37 month sentence for Kimmel

20-Nov-08 – Gary Kimmel was sentenced Thursday to 37 months in prison for money laundering in connection with a nationwide prostitution ring. He’ll have two years of supervised release after that, but the judge waived any fine. It’s not known where Kimmel will serve his time, but he must surrender on January 16.

In a hearing that lasted two and a half hours, Kimmel’s defense lawyers portrayed the Marina City resident as cooperative, accepting of responsibility, and only guilty of lacking common sense. Said Paul Zido, “If there was a federal statute against being naive and street-dumb, you should convict him and he should get the maximum penalty.”

Zido pleaded for leniency for Kimmel, whose wife is living with her mother in the Philippines along with the couple’s three children. “Let him bring his family home. He deserves a chance in life. He’s had so many bad turns. You’ll never see him a courtroom again.”

The sentence is at the low end of preliminary sentencing guidelines.

“I got into this trying to help somebody,” Kimmel told Judge Blanche M. Manning. He said he didn’t realize his tenant was involved in prostitution until a girl came to his door to pay rent and Kimmel saw she had been beaten.

“I made a terrible mistake. I’m so sorry for that,” Kimmel told the judge.

“I’ve ruined my life. I’ve ruined my children’s lives. I don’t know how I’m going to put them through school and an education. I don’t know how I’m going to support my family any longer. I don’t know what I’m going to do, but I’m not going to give up. I’m going to keep trying.”

Involvement part of plan to improve credit rating

Trying to boost his credit rating, Kimmel agreed to purchase automobiles on behalf of the prostitution ring. However, he was not paid back and ended up losing money and going deep in debt.

Describing his client as “financially entrenched,” Zido says Kimmel owes various creditors $97,231.30. “This ‘expert’ money launderer here lost $100,000. This man was street-dumb.”

Zido estimated the case has cost Kimmel between $600,000 and $700,000.

Judge Manning said she was convinced that Kimmel was taking responsibility for his actions, but that he “should have better common sense than to get involved with this activity.”

Still undecided is the issue of forfeiture. The defense claims Kimmel has voluntarily sold his condominium units at Marina City, and paid more than the required amount of restitution if the amount was calculated properly. Both sides will submit arguments, with the government’s due first, next month.

The judge agreed with defense that a Supreme Court ruling, five days after Kimmel’s plea agreement, requires restitution in cases of money laundering be determined based on profits, not just gross receipts. Assistant U.S. Attorney Julie Ruder argued that ‘profit’ should have a broader definition and mean profits of the prostitution ring paid to Kimmel. The judge, however, agreed that at the most, this amount is probably closer to $342,000.

Manning could not specify where Kimmel serves his time but said she would make recommendations.

Lopez provided the only humorous moment during the hearing, describing a scene in the film “Scarface” and how it applied to tougher money laundering laws in the 1980s.

About a dozen friends of Kimmel’s attended the sentencing hearing, including John Leonard, husband of MTCA president Donna Leonard.

Sentencing was rescheduled three times in past week

On November 13, the judge, Blanche M. Manning, reset sentencing to December 5. The next day, she reset it to January 30. Later that same day, Manning reset sentencing a third time back to November 20, the date it had been scheduled since September.

Kimmel pleaded guilty on May 29 to money laundering in connection with a nationwide prostitution ring. The maximum sentence is 20 years but the government is asking for 78 to 97 months.

In a report filed on Monday in U.S. District Court, U.S. Attorney Patrick Fitzgerald reiterated the case against Kimmel, including wiretaps of Kimmel’s phone conversations with convicted pimp Robert Lewis Young. Also known as “Diamond,” Young is now serving a 25-year prison sentence. “During these calls,” writes Fitzgerald, “it is clear that [Kimmel] knew that Young was a pimp, and that he was controlling the prostitutes working for him through violence.”

Patrick Fitzgerald

Fitzgerald says that Kimmel knew money paid to him for luxury vehicles and other items came from illegal prostitution. Kimmel was paid in cash, money order, and cashier’s check, either in person or by mail. When cash was sent to Kimmel in the mail, according to court documents, it was sometimes concealed in shoe boxes.

One prostitute that Kimmel, a former dentist, cared for in 2005 had lost several teeth in a beating by another convicted pimp in the prostitution ring. Kimmel was paid for his work in barter. According to Fitzgerald, Kimmel provided the dental work in exchange for two hours of sexual favors by a prostitute for a friend of Kimmel, an older man Kimmel identifies in the wiretaps as “Ray.”

Fitzgerald says Kimmel “very early on” knew he was laundering money for an illegal prostitution business. “Defendant’s crime was motivated purely by greed. He entered and furthered a money laundering conspiracy, knowing that doing so was promoting illegal prostitution businesses,” Fitzgerald writes. “He did all of this to improve his own credit rating, which enabled him to increase his real estate holdings and make money.”

Joseph Lopez

Kimmel’s attorney, Joseph Lopez, was asking for a sentence below minimum guidelines. Lopez says Kimmel has accepted responsibility and has cooperated with the investigation – and that he did not initially know Diamond was a pimp. “Eventually he became aware when his neighbors confronted him that the girls were seen scantily clad in the laundry room,” Lopez writes in his objection to Fitzgerald’s report filed on Monday.

Problems started with car accident in 1985

Lopez traces Kimmel’s problems back to a near-fatal car accident in 1985. It led to the loss, he says, of a trucking business Kimmel co-owned while working as a dentist. Disabled, Kimmel lost the trucking business and dental practice and filed for bankruptcy in 1988. Says Lopez, Kimmel’s “dire credit and financial predicament…motivated him in his attempt to bolster his credit rating by dealing with [convicted pimps] Jodie Spears and Robert Young.”

Eager to reestablish his credit, Kimmel agreed to purchase luxury vehicles for Young in 2002. Kimmel would not receive a fee for doing this, and he didn’t even get fully reimbursed for the cars. When Spears and Young failed to pay Kimmel for the vehicles, says Lopez, Kimmel was stuck with payments and no vehicles. “Diamond and Spears failed to pay off the vehicles, and [Kimmel’s] credit rating went down the sewer.”

Lopez says Kimmel was not aware that he was engaged in money laundering. “This can be looked at with skepticism by us in our profession, but the defendant truly had no idea he was laundering money.” He says Kimmel “fell hook, line, and sinker” for “smooth-talking con-men.”

“In the end, [Kimmel’s] ill-advised plan to increase his credit rating backfired and his rating dropped like a lead balloon.”

Supreme Court ruling favors Kimmel

From the sale of Kimmel’s condominium units at Marina City, Lopez says Kimmel has paid the government $344,247 in restitution – slightly more than the $342,000 the government says Kimmel earned from unlawful activity. But even that is in dispute, as it represents gross receipts and not profit. In June, the Supreme Court ruled that money laundering applies only to profits of an illegal operation, not just the cash it generates.

“The defendant was not in the business of laundering money,” writes Lopez. “[He] did not charge a fee for purchasing the vehicles. In fact, he lost money in the end.”

Lopez points out this is the 59-year-old Kimmel’s first arrest. He says Kimmel has cooperated with the investigation. He has health issues related to sleep apnea, and he has young children to take care of, including one who is autistic.

Lopez says there is no need to impose a sentence that would deter others, because Kimmel’s conduct was only “borderline unlawful.” As For Kimmel himself, “the deterrent effect this arrest has had on the defendant is devastating. He now knows that his conduct was wrong.”

Praised in Vietnam, less so at Marina City

“The defendant has been the subject of ridicule and scorn by others in the dental profession and his neighbors in Marina City Towers,“ writes Lopez. “The defendant has been the subject of blogs such as Marinacityonline.com. The defendant has suffered economically and emotionally and will lose everything if he is incarcerated for a long period of time.”

Lopez says Kimmel served with distinction in the U.S. Army, Inducted in 1968 at the height of the Vietnam War, Kimmel was assigned to a mechanized infantry battalion, mobilized whenever other units were in danger of being overrun. Kimmel eventually rose to the rank of sergeant and led 25 men in almost day-to-day combat for ten months.

He received two Purple Hearts. In 1969, according to Lopez, Kimmel drove his vehicle into enemy fire, allowing him and eight other soldiers to escape. But not before a rocket propelled grenade exploded in the back of the vehicle. Another time, a North Vietnamese soldier, chased by Kimmel into an underground tunnel, tossed a grenade back at Kimmel, knocking him unconscious and inflicting severe injuries that put Kimmel in the hospital for three months.