Case 2:13-Cr-00421-GJP Document 714 Filed 11/25/19 Page 1 of 19

Case 2:13-cr-00421-GJP Document 714 Filed 11/25/19 Page 1 of 19 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA, v. CRIMINAL ACTION YLLI GJELI NO. 13-421-1 PAPPERT, J. November 25, 2019 MEMORANDUM Ylli Gjeli went to trial for Racketeer Influenced and Corrupt Organizations Act (“RICO”) violations and other crimes in connection with a loan sharking and illegal gambling operation.1 The jury found him guilty on ten counts, including Count 1 alleging racketeering conspiracy in violation of RICO, 18 U.S.C. § 1962(d). (ECF No. 368.) After the trial, Judge Yohn entered a preliminary order of forfeiture holding Gjeli jointly and severally liable with his co-defendants for more than $5 million of the RICO proceeds (ECF No. 413) and sentenced him to 168 months of imprisonment. (ECF No. 482.) Gjeli and co-defendant Fatmir Mustafaraj appealed. The Third Circuit affirmed their convictions and sentences but remanded for reconsideration of the forfeiture orders, citing the Supreme Court’s intervening decision in Honeycutt v. United States. United States v. Gjeli, 867 F.3d 418, 427-28 (3d Cir. 2017), as amended (Aug. 23, 2017) (citing 137 S. Ct. 1626, 1633 (2017)). Honeycutt foreclosed joint and several liability under 21 U.S.C. § 853, a provision of the Controlled 1 Three other Defendants were tried with Gjeli. Five co-defendants entered guilty pleas before trial. 1 Case 2:13-cr-00421-GJP Document 714 Filed 11/25/19 Page 2 of 19 Substances Act that mandates forfeiture for certain drug crimes. 137 S. Ct. at 1630. The Third Circuit held that Honeycutt applies to 18 U.S.C. § 1963, the RICO forfeiture provision, because it is “substantially the same as the one under consideration in Honeycutt.” Gjeli, 867 F.3d at 427-28. It allows forfeiture to reach “any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection in violation of section 1962.” 18 U.S.C. § 1963(a)(3). Thus, RICO “forfeiture is ‘limited to property each defendant himself actually acquired as a result of the crime’” and Gjeli cannot be liable in forfeiture under RICO for proceeds that he did not actually acquire. Gjeli, 867 F.3d at 428 (quoting Honeycutt, 137 S. Ct. at 1635.). Because the initial preliminary order of judgment and forfeiture against Gjeli held him jointly and severally liable with his co-conspirators, the Government moves to amend it. This time, it pursues forfeiture only “pursuant to 18 U.S.C. Section 1963 based on [his] racketeering conspiracy conviction (Count 1).”2 (Gov’t Mot., ECF No. 678 at 10.) Gjeli opposes the motion. (Def.’s Resp., ECF No. 686.) At the Court’s direction (ECF No. 706), the Government and Gjeli filed supplemental briefs. (Gov’t Supplemental Mem., ECF No. 708 and Def.’s Reply, ECF No. 709.) The Court makes the following findings of fact and conclusions of law and grants the Government’s motion in part and denies it in part. I RICO aims to “remove the profit from organized crime by separating the 2 The Government has also moved to amend the judgment and preliminary order of forfeiture for Mustafaraj. (ECF No. 679.) The Court considers that motion in a separate opinion. 2 Case 2:13-cr-00421-GJP Document 714 Filed 11/25/19 Page 3 of 19 racketeer from his dishonest gains.” Russello v. United States, 464 U.S. 16, 28 (1983). A RICO “forfeiture claim contains at least two elements: a violation of [18 U.S.C.] § 1962 and a relationship between that violation and the property alleged to be forfeitable.” United States v. Pelullo, 14 F.3d 881, 901-02 (3d Cir. 1994). “The Government must prove the relationship between the property interest to be forfeited and the RICO violations beyond a reasonable doubt.”3 United States v. Neff, --- Fed. App’x ----, No. 18-2282, 2019 WL 4235218, at *8 (3d Cir. Sept. 6, 2019) (citing Pelullo, 14 F.3d at 906). [T]here are good reasons for employing the reasonable doubt standard in the RICO context . The RICO forfeiture provision is . far reaching, requiring the district court to order forfeiture of “any interest in,” “security of,” “claim against,” or “property or contractual right of any kind affording a source of influence over any enterprise which the person has established, operated, controlled, conducted or participated in the conduct of in violation of section 1962.” United States v. Voight, 89 F.3d 1050, 1083-84 (3d Cir. 1996) (citing 28 U.S.C. § 1963(a)). “[S]ince the identity and extent of property subject to forfeiture will not have been addressed in the course of proving the substantive RICO charge, a reasonable doubt burden of persuasion ensures greater accuracy in determining the scope of property subject to forfeiture.” Id. Following a trial, the Government may rely on the evidence already in the record for the forfeiture determination. Fed. R. Crim P. 32.2(b)(1)(B).4 3 If the Government sought forfeiture for Gjeli’s other offenses – pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c) for Counts 14-16, 23-24, and under 18 U.S.C. § 1955(d) and 28 U.S.C. § 2461(c) for Count 25 – its burden would be the less stringent preponderance of the evidence. See United States v. Sandini, 816 F.2d 869, 877 (3d Cir. 1987). 4 Neither party requested an evidentiary hearing on the forfeiture issues. Noting this in its motion, the Government states that “the trial record is extensive and provides sufficient proof for the forfeiture” it seeks. (Gov’t Mot. at 11.) 3 Case 2:13-cr-00421-GJP Document 714 Filed 11/25/19 Page 4 of 19 II The Government seeks a personal forfeiture money judgment against Gjeli pursuant to 18 U.S.C. § 1963(a)(3) in the amount of $5,072,000 for “the illegal proceeds that Gjeli obtained as a result of the racketeering conspiracy, extortion, and illegal gambling business that he participated in, and for which he was convicted”: $1,180,000 in loan collections, $992,000 in outstanding loan principal, plus $2,900,000 in gross revenue from gambling operations. (Gov’t Mot. at 8 (emphasis omitted).) The Government argues that the evidence at trial proved that the RICO enterprise, “by a conservative calculation, earned $5.072 million in gross proceeds,” and contends that Gjeli should be required to forfeit the entire gross proceeds because “[a]s the creator and leader of the Gjeli Organization, [he] obtained the gross proceeds of the organization.” Id. at 13, 16. Gjeli does not contest forfeiture of the amount attributed to loan collections but contends he should not be required to forfeit the gambling revenue or outstanding loan principal. A Gjeli argues he should not be required to forfeit $2,900,000 in gambling proceeds because the Government has not offered “substantive evidence which establishes the amount of earnings that Gjeli actually received,” as he insists it should after Honeycutt. (Def.’s Resp. at 3.) The Government argues that as the “boss” of the RICO organization, Gjeli, unlike the defendant in Honeycutt, “was deeply involved in the enterprise’s gambling operation, and therefore should be held liable for the entire amount of gross proceeds.” (Gov’t Supplemental Mem. at 5.) Gjeli challenges the Government’s ability to “rest[ ] on the broad argument that Gjeli was the head of the loan operation and 4 Case 2:13-cr-00421-GJP Document 714 Filed 11/25/19 Page 5 of 19 therefore was the head of the sports betting operation as well” to support its request for a forfeiture money judgment for the entirety of the gambling proceeds on remand. (Def.’s Resp. at 4.) He argues that the trial evidence shows that his “role in the sports betting scheme was extremely limited and only surfaced shortly before his arrest.” (Id.) The Government points out that at sentencing, Judge Yohn determined that Gjeli was the leader of the RICO enterprise. (See, e.g., Tr. 5260 (describing Gjeli “as the leader and kingpin of this organization” and explaining that “[n]othing happened here that was not done at his direction”); Tr. 5263 (“it’s quite clear to me that he was the leader and organizer of this group of individuals”); Tr. 5340 (“Mr. Gjeli was the clear leader, and boss, and organizer of the enterprise that was involved in the illegal gambling, and the loan sharking, and the extortion.”).) The trial “evidence showed that from approximately 2002 until their arrest in August 2013, Gjeli and Mustafaraj – along with Markakis, who pled guilty prior to trial – led a multimillion-dollar criminal enterprise in the greater Philadelphia area.” (See April 8, 2015, Memorandum in Support of Court’s Order Denying Defendants’ Motions for Judgment of Acquittal, or, in the Alternative for a New Trial. ECF No. 419, at 1-2.) It “established . that Gjeli was the “boss” of the organization . .” (Id. at 1.) Gjeli did not appeal this finding. The record also demonstrates that Gjeli obtained dishonest gains from the gambling enterprise. To define the term “obtain” in Honeycutt, the Supreme Court looked to dictionary definitions, such as “[t]o come into the possession or enjoyment of,” “to get or acquire,” or “to procure or gain, as the result of purpose and effort.” 137 S. Ct. at 1632 (internal quotation marks omitted). The Supreme Court has confirmed that a defendant can “obtain” forfeitable property – like gambling proceeds – directly or 5 Case 2:13-cr-00421-GJP Document 714 Filed 11/25/19 Page 6 of 19 indirectly through an intermediary.

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