court's freedom to depart from the Guidelines is limited by Guideline section 5H1 which lists factors that a court should not consider as bases for departing.
The City of New York and the Commission has asked that, as part of their sentences, the defendants be ordered to pay back the salaries they earned while they participated in the corrupt scheme. They argue that the City was grievously harmed by the conspiracy because the City's efforts to improve traffic safety and air quality were thwarted by the corrupt inspectors and that the defendants accepted wages for work not performed. They also argue that the corruption undermined the public's trust in its government. Restitution is required, but to a lesser extent than the City requests.
III. INDIVIDUAL SENTENCES
The court heard from each of the defendants, their attorneys and in many cases additional witnesses. Each defendant was sworn and testified about his background and his role in the scheme.
The defendants, all male, are working class people, most of whom have wives and children whom they are supporting. They were all released on bail after their arrests, and although they lost their inspection jobs as a result of this prosecution, most have found other work. Many have participated in community activities such as the boy scouts or church affairs. They have received high school diplomas, some went on to college and most had additional technical training and are skilled mechanics.
Some of the defendants were organizers and instigators of the corruption. These defendants, who cultivated contacts in the taxicab industry and recruited other inspectors -- or even coerced them -- to join the scheme, are more culpable than some others who, though not free from blame, may be characterized as followers.
The testimony of the defendants at the allocution described an occupation in which corruption was pervasive. One worker's corruption fed another's. Several defendants testified that they were intimidated and threatened by fellow workers when they showed resistance to the scheme -- tires were slashed, cars were scratched and physical violence was threatened. One inspector testified that he reported the corruption to a supervisor, only to find out that the supervisor was part of the conspiracy. Because of their positions, the supervisors and senior inspectors bore a special responsibility to the public and to the City to put an end to the corruption.
Here, as in the welfare fraud cases detailed in Concepcion, supra, a large portion of the blame lies with the public officials who should have prevented the corruption. Poor management by the Commission was said to be well known in New York City. See, e.g., Emily Sachar, Big Yellow Taxi Troubles, No Brakes On: Too Few Inspect Yellow Fleets, New York Newsday, Sunday, March 13, 1994 at 6. It should have been obvious to city officials years ago that the inspection system was rotten to its core, jeopardizing the public. Yet none of the officials were prosecuted criminally. Nor were any of the taxicab companies or their representatives charged with their crimes, though their guilt is clear. The court has no control over whom the United States prosecutes.
All the defendants must receive a sentence that includes some form of loss of liberty in order to deter corruption in governmental agencies charged with protecting public health and safety. Each defendant will be required to pay restitution in the amount that he received in illegal payoffs. Fines are also appropriate. The City's suggestion that the defendants pay back their salary for the time they participated in the scheme is not adopted since city officials allowed the corruption to continue and some useful services were rendered. Payment of ill-gotten gains through restitution to the city provides the equivalent payback in the form of fiduciary surcharges.
The government has rated the defendants on a scale of one to five, in its view five being the most culpable and one the least. The ratings reflect the government's assessment of where the defendants fit in the overall corruption scheme based on their 1) position in the hierarchy, 2) depth of involvement, 3) length of involvement, 4) degree of aggressiveness in soliciting bribes, and 5) aggravating and mitigating factors. See Letter from Gordon Mehler, Esq., Assistant United States Attorney, to court, January 7, 1994.
The position of the defendant in the inspector hierarchy is a critical factor in determining an appropriate sentence. The supervisors and senior inspectors had special responsibilities as a result of their positions of authority. They held positions of public trust that created a duty to block corrupt schemes such as this one that threatened public safety. The supervisors and senior inspectors not only condoned the corruption, they encouraged and participated in it. They used their authority to further the scheme and to prevent it from being detected by other government officials.
The chief supervising inspector will receive thirty-six months of imprisonment; he would have received the maximum sentence had he not cooperated with the government. The two supervising inspectors will receive 24 and 30 months imprisonment. The three senior inspectors will receive 18, 15 and 13 months imprisonment. The line inspectors will receive between 6 and 12 months imprisonment with the exception of one defendant with a prior criminal record who will receive 15 months imprisonment, and several defendants who played extremely minor roles who will be incarcerated in a community treatment facility or in home confinement.
In the main, the persons who will feel the most pain from the sentences are not the defendants, but the defendants' families. The effect on the children, spouses and others cannot be ignored. A parent's role in supervising children and in providing support is particularly important in these times when uncontrolled children of broken families burden our courts and social institutions and add to welfare rolls. Courts cannot ignore the fact that close to 50% of children in this city are born out of wedlock and most lack paternal guidance. See Single Parent Crisis: 'Disappearing Dads', New York Post, April 20, 1994, at 27 (45.7% as of 1991). See also 4 Million Children Said To Live in 'Distress', New York Times, April 25, 1994, at B10 ("Nearly four million American children are growing up in neighborhoods with high rates of poverty, absent fathers, unemployment and reliance on welfare;" large proportion in New York State.) The court should avoid being party to further breakdown of stable two-parent families unless long imprisonment is unavoidable. Factors that affect a community in which a judge sits must be considered by the sentencing judge.
What is particularly striking about these defendants is that they were among the best of our skilled and reliable working people. Many letters to the court attest to the facts that they came from stable backgrounds and have led useful lives. Most of the defendants live in working class, often minority, ...