The opinion of the court was delivered by: Marian W. Payson United States Magistrate Judge
Defendants Clarkson Auto Electric, Inc., Gerald Fretto and Matthew LaVilla, among others, have been charged with conspiracy to commit mail fraud, conspiracy to commit money laundering and substantive mail fraud offenses, in violation of 18 U.S.C. §§ 1349, 1341 and 1956(h), respectively. (Docket # 1). Fretto and LaVilla also have been charged with substantive money laundering offenses, in violation of 18 U.S.C. § 1957. (Id.). Currently pending before this Court are Fretto's and LaVilla's motions to release certain seized bank accounts in order to permit them to be used to retain counsel. (Docket ## 67, 75, 76, 172). For the reasons discussed below, I deny the motions.
On December 10, 2007, this Court issued a warrant authorizing the
seizure of various bank accounts and other assets owned by defendants
Clarkson Auto Electric, Inc.
("CAE"), Gerald Fretto, Matthew LaVilla and Anthony Fretto.*fn1
On June 8, 2010, a grand jury returned the twelve-count
pending indictment charging CAE -- its owners, Anthony and Gerald
Fretto and LaVilla -- and seven former employees of Xerox Corporation
("Xerox") with the offenses described above. (Docket # 1). The
indictment also contains two forfeiture allegations pertaining to the
same assets that were seized pursuant to the December 2007
Following their arraignments, Anthony Fretto, Gerald Fretto, LaVilla and CAE requested a post-seizure hearing pursuant to United States v. Monsanto, 924 F.2d 1186 (2d Cir.), cert. denied, 502 U.S. 943 (1991). (Docket ## 67, 75, 76). Specifically, they contended that without the release of some of the seized accounts, they would be unable to retain counsel of their choosing. This Court subsequently determined that Anthony Fretto had not demonstrated that the seized funds were necessary for him to be able to retain counsel and denied his motion on that basis. (Docket # 104 at 12).
On December 9, 2010, this Court granted the remaining three defendants' request for a Monsanto hearing. (Docket # 96). After unsuccessfully seeking reconsideration of that decision, the government appealed it to United States District Judge Charles J. Siragusa. (Docket # 98). On February 9, 2011, Judge Siragusa affirmed this Court's decision.*fn2 (Docket # 116).
The Monsanto hearing was held on August 22, 2011. (Docket # 163). At the hearing, the government introduced into evidence the indictment, the December 7, 2007 seizure warrant and accompanying affidavit sworn by Internal Revenue Service Special Agent Erin Stacer ("Stacer") and a supplemental affidavit sworn by Agent Stacer on February 3, 2011. (Docket # 110; Tr. at 3).*fn3 At the hearing, defendants cross-examined Agent Stacer. (Docket # 190 at 5). The parties submitted post-hearing memoranda*fn4 (Docket ## 178, 179, 180, 182, 190), as well as an affidavit from CAE's certified public accountant, Franz Griswold, stating that Anthony Fretto, Gerald Fretto and LaVilla are the sole and equal shareholders of CAE. (Docket # 175).
Defendants' motions seek release of the following seized accounts:
* First Niagara Bank account number XXXXXX3581 ("FNB 3581") in the name of CAE in the sum of approximately $100,129;
* Canandaigua National Bank & Trust account number XXXXXX2668 ("CNB 2668") in the name of CAE in the sum of approximately $122,766;
* Canandaigua National Bank & Trust account number XXXXXX5136 ("CNB 5136") in the name of CAE in the sum of approximately $17,365;
* Canandaigua National Bank & Trust account number XXXXXX5094 ("CNB 5094") in the name of Elsie and Matthew LaVilla in the sum of approximately $19,064.
(Docket ## 67; 75-1 at ¶ 2).
Following the Monsanto hearing, on September 12, 2011, Gerald Fretto, LaVilla and CAE requested the release of additional bank accounts, representing that the cost of retaining counsel was proving more expensive than they had anticipated when they filed their motions. (Docket # 172). The additional accounts are the following:*fn5
* Canandaigua National Bank & Trust account number XXXXXX5179 ("CNB 5179") in the name of CAE in the sum of approximately $18,472;
* Canandaigua National Bank & Trust account number XXXXXX5160 ("CNB 5160") in the name of CAE in the sum of approximately $41,431;
* HSBC account number XXX80812-2 ("HSBC 80812-2") in the name of CAE in the sum of approximately $28,731;
* Canandaigua National Bank & Trust account number XXXXXX8815 ("CNB 8815") in the name of CAE Distributors, Inc. in the sum of approximately $35,576.
(Docket # 172). Defendants argue that because the government's theory of forfeiture is the same for all of the seized accounts, it would not be prejudiced by inclusion of the additional accounts in the pending motions. (Id. at ¶ 6). The ...