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United States v. Leo

April 16, 2010


The opinion of the court was delivered by: Richard J. Holwell, District Judge


On March 23, 2010, the Court sentenced Daniel Leo to 18 months in prison for racketeering crimes. The Court imposed the sentence to run consecutively to a 60-month sentence imposed by Judge Kaplan in February 2008 for related conduct-namely, two extortion conspiracies that fell within the scope of the later-charged racketeering conduct. The case raised complex issues about how the related conviction and sentence should impact the instant sentence. The Court writes now to explain its analysis.*fn1


On October 31, 2007, Daniel Leo ("Leo") pleaded guilty to two counts of conspiracy to commit extortion based on allegations of loansharking and gambling-related conduct. (PSR at 20-21.) It was an unusual and probably misguided plea, because Leo had reason to believe that it would not resolve the government's case against him. Two months earlier, at a conference before Judge Kaplan, the government had announced that it intended to bring additional charges against Leo based on newly discovered evidence of similar gambling-related and extortionate conduct. Despite the clear risk that he would be indicted again, Leo opted to plead to the extant charges. Explanations of why he did so vary. His current counsel argues that Leo received bad advice from his lawyer at the time, whom he has since replaced. (Def. Mem. at 2-3 ("This course was clearly hazardous: Leo would likely end up facing two separate but related indictments, instead of a single indictment covering the entire course of conduct.

Leo would thus be exposed to not one, but two significant prison sentences....").) The government contends that Leo made a reasonable decision to "gamble[] that [he] would not be indicted again...." (Gov. Mem. at 13.) The pretrial schedule may also have contributed to the result: the district court ordered the government to file any superseding indictment by November 1, 2007, which the government was apparently unable to do given the ongoing nature of its investigation. (Def. Mem. Ex. A at 4-6.) Whatever the reason, Leo made the plea, and on February 28, 2008, Judge Kaplan sentenced him to 60 months in prison, working from a Guidelines Range of 57 to 71 months. (PSR at 20, 33.)

The government proved good to its word, however, and this case resulted. Leo was indicted a second time on February 4, 2009, for more loansharking and gambling-related conduct. Along with additional counts of extortion and illegal gambling, the new indictment stated charges under the Racketeer Influenced and Corrupt Organization Act ("RICO")-one for a substantive RICO violation and one for a RICO conspiracy. (PSR at 3-4.) There is no dispute that the extortion conspiracies from the first case could have been charged as predicate RICO acts in the second indictment; as defendant correctly notes, "the convictions in this case and [the] previous case are all rooted in the same time period, involved the same defendants, were discovered through a single investigation and a single set of government recordings, and clearly could have been joined in a single indictment under Rule 8 of the Federal Rules of Criminal Procedure." (Shargel Ltr. dated March 19, 2010, at 2.)

On January 12, 2010, Leo and the government entered a plea agreement whereby Leo would plead guilty to the RICO conspiracy and the substantive RICO count in exchange for dismissal of the remaining counts and an agreement that the government would not prosecute him further for any extortionate conduct during the time period covered in the indictment (2003 through 2007). In pleading to the substantive RICO count, Leo agreed to admit participation in two racketeering acts-an extortion scheme and a conspiracy to conduct an illegal gambling business. (Def. Mem. Ex. B. at 1-2.) The parties stipulated that the applicable offense level under the Sentencing Guidelines would be 22. (Id. at 4.)

The plea agreement expressly left two legal issues open to argument at sentencing: first, Leo's proper criminal history category ("CHC") under § 4A1.1 of the Guidelines; and second, the extent to which the sentence should run concurrently with the undischarged portion of the prior sentence. With regard to the first issue, the Government took the position that the prior conviction should be counted as part of Leo's criminal history, which would give him three criminal history points, placing him in CHC II. See U.S.S.G. § 4A1.1 (2009).*fn2 At the stipulated offense level of 22, this CHC determination would produce a Guidelines Range of 46-57 months. Leo, on the other hand, argued that the prior conviction formed "part of the instant offense" and therefore constituted "relevant conduct" that did not count as criminal history under § 4A1.1 and.2 of the Guidelines. Under this view, Leo would fall in CHC I, lowering his Guidelines Range to 41-51 months.

With regard to the second issue-concurrency-the parties agreed that the Court had discretion under § 5G1.3(c) to impose a sentence to run "concurrently, partially concurrently, or consecutively" to the undischarged portion of the Kaplan sentence. The government requested a Guidelines sentence to run entirely consecutively to the Kaplan sentence, while Leo argued for a sentence to run concurrently to the undischarged portion of the Kaplan sentence, which at the time of sentencing was approximately 26 months (without accounting for any anticipated good conduct credit). Though § 5G1.3(c) also permits downward departures to account for time already served for related conduct, see U.S.S.G. § 5G1.3 n.3 (E), the plea agreement did not permit Leo to seek any credit for the 34 months already served on the Kaplan sentence; he was only allowed to argue for concurrency going forward. Thus, under the strictures of the plea agreement, the lightest incremental punishment Leo could seek was 15 months: the product of a Guidelines sentence of 41 months (assuming a CHC of I), minus 26 months to be served concurrently to the undischarged portion of the Kaplan sentence.

The Probation Office analyzed the case quite differently than either party. It agreed with the government that Leo had a CHC of II and a Guidelines Range of 46-57 months. (PSR at 32.) However, to reach the appropriate sentence, Probation considered what Leo's Guidelines Range would have been had he been sentenced for both sets of convictions-from the Kaplan and Holwell cases-at the same time. It found this Guidelines Range to be 63 to 78 months. Because Leo received a 60-month sentence from Judge Kaplan, Probation concluded that an additional 10 months of incarceration (for a total 70-month term between the two sentences) would serve the interests of justice. It therefore recommended a Guidelines sentence of 46 months with only 10 months to run consecutively to the Kaplan sentence-a more lenient punishment than the plea agreement permitted Leo to seek. (Id. at 33.)*fn3

At sentencing, the Court also disagreed with both parties' reasoning and adopted an analysis similar to Probation's, though under a different application of the Guidelines. First, the Court found that the prior conviction for conspiracy to extort constituted "relevant conduct" for purposes of Leo's criminal history level (meaning the conviction would notcount as criminal history) and his offense level (meaning that the conviction would increase the offense level). This analysis placed Leo in CHC I but increased his offense level to 26, producing a Guidelines Range of 63 to 78 months, the same range that would have applied had Leo been sentenced for all the conduct at once. Secondly, the Court held that § 5G1.3(b) governed the concurrency analysis-not § 5G1.3(c), which the parties focused upon-because the prior conviction increased the offense level for the instant offense, thereby placing this case squarely within subsection (b).*fn4 Unlike subsection (c), subsection (b) requires that a defendant receive credit for time already served on a related sentence. U.S.S.G. § 5G1.3(b)(1). Thus, the Court adjusted Leo's sentence for time already served, not simply for the undischarged portion of the Kaplan sentence.

Below, the Court explains its analysis of both legal issues-"relevant conduct" and the applicability of § 5G1.3(b)-as well as its actual calculation of Leo's § 5G1.3(b) sentence, which posed unique issues given the parties' joint request that the Court state the sentence as a consecutive term, rather than as a concurrent term as the provision contemplates.


As pertinent to this discussion, the Guidelines define "relevant ...

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