The opinion of the court was delivered by: SPATT
This opinion follows a Fatico evidentiary hearing, held before the Court on December 15, 1995, December 28, 1995, December 29, 1995, January 2, 1996 and January 3, 1996. On December 28, 1995, by reason of a problem between the defendant Vincent Graff and his counsel, the Court severed Graff's sentencing proceeding and continued with the Fatico hearing as against the defendants Robert Scaretta and Susanna Scaretta.
On November 21, 1994, following a jury trial, the Scarettas were convicted of, among other crimes, conspiracy to commit bank fraud and substantive counts of bank fraud. The charges arose from the Scarettas' operation of Revere Armored, Inc., an armored car delivery company, which was involved in various other financial operations for its bank and other customers, having its main facility in Bohemia, New York.
The presentence report prepared by the Probation Department on July 7, 1995, at paragraphs 29 and 47 calculated the loss, attributed to these defendants, at the sum of approximately 35 million dollars. Applying this loss to guideline 2F1.1(b)(1)(Q), (more than 20 million dollars and less than 40 million dollars), this resulted in a 16 offense level increase. The defendants disputed the amount of the loss and requested this Fatico hearing.
The burden of proof in this Fatico hearing is on the Government to establish the facts required to support the base offense level, in this case the amount of the loss, by a preponderance of the evidence. U.S. v. Shonubi, 998 F.2d 84 (2d Cir. 1993); U.S. v. Carmona, 873 F.2d 569 (2d Cir. 1989); U.S. v. Lee, 818 F.2d 1052, 1057 (2d Cir.) cert. den., 484 U.S. 956, 108 S. Ct. 350, 98 L. Ed. 2d 376 (1987).
After a review of all the evidence taken at this Fatico hearing, and considering the relevant trial testimony, the Court makes the following findings:
Among the operations of the Revere Armored Inc. in February 1993 was the transportation of currency and coin; picking up moneys for bank customers; counting and processing moneys in Revere's money room; acting as a limited bank branch maintaining and storing an inventory of currency and coin for certain banks; and transporting money to the Federal Reserve Bank ("The Fed").
The Court finds that defendants Robert Scaretta and Susanna Scaretta were the sole owners of Revere and actively managed and supervised all of the activities of the company. The Court has already determined that both Robert Scaretta and Susanna Scaretta were organizers and leaders. As such, they had virtually unlimited access to the currency and coin stored at the Revere Bohemia facility.
The proof at the trial, accepted by the Court, is that there were constant shortages in the banks' funds at Revere; that virtually all the "proof sheets" submitted by Revere to the banks were false in that the sums actually held by Revere were less than the sums recorded in the proof sheets; that at the time of bank audits, when representatives of the banks would physically visit the Bohemia facility to personally count the banks funds, moneys from other banks were transferred into the vault or bin of the bank to be audited, so that the shortages would be hidden.
Further, there was proof elicited at the trial, which the Court accepts, that the Scarettas spent large sums of money gambling in Atlantic City, New Jersey, on a weekly basis. In fact, cooperating witnesses testified that $ 30,000 in bank funds were set aside for these gambling trips each week. In addition, weekly cash sums between $ 5,000 to $ 7,000 were paid to a contractor for work completed at the Revere facilities and in various Revere employees' houses. Moreover, large sums of bank funds financed Revere's substantial "off-the-books" cash payroll. Other sums were used for bribes, as ...