Supreme Court decision key to restitution in Kimmel case

10-Jan-09 – Although it’s certain that Gary Kimmel will do some prison time, the issue of restitution is still up in the air – and a Supreme Court decision, four days after the Marina City resident pleaded guilty, could decide how much money he has to pay the government.

Both sides have now handed in to the judge, Honorable Blanche M. Manning, “position papers,” pleading their case. The prosecution argues that Kimmel gave up his right to challenge restitution when he signed a plea agreement on May 29. Defense attorneys say not only can Kimmel challenge the agreement, but he may very well not owe anything in restitution.

Kimmel was sentenced on November 20 to 37 months in prison for money laundering in connection with a nationwide prostitution ring. His attorney, Joseph Lopez, believes Kimmel will be eligible for work release after serving 25 months.

In his plea agreement, Kimmel was assigned a base offense level of 8, which is the starting point for determining the seriousness of an offense. But the level was to be increased proportional to the value of the laundered funds, which at the time was believed between $200,000 and $400,000, pushing the base offense level to 20.

Kimmel started out owing the government $405,000 in restitution. Then it was decided the amount was not calculated properly and lowered to $342,000.

But on June 2, the Supreme Court ruled in the case of United States v. Santos that restitution in cases of money laundering is determined based on profits, not just gross receipts.

Good news for Kimmel because according to his attorneys, not only did he not make any profit, but he actually lost $300,000 – and now owes various creditors $97,231.30. At sentencing, Paul Zido told the judge, sarcastically, “This ‘expert’ money launderer here lost $100,000. This man was street-dumb.”

They argue Kimmel had expenses to pay as he supplied a variety of vehicles to the prostitution ring. Writes Zido in his position paper, “The vehicles were used in the prostitution business just like a pink Mary Kay Cadillac is used for a cosmetic business.” (Left) Kimmel in April 2000, at a party attended by Marina City residents.

Because there were no profits, the defense wants Kimmel’s offense level pushed back to 8. “Here, there were significant losses during the scheme,” Zido writes.

The defense says that whatever Kimmel may have agreed to in the plea agreement regarding restitution is not binding because in the meantime there has been a change in the law. It even says so in the agreement, they point out, that the judge has some latitude. “It is further understood by the parties that the sentencing judge is neither a party to or is bound by this Plea Agreement.”

Although they say the change in law could allow Kimmel to withdraw his guilty plea, he won’t. “Instead, the Defendant requests that this Court follow the change in law stated in Santos and not increase his base offense level beyond the advisory guideline level of 8.”

Kimmel’s next status hearing is on Tuesday and he must report to prison on January 16. However, saying his client needs more time to get his affairs in order, Lopez will try at the status hearing to get the reporting date pushed back.

 Related story: Kimmel forfeiture amount still undecided