United States District Court, S.D. New York
March 29, 2004.
UNITED STATES OF AMERICA, -against- MILTON BIALOSTOK, Defendant
The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendant Milton Bialostok ("Bialostok") pled guilty on November 18,
2003 to Conspiracy to Commit Money Laundering in violation of
18 U.S.C. § 1956(h). He conspired, along with others, to commit unlawful
financial transactions and participated in an offense involving the
proceeds of illegal gambling and bookmaking that affected interstate and
foreign commerce, in violation of 18 U.S.C. § 1956(a)(1)(A)(i) and
18 U.S.C. § 1956(a)(1)(B)(i). Bialostok avoided transaction
reporting requirements, in violation of 18 U.S.C. § 1956 (a)(1)(B)
(ii), and engaged in monetary transactions in criminally derived property
having a value greater than $10,000, in violation of
18 U.S.C. § 1957. Bialostok will be sentenced to 24 months' imprisonment, to
be followed by two years of supervised release. A special assessment fee of
$100 is mandatory.
Bialostok was born on April 5, 1925 in Lebanon, Pennsylvania to the
marital union of Samuel Bialostok and Elsie Lantz. Bialostok's parents
Bialostok completed the twelfth grade in January of 1943 and enrolled
in Brooklyn College in June of the same year, where he took evening
courses on a part-time basis until June 1953.
In January of 1949, Bialostok commenced service in the U.S. Army. He
held the rank of private, and was honorably discharged in February 1950.
In September of 1956, Bialostok married the former Joan Alberti in
Woodmere, New York. Mrs. Bialostok is currently employed as a sales
representative for her husband's vending company. Bialostok and his wife
have three adult children together, and Mrs. Bialostok has a son from her
From 1960 through 1986, Bialostok, along with his father-in-law, was
the co-owner of Burt Burtaine Tire Company, formerly located in Ozone
Park, New York. Bialostok was subsequently employed by Janus Funding from
1986 through 1988 and by Sharpe Home Improvement, formerly located in
West Hempstead, New York, from 1988 through 1990.
In 1991, Bialostok started his own business, M and B Vending, which,
according to Bialostok, rents video, pinball and vending machines to
businesses. From 1999 through November of 2002, Bialostok had a one-third
ownership interest in Sinderella, an adult entertainment store located in
Brentwood, New York. In 2001, Bialostok along with two partners
incorporated Long Island Town Car, Inc., located in Ronkonkoma, New York.
Bialostok's monthly income from M and B Vending is approximately
$1,000. His monthly income from his share in Long Island Town Car, Inc.
is approximately $500. Bialostok's share of his and his wife's net assets
The instant offense does not represent Bialostok's first conviction.
Bialostok was sentenced to pay a $50 fine in February of 1966 following a
conviction for Disorderly Conduct. In March of 1977 Bialostok was
sentenced to pay a $500 fine after conviction for Possession of Gambling
Records in the Second Degree.
In January of 1987 Bialostok was arrested in connection with his role
in a gambling operation relating to illegal sports betting. On March 9,
1989 he was convicted at trial of four counts of Promoting Gambling in
the First Degree, and one count of Conspiracy in the Fifth Degree. He was
sentenced to a one-to three-year term of imprisonment and a $150,000
fine. Bialostok began to serve his custodial term on May 24, 1993, and he
paroled on April 18, 1994. Bialostok was discharged on the maximum
expiration date of April 18, 1996.
On November 13, 2002, Bialostok was arrested and charged with
Enterprise Corruption. According to the Felony Complaint prepared in that
matter, Bialostok and his co-defendants are also charged with the
offenses of Coercion in the First Degree and Criminal Usury in the First
Degree. Those charges are still pending.
Bialostok suffers from atrial fibrillation, asthma and ileitis, and
requires monthly blood monitoring as well as ongoing maintenance
procedures as the result of an ileostomy performed in 1963. Among other
things, Bialostok also suffers with osteoporosis and scoliosis of the
back. He has mild to severe hearing loss in each ear. Bialostok has
previously acknowledged experimenting with cocaine and marijuana.
Bialostok pled guilty to Conspiracy to Commit Money Laundering.
Bialostok, along with others, conducted an illegal sports-bookmaking
operation in the New York City metropolitan area from May of 1993 through
April of 1999. Bialostok was the supervisor of the operation. He engaged
in "layered" transactions to make the criminally derived funds appear
by accepting gambling debt payments by personal checks made out to
cash which were then negotiated through the bank accounts* of Bialostok's
nominees in such a way as to avoid having Currency Transaction Reports
generated by the financial institutions involved. During the course of
the conspiracy, Bialostok caused approximately $1.3 million worth of
checks from a single bettor to be negotiated or cashed through such
Pursuant to a written plea agreement dated October 28, 2003, Bialostok
has admitted to the forfeiture allegation in the indictment and has
agreed to forfeit to the United States a sum of money equal to $750,000,
pursuant to 18 U.S.C. § 982.
The November 5, 2003 edition of the United States Sentencing
Commission Guidelines Manual has been used in this case.
The parties stipulate that the guideline applicable to Count One is
§ 2S1.1. Pursuant to § 2S1.1(a)(1), the base offense level is
the offense level for the underlying offense from which the laundered
funds were derived. As the underlying offense was gambling, pursuant to
§ 2E3.1(a)(1), the base offense level is 12.
The offense level is increased by two levels pursuant to §
2S1.1(b)(2)(B) because Bialostok was convicted under
18 U.S.C. § 1956.
Pursuant to § 2S1.1(b)(3), the offense level is further increased by
two levels because the offense involved sophisticated money laundering.
As Bialostok was a supervisor in the criminal activity, which involved
fewer than five participants, the offense level is increased by another
two levels pursuant to § 3B1.1(c).
Based on Bialostok's acceptance of responsibility, the offense level is
reduced by two levels pursuant to § 3E1.1(a). The offense level is
further reduced by one level due to Bialostok's timely notification of
his intention to plead guilty, pursuant to § 3E1.1(b). In accordance
with these calculations, the applicable Guidelines offense level of 15.
The criminal convictions set forth above result in a subtotal criminal
history score of three, pursuant to §§ 4A1.1(a) and 4A1.2(e)(1). As
the instant offense was committed while Bialostok was on parole, two
points are added pursuant to § 4A1.1(d). The instant offense was also
committed less than two years after Bialostok's release from custody on
April 18, 1994 for the sentence imposed on March 9, 1989. Pursuant to
§ 4A1.1(e), one point is added, as two points were added under §
4A1.1(d). The total of the criminal history points is six, which
establishes a Criminal History Category of III.
Based on these calculations, the guideline range for imprisonment is 24
to 30 months. The maximum term of imprisonment
is 20 years, pursuant to 18 U.S.C. § 1956(h). The parties
stipulate that neither a downward nor an upward departure from the
guideline range is warranted.
If a term of imprisonment is imposed, a term of supervised release of
not more than three years may be imposed pursuant to 18 U.S.C. § 3583
(b)(2). The guideline range for a term of supervised release is at least
two years but not more than three years, pursuant to § 5D1.2(a)(2).
Supervised release is required if a term of imprisonment of more than one
year is imposed or when required by statute, pursuant to § 5D1.1(a).
As the applicable guideline range is in Zone D of the Sentencing Table,
Bialostok is not eligible for probation, pursuant to § 5B1.1,
application note 2.
A special assessment of $100 is mandatory, pursuant to
18 U.S.C. § 3013.
The maximum fine is $2,640,400 (twice the value of the monetary
instruments), pursuant to 18 U.S.C. § 3571(d). The fine range for the
instant offense is from $4,000 to $2,640,400, pursuant to §§ 5E1.2 (c)
(3)(A) and 5E1.2(c)(4). Subject to Bialostok's ability to pay, the
expected costs to the government of any imprisonment, probation, or
supervised release shall be considered, pursuant to § 5E1.2(d)(7).
The most recent advisory
from the Administrative Office of the United States Courts suggests
a monthly cost of $1,848.02 to be used for imprisonment, a monthly cost
of $270.59 for supervision, and a monthly cost of $1,383.50 for community
In light of his deteriorating health and the significant time that has
elapsed since his last conviction, Bialostok will be sentenced at the
lower end of the guideline range to 24 months' imprisonment, followed by
two years of supervised release.
No fine will be imposed due to Bialostok's lack of financial resources
at this time in light of his agreement to forfeit $750,000 to the
government, $500,000 of which has already been received by the
government. If Bialostok has not done so prior to sentencing, he shall
forfeit to the United States his interest in $250,000 in U.S. currency.
A special assessment fee of $100 is mandatory and is due immediately.
Bialostok shall report to the nearest Probation Office within 72 hours
of his release from custody, and supervision shall be in the district of
residence. As mandatory conditions of supervised release, Bialostok shall
(1) abide by the standard terms
of supervised release (1-13); (2) not commit another federal,
state, or local crime; (3) not illegally possess a controlled substance;
(4) not possess a firearm or destructive device; (5) provide the
probation officer with access to any requested financial information; and
(6) not incur new credit charges or open additional lines of credit
without the approval of the probation officer unless the defendant is in
compliance with the forfeiture payment schedule. The mandatory drug
testing condition is suspended based on Bialostok's low risk of future
This sentence is subject to modification at the sentencing hearing now
set for April 1, 2004.
It is so ordered.
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