Source: http://www.justice.gov/atr/cases/f3700/3774.htm
Timestamp: 2014-03-12 00:34:15
Document Index: 718253951

Matched Legal Cases: ['§2', '§1', '§1', '§2', '§2', '§1', '§3', '§3', '§2', '§1', '§2']

Response of the United States to Objections of Defendant David Giordano to the Presentence Investigation Report : U.S. v. Atlas Iron Processors, Inc., et al.
Adobe site. For an official signed copy, please contact the Antitrust Documents Group. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA UNITED STATES OF AMERICA, Plaintiff,
v. ATLAS IRON PROCESSORS, INC., et al., Defendants. |
| Case No. 97-0853-CR-Middlebrooks Magistrate Dubé (Amended order of reference dated May 7, 1998) RESPONSE OF THE UNITED STATES TO OBJECTIONS OF DEFENDANT DAVID GIORDANO TO THE PRESENTENCE INVESTIGATION REPORT I INTRODUCTION
In this Memorandum, the United States responds to the numerous objections made by defendant
David Giordano ("Giordano" or "defendant") in response to the
Presentence Investigative Report prepared by the United States Probation Office
("USPO"). The responses of the United States correspond with the paragraph
numbers of the objections made by Giordano.
In his preliminary statement, Giordano again rehashes his opinion that the difference between
"picked-up" and "delivered" prices is important. The distinction drawn
by him bears no significance to this sentencing proceeding. Pursuant to the price-fixing and
market allocation agreement reached at Sea Ranch, the defendants agreed on a maximum price
that each co-conspirator would pay to specific suppliers of scrap and for various grades of scrap,
both generally and with respect to particular suppliers. The fact that Atlas may have cheated on
the agreement does not affect the volume of commerce attributable to it (and Giordano) under
U.S.S.G. §2R1.1. The United States treats this red herring issue raised by Giordano fully in
its response to Paragraphs 31 and 34 below. II RESPONSES TO OBJECTIONS PART A. THE OFFENSE
Paragraph 6: The Indictment charged that, beginning at least as early as
October 24, 1992, and continuing at least until November 23, 1992, the exact dates being
unknown to the grand jury, the defendants and co- conspirators engaged in a combination and
conspiracy to suppress and restrain competition by fixing the price of scrap metal, and allocating
suppliers of scrap metal, in southern Florida. Indictment, ¶ 2. In its Bill of Particulars, the
United States stated: "By way of further explanation, the United States believes that the
conspiracy alleged in the Indictment ended sometime in January, 1993." Bill of
Particulars, p. 8. The evidence at trial showed that the conspiracy continued into January, 1993. Moreover, U.S.S.G. §1B1.3 specifically provides that all relevant conduct should
be taken into consideration in determining the applicable guideline sentencing range.1
David Giordano is wrong in stating that very few of the summaries introduced at trial extended
beyond November 23, 1992. For Atlas, nearly all of the summaries relating to car suppliers
extended to December 31, 1992. The figures used by the United States in calculating the volume
of commerce affected by the conspiracy and attributable to David Giordano are based on Atlas
business records (scale tickets and summary reports) admitted into evidence at trial. The United
States intends to submit detailed summaries relating to the volume of commerce at the sentencing
Paragraph 7: This objection is poorly taken. The uncontroverted testimony at
trial was that Sunshine was Atlas' major competitor in the Miami market. Trial Transcript
(McConnell), p. 98.
Paragraph 8: The United States does not understand this objection. The Sea
Ranch meeting and the subsequent involvement of David Giordano occurred close enough in
time to Hurricane Andrew to justify the statement that the price-fixing and market allocation
agreement was struck shortly after Hurricane Andrew. Hurricane Andrew struck southern
Florida on August 24, 1992. The uncontroverted evidence at trial showed the defendants,
including David Giordano, met initially at Charcoal's restaurant on September 21, 1992, to
discuss prices and customers relating to Hurricane scrap. A second meeting was held on October
14, 1992, at a restaurant called Casa D'Oro, where the subject of Hurricane scrap again was
discussed. Henry Kovinsky testified that Hurricane scrap was a principal subject discussed at
Sea Ranch. See, e.g., Trial Transcript (Kovinsky), p. 1505. In his testimony,
Kovinsky connected the "Hurricane" scrap discussion at Sea Ranch with the
preliminary meetings at Charcoal's and Casa D'Oro. Id. In addition, pursuant to
U.S.S.G. §1B1.3, the meetings at Charcoal's and Casa D'Oro are properly included as
relevant conduct in setting the Guidelines offense level for David Giordano.
Paragraph 9: David Giordano would have this Court believe that the
collusive deal struck at Sea Ranch just happened one day -- apparently out of the blue. That is
not the case. Prior to the Sea Ranch meeting, there were two preliminary meetings between the
defendants, one of which occurred at Charcoal's restaurant. The meetings at Charcoal's and Sea
Ranch are directly connected to each other. Without question, the meeting at Charcoal's -- which
occurred less than one month prior to the Sea Ranch meeting -- planted the seed for the
defendants' collusion in southern Florida.
Henry Kovinsky testified at trial that a meeting took place on September 21, 1992, at Charcoal's
restaurant. Trial Transcript (Kovinsky), p. 1523-24. Participants at this meeting included the
defendants Anthony Giordano, Jr., David Giordano and Randolph Weil. Id. at p.1523. Kovinsky described the Charcoal's meeting as a "kind of feeling out process."
Id. Although the defendants may have talked about the possibility of a joint venture to
salvage scrap relating to Hurricane Andrew, that was not the only subject discussed. Kovinsky testified as follows:
Q: Now, you mentioned that at this Charcoals meeting, there was a
discussion of a joint venture. Did you propose anything else at this Charcoals' meeting? A: Not too much. I think the Hurricane was the subject of the day. That
certainly was on everybody's mind. But there was discussion at Charcoals about Hurricane pricing
relative to Hurricane. I don't recall suppliers being mentioned or auto wrecking yards. But I
recall Hurricane pricing as it related to yard buying pricing, the scale pricing, as well as prices
being offered down in the Hurricane area.
Q: Now, were there different subjects discussed at the [Sea Ranch] meeting? A: Yes. Q: Do you recall what those subjects were? A: The subjects were Hurricane pricing, which was also discussed at priormeetings, but Hurricane pricing seemed to be a catalyst that was driving, at least from Randy's standpoint, and the Giordanos' meeting and talking about their -- where there was a tremendous amount of scrap that became available because of the Hurricane. Trial Transcript (Kovinsky), p. 1505.
Q: Do you know what Tony Giordano, Junior did when he returned? A: Yes, he went into David Giordano's office and shut the door. Q: Do you know how long--well, let me ask you this: Was there anyone else that you are aware of that was in David's office, other than his brother, Tony Giordano, Junior? A: No, he just walked into David's office. He was standing in the doorway of his office when we walked in. Q: And this is while you are in your office? A: I was standing in the doorway of my office. Q: Where was your office in location to David Giordano's office? A: My office being here, David Giordano's office would be where the Judge is sitting. Q: So you could see it from your office? A: Yes, quite readily. Q: Okay. Do you recall, approximately, how long David Giordano and his brother, Tony, Junior, met in the office? A: No, I do not. Not specifically. Q: Do you recall Tony, Junior leaving at some point? A: Yes, I do. He just walked past my--opened the door, walked past my office and left the building. Q: Do you recall what David Giordano did after his brother left his office? A: Yes. He opened the door and was rather--in heavy spirits, and he said drop the prices. Trial Transcript (McConnell), pp. 182-83 (emphasis added).
Q: Was there any conversation between you and Tony Giordano, Junior on the drive up to Fort Lauderdale [for the Sea Ranch meeting]? A: Yes. Q: Can you tell the jury what that conversation was? A: Well, initially, he started the conversation by just general small talk, you know, asked me what was going on at the facility, what was going on generally in the market, and we talked at length about that. And then at some point I asked him where we were going and who we were meeting with, and he said that we were going to meet with Sunshine Metal. Randy Weil in particular, he mentioned. And that it was -- he wanted me to fully understand that it was of great concern to him that I was attending this meeting, because I was not principal of any company at that time, of the two companies involved, and that Tony Giordano, Senior and Junior and Randy had grave reservations as to me attending the meeting, but that he felt that I needed to attend this meeting because he really wasn't familiar with the Miami market and he wanted me to make certain that I understood what Randy was referring to. Q: Did Tony Giordano, Junior, did he tell you what the meeting was going to be about? Did he tell you the gist of the meeting on the drive up to Fort Lauderdale? A: He basically said that, you know, we are going to have a meeting to see what we can do about these prices. And with that, I was a little reserved about that. I said, well, to have that kind of meeting is illegal. And he just laughed. Q: Was there any other conversation? A: Other than covering those subjects, no. Q: Okay. And you say, you know, you said it was illegal? A: Yes, I did. Q: And he laughed? A: Well, I was very concerned about it, because when he said we were having a meeting with Sunshine, all I could remember was that here is Cleveland all over again. Trial Transcript (McConnell), pp. 135-37 (emphasis added).
Q: When you left the meeting, did you have an understanding that Mr. Giordano, Senior had any objection to what was said at the meeting or what was agreed upon? A: No, there was no objection from anybody. If there is any objection from -- it would be that maybe Randy knew more to the market, the pricing than they did, and maybe they objected to the way Randy felt that their prices were inappropriate to the market price. They certainly objected to Mr. Weil's acumen and telling them that they are overpaying and don't know what they are doing in the business, and I heard that on several occasions, both at Sea Ranch and before the Sea Ranch. Trial Transcript (Kovinsky), p. 1515 (emphasis added).
Q: Now, what was talked about next at this [Sea Ranch] meeting? A: At that juncture of the meeting, we had basically finished discussing the Bahamas cars and Cairo Lane, and they felt at that time they had pretty much covered all of the car carriers in given areas that were to be priced a certain way. And then Tony Giordano, Senior brought up the pricing of the scale. He said in as much as we have gotten this far, why don't we just -- just discuss the scale and see what we can do there. We might as well do the whole thing. Q: What do you mean by "scale?" A: Scale is the general pricing that you have to the general public for various grades of scrap that they would generate, in addition to buying from the auto wreckers and towers. Trial Transcript (McConnell), p. 223.
Q: What were the other subjects [discussed at Sea Ranch]? A: The other subjects were suppliers, their pricing. And there was some tonnage. I really don't know how to describe this. I don't know that it was a formula, that the Giordanos were rather insistent on getting X amount of tons. How those tons were made up, I really couldn't tell you, not being involved. But there was some magic tonnage figure of 3, 4,000 tons, or whatever that was, per month. If they could get assurances from Randy [Weil] that tonnage would be available, then they would cooperate and work with the pricing, work with the suppliers, work with the territories, geographical territories. Trial Transcript (Kovinsky), pp. 1505-06. Seealso Trial Transcript (Kovinsky), p. 1512. Kovinsky's testimony is clear: Atlas wanted a certain amount of tonnage in order to agree to lower prices. Id. at 1512.
David Giordano's reliance on United States v. SKW Metals & Alloys, Inc., 4 F. Supp. 2d 166, 167 (W.D.N.Y. 1997) ignores contrary -- and more compelling -- relevant case law. In United States v. Hayter Oil Co., Inc., 51 F.3d 1265 (6th Cir. 1995), the Sixth Circuit agreed with the government's conclusion that "there is nothing in the language of the Antitrust Guideline [U.S.S.G. §2R1.1,] that suggests that the Sentencing Commission intended the district court �exclude from a defendant's volume of commerce sales of a product that was the direct object of a price-fixing agreement, because those sales were made at less than the agreed-upon price.'" Hayter Oil, 51 F.3d at 1273. Rather, the court in Hayter Oil held:
Accordingly, pursuant to U.S.S.G. §2R1.1, the United States agrees with the method used by the USPO in arriving at the volume of commerce affected by the conspiracy and attributable to David Giordano for sentencing purposes.2 In addition, David Giordano's contention finds no support in U.S.S.G. §1B1.3, which provides that all relevant conduct should be included in arriving at the volume of commerce attributable to him.3 The defendant attempted to confuse the jury with his "picked-up" versus "delivered pricing" spiel at trial, but failed. His attempt to confuse issues at sentencing with the same spiel should also fail. Role Assessment
U.S.S.G. §3B1.1(b) provides that an increase in the offense level should be applied "[i]f the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity that involved five or more participants or was otherwise extensive, increase by 3 levels." U.S.S.G. §3B1.1(b) (emphasis added). In this price-fixing and market-allocation conspiracy, there were more than five participants. Application Note 1 of this Guideline provides: "A �participant' is a person who is criminally responsible for the commission of the offense, but need not have been convicted." At a minimum, at least seven individuals participated in the conspiracy and were criminally responsible for it, including the following: Anthony Giordano, Jr.; Anthony Giordano, Sr.; David Giordano; Randolph Weil; Henry Kovinsky; Dan Allen; and Sheila McConnell.
There is ample evidence in the record to support the USPO's position that the conduct of David Giordano merits a three-level enhancement for his role in the criminal activity. The United States, too, recommends that the three-level enhancement be applied to David Giordano. Victim Impact
The United States intends to submit a detailed summary showing the amount of restitution which should be paid by Atlas. Paragraph 60: The one-point enhancement for volume of commerce is appropriate. The volume of commerce attributable to David Giordano is $614,436.39. Pursuant to U.S.S.G. §2R1.1(b)(2), a one-point enhancement should be added to David Giordano's base offense level of 10.
Paragraph 80: The United States does not have sufficient information to comment upon this Objection. Financial Condition: Ability to Pay
WILLIAM J. OBERDICK Acting Chief Cleveland Field Office By: ____________________________
RICHARD T. HAMILTON, JR. Court I.D. No. A5500338 PAUL L. BINDER Court I.D. No.A5500339 IAN D. HOFFMAN Court I.D. No. A5500343 Trial Attorneys, U.S. Department of Justice Antitrust Division Plaza 9 Building 55 Erieview Plaza, Suite 700 Cleveland, OH 44114-1816 Phone:(216) 522-4107 FAX: (216) 522-8332 FOOTNOTES
1. U.S.S.G. §1B1.3, Application Note 1, states: "The principles and limits of sentencing accountability under this guideline are not always the same as the principles and limits of criminal liability. Under subsections (a)(1) and (a)(2), the focus is on the specific acts and omissions for which the defendant is to be held accountable in determining the applicable guideline range, rather than on whether the defendant is criminally liable for an offense as a principal, accomplice, or conspirator." 2. For sentencing purposes, the figures used by the United States in calculating the volume of commerce attributable to Atlas (and David Giordano) are the actual dollar amounts paid by Atlas to its suppliers of scrap. These actual amounts represent the true amount of the volume of commerce affected by the conspiracy. You would no more deduct freight costs from the volume of commerce than you would any other internalized cost (e.g., plant, power, equipment, labor, etc.). Pursuant to U.S.S.G. §2R1.1, all scrap purchases made by Atlas affected by the conspiracy should be included as volume of commerce attributable to David Giordano for sentencing purposes. See, e.g., United States v. Hayter Oil Co., Inc., 51 F.3d 1265 (6th Cir. 1995); United States v. Michael D. Andreas, et al., 1999 WL 51806 (N.D. Ill.).