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United States v. King

United States District Court, W.D. Oklahoma

March 6, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
(1) BARTICE A. “LUKE” KING, (8) KORY ELWIN KORALEWSKI, (24) PAUL FRANCIS TUCKER, (27) LEON MARK MORAN, (29) LUIS ROBLES, (52) ZAPT ELECTRICAL SALES, INC., (58) RODGER VANPELT BRAMLEY and (59) KELLEY WARD DIEBNER. Defendants.

          MEMORANDUM OPINION AND ORDER RE: FORFEITURE

          STEPHEN P FRIOT UNITED STATES DISTRICT JUDGE.

         Table of Contents

         I. Introduction ...................................................................................................... 1

         A. The Criminal Charges ........................................................................... 2

         B. The Trials and Convictions ................................................................... 3

         C. The Moving Papers and Evidentiary Hearing ....................................... 5

         II. Authority for Forfeiture ................................................................................. 10

         A. Forfeiture Procedures .......................................................................... 10

         B. General Principles ............................................................................... 11

         C. Forfeitures Based on RICO Conspiracy Convictions ......................... 17

         D. Forfeitures Based on Convictions for Operation of Illegal Gambling Business .................... 23

         E. Forfeitures Based on Money Laundering Conspiracy Convictions........................................... 25

         F. Forfeiture Based on a Facilitation Theory .......................................... 29

         III. The Excessive Fines Clause .......................................................................... 32

         IV. Burden of Proof ............................................................................................. 43

         A. The Government's Burden .................................................................. 43

         B. The Defendants' Burden ..................................................................... 46

         V. The Exclusionary Rule .................................................................................. 48

         VI. Tracing, Tainting, Commingling and Extrapolation ..................................... 51

         A. Tracing, Tainting and Commingling ................................................... 52

         B. Extrapolation ....................................................................................... 61

         VII. Notice of the Government's Intent to Seek Money Judgment ...................... 62

         VIII. Overview of the Government's Forfeiture Case ........................................... 65

         A. The Government's Forfeiture Brief (doc. no. 1999) ..................................................................................... 65

         1. King ........................................................................................... 67

         2. Koralewski ................................................................................ 68

         3. Tucker ....................................................................................... 68

         4. Moran ........................................................................................ 69

         5. Robles ........................................................................................ 69

         6. Bramley ..................................................................................... 70

         7. Diebner ...................................................................................... 70

         B. The Government's Presentation at the Forfeiture Trial ...................... 71

         IX. Findings of Fact ............................................................................................. 73

         A. Introduction ......................................................................................... 73

         B. Viability of the Government's Characterization of Funds Allegedly Laundered.................... 77

         1. Preliminary Matters .................................................................. 77

         2. Sources of Deposits and Nature of Activities Generating the Funds ................................................................ 83

         3. Money Laundering Total ........................................................ 123

         4. A Brief Digression .................................................................. 123

         C. Viability of the Government's Proposed Direct Attributions and Extrapolations ........................................................ 127

         1. General Nature of the Government's Proposed Direct Attributions and Extrapolations ................................... 127

         2. Extrapolation Based on Legendz Payouts to Bettors through Global Data Payment Services ..................... 133

         3. The Government's Proposed Extrapolations and Direct Attributions re: Proceeds Attributable to Individual Agents and Runners ............................................... 135

         a. Terry Campbell ............................................................. 136

         b. Ralph Hernandez .......................................................... 139

         c. Kelly Diebner ................................................................ 144

         d. Christopher Tanner ....................................................... 153

         e. Michael Lawhorn .......................................................... 156

         f. Joseph Barry ................................................................. 161

         g. Paul Tucker ................................................................... 162

         h. Bruce Middlebrook ....................................................... 166

         i. Rodger Bramley ............................................................ 169

         j. Paul Wilson ................................................................... 173

         k. Leon Moran .................................................................. 174

         l. Joseph McFadden ......................................................... 182

         m. David Ross .................................................................... 185

         n. Kory Koralewski ........................................................... 186

         o. Luis Robles ................................................................... 204

         4. Conclusion as to the Government's Proposed Extrapolations and Direct Attributions ................................... 206

         D. Viability of the Government's Contention that all Forfeiture Defendants, Regardless of their Respective Degrees of Participation in the Legendz Enterprise, Should be Subjected to a Forfeiture Money Judgment in the Same Amount .................................................................................... 207

         E. Findings Specific to King .................................................................. 209

         1. Forfeiture of Specific Assets ................................................... 209

         2. Forfeiture Money Judgment .................................................... 214

         F. Findings Specific to Koralewski ....................................................... 215

         1. Forfeiture of Specific Assets ................................................... 215

         2. Forfeiture Money Judgment .................................................... 218

         G. Findings Specific to Tucker .............................................................. 219

         1. Forfeiture of Specific Assets ................................................... 219

         2. Forfeiture Money Judgment .................................................... 219

         H. Findings Specific to Moran ............................................................... 227

         1. Forfeiture of Specific Assets ................................................... 227

         2. Forfeiture Money Judgment .................................................... 227

         I. Findings Specific to Robles ............................................................... 230

         1. Forfeiture of Specific Assets ................................................... 230

         2. Forfeiture Money Judgment .................................................... 230

         J. Findings Specific to Bramley ............................................................ 232

         1. Forfeiture of Specific Assets ................................................... 232

         2. Forfeiture Money Judgment .................................................... 238

         K. Findings Specific to Dieber ............................................................... 240

         1. Forfeiture of Specific Assets ................................................... 240

         2. Forfeiture Money Judgment .................................................... 240

         L. Summary of Forfeiture-Related Findings ......................................... 243

         X. Forfeiture-Related Sanctions Against the United States ............................. 244

         XI. Conclusion ................................................................................................. 255

         I. Introduction

         The government moves for preliminary orders of forfeiture against the defendants Bartice A. “Luke” King, [1] Kory Elwin Koralewski, Paul Francis Tucker, Leon Mark Moran, Luis Robles, Zapt Electrical Sales Inc., Rodger Vanpelt Bramley and Kelley Ward Diebner. This order refers to these parties, other than Zapt, [2] as “the forfeiture defendants.”[3]

         The government seeks forfeiture of specific assets as well as a forfeiture money judgment. See generally, Rule 32.2(b), Fed.R.Crim.P. (procedures for entering a preliminary order of forfeiture). As for the forfeiture money judgment, the government now seeks a judgment in the amount of $231, 432, 686.73 against the forfeiture defendants. (In the last of the four jury trials that were held in this case, an FBI witness maintained, repeatedly, that the government actually seeks $1 billion by way of forfeiture. Oct. Tr. 2074, 2077, 2114-14.[4])

         These forfeiture proceedings are, to put it mildly, contested.

         The findings of fact in this order are based on the evidence presented at the four jury trials which were held in this case, as well as the James hearings and the nonjury trial which was addressed exclusively to forfeiture issues - all of which generated 11, 368 pages of trial transcript.

         A. The Criminal Charges

         The original Indictment in this case was returned on March 20, 2013. It alleged a ten-year conspiracy period for the two conspiracy counts. Doc. no. 1, at 18, 47.[5] As of the date of the Indictment, there was about a nine-year overlap between the ten-year duration of the conspiracy and the duration of the government's investigation of that conspiracy.

         The original Indictment charged fifty-seven defendants, including six of the eight forfeiture defendants now before the court (King, Koralewski, Moran, Robles, Tucker and Zapt). Doc. no. 1. The Indictment charged: Count 1, a racketeering (RICO) conspiracy in violation of 18 U.S.C. § 1962(d); Count 2, operation of an illegal gambling business in violation of 18 U.S.C. § 1955; and Count 3, conspiring in violation of 18 U.S.C. §1956(h) to commit money laundering under 18 U.S.C. §§1956 and 1957. The Indictment included forfeiture allegations stating the government's intent to seek criminal forfeiture of at least $1, 000, 000, 000.00 as well as specific items of real and personal property.

         On August 16, 2013, the United States filed a Bill of Particulars for Forfeiture of Property, giving notice to defendants King, Tucker and Moran (and other defendants not involved in these forfeiture proceedings), that the United States was seeking forfeiture of additional specific property listed in the Bill of Particulars. Doc. no. 346.

         On August 21, 2013, a grand jury sitting in the Western District of Oklahoma returned a Superseding Indictment against fifty-nine defendants, including the eight forfeiture defendants before the court in these proceedings (King, Koralew-ski, Tucker, Moran, Robles, Zapt, Bramley and Diebner). Doc. no. 354. The Superseding Indictment included modified versions of the same three counts. The Superseding Indictment included forfeiture allegations stating the government's intent to seek criminal forfeiture of at least $1, 000, 000, 000.00 and specific items of real and personal property. Each of the forfeiture defendants was convicted, by a jury, on one or more of the three counts.

         On October 15, 2013, a Second Bill of Particulars for Forfeiture of Property was filed providing notice (to the extent material here) to King, Bramley and Diebner of the government's intent to pursue forfeiture of additional items of real and personal property. Doc. no. 465.

         B. The Trials and Convictions

         The sheer number of defendants necessitated multiple trials. Accordingly, the forfeiture defendants, along with other defendants, were grouped in four sets of defendants to be tried together in four separate trials. All of the defendants who have been tried have agreed to have forfeiture determined by the court rather than by a jury.

         The first trial began on February 12, 2015, and a jury verdict was returned on March 3, 2015. Forfeiture defendants Tucker, Robles and Zapt were tried in this first set of defendants. Tucker was found guilty on all three counts. Robles was found guilty on all three counts. Zapt was not a defendant with respect to Count 2, and was found guilty on Count 1 and Count 3. The court denied their post-trial motions. United States v. Robles, 2015 WL 12852050 (W.D. Okla. July 1, 2015).

         The second trial began on April 14, 2015, and a jury verdict was returned on April 30, 2015. In the second trial, King (the lead defendant) was found not guilty on Count 1 (by any standard, the flagship count), and guilty on Count 2 and Count 3. The court denied King's post-trial motion. United States v. King, 2015 WL 12852049 (W.D. Okla. July 10, 2015).

         The third trial began on May 4, 2015, and a jury verdict was returned on May 22, 2015. Forfeiture defendants Moran, Bramley and Diebner were tried in this third set of defendants. All three of those defendants were found guilty on all three counts. The court denied their post-trial motions. United States v. Bramley, 2015 WL 12852048 (W.D. Okla. Sept. 16, 2015).

         The fourth trial began on October 19, 2015, and a jury verdict was returned on November 4, 2015. Forfeiture defendant Koralewski was in this fourth set of defendants. Koralewski was found guilty on Count 1. He was found not guilty on counts two and three. The court denied Koralewski's post-trial motion. United States v. Dorn, 2016 WL 7388658 (W.D. Okla. Mar. 31, 2016).

         Below is a count-by-count summary of the verdicts relevant to these proceedings.

Count 1 - Racketeering Conspiracy

Count 2 - Illegal Gambling Business

Count 3 - Money Laundering Conspiracy

King

Not guilty

Guilty

Guilty

Koralewski

Guilty

Not guilty

Not guilty

Tucker

Guilty

Guilty

Guilty

Moran

Guilty

Guilty

Guilty

Robles

Guilty

Guilty

Guilty

Zapt

Guilty [Not charged]

Guilty

Bramley

Guilty

Guilty

Guilty

Diebner

Guilty

Guilty

Guilty

         C. The Moving Papers and Evidentiary Hearing

         The issues addressed in this order are those raised by the moving papers considered as a whole, which are extensive.

         The government moved for preliminary orders of forfeiture against defendants King (doc. no. 1493), Koralewski (doc. no. 1975), Tucker (doc. no. 1512, amended motion), Moran (doc. no. 1482), Robles (doc. no. 1887), Zapt (doc. no. 1494), Bramley (doc. no. 1481) and Diebner (doc. no. 1480). Setting defendants Tucker and Zapt aside for the moment (because the government's motions against these two defendants stand on a slightly different procedural footing, as discussed next), defendants King, Koralewski, Moran, Bramley and Diebner dispute the government's entitlement to forfeiture of specific property identified in each of these motions. These defendants, plus Robles, [6] also dispute the government's entitlement to a money judgment against them.

         The government's motions for preliminary orders of forfeiture against Tucker and Zapt have already been granted by agreement, to the following extent. The government's amended motion for a preliminary order of forfeiture against Tucker was granted (doc. no. 1797), as was the government's motion for a preliminary order of forfeiture against Zapt. Doc. no. 1798. These motions were granted with respect to the specific property identified in the motions, as to which there was no dispute; however, the government's entitlement to a money judgment against Tucker remains in dispute, as does forfeiture of one of Tucker's bank accounts, as explained in Part VIII(A)(3), below. The government has not explicitly sought a money judgment against Zapt. See, doc. no. 1999-7, at 3-4 (describing money judgment sought against Tucker, but stating nothing about a money judgment from Zapt). Furthermore, it does not appear that the government seeks to forfeit any assets of Zapt which have not already been preliminarily forfeited. See, doc. no. 1798 (preliminary order of forfeiture by Zapt of contents of account X0897, in approximate amount of $1, 657.94, located at TD Bank, Mount Laurel, NJ, in the name of ZAPT Electrical Sales). Thus, although Zapt was given permission to participate in the forfeiture proceedings along with Tucker, nothing remains to be decided at this stage with respect to Zapt.

         After the government filed its motions for preliminary orders of forfeiture, the forfeiture defendants filed response briefs. See, King (doc. no. 1530), Ko-ralewski (doc. no. 1983), Tucker (doc. no. 1548), Moran (doc. no. 1513), Robles (doc. no. 1897), Zapt (doc. no. 1548), Bramley (doc. no. 1523) and Diebner (doc. no. 1525).

         Viewed in light of the complexity of these proceedings, the government's motions were somewhat perfunctory. For example, the motions listed forfeiture statutes from the Superseding Indictment, but they did not specify which particular forfeiture statutes the government invoked in support of particular forfeitures. Notably, the government's motions seeking forfeitures from King, Koralewski, Tucker, Bramley, Zapt and Diebner did not mention a personal money judgment against these defendants.

         On January 19, 2016 (about twelve years after the Legendz investigation started and nearly three years after the April, 2013 takedown in which the government seized hundreds of thousands of records from the defendants), the government filed its opening brief in support of its forfeiture claims. That brief (herein: Forfeiture Brief) was the government's definitive statement of its forfeiture case. It was filed pursuant to Case Management Order No. 7, doc. no. 1879, which required the government to:

(i) state the statutory basis for the government's forfeiture claims with respect to each forfeiture defendant, (ii) specifically identify the property sought to be forfeited, as to each forfeiture defendant, (iii) state with reasonable specificity the factual basis on which the government asserts that there is a nexus between the property and the offense(s) of conviction, (iv) specify the amount of any forfeiture money judgment sought against any forfeiture defendant, with a reasonably detailed explanation of the factual basis for the government's determination of the amount sought, and (iv) address any other relevant matters as set forth in Part F of the Chambers Procedures of the undersigned judge, as found at the court's website.”

Id. at 1 - 2.

         In its Forfeiture Brief, the government set out, in separate exhibits for each of the forfeiture defendants, the government's position as it stood heading into the evidentiary hearing, regarding the property, and the size of personal money judgments, sought in these proceedings. See, doc. no. 1999-1 (King); doc. no. 1999-5 (Koralewski); doc. no. 1999-7 (Tucker); doc. no. 1999-3 (Moran); doc. no. 1999-8 (Robles); doc. no. 1999-7 (Zapt); doc. no. 1999-2 (Bramley); doc. no. 1999-4 (Diebner).

         As already stated, Case Management Order No. 7 also required the government to specify the statutory basis invoked by the government in support of each forfeiture. Per the government's Forfeiture Brief, the sole statutory basis pressed by the government in support of forfeitures based on RICO conspiracy convictions was 18 U.S.C. § 1963(a). The sole statutory basis pressed by the government in support of forfeitures based on convictions for operating an illegal gambling business was 18 U.S.C. §1955(d). And the sole statutory basis pressed by the government in support of forfeitures based on money laundering conspiracy convictions was 18 U.S.C. §982(a)(1). Doc. no. 1999, pp. 11-12.[7]

         All of the forfeiture defendants filed briefs in response to the government's Forfeiture Brief. See, King (doc. no. 2074); Koralewski (doc. no. 2071); Tucker (doc. no. 2077); Moran (doc. no. 2067); Robles (doc. no. 2078); Zapt (doc. no. 2077); Bramley (doc. no. 2075); Diebner (doc. no. 2070).

         As required by the court's order of March 7, 2016, (doc. no. 2082), the government also filed a reply brief to address arguments made by some defendants in their response briefs, contending the government had failed to give adequate notice it intended to seek a personal money judgment. Doc. no. 2101.

         An exclusionary rule argument was raised by King in his motion, seeking to exclude the documents commonly referred to as the Karlo Stewart documents. Doc. no. 2169. The government filed a response brief addressing that issue. Doc. no. 2180. (King had previously filed a successful motion to suppress those documents, and they were not admitted into evidence at his jury trial. United States v. King, 2015 WL 12852051 (W.D. Okla. Jan. 21, 2015)).

         The government filed pre-hearing proposed findings and conclusions. Doc. no. 2130. The government's forfeiture claims against the forfeiture defendants now before the court were tried to the court in three days of hearings in late April, 2016. Doc. nos. 2174-76.

         Following the hearing, proposed findings of fact and conclusions of law were submitted by all parties. See, doc. no. 2242 (government); doc. no. 2275 (King); doc. no. 2273 (Koralewski); doc. no. 2276 (Tucker); doc. no. 2270 (Moran); doc. no. 2278 (Robles); doc. no. 2276 (Zapt); doc. no. 2315 (Bramley); doc. no. 2274 (Diebner). In addition, the court has permitted the forfeiture defendants to adopt proposed findings and conclusions of the other forfeiture defendants. See adoption orders, doc. no. 2288 (King);[8] doc. no. 2285 (Koralew- ski); doc. no. 2284 (Tucker); doc. no. 2289 (Moran); doc. no. 2286 (Robles); doc. no. 2284 (Zapt); doc. no. 2287 (Diebner). (Bramley did not ask to adopt the other forfeiture defendants' proposed findings and conclusions, but the court gives him the benefit of the others' proposed findings and conclusions where applicable to his situation.) At previous stages of the briefing, the forfeiture defendants have also, at times, incorporated each others' arguments by reference.

         II. Authority for Forfeiture

         A. Forfeiture Procedures

         “As soon as practical after a verdict ... of guilty ... on any count in an indictment. . . regarding which criminal forfeiture is sought, the court must determine what property is subject to forfeiture under the applicable statute.” Rule 32.2(b)(1)(A), Fed. R. Crim. P. “If the government seeks forfeiture of specific property, the court must determine whether the government has established the requisite nexus between the property and the offense. If the government seeks a personal money judgment, the court must determine the amount of money that the defendant will be ordered to pay.” Id.

         “The court's determination may be based on evidence already in the record, . . . and on any additional evidence or information submitted by the parties and accepted by the court as relevant and reliable.” Rule 32.2(b)(1)(B), Fed. R. Crim. P. “If the forfeiture is contested, . . . the court must conduct a hearing after the verdict...of guilty.” Id.

         “If the court finds that property is subject to forfeiture, it must promptly enter a preliminary order of forfeiture setting forth the amount of any money judgment, directing the forfeiture of specific property, and directing the forfeiture of any substitute property if the government has met the statutory criteria.” Rule 32.2(b)(2)(A). “The court must enter the order without regard to any third party's interest in the property. Determining whether a third party has such an interest must be deferred until any third party files a claim in an ancillary proceeding under Rule 32.2(c).” Id. “Thus, the ancillary proceeding has become the forum for determining the extent of the defendant's forfeitable interest in the property. This allows the court to conduct a proceeding in which all third-party claimants can participate and which ensures that the property forfeited actually belongs to the defendant.” Advisory Committee Notes, 2000 Adoption, Subdivision (b).

         “Unless doing so is impractical, the court must enter the preliminary order sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final as to the defendant under Rule 32.2(b)(4).” Rule 32.2(b)(2)(B), Fed. R. Crim. P.

         “At sentencing - or at any time before sentencing if the defendant consents - the preliminary forfeiture order becomes final as to the defendant.” Rule 32.2(b)(4)(A), Fed. R. Crim. P. “If the order directs the defendant to forfeit specific property, it remains preliminary as to third parties until the ancillary proceeding is concluded under Rule 32.2(c).” Id.

         B. General Principles

         These forfeitures are criminal forfeitures. Criminal forfeiture is part of the sentence - punishment - imposed on a defendant who has been convicted in a criminal case. See, Libretti v. United States, 516 U.S. 29, 38-39 (1995) (forfeiture is an element of the sentence imposed following conviction). A criminal forfeiture order is an in personam proceeding against a defendant in a criminal case, as distinguished from civil forfeiture which is an in rem proceeding brought against the thing. United States v. $39, 000 in Canadian Currency, 801 F.2d 1210, 1218 (10th Cir. 1986); United States v. Vampire Nation, 451 F.3d 189, 202 (3d Cir. 2006).

         Criminal forfeitures fall into two categories, forfeiture of property, and forfeiture in the form of a money judgment. See, Rule 32.2(b)(1), Fed. R. Crim. P., and Advisory Committee Notes, 2000 Adoption, Subdivision (b) (“Subdivision (b)(1) recognizes that there are different kinds of forfeiture judgments in criminal cases. One type is a personal judgment for a sum of money; another is a judgment forfeiting a specific asset.”).

         The burden rests on the government to establish the nexus between the property forfeited and an offense of conviction that authorizes forfeiture. United States v. Bader, 678 F.3d 858, 894-95 (10th Cir. 2012). This aspect of the matter will receive more attention in Part IV(A), below.

         As for money judgments, although the criminal forfeiture statutes in issue in this case do not explicitly refer to money judgments, courts uniformly recognize that money judgments representing unlawful proceeds are appropriate. See, United States v. McGinty, 610 F.3d 1242, 1246 (10th Cir. 2010) (involving a forfeiture of the defendant's house and proceeds from the sale of his boat and its motor, following defendant's conviction of misapplication of bank funds; the forfeiture statute involved was 18 U.S.C. § 982(a)(2), which refers to property consisting of or derived from proceeds obtained directly or indirection as a result of the violation).

         There are two primary reasons for permitting forfeiture money judgments. First, criminal forfeiture is a sanction against the individual defendant rather than a judgment against the property itself. McGinty, 610 F.3d at 1246, quoting United States v. Hall, 434 F.3d 42 (1st Cir. 2006). Because the sanction follows the defendant as part of the penalty, the government need not prove that the defendant actually has the forfeited proceeds in his possession at the time of conviction. Id. Second, permitting a money judgment as part of a forfeiture order prevents a defendant from ridding himself of his ill-gotten gains to avoid the forfeiture sanction. Id.

         The nature of a particular forfeiture order will depend on the relevant forfeiture statute as well as the facts of a given case. Id. at 1248. Hybrid orders which forfeit specific property of a defendant, and which also enter a money judgment against a defendant, may be appropriate and are permitted. Id. at 1248-49.

         As will be seen in the portions of this order which address the individual forfeiture statutes relied on by the government in this case, those statutes permit forfeiture of proceeds.[9] Moreover, there is universal agreement that at least the portion of property that derives from proceeds of illegal activity is subject to forfeiture. See, United States v. Rudaj, 2006 WL 1876664, *4, and n.6 (S.D.N.Y. 2006) (stating, in discussion of bank fraud forfeiture under 18 U.S.C. §982, that “there is universal agreement that at least the portion of the property that derives from proceeds of illegal activity is subject to forfeiture”; and citing United States v. Genova, 333 F.3d 750, 762 (7th Cir. 2003), for the proposition, in a RICO case, that ill-gotten gain is forfeited but value added independently by accused is not forfeitable gain.)

         With the exception to be discussed immediately below, the general rule is that joint and several liability applies to forfeitures sought in a multi-defendant case. See, United States v. Contorinis, 692 F.3d 136, 146-47 (2d Cir. 2012) (government sought forfeiture of over twelve million dollars following conviction of conspiracy to commit securities fraud and insider trading; court noted that criminal forfeiture focuses on the disgorgement by a defendant of his ill-gotten gains, citing McGinty for the proposition that the calculation of a forfeiture amount in criminal cases is usually based on the defendant's actual gain, at 146; court noted this general rule is somewhat modified by the principle that a court may order a defendant to forfeit proceeds received by others who participated jointly in the crime, provided the actions generating those proceeds were reasonably foreseeable to the defendant).[10]

         For purposes of this case, the exception to the general rule of joint and several liability is that the doctrine of joint and several liability does not permit the government to forfeit racketeering proceeds under the RICO forfeiture statute, 18 U.S.C. §1963(a)(3), where the proceeds in question were never “obtained, directly or indirectly” by the particular forfeiture defendant from whom forfeiture is sought. This exception to joint and several liability is addressed later in this order, in connection with the RICO forfeiture statute.

         Similarly, it is generally (but not inevitably) true that a court may order a defendant to forfeit proceeds received by others who participated jointly with the defendant in the crime. In these proceedings, however, the government only argues for joint and several liability with respect to the conspiracy convictions.[11]

         Moreover, to obtain a money judgment based on joint and several liability for proceeds received by others, at least in the circumstances of this case, a foreseeability requirement must be met so that the government can get a judgment for only so much of the proceeds as were foreseeable to that defendant.[12] Long before the forfeiture trial, the government was on notice that foreseeability was very much in issue. See, Tucker's forfeiture brief, doc. no. 2077, at 5-6 (filed on February 29, 2016, nearly two months before the forfeiture trial). After the forfeiture trial, in a filing that was adopted by the other forfeiture defendants, [13]Tucker again argued foreseeability, as a legal matter and as a factual matter. Doc. no. 2276, at 23-25, ¶¶ 88-92. But neither the government's forfeiture brief nor its proposed findings and conclusions address the issue of foreseeability - an issue that is undeniably, and prominently, in the mix as to forfeiture based on money laundering, [14] given the far-flung nature of the Legendz betting operation and the geographic and functional differences among the defendants. The government's filings make no reference, to say nothing of providing any developed argument, on that issue or as to the burden of proof on that issue (discussed in Part IV, below). Any argument that foreseeability is not required as a prerequisite to joint and several forfeiture liability is therefore waived. However, aside from the government's waiver, the court concludes that each forfeiture defendant's exposure to money laundering forfeiture is limited to those transactions that the government proves were foreseeable to that defendant.

         As discussed later in this order, at least in the context of this case, joint and several liability does not eliminate eighth amendment concerns; rather, at least arguably, it heightens them. For example, United States v. Jalaram, 599 F.3d 347 (4th Cir. 2010), involved forfeiture based on convictions for violating, and conspiring to violate, the Mann Act; money laundering; and conspiracy to commit money laundering. In Jalaram, the Fourth Circuit recognized that in single-offender cases, it would be very difficult and perhaps impossible for the defendant to show that the forfeiture of proceeds was disproportionate to the gravity of his offense, which the Fourth Circuit speculated might explain the desire of some of its sister circuits to simplify the analysis by holding such forfeitures exempt from constitutional scrutiny in the first place. Id. at 355. Jalaram states, however, that such a “proposed shortcut may work a grave injustice in cases involving joint and several liability.” Id. The court explained that “[i]n such cases, some defendants inevitably disgorge more money than they received from the conspiracy, thus forfeiting property they obtained lawfully in order to satisfy the forfeiture judgment. In a case where a defendant played a truly minor role in a conspiracy that generated vast proceeds, joint and several liability for those proceeds might result in a forfeiture grossly disproportionate to the individual defendant's offense.” Id.

         Additional legal principles of general application are addressed later, under separate headings. Those topics (including the Excessive Fines Clause, burden of proof, the exclusionary rule, tracing, commingling, extrapolation and double counting, and the sufficiency of the government's notice of its intention to seek money judgments) address issues raised in the forfeiture defendants' papers. Before addressing those topics, it is useful to address the specific forfeiture statutes relied on by the government in these proceedings.

         C. Forfeitures Based on RICO Conspiracy Convictions

         As the statutory authority for forfeitures based on a RICO conspiracy in violation of 18 U.S.C. § 1962(d), the government relies on 18 U.S.C. § 1963(a). Doc. no. 1999, p. 11 (in which government was required to identify all forfeiture statutes invoked). Section 1963(a) provides as follows.

Whoever violates any provision of section 1962 of this chapter . . . shall forfeit to the United States, irrespective of any provision of State law-
(1) any interest the person has acquired or maintained in violation of section 1962;
(2) any-
(A) interest in;
(B) security of;
(C) claim against;
(D) 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; and
(3) any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity . . . in violation of section 1962.

         The government's proposed findings and conclusions cite subsection (3). See, e.g., doc. no. 2242, pp. 57-58, ¶ 237, citing §1963(a)(3) (the only subsection of the statute expressly cited or quoted in the government's proposed findings and conclusions). Subsections (1) and (2) (which are quoted in the government's Forfeiture Brief) provide that a defendant's conviction under RICO subjects all of his interests in the enterprise to forfeiture. See, United States v. Cauble, 706 F.2d 1322, 1349 (5th Cir. 1983) (punishment imposed by a RICO forfeiture “deprives that defendant of all of the assets that allow him to maintain an interest in a RICO enterprise”; jury may not find that less than the full amount of the defendant's interest in an enterprise is subject to forfeiture under § 1963). The government's present exclusive reliance on subsection (3) is understandable. The evidence does not show that there is (or, for a long time, has been) anything left of the Legendz gambling enterprise other than such assets as may be within the reach of subsection (3).

         The RICO forfeiture provision is broadly drafted and has long been liberally construed. United States v. Fruchter, 411 F.3d 377, 384 (2d Cir. 2005), cert. denied, 546 U.S. 1076 (2005).

         Proceeds forfeitable based on a conspiracy to violate RICO potentially include gross proceeds of the RICO conspiracy, not just net profits after expenses. See, United States v. Christensen, 828 F.3d 763, 822-23 (9th Cir. 2016), cert. denied, No. 16-461, 2017 WL 69212 (Jan. 9, 2017) (concluding in a RICO forfeiture that “proceeds” means gross receipts, but noting some circuits have held otherwise; affirming the district court's conclusion that the gross receipts of the investigative agency which was at the center of the criminal enterprise rather than the agency's profits, were subject to forfeiture under § 1963(a)(3)). Christensen reasoned that legislative history of RICO indicates that “proceeds” was used in lieu of the term “profits” to alleviate the unreasonable burden on the government of proving net profits). Bader, 678 F.3d 858 (10th Cir. 2012), involved a forfeiture based on a conviction for various drug-related crimes involving human growth hormone. Defendant argued that the forfeiture verdict, based on calculation of proceeds from gross drug sales instead of net sales, was improper under United States v. Santos, 553 U.S. 507 (2008). Id. at 892-94. The Court of Appeals held the defendant had waived this argument, but went on to state that Santos should be “confined to its factual setting, ” concluding that “‘proceeds' means ‘profits' for the purpose of the money laundering statute only where an illegal gambling operation is involved.” Id. at 894, quoting United States v. Fishman, 645 F.3d 1175, 1193-94 (10th Cir. 2011), cert. denied, 565 U.S. 1115 (2012). In Bader, the court stated that defendant's reliance on Santos was misplaced because his convictions involved neither the federal money laundering statute nor an illegal gambling operation. Bader, 678 F.3d at 894.[15] And see, United States v. Miller, 2009 WL 2949784 (D. Kan. 2009), in which the defendant conceded, and the court agreed, that “it is gross receipts that are considered forfeitable under federal forfeiture statutes invoking the term ‘proceeds.'” Id. at *4. Defendant had argued that “proceeds” under 18 U.S.C. § 982(a)(2) must be interpreted as “profits” under Santos. Id. Rejecting that contention, Miller discussed the legislative history of the Crime Control Act of 1984, pointing out that Congress explained that it used “proceeds” in the RICO forfeiture statute in lieu of the term “profits” in order to alleviate the unreasonable burden on the government of proving net profits. Id. at *5. (Santos is a bit more problematic in the money laundering forfeiture context, and, on that score, will get further discussion in Part E, below.)

         As for the issue of joint and several liability for racketeering proceeds, this order has already indicated that although, as a general proposition, joint and several liability (limited by principles of foreseeability and the Eighth Amendment) applies to forfeitures which are based on conspiracy convictions, joint and several liability does not apply to permit forfeiture of racketeering proceeds from a particular forfeiture defendant who never, in any sense of the word, “obtained” those racketeering proceeds. In the court's view, the “obtained” language in the RICO forfeiture statute, 18 U.S.C. § 1963(a)(3), allows no other conclusion.

         In this regard, the undersigned's reading of the RICO forfeiture statute is the same as the D.C. Court of Appeals' reading of almost identical language in 21 U.S.C. § 853(a), a drug forfeiture statute, as explained with clarity in United States v. Cano-Flores, 796 F.3d 83 (D.C. Cir. 2015), cert. denied, 136 S.Ct. 1688 (2016). Title 21 U.S.C. § 853(a), like the RICO forfeiture statute, authorizes forfeiture of “proceeds the person obtained, directly or indirectly” as a result of the violation. Cano-Flores is at odds with the majority view, as Cano-Flores recognizes. See, 796 F.3d at p. 91 (discussing the contrary view in other circuits). That said, the undersigned is convinced that to join the majority of courts - which hold that the doctrine of joint and several liability permits forfeiture of racketeering proceeds which were obtained by others, although those proceeds were never obtained by the particular forfeiture defendant in question[16] - would be to read the “obtained, directly or indirectly” language entirely out of the RICO forfeiture statute. In an analysis that is hard to argue with, Judge Williams's plain language persuasively explains the statute's equally plain language. Id. at 91 - 95. And see, United States v. Honeycutt, 816 F.3d 362, 379-80 (6th Cir. 2016) (involving forfeiture of drug proceeds; court follows the majority of courts, and applies joint and several liability among conspirators to forfeiture sought under 21 U.S.C. § 853(a)(1), although noting that Cano-Flores is contra), cert. granted, ___U.S.___, 2016 WL 4078900 (Dec. 9, 2016).

         The court's agreement with Cano-Flores affects the result in these forfeiture proceedings with respect to only one of the forfeiture defendants - Koralewski. This is because the other forfeiture defendants were convicted on the money laundering conspiracy charge, subjecting them to the broader reach of the money laundering forfeiture statutes, none of which include the “obtained” language found in the RICO forfeiture statute. Koralewski, however, was convicted solely on the RICO conspiracy charge.

         Eighth amendment limitations are addressed later, in Part III. At this point it is enough to observe that courts have applied an excessive fines analysis to forfeitures that are based on RICO convictions. See, e.g., Rudaj, 2006 WL 1876664 at *8 (under gross disproportionality test of United States v. Bajakajian, 524 U.S. 321, 332 (1998), the forfeiture sought by the government, consisting of over five million dollars and three properties, was not grossly disproportionate to the gravity of the defendants' offense). Although the “shall” language in the RICO forfeiture statute suggests that forfeitures which meet the statutory requirements are mandatory, this language does not trump eighth amendment limits. See, United States v. Corrado, 227 F.3d 543 at 552 (noting mandatory “shall forfeit” language in RICO forfeiture statute, but stating that although the statute appears to require total forfeiture of illegal proceeds, courts can reduce the forfeiture to make it proportional to the seriousness of the offense so as not to violate the eighth amendment prohibition against excessive fines).

         The government need not provide a precise calculation of the proceeds from a RICO enterprise; however, estimates must be conservative, and overly speculative evidence about what constitute proceeds will not support a RICO forfeiture.

[B]ecause it is intended to be a potent means of punishment, the Government need not provide a precise calculation of the proceeds. See United States v. Lizza Industries, Inc., 775 F.2d 492, 498 (2d Cir. 1985) (“RICO does not require the prosecution to prove or the trial court to resolve complex computations, so as to ensure that a convicted racketeer is not deprived of a single farthing more than his criminal acts produced.”). A total amount derived from “conservatively estimating” the revenue regularly collected or received will suffice where the evidence establishes the approximate amounts. Corrado, 227 F.3d at 555. But evidence regarding proceeds that is overly speculative will be insufficient to support a forfeiture award. Id. at 557-58.

Rudaj, 2006 WL 1876664 at *3.

         Rudaj strikes the right balance. The court's reckoning should be conservative in the sense that the evidence should be assessed with some semblance of intellectual rigor, lest loose talk, even under oath (of which there has been no shortage in this case), be allowed to render a defendant a pauper for life. But to-the-penny precision - within the general confines of a result produced by a reasonably rigorous analysis of the evidence - is another issue altogether. That degree of precision is rarely possible and, if required, would hollow out much of the forfeiture legislation.

         D. Forfeitures Based on Convictions for Operation of Illegal Gambling Business

         As the statutory authority for forfeitures based on operation of an illegal gambling business in violation of 18 U.S.C. §1955, the government relies on 18 U.S.C. §1955(d). Doc. no. 1999, p. 12. Section 1955(d) provides that: “Any property, including money, used in violation of the provisions of this section may be seized and forfeited to the United States.”

         In addition, although not mentioned in the government's Forfeiture Brief as required by the court, the government's proposed findings and conclusions relating to forfeitures based on operation of an illegal gambling business (doc. no. 2242, ¶205 at p. 51, ¶249 at p. 60), rely on 18 U.S.C. § 981(a)(1)(C).[17] That statute provides that the following property is subject to forfeiture to the United States:

Any property, real or personal, which constitutes or is derived from proceeds traceable to a violation of . . . any offense constituting “specified unlawful activity” (as defined in section 1956(c)(7) of this title), or a conspiracy to commit such offense.

         Continuing the chain of cross references, § 1956(c)(7) incorporates offenses listed in § 1961(1) (RICO) and § 1961(1) includes, among other things, violations of § 1955 (illegal gambling business).

         Proceeds which the government seeks to forfeit based on illegal gambling convictions means gross receipts, not net profits. See, e.g., 18 U.S.C. §981(a)(2)(A) (“For purposes of paragraph (1) [§ 981(a)(1)] . . . [i]n cases involving...illegal services [or] unlawful activities, . . . the term ‘proceeds' means property of any kind obtained directly or indirectly, as the result of the commission of the offense giving rise to forfeiture, and any property traceable thereto, and is not limited to the net gain or profit realized from the offense.”

         The forfeiture defendants argue that, unlike the forfeiture statutes which the government relies on to support forfeiture based on RICO and money laundering conspiracy convictions, 18 U.S.C. § 1955(d) uses the permissive “may” rather than the mandatory “shall, ” so that forfeitures under this statute are not mandatory. For example, Diebner's response brief (doc. no. 2070, p. 10, responding to the government's Forfeiture Brief), cites United States v. Premises Known as 318 South Third Street, 988 F.2d 822, 827 (8th Cir. 1993), for the contention that a forfeiture under § 1955(d) is permissive and allows for judicial discretion. That decision held that under the permissive language of §1955(d), “a court can refuse a forfeiture if it seems to work a disproportionate penalty in light of the peculiar facts of a particular case.” Id. at 828. Thus, arguments regarding the “may” language of §1955(d) are taken into account in Part III, below (discussion of the Excessive Fines Clause, where disproportionality is considered).

         E. Forfeitures Based on Money Laundering Conspiracy Convictions

         As the statutory authority for forfeitures based on conspiring to launder money under 18 U.S.C. §§1956 and 1957 in violation of § 1956(h), the government relies on 18 U.S.C. §982(a)(1). Doc. no. 1999, p. 12. Section 982(a)(1) provides as follows:

The court, in imposing sentence on a person convicted of an offense in violation of section 1956, 1957, or 1960 of this title, shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property.

         As stated in United States v. Bornfield, 145 F.3d 1123 (10th Cir. 1998), cert. denied, 528 U.S. 1139 (2000), a case involving forfeiture of funds in the defendant's bank account following a money laundering conviction, “[t]he key to whether property is forfeitable [under §982(a)(1)] is whether it was ‘involved in' or ‘traceable to' the offense.” Id. at 1135.[18] More about this in Part VI, below.

         The forfeiture defendants argue that when the government, seeking forfeiture, relies on transactions it says constituted laundering of illegal gambling proceeds, the transactions are subject to the same Santos date limitation which applied at trial. The court disagrees.

         Santos, and the legislation passed soon after that decision to address the definition of “proceeds” as used in 18 U.S.C. §§ 1956 and 1957, created issues in the jury trials in this case concerning which transactions the government could use to prove money laundering or money laundering conspiracy. See generally, doc. nos. 921 and 1247 (Memorandum and Order with Respect to Santos Issues). The government did not prove, either in the jury trials or in forfeiture proceedings, any net profits in the sense required for money laundering transactions involving illegal gambling proceeds prior to May 20, 2009 (that date being the effective date of the legislation, 123 Stat. 1617, § 2, enacted to overrule Santos). Accordingly, in each of the four jury trials in this case, the jury was instructed that, for purposes of Count 3 (and with one exception), it could not consider transactions to be money laundering transactions if those transactions occurred before May 20, 2009. The exception was that the date limitation did not apply to transactions shown to be within the scope of §1956(a)(2)(A). (Because that statute does not use the term “proceeds, ” a conspiracy to violate it does not depend on the Santos definition of “proceeds” as net profits. See, e.g., doc. no. 1206, pp. 85-86, jury instructions used in trial of Robles, Tucker and Zapt.)

         In Bader, 678 F.3d 858, the Court of Appeals upheld a $4.8 million proceeds forfeiture following convictions for drug crimes involving human growth hormone. The court rejected defendant's argument that the calculated forfeiture amount was improperly based on aggregated sales rather than on net sales. Id. at 893-94. Although the court deemed the Santos issue waived, it stated that defendant's “reliance on Santos is...misplaced, as his convictions pertain neither to the federal money-laundering statute nor to an illegal gambling operation.” Id. at 894. By contrast, this case involves forfeiture under federal money laundering statutes and the government seeks forfeiture of laundered funds on the basis that they are proceeds of an illegal gambling operation. Therefore, unlike the situation in Bader, Santos remains potentially relevant to the forfeiture issues in this case, but that relevance is probably only theoretical, for this reason: In Santos, the Court was construing the term “proceeds” as found in the relevant money laundering statute, specifically 18 U.S.C. § 1956(a)(1)(a)(i). And, as has been stated, the Court held that “proceeds” meant net profits, not gross receipts, thus causing much confusion in the lower courts, as the Tenth Circuit noted in Bader. Id. at 894. But, in this case, at this juncture, the issue is forfeiture, not criminal liability for money laundering, and the operative words, for the purpose of determining the scope of the forfeiture to which the government is entitled are to be found in the relevant forfeiture statute, specifically 18 U.S.C. § 982(a)(1). Those operative words render forfeitable any property “involved in [the offense of conviction], or any property traceable to such property.” Id. (emphasis added). Money or other property can surely be “involved in” or “traceable to” a money laundering offense without being, in an accounting sense, net profits of a specified unlawful activity. See Cassella, Stefan D., Asset Forfeiture Law in the United States, § 25-4, p. 918 at nn. 63-65 (2d ed. 2013), stating that Santos has no application to civil or criminal forfeiture, presumably meaning that money laundering forfeitures are not limited to net profits. The offense of conviction in Bader was not money laundering and it did not involve gambling. Consequently, the most that can be said about Bader's take on Santos from the perspective of the defendants in this case is that the Tenth Circuit may have assumed - but clearly did not decide - that Santos would apply to money laundering forfeiture in a gambling case. Furthermore, as a practical matter, the impact of Santos and the date limitation that results from Santos and the legislation overruling that case is lessened in this case because the government seeks the same funds under other forfeiture statutes.

         Per the general rule (which this court has held is not applicable to forfeitures of racketeering proceeds) that joint and several liability applies in the context of forfeitures based on conspiracy convictions (limited by foreseeability and the Eighth Amendment), it is only necessary to note here that courts have applied joint and several liability in the context of forfeitures based on money laundering convictions. See, United States v. Seher, 562 F.3d 1344, 1372-73 (11th Cir. 2009) (it was reasonable to hold defendant liable for all proceeds that were a reasonably foreseeable result of the money laundering conspiracy, regardless of whether he still possessed them; citing United States v. Caporale, 806 F.2d 1487, 1506-09 (11th Cir. 1986), which affirmed joint and several liability for RICO conspirators).

         Courts have applied an excessive fines analysis to forfeitures that are based on money laundering conspiracy convictions. See, e.g., United States v. Viloski, 814 F.3d 104 (2d Cir. 2016). Eighth amendment limitations are discussed in the next part of this order. The “shall” language in the statutes which authorize forfeiture based on convictions for conspiring to launder money does not alleviate eighth amendment concerns. See, e.g., United States v. Warshak, 2008 WL 2705044 at **3-5 (S.D. Ohio 2008) (government argued forfeiture of money laundering proceeds was mandatory and not disproportionate, at *3; court found joint and several liability was required where defendants were guilty of conspiracy to launder money, and that money judgment forfeiture did not qualify as excessive given the sophistication of the offenses, the scope and duration of the scheme, and the length of potential prison terms and statutory fines, so that Eighth Amendment was not triggered in that case, at *5).

         F. Forfeiture Based on a Facilitation Theory

         The government seeks forfeiture of Bramley's house on a facilitation theory, arguing that Bramley maintained an office in his residence which he used to conduct illegal gambling activity and to conduct financial transactions involving criminal proceeds. See, Forfeiture Brief, doc. no. 1999-2, p. 6 of 17. The government's brief contends that the Bramley house was used to “carry out his crime, and clearly used to conceal proceeds of his crime and to conduct financial transactions involving the criminal proceeds.” Id.

         At a minimum, [19] a facilitation theory of forfeiture must meet the “substantial connection” test. Cassella, Stefan D., Asset Forfeiture Law in the United States, (2d ed. 2013) § 26-1, p. 938. Courts unanimously hold that “involved in” should be read broadly to include any property used to facilitate the money laundering offense. Id., § 27-7, p. 978. A “facilitating” theory can have a long reach. It is not limited to property that is integral, essential or indispensable to the offense. It can reach property that makes the prohibited conduct less difficult or more or less free from obstruction or hindrance. Id., § 26-3, p. 942. But proving that property made the crime easier to commit or harder to detect is only part of the government's burden, because many things may make a crime easier to commit in some trivial or incidental way, which is not enough. Id., § 26-4, p. 951. To prevail under the facilitation theory, the government must show that the degree to which the property facilitated the crime was substantial. This is known as the “substantial connection test.” Id.[20]

         Thus, to forfeit the Bramley residence on the basis that it was facilitating property with respect to any of the crimes for which Bramley was convicted, there has to be more than an incidental or fortuitous connection between the property and the crime in question; moreover, the connection has to be substantial.

         Obviously, whether the proof supports forfeiture of a residence on a facilitation theory of forfeiture is a case-by-case determination based on the evidence before the court, as a review of some cases will show.

         In United States v. Iacaboni, 221 F.Supp.2d 104, 115 (D. Mass. 2002) (rev'd in part on other grounds, 363 F.3d 1 (1st Cir. 2004), the court stated that evidence showing the defendant used a house to promote his gambling business was sufficient to permit forfeiture under § 1955(d). There was evidence that envelopes with money and documents were dropped off and picked up in the garage of the house; that faxes and phone calls related to the enterprise came to and went from the residence; that football tickets were “corrected” on the premises; and that meetings were held in the house. 221 F.Supp.2d at 115. The court said: “Given these facts, the Government would have a strong case for forfeiture of the house under the statute permitting forfeiture of ‘property . . . used in violation' of the gambling statute, 18 U.S.C. § 1955(d), if this provision had been cited in the formal charge.” Id. The court denied forfeiture of the house, however, because the government had not sought forfeiture under that statute, and had, instead, sought forfeiture under 18 U.S.C. § 982(a)(1), the money laundering forfeiture statute. The court held there was no evidence that the house was involved in money laundering. Iacaboni, 221 F.Supp.2d 104, 115-116.

         In United States v. Nicolo, 597 F.Supp.2d 342 (W.D.N.Y. 2009), the government sought property which it claimed Nicolo used to facilitate the receipt of illegal payments and to conduct financial transactions with the same funds. Id. at 356. The government asserted that the properties helped maintain an overall appearance of a legitimate business to further the illegal money-laundering activity. Id. The government contended that Nicolo generated invoices using the addresses of the properties as the address of his business, that he faxed invoices from those properties, and that checks were sent to those addresses in payment of those invoices. Id.

         The court held that the evidence relied on by the government was more tenuous than the type of evidence which courts have used to find that real property is involved in money laundering, citing a Second Circuit decision in which the evidence showed the defendant had deposited the proceeds of his fraud into the business operating accounts of the companies which he ran at the subject premises, and that the premises “served as a conduit for the proceeds of the illegal transactions.” Id., citing States v. Shlesinger, 261 Fed.Appx. 355, 361 (2d Cir. 2008). In Nicolo, the court held that defendant's acts such as faxing invoices, and use of the properties as a mailing address for his business, were activities which were merely incidental or fortuitous in relation to Nicolo's offenses. Nicolo, 597 F.Supp.2d at 357. The court stated that even if Nicolo physically wrote checks while at the properties to Roeder, his wife and co-defendant, (which the court noted there was no evidence he did), it would not show that the properties themselves had anything more than a fortuitous, transitory and tangential relationship to the money laundering. Id. at 359. That was not enough to justify forfeiting the properties under §982(a)(1). Id.

         The application of these principles to the proposed forfeiture of Bramley's house will be addressed in Part IX(J), below.

         III. The Excessive Fines Clause

         At the outset, it is important to note that, in places, the government's filings (such as in its Forfeiture Brief, [21] and in its proposed findings and conclusions[22]), acknowledge that the Eighth Amendment's prohibition against excessive fines limits these forfeitures.[23]

         In addition, and alternatively, the court concludes that eighth amendment limitations apply for the reasons stated below.

         Criminal forfeitures which proceed against a defendant (as contrasted with civil in rem forfeitures) are designed to punish the offender. United States v. Bajakajian, 524 U.S. 321, 332 (1998). Although the government argued in Bajakajian that the forfeiture of defendant's currency was constitutional because it involved an instrumentality of the crime, the Court rejected that argument, stating that whether defendant's currency was an instrumentality was irrelevant; “the forfeiture is punitive, and the test for the excessiveness of a punitive forfeiture involves solely a proportionality determination.” Id. at 333-34. The Court continued: “The touchstone of the constitutional inquiry under the Excessive Fines Clause is the principle of proportionality: The amount of the forfeiture must bear some relationship to the gravity of the offense it is designed to punish. . . . We now hold that a punitive forfeiture violates the Excessive Fines Clause if it is grossly disproportional to the gravity of a defendant's offense.” Id. at 334.

         Some courts and commentators describe the Tenth Circuit as holding that forfeitures of criminal proceeds are not subject to an excessive fines clause analysis.[24] Based on Bajakajian and the authorities cited below, the undersigned disagrees with those descriptions. A case often cited as indicating the Tenth Circuit does not apply the Excessive Fines Clause to criminal forfeitures is United States v. One Parcel of Real Property Described as Lot 41, Berryhill Farm Estates, 128 F.3d 1386 (10th Cir. 1997), a civil forfeiture case involving drug proceeds. In Berryhill, the government sought forfeiture of, among other things, personal property located in the home of the defendant.[25] According to the government, the defendant's property had been obtained with proceeds traceable to exchanges of controlled substances and was therefore forfeitable under 21 U.S.C. §881(a)(6). Id. at 1389. Berryhill is a pre-Bajakajian decision.[26] Berryhill holds “as a matter of law that forfeiture of drug proceeds pursuant to § 881(a)(6) can never be constitutionally excessive.” Id. at 1395. Berryhill reasons as follows. “Because the amount of proceeds produced by an individual drug trafficker is always roughly equivalent to the costs that drug trafficker has imposed on society, the forfeiture of those proceeds can never be constitutionally excessive.” Id. at 1395-96. “Therefore, the forfeiture is proportionate as a matter of law and [defendant's] Eighth Amendment objection is rejected.” Id. at 1396. Thus, Berryhill simply held, in a pre-Bajakajian context, and in a case in which the government sought personal property obtained by the defendant with drug proceeds, that eighth amendment concerns were satisfied as a matter of law. Berryhill does not preclude an excessive fines clause analysis in these post-Bajakajian proceedings, either by its terms or under its rationale.

         Moreover, civil forfeiture cases decided post-Bajakajian suggest the Tenth Circuit Court of Appeals would recognize that eighth amendment arguments apply.[27]

         The undersigned concludes that the Eighth Amendment applies.

         The next question is: what criteria should this court use to determine whether a particular proposed forfeiture is grossly disproportionate to the gravity of the defendant's offense? Some general observations, as well as some specific criteria set out in Bajakajian, help answer that question.

         First, it is important to note that the test is applied in an individualized manner, because it requires comparing the amount of the forfeiture to the gravity of the defendant's offense. See, Bajakajian, 524 U.S. at 336-37 (“If the amount of the forfeiture is grossly disproportional to the gravity of the defendant's offense, it is unconstitutional.”). Id. at 336-37. Especially in a multi-defendant case like this one, this focus on the particular defendant's offense is of more than passing importance. For example, as the court has previously noted, “the federal criminal offense of conspiracy to launder money does not require much more than bad thoughts.” United States v. Bramley, 2015 WL 12852048, at *8 (W.D. Okla. Sept. 16, 2015). For purposes of evaluating the gravity of criminal conduct, the statutory offense of conviction is the beginning, not the end, of the analysis.

         Second, Bajakajian rejected the government's argument that forfeiture of the entire amount of cash which had not been reported when it was transported out of the country, was a “perfectly calibrated” forfeiture. The Court rejected this “inherent proportionality” argument. Id. at 339. This is relevant to some of the defendants in this case - particularly the runners who transported cash but didn't generate those proceeds and derived no exceptional financial benefit from the betting activity that produced the proceeds for the Legendz enterprise.

         Third, with regard to specific factors weighed by a court, Bajakajian sets out several factors considered in the disproportionality analysis. An important part in the analysis is played by the legislature's enactments regarding the types and limits of punishments, such as potential sentences and fines; the Court also considered whether the defendant falls into the class of persons at which the criminal statute was principally directed; and the Court considered the harm which the defendant caused. Id. at 336-39. In addition, the Court looked at the relationship of defendant's offense to other illegal activity, of which it found there was none in that case. Id.

         Applying these Bajakajian factors in a civil forfeiture case (involving residential property which the government alleged had been used to commit or facilitate drug offenses), the Tenth Circuit explained as follows. “One of the most important [factors from Bajakajian] was Congress's judgment about the appropri- ate punishment for the owner's offense. Maximum statutory fines provide guidance on the legislative view of the seriousness of the offense.” United States v. Wagoner County Real Estate, 278 F.3d 1091, 1100 (10th Cir. 2002). The fines set out in the sentencing guidelines are a way of translating the gravity of a crime into monetary terms. Id. Additional factors for consideration with regard to the gravity of the offense include the extent of the criminal activity, related illegal activities, and the harm caused to other parties. Id., citing Bajakajian. Wagoner County also recognizes that a proportionality analysis is factually intensive, so that a catalog of factors is not necessarily exclusive. Id. at 1101. Thus, in addition to the Bajakajian factors, factors such as “the general use of the forfeited property, any previously imposed federal sanctions, the benefit to the claimant, the value of seized contraband, and the property's connection with the offense, ” are relevant considerations. Id.[28]

         Bearing in mind that, as has been discussed, the proportionality analysis is necessarily undertaken on an individualized basis, it is worth noting that in hierarchical organizations in general (and in large gambling organizations in particular), there will be substantial differences among the defendants in terms of their roles in the criminal activity. Thus, in United States v. Lyons, 870 F.Supp.2d 281, at 292 (D. Mass. 2012), a RICO prosecution involving a large gambling enterprise, Judge Saris expressly recognized the propriety of a Bajakajian-driven proportionality analysis. In affirming the district court opinion (which it described as “detailed, thoughtful, and well-researched, ” United States v. Lyons, 740 F.3d 702, 733 (1st Cir. 2014)), the First Circuit also noted that an individual defendant's role in the organization is relevant to the proportionality analysis. Id.

         A non-exclusive list of factors pertinent to a disproportionality analysis includes the following.

(i) Congress's judgment about the appropriate punishment for the defendant's offense, as reflected in the maximum statutory fine for the counts of conviction and the fines set out in the Sentencing Guidelines;
(ii) whether the defendant falls into the class of persons at which the criminal statute is principally directed;
(iii) the gravity of the defendant's offense and the extent of his criminal activity;
(iv) any related illegal activities;
(v) the harm caused to other parties;
(vi) the general use of the forfeited property;
(vii) any previously imposed federal sanctions;
(viii) the benefit reaped by the defendant as a result of his criminal conduct;
(ix) the value of the property; and
(x) the property's connection to the offense.

         Aside from these considerations, at least two circuits have expressly held that deprivation of a defendant's future ability to earn a living should be consid-ered.[29] See, United States v. Viloski, 814 F.3d 104 (2d Cir. 2016); United States v. Levesque, 546 F.3d 78 (1st Cir. 2008). As noted in Viloski, Bajakajian emphasizes that the Excessive Fines Clause grew out of the English constitutional tradition, including the Magna Carta, which required that a fine “should not deprive a wrongdoer of his livelihood.” Viloski at 111, quoting Bajakajian, 524 U.S. at 335.[30] Viloski reasons that in light of its “strong constitutional pedigree, it seems unlikely that the Bajakajian Court meant to preclude courts from considering whether a forfeiture would deprive an offender of his livelihood.” Viloski at 111. Levesque also cites passages from Bajakajian, and concludes that the notion that a forfeiture should not be so great as to deprive a wrongdoer of his livelihood is “deeply rooted” in the history of the Eighth Amendment. Levesque, 546 F.3d 78, 83-84. For example, Levesque states that “a court should consider a defendant's argument that a forfeiture is excessive under the Eighth Amendment when it effectively would deprive the defendant of his or her livelihood. Such ruinous monetary punishments are exactly the sort that motivated the 1689 [English] Bill of Rights and, consequently, the Excessive Fines Clause.” Id. at 84-85.

         Viloski and Levesque part ways, however, when it comes to exactly how concerns over a defendant's ability to provide a future livelihood should be folded into the eighth amendment mix. Viloski holds that deprivation of the future ability to earn a living is “a component of the proportionality analysis, not a separate inquiry.” Viloski, 814 F.3d at 111-12. Thus, for the Second Circuit, a forfeiture which destroys a defendant's livelihood may nevertheless be constitutional, depending on defendant's culpability and other circumstances. Id. at 112. Under Viloski, the impact of a money judgment on a defendant's future ability to earn a living is not a free-standing cap on the government's ability to obtain forfeiture, rather, it is one consideration in the disproportionality assessment. Levesque, on the other hand, regards deprivation of future livelihood as a question which is “beyond, ” and “is separate from, ” the multi-part “test for gross disproportionality. . . .” Id. 83-85. Levesque concludes by stating that “it is not inconceivable that a forfeiture could be so onerous as to deprive a defendant of his or her future ability to earn a living, thus implicating the historical concerns underlying the Excessive Fines Clause.” Id. at 85. Thus, Levesque conceives of the deprivation of livelihood inquiry as a cap which stands apart from the various factors looked at under the gross disproportionality analysis.

         Both Viloski and Levesque give a reasonable reading to Bajakajian and the history of the Excessive Fines Clause, saying that deprivation of future livelihood plays a role under the Eighth Amendment. The court adopts the Levesque approach, because the treatment of the livelihood criterion as a free-standing reference point is more consonant with the holding, reasoning, and historical antecedents articulated by the Court in Bajakajian. The Court's historical discussion in Bajakajian is illuminating:

[T]he [Excessive Fines] Clause was taken verbatim from the English Bill of Rights of 1689. That document's prohibition against excessive fines was a reaction to the abuses of the King's judges during the reigns of the Stuarts, but the fines that those judges imposed were described contemporaneously only in the most general terms. See Earl of Devonshire's Case, 11 State Tr. 1367, 1372 (H.L.1689) (fine of £30, 000 excessive and exorbitant, against Magna Charta, the common right of the subject, and the law of the land). Similarly, Magna Charta - which the Stuart judges were accused of subverting - required only that amercements (the medieval predecessors of fines) should be proportioned to the offense and that they should not deprive a wrongdoer of his livelihood:
‘A Free-man shall not be amerced for a small fault, but after the manner of the fault; and for a great fault after the greatness thereof, saving to him his contenement; (2) and a Merchant likewise, saving to him his merchandise; (3) and any other's villain than ours shall be likewise amerced, saving his wainage.' Magna Charta, 9 Hen. III, ch. 14 (1225), 1 Stat. at Large 6-7 (1762 ed.).

Bajakajian, 524 U.S. 321, 335 - 36.

         The Court's very evident concern about deprivation of livelihood, and the Magna Carta's concern about the same thing - “wainage” being tools and implements of husbandry used to earn a livelihood - strongly suggest that the livelihood criterion is not to be folded into the mix of other excessive fines criteria, to make a difference, or not, depending on how the other criteria shake out.

         Although the court, for the reasons stated, adopts the Levesque approach to the livelihood issue, the results stated in this order would be the same whether determined under the Levesque or the Viloski approach. Pursuant to Levesque, the fact-findings portion of this order applies two separate screens (not to be confused with the initial screen for foreseeability) to determine how the Eighth Amendment impacts a particular forfeiture sought by the government. First, the court will screen out (disallow) a requested forfeiture to the extent that the forfeiture would be grossly disproportionate to the gravity of the defendant's offense as determined under the list of factors described above. Second, the court will screen out (disallow) a requested forfeiture to the extent that the forfeiture would be so onerous as to be potentially ruinous to the defendant's ability to earn a living.

         Finally in this regard, the court emphasizes that a defendant's present inability to satisfy a forfeiture, in and of itself, is not at all sufficient to render a forfeiture unconstitutional, and is also not the correct inquiry. Levesque, 546 F.3d at 85. This is so because the court cannot consider, as a discrete factor, a defendant's personal circumstances, such as his age, health or present financial condition. Viloski, 814 F.3d at 112. Of course, it is possible a defendant's health or financial condition might bear on his ability to earn a future living and thus be indirectly relevant. Id. at 113. But that is a different thing from considering a defendant's present financial circumstances as a discrete factor, which is not permitted. Id. at 113, 115-16.[31] Thus, looking at the day of sentencing as Day 1 of the rest of the defendant's financial life, forfeiture may render the defendant a pauper on Day 1. But as for Day 2 and thereafter, the court clearly has the authority to consider the impact of the forfeiture sought by the government on the defendant's ability to make a living.

         Measured by the joint and several $231, 432, 686.73 forfeiture money judgment it seeks, the government's objective, if realized, would sentence the forfeiture defendants life terms of impoverishment or living off the books, or both. The text, the historical antecedents, and the judicial treatment of the Excessive Fines Clause, as expounded in Bajakajian and other relevant precedents, tell us that the statutory forfeiture tools wielded by the government in this case, powerful though they are, do not trump the limitations imposed by the Eighth Amendment.

         To summarize, the Eighth Amendment's Excessive Fines Clause requires the court to consider, first, the Bajakajian factors (supplemented by other factors which may be relevant) to determine whether the forfeiture in question is grossly disproportionate to the defendant's offense. Second, the court considers whether the forfeiture in question would be so ruinous to the defendant's future ability to provide a livelihood as to be unconstitutional for that reason. Accordingly, the forfeitures the government seeks will be tested for foreseeability, disproportionality, and deprivation of the ability to earn a livelihood.

         IV. Burden of Proof

         A. The Government's Burden

         The government has the ultimate burden of establishing the forfeitures by a preponderance of the evidence. United States v. Smith, 770 F.3d 628, 637 (7th Cir. 2014). Thus, the burden is on the government to prove, by a preponderance of the evidence, the requisite nexus between the property sought to be forfeited and the underlying crime of conviction. United States v. Susaeta, 2009 WL 928657, *2 (D. Utah 2009) (“The government's burden at a forfeiture hearing is to prove, by a preponderance of the evidence, the nexus between the property and the offense.”); Rule 32.2(b)(1)(A) (“the court must determine whether the government has established the requisite nexus between the property and the offense).

         The preponderance of the evidence standard also applies to the government's burden to establish the amount of the criminal forfeiture money judgment. United States v. Executive Recycling, Inc., 953 F.Supp.2d 1138, 1158 (D. Colo. 2013), citing Bader, 678 F.3d 858, 893, for the proposition that a forfeiture money judgment must be supported by a preponderance of the evidence.

         “[O]nce the defendant has contended, with some evidentiary support, that at least some of the value in a given asset came from lawful, non-forfeitable sources, then the prosecutor must demonstrate how much is forfeitable.” United States v. Genova, 333 F.3d 750, 762 (7th Cir. 2003). And see, Bornfield, 145 F.3d 1123, 1135 (involving money-laundering-based forfeitures; “forfeiture of legitimate and illegitimate funds commingled in an account is proper as long as the government demonstrates that the defendant pooled the funds to facilitate, i.e., disguise the nature and source of, his scheme, ”); Rudaj, 2006 WL 1876664 at *4 (noting “universal agreement that at least the portion of property that derives from proceeds of illegal activity is subject to forfeiture”).

         Defendants object to the preponderance of the evidence standard when applied to forfeitures based on RICO convictions, citing the Third Circuit's rule that the government must establish entitlement to RICO forfeitures beyond a reasonable doubt. See, United States v. Pelullo, 14 F.3d 881, 906 (3d Cir. 1994). Most courts addressing the issue have held otherwise, relying primarily on statements in Libretti v. United States, 516 U.S. 29 (1995), to the effect that forfeitures based on RICO convictions are a part of sentencing. See, e.g., United States v. Fruchter, 411 F.3d 377, 383 (2d Cir. 2005) (“Libretti remains the determinative decision. Accordingly, the district court did not err when it applied a preponderance standard to the determination of Braun's forfeiture, ” in determining criminal forfeiture based on RICO conviction); United States v. DeFries, 129 F.3d 1293, 1312 (D.C. Cir. 1997) (government must prove forfeiture allegations under 18 U.S.C. § 1963(a) by a preponderance of the evidence, citing Libretti for the proposition that criminal forfeiture is an aspect of sentencing). This court concludes that the preponderance of the evidence standard is correct. That makes a difference in this case. Much of the forfeiture relief granted in this order would be unavailable if the government's forfeiture case were measured by any standard more demanding than the preponderance standard.

         The government also has the burden of proof on the issue of foreseeability as a prerequisite to joint and several liability for money laundering forfeiture. Because United States v. Lyons, 870 F.Supp.2d 281, at 292 (D. Mass. 2012), was a gambling case, Judge Saris's treatment of the foreseeability issue in that case is illuminating.

         In Lyons, as in the case at bar, the sports betting operation was geographically far-flung. The betting operation (“Sports Offshore, ” a/k/a SOS) was based in Antigua. It operated “in Massachusetts, Florida, South Carolina and other parts of the United States from 1996 through 2010.” Id. at 284. As a result, some of the defendants didn't know much about what the others were doing. Thus:

[T]he government did not introduce evidence that Thomas informed Lyons that SOS was operating in Florida and did not meet its burden to prove . . . that the proceeds SOS generated in Florida were reasonably foreseeable to Lyons. Accordingly, the checks totaling $416, 770 in SOS gambling proceeds that Eremian deposited into his personal bank account were not reasonably foreseeable to Lyons.

Id. at 289 (emphasis added).

         The quoted passage goes to the question of what the government has the burden of proving was foreseeable. The answer, per Judge Saris, is that the government must prove that the generation of proceeds, arguably in a given locale, by a given individual was reasonably foreseeable to a defendant who would be, for forfeiture purposes, chargeable with those proceeds. This court agrees. The next question is: How does this work in a multi-defendant gambling case with defendants operating in various places, with varying roles and varying levels of involvement. In Lyons, that issue was parsed as follows:

In the circumstances of this case, the government has proven that proceeds generated by SOS agents and bettors known to a defendant were reasonably foreseeable to that specific defendant. On the other hand, I find that the government has not met its burden with respect to agents not known to the defendants, even though the existence of such agents would be conceivable.

Id. at 292 (emphasis added).

         The court agrees with this approach as far as it goes. If a given agent, say, Campbell, was at least generally known to one of these forfeiture defendants as an active Legendz agent, then it is highly likely that the betting proceeds generated by that agent (i.e., money “involved in” the offense of conviction for purposes of Count 3 - see, 18 U.S.C. §982(a)(1) and discussion in Part II(E), above) were reasonably foreseeable to that defendant. This court does not exclude the possibility, however, that there are situations in which illegal betting proceeds generated by a particular agent may have been reasonably foreseeable to a particular forfeiture defendant even if that defendant was not specifically aware of that agent or of the details of his activities. This is, of necessity, a fact-bound determination.[32] Finally, on this topic, it should be noted that the court's assignment of the burden of proof on foreseeability to the government, as the plaintiff, for forfeiture purposes, is consistent with judicial treatment of that issue in other contexts.[33]

         B. The Defendants' Burden

         The defendants other than King assert that the forfeiture relief available to the government is limited by the Excessive Fines Clause, as is discussed in Part III, above. If facts relevant to the application of the Excessive Fines Clause are actually in controversy, the burden of going forward with the evidence - sometimes called the burden of production - rests with the defendant, as the proponent of the limitation.[34] But on these issues, it should be borne in mind that, in terms of proof of facts, the burden of going forward with the evidence comes into play and potentially makes a difference only where there actually is a fact issue. Thus, for instance, where the evidence or other reliable information shows without contradiction that it would not take much of a forfeiture judgment to destroy a defendant's future ability to earn a livelihood, the burden of going forward (in default of which the defendant loses on that issue) is wholly academic - it does not come into play as a tie breaker because there is no tie to break. That said (and regardless of whether burden of going forward makes a difference as to factual matters), the ultimate burden of persuasion as to eighth amendment limitations remains with the defendants. This is so both as to the application of the Bajakajian factors (supplemented by other factors which may be relevant) and as to the livelihood issue. On the livelihood issue, the ultimate burden rests with the defendant to persuade the court that it should apply a limitation on forfeiture due to deprivation of future ability to earn or provide a livelihood. See, Viloski, 814 F.3d 104, 115; and see, Fogg, 666 F.3d 13, 18-19 (district court incorrectly put the burden on the government to prove that the defendant could pay, overlooking the fact that defendant had made no eighth amendment argument).[35]

         V. The Exclusionary Rule

         During King's trial, the court excluded documents which Karlo Stewart surreptitiously took, with the encouragement of the government, from the offices of Data Support Services. (For present purposes, DSS may be considered to have been the equivalent of Legendz.) As noted in Part I(C), above, those documents were obtained in violation of King's fourth amendment rights. United States v. King, 2015 WL 12852051 (W.D. Okla. Jan. 21, 2015). King argues that that ruling means the Stewart documents are also excluded from consideration in these criminal forfeiture proceedings against him. (Some of the other forfeiture defendants make similar arguments, even if not explicitly premised on the exclusionary rule. For example, Koralewski's proposed findings concern the fact that the government's “agent list” was excluded in his trial; he argues it lacks reliability. Doc. no. 2273, pp. 1-2.) King's argument has much appeal. The government seeks to render him a pauper based, to significant degree, on documents that are in the possession of the government only because of a search that clearly violated King's fourth amendment rights. But the court concludes, reluctantly, that King's reliance on the exclusionary rule is, under authority by which this court is bound, misplaced.

         Criminal forfeiture is a component of the sentence imposed following a defendant's conviction. Libretti, 516 U.S. 29, 38-39. And see, United States v. Sanders, 743 F.3d 471, 472-73, 475 (7th Cir. 2014) (Easterbrook, J., characterizing 18 U.S.C. § 3661 as a statute “which provides that all evidence is admissible at sentencing”; rejecting a proposed exception in that case for egregious violations of the Fourth Amendment). And the Tenth Circuit has held that it was not error for a court, at sentencing, to consider evidence obtained during an illegal search, so long as there was no evidence that the officers' unconstitutional actions were taken with the intent to secure an increased sentence (or, presumably, an increased forfeiture as a part of sentencing). United States v. Ryan, 236 F.3d 1268, 1272-73 (10th Cir. 2001). (King has not argued, nor is there evidence to show, that in obtaining the Stewart documents law enforcement sought to secure an increased sentence or an increased forfeiture amount. Accordingly, that possible exception to the general rule need not be further considered.)

         Citing One 1958 Plymouth Sedan v. Commonwealth of Pennsylvania, 380 U.S. 693, 700-02 (1965), King contends that the primary rationale for applying the exclusionary rule in civil forfeiture proceedings is that such proceedings are quasi-criminal, and he therefore argues that the rule, perforce, must apply in proceedings which are actually criminal in nature as opposed to quasi-criminal.[36]There are differences, however, between civil and criminal forfeiture proceedings which, in addition to the fact that criminal forfeiture occurs as a part of sentencing, may help explain the different treatment afforded to the exclusionary rule in these two contexts. Criminal forfeiture proceedings may only ensue after the evidence, filtered through all rules and protections which apply in a criminal trial, has been found sufficient to convict a defendant beyond a reasonable doubt. Civil forfeitures, on the other hand, do not have an equivalent preliminary stage for testing the prosecution's evidence; in civil forfeiture, forfeitability is determined by a preponderance of the evidence and neither the property owner, nor anyone else for that matter, need be convicted of the crime giving rise to the forfeiture.

         Furthermore, the exclusionary rule is a prudential doctrine. Davis v. United States, 564 U.S. 229, 236 (2011), citations and quotations omitted. Exclusion is not a personal constitutional right, nor is it designed to redress the injury occasioned by an unconstitutional search. Id. The rule's sole purpose is to deter fourth amendment violations. Id. at 236-37. Its operation is limited to situations in which this purpose is efficaciously served. Id. at 237. Where suppression fails to yield appreciable deterrence, exclusion is clearly unwarranted. Id. The Tenth Circuit recognizes that applying the exclusionary rule at the sentencing stage of a criminal trial would, in the ordinary case, have a minimal deterrent effect on law enforcement's conduct. Ryan, 236 F.3d 1268, 1271. There is nothing about the facts of this case which would take it out of this general rule, debatable though that general rule may be.

         Thus, despite the inadmissibility of the Stewart documents during King's trial, the documents are not excluded in these criminal forfeiture proceedings against King. This ruling makes the Stewart documents admissible. It does not suggest what weight, if any, the court will ultimately give the documents, but the court will note, first, that significant segments of the government's forfeiture case are rooted in data extracted from the spreadsheets taken by Karlo Stewart at the instance of the government, in violation of King's fourth amendment rights (see, e.g., Tr. 720 - 21), and secondly, that, throughout the forfeiture trial, King was careful to preserve his objection to the use of the documents that were taken in violation of his fourth amendment rights. E.g., Tr. 70, 71, 437, 440. The court excused King's counsel from having to reassert that objection throughout the forfeiture trial. Tr. 440.

         VI. Tracing, Tainting, Commingling and Extrapolation

         The jury's guilty verdict may turn a prince into a frog, but the frog, even though possibly headed for prison, doesn't forfeit anything until the government proves a forfeiture case. And because of the natural import of the statutory language defining a defendant's liability to forfeiture, that forfeiture case may present issues and problems of proof - for both sides - that differ markedly from the issues and problems of proof that arose in the underlying trial of the issue of guilt or innocence. For that reason, the discussion returns to the relevant statutory language. The forfeiture statutes that are relevant in this case use various words to express the concept that there must be some connection between the offense that triggers forfeiture and the assets sought to be forfeited - what Rule 32.2 refers to generically as the “nexus.” Those statutory provisions are discussed in detail in Part II, above, but brief repetition is necessary here.

         For present purposes:[37]

On Count 1, forfeiture reaches property “constituting” or “derived from” any “proceeds” which the defendant “obtained, directly or indirectly, from racketeering activity.”[38]
On Count 2, forfeiture reaches property that was “used in violation of” §1955 or that “constitutes” or is “derived from” proceeds “traceable” to a violation of §1955.[39]
On Count 3, forfeiture reaches property “involved in” the offense of conviction, or property “traceable to” such property.[40]

         As will be seen, the judicial decisions do pay attention to these words defining the connection the government must prove.

         A. Tracing, Tainting and Commingling

         Given the nature of most of the criminal activity (especially including organized criminal activity, as in the case at bar) the federal courts see, the property that is ultimately found and forfeited is often not the property that was used to commit the offense (the “corpus”) or that was directly generated by the offense. Concealment and the mere passage of time see to that. Consequently, the forfeiture statutes, or at least those that are relevant here, permit the government to cast a wide net. It falls to the courts, addressing concrete cases, to determine the reach of the statutory language in those concrete cases. The Tenth Circuit and the other Courts of Appeals have provided much valuable guidance.

         The Tenth Circuit's 1998 decision in Bornfield, 145 F.3d 1123, already discussed in this order in other contexts - a decision that was bracketed in point of time by two equally illuminating Third Circuit decisions, United States v. Voigt, 89 F.3d 1050 (3rd Cir. 1996), cert. denied, 519 U.S. 1047 (1996) and United States v. Stewart, 185 F.3d 112 (3rd Cir. 1999), cert. denied, 528 U.S. 1063 (1999) - provides a good starting point.

         Bornfield was a money laundering case. Accordingly, as the Court of Appeals recognized, the key to the determination of forfeitability was the question of whether the property in question was “involved in” or “traceable to” the offense. Id. at 1135. The case involved two bank accounts, one of which (a personal account) had been a conduit for tainted money and one of which (a business account) had not. But, as the court described it, there was “mass confusion between [the] two accounts.” Id. at 1137. On appeal (and apparently in the district court), reliable differentiation between the two accounts was made impossible because the jury instructions at the forfeiture stage associated the personal account (through which tainted funds had passed) with the name of the business. Id. Consequently, the court noted that “we cannot tell with certainty the proper identifications of the accounts.” Id. Moreover, at the time of the indictment, the tainted funds were no longer in his personal account, with the result that “any money contained in the personal account would be subject to forfeiture solely under a facilitation theory.” Id. at 1138. After the forfeiture jury trial, the district court apparently attempted to scab over these problems by ordering “forfeiture based on the substitute assets provision of the same asset alleged to be forfeitable.” Id. at 1139.

         In reversing the forfeiture order, the court noted, as an initial matter, that, although, in the indictment, the government sought forfeiture of a specific account, “the account itself is not ‘property' subject to forfeiture, but merely a container to hold the ‘property' or money subject to forfeiture. In other words, the account number is merely used for identification purposes and is not itself a forfeitable item.” Id. at 1137 n. 7 (citing Judge Easterbrook's opinion for the Seventh Circuit in United States v. $448, 342.85, 969 F.2d 474, 476 (7th Cir. 1992)).[41] Thus, the court's analysis centered on “the funds in Bornfield's personal account” (id. at 1138), and not on the account itself as forfeitable property.

         Addressing the fact that the tainted funds were no longer in the account at the time of the indictment, the court concluded that the only remaining basis for forfeiture would be a facilitation theory, rendering forfeitable “all of the money contained in the account at the time of the offense, ” id. (emphasis added), but - because of the conceptual basis for the facilitation theory - not limited to the amount of the corpus (the corpus being the laundered finds that had passed through the account). Id. at 1138. It was “clear error” to measure the forfeiture by the amount of the corpus because “the corpus was no longer in the account.” Id. And as for facilitation - reaching tainted and untainted funds commingled in an account - the government was obliged to “demonstrate[] that the defendant pooled the funds to facilitate, i.e., disguise the nature and source of, his scheme.” Id. at 1135. Citing, among other cases, the Third Circuit's decision in Voigt, the Court of Appeals also explained that the “traceable to” prong of §982(a)(1) reaches “property where the acquisition is attributable to the money laundering scheme rather than money obtained from untainted sources.” Id. at 1135.

         The district court's resort to a substitute assets theory did not save the forfeiture order in Bornfield:

An asset cannot logically be both forfeitable and a substitute asset. To allow such an anomaly would render the substitute assets provision meaningless. Assets involved in or traceable to the offense are forfeitable once the requisite nexus is established. See 18 U.S.C. § 982(a). The substitute assets provision allows the forfeiture of other assets not already forfeitable when the forfeitable asset is unavailable due to some act or omission of the defendant. [Citations omitted.] Here, the district court ordered forfeiture based on the substitute assets provision of the same asset alleged to be forfeitable. However, the court could not logically order the forfeiture of § 982(a)(1) forfeitable assets pursuant to § 982(b) and §853(p), the substitute assets provisions.

Bornfield, at 1139.

         Accordingly, Bornfield establishes that:

• Accounts, as such, are not forfeitable, even on a facilitation theory. What the government must go after is property - money or other property, but not an account as such - that is either (i) the corpus of the offense or (ii) acquired with tainted funds, or (iii) used to facilitate the offense.
• The “mere pooling or commingling of tainted and untainted funds in an account does not, without more, render the entire contents of the account subject to forfeiture.” Id. at 1135. (Or, as the court stated in United States v. $448, 342.85: “Once we distinguish the money from its container, it also fol-lows that the presence of one illegal dollar in an account does not taint the rest - as if the dollar obtained from fraud were like a drop of ink falling into a glass of water.” 969 F.2d at 476.)[42]
• Because of the fungible nature of money, if “the corpus of the money laundering offense” is not shown to have been in the account “at the time of the indictment, ” the money in the account is forfeitable, if at all, only on a facilitation theory. Id. at 1138.
• If the government satisfies the prerequisites of the facilitation theory, forfeiture “of legitimate and illegitimate funds commingled in an account is proper, ” and not limited by the amount of the corpus. Id. at 1135.
• But the money that is forfeitable on a facilitation theory is limited to “what was in the account at the time of the offense.” Id. at 1138 n. 11.
• The substitute asset legislation permits forfeiture of assets not already forfeitable when the defendant has put the forfeitable asset beyond reach.

         In Bornfield, the Tenth Circuit's focus was on fungible property - money - in bank accounts. The Third Circuit's decision in Voigt, cited with approval in Bornfield, dealt with tangible property (jewelry) purchased with funds in an account that had served as a conduit for criminally laundered funds. After the tainted funds were deposited, there were “numerous intervening deposits and withdrawals.” Voigt, 89 F.3d at 1082. The question was whether “the money used to purchase the jewelry in question was ‘traceable to' money laundering proceeds.” Id. at 1084. Because of the commingling problem, the government sought to reach the jewelry via the substitute assets provision, § 982(b), that was added to § 982 in 1988. Id. at 1085.[43] The Third Circuit rejected this argument, as did the Tenth Circuit two years later in Bornfield, but the Third Circuit's follow-on reasoning is instructive because of the government's arguments, in that case, relating to the tangible property. The Third Circuit started out with the basics:

We hold that the term “traceable to” means exactly what it says. [footnote omitted] In light of our holding on the burden of proof, this means that the government must prove by a preponderance of the evidence that the property it seeks under § 982(a)(1) in satisfaction of the amount of criminal forfeiture to which it is entitled has some nexus to the property “involved in” the money laundering offense.
. . . .
Where the property involved in a money laundering transaction is commingled in an account with untainted property, however, the government's burden of showing that money in the account or an item purchased with cash withdrawn therefrom is “traceable to” money laundering activity will be difficult, if not impossible, to satisfy.

Id. at 1087.

         Because the jewelry had been “purchased with funds from an account into which money laundering proceeds had been commingled with other funds, and after numerous intervening deposits and withdrawals, ” the court concluded that the jewelry could not be found to be “traceable to” money laundering activity. Id. at 1088. This reasoning would apply a fortiori where the government's evidence does not show the immediate source of the funds used to purchase a tangible asset.

         As has been seen, in 1992, the Seventh Circuit opined that “the presence of one illegal dollar in an account does not taint the rest.” United States v. $448, 342.85, 969 F.2d 474, 477 (7th Cir. 1992). In an opinion that limited an expansive reading of its decision in Voigt, the Third Circuit held that the converse is also true: The commingling of a smidgeon of clean money with a heap of dirty money will not stand in the way of forfeiture of the dirty money. In United States v. Stewart, 185 F.3d 112 (3rd Cir. 1999), cert. denied, 528 U.S. 1063 (1999), the Third Circuit distinguished Voigt and granted forfeiture of $2.6 million that remained in an account into which the defendant had deposited $160, 000 of untainted money and $3 million of tainted money. Id. at 129-30. There had not been numerous deposits and withdrawals, and the account was frozen “almost immediately” after the $3 million in dirty money was deposited. Id. (One $600, 000 withdrawal had been made by agreement, deemed to have included the untainted funds. Id. At 130.)

         The question before the court in Stewart was “whether the government may forfeit directly tainted funds from an account that has been frozen from the time of the illegal transfer but that also contains untainted money.” Id. Pointing out that Voigt was not a case in which “one readily could separate out the amount subject to forfeiture, ” id. (citation omitted), the court noted that: “Here, the government clearly traced laundered funds forfeited by the jury to Stewart's account. Stewart does not contest this tracing, which in any event the government clearly established.” Id. at 129 - 30. Thus, Voigt's treatment of commingling did not dictate the result in Stewart because, as the Seventh Circuit has noted (discussing Voigt and Stewart in tandem), Voigt was “a very simple case involving few individual deposits.” Rothstein, Rosenfeldt, Adler, P.A. v. Rothstein, 717 F.3d 1205, 1213 (7th Cir. 2013). In Rothstein, the commingling occurred over a long period of time and involved numerous transactions. Consequently, the Seventh Circuit concluded that: “The sheer volume of financial information available and required to separate tainted from untainted monies in this case leads us to the conclusion that it is far more appropriate to apply the Third Circuit's rule in Voigt than the exception to that rule it lays out in Stewart.” Rothstein, 717 F.3d at 1213.[44]

         As for hard assets, if a hard asset was acquired (or the mortgage on it serviced) partly with untainted funds, the record must “establish how much of the value came from [untainted sources] and how much from [tainted sources].” United States v. Genova, 333 F.3d 750, 762 (7th Cir. 2003). Cf., United States v. One 1980 Rolls Royce, 905 F.2d 89, 90 (5th Cir. 1990) (rejecting government's contention that if one dollar of drug money was used to purchase an asset, the entire asset is forfeitable). And, as has been noted (in Part IV(A), above), once the defendant has contended, with some evidentiary support, that at least some of the value in a given asset did come from lawful, non-forfeitable sources, the burden of showing how much is forfeitable rests with the government. This evidentiary burden, resting on the government, is especially significant where, from the nature of the case, the government's forfeiture case encompasses both (i) funds (or a judgment representing those funds) forfeitable because they are tainted and (ii) assets acquired at least in part with those funds: “[T]he value may be forfeited once, as cash or as an interest in the property, but not twice.” Genova, id.

         The short of the matter is that commingling will not stand in the way of forfeiture if the account in question was used exclusively, or nearly so, for illicit purposes (or, by the same token, if the hard asset in question was acquired or financed exclusively, or nearly so, with illicit money). But if the commingling problem is not cured by proof of facilitation, significant commingling can present a significant obstacle to forfeiture.

         The case at bar presents a tangle of issues as to tracing, [45] commingling and related matters. The application of Bornfield, [46] Voigt and Stewart (and cases of similar import, like Genova and Rothstein) to the government's forfeiture claims that are now before the court is discussed below.

         B. Extrapolation

         As has been discussed and will be further discussed in Part VII, below, the government is entitled to seek forfeiture by way of money judgments against the defendants. Forfeiture will not be limited to identifiable assets. But the need to determine, on a reasoned basis, the amount of a forfeiture money judgment raises the issue of extrapolation. Or, more precisely, the limits of extrapolation.

         Extrapolation is necessary, and permitted by forfeiture law, in the absence of records that would directly provide, for the relevant time periods, the information necessary to enable the court to do the arithmetic. The law of extrapolation (to the extent that law, as opposed to the routine task of looking for plausible factual inferences, has any bearing on it) is that if the government proposes an extrapolation for the purpose of arriving at the amount of a forfeiture money judgment, that proposed extrapolation must be supported by evidence - measured by the preponderance standard - that provides a beginning point reliable enough to lead to the proposed end point (the amount to be included in the judgment) without unacceptable speculation and conjecture.

         On one hand, it is quite obvious that “[t]he calculation of forfeiture amounts is not an exact science. The court need not establish the loss with precision but rather need only make a reasonable estimate of the loss, given the available information. A court is permitted to use general points of reference as a starting point for calculating the losses or gains from fraudulent transactions and may make reasonable extrapolations from the evidence established by a preponderance of the evidence at the sentencing proceeding.” United States v. Treacy, 639 F.3d 32, 48 (2d Cir.2011) (internal citations omitted). On the other hand, if there are simply not enough reliable reference points (or if those reference points, though intrinsically reliable, are only marginally probative for other reasons, such as timing), the proposed extrapolation will cross the line into the realm of impermissible speculation and guesswork. See, e.g., Corrado, 227 F.3d 543, 557-58 (6th Cir. 2000) (thirty years of weekly draws of illegal gambling proceeds too speculative); Lyons, 870 F.Supp.2d 281, 287 (D. Mass. 2012) (rejecting government's efforts to forfeit cash gaming proceeds which it argued represented an “extrapolation estimate” for the years in question; four-year time period over which the government sought to extrapolate was not similar to the original eight-year time period for various reasons, including law enforcement's disruption of operations, and changed economic conditions such as the financial crisis in 2008)[47]; and United States v. Basciano, 2007 WL 29439, at *2 (E.D.N.Y. Jan. 4, 2007) (total amount of forfeited assets may be determined by “conservatively estimating” the revenue regularly collected or received, but evidence of such revenue may not be overly speculative).

         VII. Notice of the Government's Intent to Seek Money Judgment

         Defendants argue that lack of notice, or lack of adequate or timely notice, precludes or estops the forfeitures which the government seeks in these proceedings. The court disagrees.

         Rule 32.2(a) provides that “A court must not enter a judgment of forfeiture in a criminal proceeding unless the indictment or information contains notice to the defendant that the government will seek the forfeiture of property as a part of any sentence in accordance with the applicable statute.” The rule further provides that “The indictment or information need not identify the property subject to forfeiture or specify the amount of any forfeiture money judgment that the government seeks.” Id.

         The Advisory Committee Notes to the 2009 Amendments, Subdivision (a), state: “The amendment . . . makes it clear that the indictment or information need only provide general notice that the government is seeking forfeiture, without identifying the specific property being sought. This is consistent with the 2000 Committee Note, as well as many lower court decisions.” The Superseding Indictment states that “notice is hereby given to the defendants that the United States will seek forfeiture as part of any sentence” for a conviction under counts one, two or three. Doc. no. 354, ¶110 (forfeiture allegation 1, pertaining to racketeering conspiracy offense); ¶115 (forfeiture allegation 2, pertaining to illegal gambling business offense), ¶119 (forfeiture allegation 3, pertaining to money laundering offense; stating that upon conviction the government will seek forfeiture of any property involved in such offenses or traceable to such property). The RICO forfeiture allegation of the Superseding Indictment lists specific interests subject to forfeiture, stating that “The interests of the defendants subject to forfeiture . . . include but are not limited to at least $1, 000, 000, 000.00 and all interests and proceeds traceable thereto. . . .” Doc. no. 354, ¶112 (RICO). And see, ¶ 116 (the illegal gambling business forfeiture allegation, stating that “property of the defendants subject to forfeiture ... include but are not limited to at least $1, 000, 000, 000.00 and all interests and proceeds traceable thereto, including but not limited to the following assets. . . .”); ¶19 (money laundering forfeiture allegation, stating that “property of the defendants subject to forfeiture...include but are not limited to at least $1, 000, 000, 000.00 and all interests and proceeds traceable thereto, including but not limited to the following assets. . . .”).

         Courts which have addressed the issue have found that the government is not required to provide notice of the possibility of a money judgment. See, e.g., United States v. Odom, 2007 WL 2433957, *4 (S.D.Miss. 2007) (defendant complained that the bill of particulars was silent as to any money judgment the government was seeking; court noted defendant had cited no law requiring the government to provide notice of the possibility of a money judgment and that courts which have addressed the issue have found no notice required, citing cases). As previously stated, the rationale which underlies permitting money judgments in the amount of unlawful proceeds is that the defendant may not have the proceeds in his possession at the time of conviction and should not be able to avoid forfeiture by ridding himself of ill-gotten gains. McGinty, 610 F.3d 1242, 1246. As this rationale suggests, facts which may prompt the need for a money judgment as part of a criminal forfeiture, or which may determine the amount of any money judgment eventually sought via forfeiture, are not necessarily facts which are fixed at the time of the indictment, or even at other stages.

         Finally, there is no evidence that the timing of the government's announcements regarding its intent to seek personal money judgments has prejudiced the forfeiture defendants.[48]

         The forfeiture defendants' notice arguments are rejected as a basis for concluding that the government is precluded or estopped from seeking money judgments.

         VIII. Overview of the Government's Forfeiture Case

         An understanding of the outcome of the forfeiture proceedings will be aided by a review of the evolution of the government's factual contentions in support of its forfeiture claims. The court's determinations as to the merits of those factual contentions are not discussed here. They are addressed in Part IX, below.

         A. The Government's Forfeiture Brief (doc. no. 1999)

         Although the broad outlines of the government's forfeiture claims may be discerned from the motions for preliminary order of forfeiture, most of which were filed in mid-2015, the government's Forfeiture Brief, doc. no. 1999, provided (as specifically required by the court - see Part I(C), above) the first detailed statement of the basis for its forfeiture claims.

         The government does not assert, either in its Forfeiture Brief or in its lengthy post-trial proposed findings and conclusions (doc. no. 2242), that any of the specific items of real or personal property it seeks to forfeit are sought as substitute assets. Consistent with that, the government does not cite, or otherwise purport to invoke, the legislation[49] authorizing it, in some situations, to go after substitute assets.[50] Consequently, the government's forfeiture case presents no occasion for consideration of forfeiture of substitute assets.

         Before going further, one other matter should be noted. The government's Forfeiture Brief did, in general terms, acknowledge, as a legal matter, that the government is not entitled to run up the forfeiture score by double counting. Doc. no. 1999, at 20. But nowhere did the government attempt to address or explain the instances of double counting that are embedded in its forfeiture case, as is discussed in several places in this order. To the contrary (and remarkably), the government would have the court sift the record and do the math: “After determining which assets are subject to forfeiture and the appropriate theories for forfeiture, and after determining the full amount of the forfeiture judgments, the United States respectfully requests that the Court adjust the amount of the judgments and forfeiture of assets accordingly to ensure that there is no double counting.” Id. at 21 (emphasis added).

         1. King

         As to King, the government seeks forfeiture of specific amounts of funds (e.g., $978.18 in one instance) from eighteen specifically identified bank and brokerage accounts (doc. no. 1999-1), as well as three automobiles, $10, 236.86 in currency, 58 pieces of jewelry, 88 pairs of shoes (including, apparently, all of his 20 pairs of Jimmy Choo shoes, doc. no. 653-3), 75 purses, a jukebox, sports memorabilia, $303, 527.46 as a substitute res for a residence in Texas, and five parcels of real property. Id.

         As set forth in its Forfeiture Brief, the government also sought a money judgment against King in the amount of $222, 358, 480.00. Id. at 13. That total is substantially based on a series of extrapolations. Those proposed extrapolations are discussed in Part IX(C), below.

         In support of this wide-ranging forfeiture, the government asserts that “[b]etween 2003 and 2013, Mr. King only worked for Legendz Sports [transcript citation omitted]. Consequently, his only source of income derived from his illegal gambling operation with Legendz Sports.” Id. at 3. The government's citation is to the direct examination of Joseph McFadden, in which he testified that “to [his] knowledge, ” Mr. King did not have “any job other than with Legendz” between 2002 and 2013. Oct. Tr. 607. (McFadden is a businessman and former Legendz agent who, at all times relevant to this case, resided in Florida, not Panama. Apr. Tr. 844-849, 862.) The government concluded that “Because Mr. King's only source of income from 2003 through 2013 derives from his operation of the Legendz Sports enterprise, the United States contends that all property seized and listed for forfeiture constitutes proceeds of Mr. King's criminal activity.” Doc. no. 1999-1, at 3-4. This assertion deserves, and will get, more discussion later in this order.

         Eleven of the bank accounts listed for forfeiture are accounts in the name of Serena King and various children of Mr. and Mrs. King. Id. at 5 - 8. As for Mr. King's seventy-five purses, the government states that “Mr. King's only source of income was from the Legendz Sports illegal gambling enterprise. The approximately seventy-five miscellaneous purses constitute proceeds of his illegal gambling operations associated with Legendz Sports.” Id. at 11.

         2. Koralewski

         As to Koralewski, the government seeks to forfeit, by way of identifiable property, a gas lease covering the Koralewski residence in Parker, Colorado, as well as specific amounts found in two Wells Fargo bank accounts, totaling about $1, 500.00. In addition, the government sought a “[s]ubstitute res” in the amount of $172, 039.65, representing the proceeds of the sale of the Koralewski residence. Doc. no. 1999-5, at 1. The government asserted, by way of basis for the nexus between the property and Koralewski's offense of conviction (Count 1 only) that, during the relevant period, “Koralewski's only source of income derived from his association with Legendz Sports.” Id. The government elaborated by asserting that: “Koralewski failed to earn legitimate income from 2003 through 2013.” Id. at 2.

         In its Forfeiture Brief, the government also sought a money judgment against Koralewski for an amount slightly in excess of $1.2 million. Id. at 3. (As will be discussed, the government now seeks a forfeiture money judgment against Koralewski and the other forfeiture defendants in an amount in excess of $230 million.)

         3. Tucker

         As to Paul Tucker, the government sought, in its Forfeiture Brief, slightly less than $9, 000.00 in currency which had been seized, as well as the contents of four bank accounts. (Item 7 on the list on p. 1 of doc. no. 1999-7 is an exact duplicate, including dollar amount, of the description of the account listed as item 3 on that page, so the government's Forfeiture Brief only implicates four accounts even though accounts are listed in five paragraphs.) The government's Forfeiture Brief, filed in January, 2016, overlooks the fact that the currency and three of the four bank accounts (those listed in paragraphs 3, 5 and 6 in doc. no. 1999-7, at 1) had been forfeited by agreement as set forth in the Preliminary Order of Forfeiture filed on November 13, 2015 (doc. no. 1797). Consequently the only account remaining in play is the one listed in paragraph 4 of doc. no. 1999-7, p. 1, an account at “Wells Fargo/Wachovia Bank” in the amount of $3, 490.64.

         The government also sought, in its Forfeiture Brief, a money judgment against Tucker in an amount in excess of $8.8 million “for his participation in the Legendz Sports enterprise.” Doc. no. 1999-7, at 3.

         4. Moran

         As to Moran, the government sought, in its Forfeiture Brief, approximately $60, 000.00 in currency, as well as a money counter, a watch and a diamond ring. Doc. no. 1999-3, at 1. The government also stated that it sought a money judgment against Moran in an amount slightly less than $3 million, arrived at substantially by way of estimating the amount of money Moran picked up and delivered as a runner for the Legendz organization. See, doc. no. 1999-3, at 4-6.

         5. Robles

         In its Forfeiture Brief, the government sought a money judgment for slightly more than $815, 000.00 against Robles, on the basis of the funds he picked up and delivered as a runner, plus the salary paid to him while he served as a runner. Doc. no. 1999-8, at 1-2.

         6. Bramley

         As to Bramley's hard assets and financial assets, the government sought, in its Forfeiture Brief, forfeiture of his house in Plano, Texas, the contents of five investment accounts and bank accounts (in unspecified amounts), a Mercedes Benz automobile, slightly more than $23, 000.00 in currency and slightly more than $1, 100.00 in “collectible” currency. Doc. no. 1999-2, at 1. By way of nexus, the government asserted, among other things, that “Bramley's only source of income (excluding Social Security benefits), between 2003 and 2013, was income he received from his participation in the Legendz Sports conspiracy.” Id. at 2. As to the residential property in Plano, Texas, the government also asserted a facilitation theory, alleging that “Bramley maintained an office in the residence that he used to conduct illegal gambling activity.” Id. at 5-6.

         In addition to the hard assets and financial assets, the government also sought a money judgment against Bramley in an amount slightly in excess of $5.1 million.

         7. Diebner

         As to Diebner, by way of hard assets and financial assets, the government sought, in its Forfeiture Brief, forfeiture of a residence in Houston, Texas, the contents of three bank accounts (unspecified as to amount), approximately $8, 400.00 in U.S. currency and miscellaneous items of jewelry. Doc. no. 1999-4, at 1. In support of forfeiture of the currency, the government stated, in its Forfeiture Brief, that: “Over the course of his involvement with the Legendz Sports enterprise, [Diebner] is responsible for approximately $18, 567, 345.60 in proceeds.” Doc. no. 1999-4, at 3. In the very next paragraph, in support of forfeiture of the jewelry, the government said: “Over the course of his involvement with the Legendz Sports enterprise, [Diebner] is responsible for approximately $3, 679, 585.80 in proceeds.” Id. No explanation is offered for the difference between these two figures.

         As to Diebner, the government also sought a money judgment in the amount of $18, 567, 345.00. Id. at 4.

         B. The government's presentation at the forfeiture trial

         The government called two witnesses at the forfeiture trial. The first witness was Bart Lowrance, an asset forfeiture investigator employed by the Federal Bureau of Investigation. Tr. 8. The government's other witness was David Jansen, also a forfeiture investigator, apparently on a contract basis. Tr. 427. Jansen's description of his status was: “I do work for the FBI.” Tr. 427.[51] The defendants called no witnesses. (This case has had two case agents, one FBI agent and one agent of the Internal Revenue Service Criminal Investigation Division, from a very early stage. Neither of those case agents testified at the forfeiture trial or, for that matter, at any of the four jury trials.) The government introduced 228 exhibits at the forfeiture trial, of which fifty-eight were charts and summaries of voluminous documents. (In this order, the court will also refer, as needed, to exhibits introduced at one or more of the four jury trials.) The defendants introduced four exhibits (two by Moran and one each by Bramley and Diebner).

         For reasons that will become apparent, some discussion of the extent of the knowledge of the government's forfeiture witnesses is appropriate.

         At the forfeiture trial, Lowrance made a discernible, and mostly successful, effort to stay within the limits of what he knew. And the main thing he knew was that his arithmetic was correct. For the most part, he was right about that. Lowrance, as the sponsor of the government's updated recap of its forfeiture figures (GX C89), [52] acknowledged that he did not examine any of the underlying evidence, testimony or documents backing up the extrapolation leading to the attribution of $1, 055, 112.00 to Koralewski. Tr. 387 - 88. Nor, at least as to Koralewski, did he look at any of the underlying summaries that are consolidated onto GX C89 (App. 1 hereto), a summary that Lowrance agreed was “an overall look at the financial forfeiture case.” Tr. 383, 388. He believes the numbers in GX C89 to be correct, but he does not know them to be correct, because he “did nothing independently of [Jansen] giving you [Lowrance] a number and you putting it on the document.” Tr. 389-90. Consequently, he “wouldn't know whether any of the information Jansen relied on was problematic, inaccurate, disproved, debunked, or anything else.” Tr. 390. The same is true as to Bramley and Moran. Tr. 381, 391. Likewise, as to Tucker, Lowrance simply did a multiplication (for extrapolation purposes, as discussed below) of a number supplied by Jansen. Tr. 392.

         The government's second (and last) witness at the forfeiture trial was Jansen. A former agent with the Internal Revenue Service Criminal Investigation Division, Jansen is employed by an organization that contracts with the Department of Justice to do forfeiture and money laundering-related work for the FBI. In his words: “I do work for the FBI.” Tr. 427. He got involved in this case in 2011. His main activity has consisted of examining financial records for the purpose of “tracing money to assets and then trying to determine the source funds that bought them.” Tr. 432. Although Jansen acknowledged that the source documents he had to work with were incomplete (Tr. 432), he was, in comparison to Lowrance, clearly more familiar with those documents.

         Although the testimony of Lowrance and Jansen was, in some ways, informative, it is worthy of note, before going further, that they added nothing to the record in this case in terms of first-hand knowledge imparted by testimony from percipient witnesses.

         IX. Findings of Fact

         A. Introduction

         Broadly speaking, the government's forfeiture case breaks down into two categories: (i) forfeiture of specifically-identified assets (partly financial assets and partly tangible assets such as houses, cars, shoes and purses) and (ii) forfeiture in the form of money judgments against the forfeiture defendants. As stated in Part I, above, the government originally contended that the forfeiture in this case would amount to a billion dollars. Regardless of what the merits of that number might be, or might ever have been, the government's forfeiture contentions have been very much a moving target. This is so despite, or perhaps because of, the fact that the court has repeatedly required the government to provide specifics - first in terms of allegations and later in terms of proof - of just what it seeks to forfeit, both by way of specific assets and by way of forfeiture money judgments.

         As for forfeiture money judgments, the government, when first required to clearly state what it sought (Case Management Order No. 7, doc. no. 1879), specified the amounts set forth at length in Part VIII(A), above, in its Forfeiture Brief. This, to put it mildly, has changed, as indicated in the following table.

Table 1
Government's Positions as to Amount Sought by way of Forfeiture Money Judgment
(All amounts in dollars)

Defendant

Amount sought in Forfeiture Brief, doc. no. 1999[53]

Amount sought in GX C89, without govt's updated figures[54]

Amount sought in GX C89, with govt's updated figures[55]

Amount sought in Proposed FoF and CoL, doc. no. 2242

King

222, 358, 480.00

209, 293, 468.38

227, 508, 341.16

231, 432, 686.73

Koralewski

1, 222, 856.00

209, 293, 468.38

227, 508, 341.16

231, 432, 686.73

Tucker

8, 842, 560.00

209, 293, 468.38

227, 508, 341.16

231, 432, 686.73

Moran

2, 993, 660.00

209, 293, 468.38

227, 508, 341.16

231, 432, 686.73

Robles

815, 197.50

209, 293, 468.38

227, 508, 341.16

231, 432, 686.73

Bramley

5, 102, 789.00

209, 293, 468.38

227, 508, 341.16

231, 432, 686.73

Diebner

18, 567, 345.60

209, 293, 468.38

227, 508, 341.16

231, 432, 686.73

         The total amount of the forfeiture money judgment the government now seeks against each of the forfeiture defendants is the sum of:

• Legendz payouts to bettors based on Global Data Payment transactions. This is the top section on the government's summary, GX C89 (App. 1), amounting to more than $25 million. This item is based on an extrapolation.
• The betting proceeds the government attributes, by way of a series of direct attributions and (in some instances) extrapolations, to the individual Legendz agents and runners. This is the middle section (“Agents”) on the first page of the government's summary, GX C89, amounting to more than $142 million.
• The total of the funds the government asserts were illegally laundered through the various bank accounts associated with the Legendz enterprise. This is the section under the heading of “Money Laundering Accounts/Items” on the first two pages of government's summary, GX C89, amounting to more than $43 million. This item is not based on extrapolations.

         In the second category listed above (betting proceeds attributable to individual Legendz agents), the government attributes illicit proceeds to a total of fifteen agents and runners. Id. Of those fifteen, six are forfeiture defendants now before the court (Koralewski, Tucker, Moran, Robles, Bramley and Diebner). Id.

         The government seeks a forfeiture money judgment against all of the forfeiture defendants, including King, for the same grand total: $231, 432, 686.73. Doc. no. 2242, at 48, ¶ 189. Thus, given the government's final factual approach to determining the amount of the forfeiture money judgments, the viability of the government's proposed extrapolations (the first two categories listed above) presents an issue common to all of the forfeiture defendants - because it directly affects all of them. For instance, the viability of the government's proposed extrapolation as to Tucker, a Florida bookie, affects Moran, a California runner. Likewise, but as matters distinct from the merits of the government's proposed extrapolations, there are common issues as to the viability of the government's characterization of funds allegedly laundered (the third category listed above), and as to the viability of the government's contention that there should be no differentiation among the defendants as to the amount of the forfeiture money judgment to be entered. Those common issues are treated separately, below.

         B. Viability of the government's characterization of funds allegedly laundered

         By way of factual findings, the court will start with the third category listed above - the government's request for inclusion in its forfeiture money judgment of more than $43 million attributable to funds the government asserts were illegally laundered through the various bank accounts associated with the Legendz enterprise. As has been noted, the government seeks inclusion of this amount in a forfeiture money judgment against all of the forfeiture defendants.

         The government's case under this heading depends on two things: (i) the facts as to the source of the funds deposited, and (ii) the facts as to the nature of the activities generating the funds in the hands of that source. These two concepts - the source of the funds and the nature of the activities that generated the funds - are related but, for analytical purposes, are not identical.

         1. Preliminary matters

         One important thing to bear in mind about the figures shown under the heading of “Money Laundering Accounts/Items, ” GX C89 (App. 1, Lines 1 - 16) is that these items are not extrapolations. As will be discussed, these items depend on some assumptions, but they are not extrapolations.[56]

         Before going further, one of those assumptions deserves detailed treatment, because it has a very substantial effect on the factual merit of the government's contention that the $43 million shown on GX C89 under the Money Laundering heading should be included in the forfeiture money judgment calculation.

         When required to definitively state the factual basis for its forfeiture case, the United States Government told the court eleven times, in these words or in substance, that: “King lacked a legitimate source of income between 2003 and 2013, ” doc. no. 1999-1, at 3.[57] More specifically, the government represented that “his only source of income derived from his illegal gambling operation with Legendz Sports.” Id. (emphasis added). King's asserted lack of a legitimate source of income during the conspiracy period is an essential underpinning of significant elements of the government's forfeiture case against King and the other forfeiture defendants. The government's contention necessitates a review of the evidence - from the government's witnesses - at the four jury trials.

         During the period relevant to this case, King had interests in at least four businesses other than the Legendz sports betting enterprise. They are: Grupo Legendz, Vaporama Internacional, S.A., Magna Tours and Platinum Vacations.

         Grupo Legendz. Grupo Legendz was knowledgeably described by the government's witnesses at the four jury trials. Through Grupo Legendz, King operated a brick and mortar bookmaking business in Panama City. Feb. Tr. 242. “Grupo Legendz was the company that owned the SuperBook, the actual physical sportsbook across from the Marriott.” Apr. Tr. 1277; Oct. Tr. 1124. (It had started out in the Marriott in Panama City and then moved to the location near the Marriott. Oct. Tr. 1085.) Consequently, the SuperBook's bank account was in the name of Grupo Legendz. Feb. Tr. 900; May Tr. 431. King owned Grupo Legendz and thus was the owner of the SuperBook. May Tr. 417; Oct. Tr. 792, 1084. It was “a separate business from the Internet sports-betting operation” (Oct. Tr. 1085) and was a legal, licensed sportsbook, holding a license from the Panamanian government (Oct. Tr. 1301), or as per another government witness: “a perfectly legal business, a walk-in casino in Panama City.” Oct. Tr. 434. It was a place “where you could bet the dogs, horses, different things.” May. Tr. 260. In addition to providing sportsbook services, the licensed casino had “a lounge and a restaurant and a nightclub.” Id. at 989 (and see the discussion of Vaporama, below). Patrons could “go in and sit down and have drinks and place bets on sports, horse wagering.” Apr. Tr. 601.

         Although Grupo Legendz accounts apparently did receive funds generated by the Legendz gambling enterprise that is the subject of this case (Oct. Tr. 803), Lowrance acknowledged that if King's characterization of Grupo Legendz and Vaporama was correct (that being the characterization that was based on testimony from government witnesses at the four jury trials - testimony that was neither contradicted nor disputed in any other way by any party), then it “might be possible” that the $3, 746, 816.83 in allegedly laundered funds shown in Line 1 on GX C89 “represents both lawful and unlawful proceeds being counted into that account.” Tr. 187. In light of the uncontradicted testimony of the government witnesses at the jury trials, this was a remarkably tepid concession by Lowrance. The evidence before the court will permit no finding other than that Grupo Legendz was a lawful business situated in Panama City, generating lawful revenues for Bartice King.

         Vaporama Internacional S.A. The uncontradicted testimony (from a government witness) at the April trial established to the satisfaction of the court that Vaporama was a company, affiliated with King, that held the liquor license for the sportsbook that was operated by Grupo Legendz in Panama City. Apr. Tr. 1277.[58]There was no evidence to the contrary, nor was there any suggestion, from any party, to the contrary. As is discussed below, Vaporama deposited $1, 934, 515.94 into an account at Banco General, S.A. in Panama between 2006 and 2013. GX C64A (summary).[59] And as has been discussed, the government seeks to include this $1.93 million in the forfeiture money judgment. GX C89, p. 2. But, bearing in mind the government's repeated representations to the court that King had no legitimate source of income during the conspiracy period, the Vaporama account is significant for other reasons. As Lowrance acknowledged, application of simple arithmetic to the government's summaries leads to the conclusion (“I presume so.” Tr. 264) that Vaporama made a profit of about $780, 000 during the period covered by the government's summaries (GX C64A and C64B). There is no basis in the record for any inference that the income generated by Vaporama, as the bar and restaurant co-located with the licensed sportsbook operated by Grupo Legendz in Panama City, was anything other than legitimate. This, as will be seen, affects the viability of the government's contentions as to the forfeitability of the hard assets that the government seeks to forfeit on the premise that King had no legitimate source of income during the conspiracy period.

         Magna Tours and Platinum Vacations. At the four jury trials, government witnesses also testified about King's interests in two other businesses: Magna Tours and Platinum Vacations. Magna and Platinum were separate entities. Feb. Tr. 823.

         Magna Tours was a travel agency - an IATA-certified travel agency (Feb. Tr. 842; Apr. Tr. 1078), otherwise described as a “walk-in retail travel agency.” Feb. Tr. 719. “You can go in and book a cruise, book airline tickets.” Id. As a “legitimate travel agency” (Oct. Tr. 1035 - 36), Magna had its own, separately-keyed, leased space in the building that also housed the Legendz call center. Feb. Tr. 844; May. Tr. 344.

         King was the founder, and, for a time, the sole owner of Magna Tours. Feb. Tr. 720; Apr. Tr. 657. Later, he was a partner in this business with Reggie Berthiaume and Michael Lawhorn (Feb. Tr. 328 - 29), both of whom (as government witnesses) testified in detail about that business. Berthiaume was in this business with King from 2004 to 2010 - very much within the conspiracy period. Feb. Tr. 720; Apr. Tr. 596. In addition to serving the needs of the Legendz organization (Oct. Tr. 1086), Magna Tours had corporate accounts in Panama. Feb. Tr. 720. With Berthiaume's help, they were “picking up a lot of corporate accounts” (id. 721), so the business was “pretty successful” (Apr. Tr. 596), concisely described by Berthiaume as “a profitable business.” Apr. Tr. 657. It was “growing at about 20 percent annually in sales.” Apr. Tr. 596.[60] Magna Tours was also “the beneficiary of any travel that was booked through the sale of” vacations by Platinum Vacations. Feb. Tr. 722. Initially, King and Berthiaume split the profits 50/50. Apr. Tr. 596. Although King owned Magna Tours at least until 2010 (May Tr. 430), the company was ultimately purchased by Antonio Jenkins-Lara. Feb. Tr. 842. At that time, it was still “an operating business and a going concern.” Apr. Tr. 659.[61]

         Beginning in approximately 2006, King, Berthiaume and Robles were partners, one-third each, in Platinum Vacations. Feb. Tr. 722; Apr. Tr. 597.[62] King supplied the start-up capital and equipment. Feb. Tr. 723; Apr. Tr. 597. Platinum Vacations sold vacation packages - ultimately needing “maybe 20 to 30 operators” at its call center in an office “around the corner from Legendz.” Feb. Tr. 722, 830-31. To patronize Platinum, “you can call and plan your vacation through them and they would give you the best package that they could for your vacation.” Oct. Tr. 1088. Platinum had nothing to do with Legendz or with gambling. Feb. Tr. 831, 1168. Its offices were separate from the Legendz facility. Feb. Tr. 1167. Although the business was ultimately unsuccessful, Platinum's revenues grew, at one point, to $10, 000 a day. Feb. Tr. 722.

         This, in a nutshell, is where the record stood after the government had called various combinations of four witnesses at four jury trials who testified without contradiction - or even an intimation of doubt from the government or anyone else - about the particulars of King's outside businesses during the period in which, as the government put it after those four trials had been completed: “his only source of income derived from his illegal gambling operation with Legendz Sports.” Doc. no. 1999-1, at 3. Finally, on this subject (for now), it should be noted that the government's forfeiture witnesses offered no estimation of the ratio of King's legitimate income vs. his illegal gambling income. The government made no attempt to determine this. Tr. 649. Thus, Jansen had no conclusion at all as to “how much money attributable to Mr. King is tainted up versus clean or legitimate.” Tr. 629. This is consequential for forfeiture purposes.[63]

         2. Sources of deposits and nature of activities generating the funds.

         As stated above, the government's case for inclusion of $43 million in the forfeiture money judgment based on deposits under the heading of Money Laundering on GX C89 requires resolution of two separate (but in some instances related) factual issues as to each of the sixteen line items in the money laundering section of GX C89: (1) What was the source of the funds deposited? (2) What was the nature of the activities that generated those funds in the hands of that source? The court will now address these issues as to each of the sixteen line items shown under the Money Laundering heading on GX C89.[64]

         GX C89, Line 1: Source of funds and nature of activities. The forfeiture money judgment the government seeks would include $3, 746, 816.83, representing funds deposited into a Legendz account at Banco Nacional de Panama (BNP). See, GX C89, Line 1; doc. no. 2242, at 21, ¶ ¶ 83, et seq.; Tr. 171. The relevant entry on GX C89 takes us to GX46, 46A, C58A and B and 1264. Three of those exhibits, GX 46 and 46A, and 1264 are irrelevant for present purposes - they consist of documents establishing the fact of the formation of “Legendz Gamming [sic] Corp., ” evidencing the opening of an account at BNP, and evidencing transactions in that account in 2007 - 2012. Government Exhibit C58A, a summary of deposits into this account, supplies the dollar amount - $3, 746, 816.83 - that the government would include in the forfeiture money judgment. But of the 233 deposit transactions summarized on GX C58A, the source of 163 is unknown, as shown on the face of the exhibit and as acknowledged by FBI witness Lowrance:

Q. [by Mr. Mays] And with respect to those payments, you can't --that are reflected for those unknown payors, you can't testify that those represent lawful or unlawful proceeds being deposited into that account, can you?
A. No, I can't.
Q. It's impossible for you to know since the payor is unknown?
A. Correct.

Tr. 184-85.

         In addition, as to 46 of those 233 deposits, the source is shown to be Grupo Legendz. GX C58A, p. 1-2. Grupo Legendz, as discussed in Part IX(B)(1), above, was a source of legitimate income for King. In fact, there is no basis in the record for any suggestion that Grupo Legendz was a source of anything other than legitimate income for King.[65] After being confronted with the facts as to Grupo Legendz, Lowrance maintained that the Banco Nacional account was nevertheless “a tainted account” (Tr. 182), apparently justifying the government's attempt to include in its forfeiture money judgment all of the $3.75 million in Banco Nacional deposits shown in Line 1 of GX C89. But of those 233 deposits, the source of 163 is unknown, and 46 were from Grupo Legendz, for a total of 209 out of 233 deposits that are devoid of significance for forfeiture purposes - or at least significance favorable to the government. The twenty-four deposits from identified sources other than Grupo Legendz account for about fifteen percent of the $3.75 million sought by the government in Line 1. Those 24 deposits provide little, if any, help to the government. One, in the amount of $250, is from Alfred Ly, a cooperating witness. Mr. Ly began cooperating with the government, acting for the government as a subagent under Bruce Middlebrook, in 2006. Oct. Tr. 1570, 1604 - 07. The only check attributed to Ly in GX C58A is dated in March of 2009, when Ly was a cooperator. Three other checks, totaling $8, 700, are from FBI agents, acting as bettors. GX C58A, p. 2 (Hash and Lyon). Another one of the 24 checks is from Vaporama, a legitimate business operated by King as is discussed above.

         Unsurprisingly, when confronted with the facts establishing the deficiencies in GX C58A, Lowrance was unable to venture a guess as to the percentage of the account activity shown in GX C58A that actually consists of “deposits from bettors or reflects earnings into this account from unlawful sports betting.” Tr. 186 - 87. Facts notwithstanding, the government has blithely asserted that: “Records from [this Banco Nacional account] show that from October 2005 through July 2012, Legendz Gamming Corp., an entity used by Legendz Sports and Mr. King to collect funding from its post-up bettors, collected approximately $3, 746, 816.83 in deposits for illegal gambling.” Doc. no. 1999-1, at 19. In its post-trial proposed findings, the government seeks to include the entire $3.75 million in its forfeiture money judgment, without so much as a nod in the direction of the uncontroverted evidence that thoroughly undermines its factual contentions as to Line 1. Doc. no. 2242, at 21, ¶ 83.

         Save for the $250 from Alfred Ly and the $8, 700 from the FBI agents posing as bettors, there is a failure of proof as to both the source of the $3, 746, 816.83 comprising Line 1 and as to the nature of the activities generating those funds. The court finds that Line 1 contributes $8, 950 to the forfeiture money judgment calculation.

         GX C89, Line 2: Source of funds and nature of activities. The allegedly laundered funds in this line on GX C89 are shown on the government's recap to total $7, 167, 005.65. But, at the forfeiture trial, the government stated that this number should be $7, 152, 574.65. Tr. 172. This matches up with the government's supporting summary of the deposits, GX C49A.

         Before going further with respect to Line 2, it should be noted that Line 2 is in a different category than the other fifteen lines under the heading of Money Laundering on GX C89. The reason is that the deposits into this account - $7.15 million - are the basis for the government's proposed extrapolation from twenty-four months to 108 months, to attribute $25 million to Legendz payouts to bettors, as shown in the top box on GX C89. Tr. 201. The government does not propose any extrapolations from any of the other fifteen accounts the government asserts were used for money laundering purposes. Thus, aside from any other problems there may be with this extrapolation (see Part IX(C)(2), below), any deficiencies in the government's reckoning as to the deposits into this account are magnified by a factor of more than four for purposes of the government's forfeiture money judgment case.

         The summary the government uses to back up Line 2, GX C49A, is based on deposits into a bank account of Global Data Payments Services S.A. (GDPS). In turn, the source document for this summary is GX 1258, an account ledger from HSBC Bank in Panama, which has entries for the deposits summarized on GX C49A and the payments summarized on GX C49B. The deposits shown by GX C49A total $7, 152, 574.65, consisting of 136 deposit transactions, all of which were in 2007 or 2008. The source of the deposited funds is shown on the exhibit to be unknown for 104 of the 136 deposits. Those 104 deposits, for which the source of the funds is unknown, account for approximately $5.43 million of the $7, 152, 574.65 in total deposits, yet the government seeks to include this entire amount in the forfeiture money judgment.[66]

         The thirty-two deposits for which the source is known are from fourteen persons or entities. Of those fourteen, Lowrance recognized only four (International Goldstore, International Data Processing, Elite Pay Systems and Agathe Services, Ltd.) as Legendz affiliates that “receive bettor payments from the United States.” Tr. 79.

         International Goldstore and Elite Pay Systems need not detain the court long. The evidence from the four jury trials established quite clearly that those entities were used for receipt and payment of illegal betting proceeds. Those two entities account for $61, 604.40 on GX C49A.

         Agathe Services is another matter. Agathe was not mentioned at any of the four jury trials. Agathe is not mentioned in the government's Forfeiture Brief (doc. no. 1999) or in its proposed findings of fact. Doc. no. 2242. At the forfeiture trial, Lowrance could not cite any document that would implicate Agathe as a recipient of (and, in turn, as a source of) betting proceeds. Tr. 189. All he could refer to was “[d]iscussions with other investigators in this case” (id.), presumably the case agents. Thus, no percipient witness has told the court, in the jury trials or in the forfeiture trial, that Agathe was a recipient of anything, let alone illegal betting proceeds. And, not to put too fine a point on it, [67] the court declines to include deposits originating with Agathe in the forfeiture money judgment calculation on the basis of what the case agents (who did not testify in any of the jury trials or in the forfeiture trial) may have told Lowrance.

         Likewise, Lowrance had no personal knowledge as to International Data Processing, which was the source of one deposit into the GDPS account. Tr. 193-94. It was his understanding that International Data was “affiliated with the Legendz enterprise” (id. at 193), but he did not know in what way it was affiliated. Id. at 194. He had no “idea what that payment of $39, 975 represents.” Id. The testimony at the jury trials provides no real help as to International Data. That company was mentioned once, and only once, at each of the four jury trials. Feb. Tr. 912; Apr. Tr. 1186; May Tr. 433 and Oct. Tr. 972. In the first three jury trials, the singular mention was to the effect, in the testimony of Karlo Stewart (the Chief Financial Officer of the Legendz organization, Feb. Tr. 891) that he opened an account at a Costa Rican bank for International Data Processing Services. There was no mention of the uses to which that account was put, other than an unelaborated statement by Stewart in the May trial that International Data Processing was “a company that was set up to receive funds.” May Tr. 433. There was no mention of whose funds were to be received, which is no small point in light of the fact that, as has been seen, King had several sources of legitimate cash flow during the conspiracy period. Stewart's lack of knowledge as to the use of the International Data Processing account was demonstrated at the October trial, where he testified that, for lack of knowledge, he had been unable to respond to an inquiry from a bank as to the provenance of some funds that were being sent to an International Data Processing account from Mexico. Oct. Tr. 972.[68]

         Another curious thing about the government's approach in Line 2 is that the transactions summarized on exhibit C49A - deposits into an account associated with Legendz - are used as the basis for an extrapolation (from $7.15 million to $25 million) arriving at a dollar amount for payouts, under the heading of “Legendz Payouts to Bettors.” GX C89, p. 1; Tr. 205. As shown by GX C49B, the amount of the payouts for a virtually identical period was known (and, by the way, added up to a significantly lower dollar amount), but the government chose to estimate payouts from GDPS by adding up the deposits into its bank account. The illogic of estimating payouts by adding up deposits when the actual amount of the payouts was known was acknowledged by Lowrance on cross examination:

Q. [by Mr. Mays] Well, let me ask it this way: If you wanted to find out how much money somebody spent in a month, would you look at how much they put into their account or how much they took out of their account?
A. Took out of their account.
Q. All right. And in this particular instance, you looked at how much money went into the account and then extrapolated from there, correct?
A. Yes.

Tr. 205.

         As will be seen in Part IX(C)(2), below, the court rejects the $25 million extrapolation (in the top box on GX C89) that the government has based on Line 2. So, even though the government does not, as a fallback position, ask the court to treat Line 2 as a money laundering item (as it does with the other fifteen lines under the Money Laundering heading), the court will do so. Measured by the preponderance of the evidence, Line 2 is good for $61, 604.40 of dirty money, fair game for the forfeiture money judgment. Thus, the beginning point for the government's proposed 108-month extrapolation in the top box on GX C89 is $61, 604.40, not $7, 152, 574.65. Other aspects of that proposed extrapolation are discussed in Part IX(C)(2), below.

         GX C89, Line 3: Source of funds and nature of activities. In Line 3, the government seeks to include $4, 179, 355.00 in the forfeiture money judgment. The backup summary for Line 3 is GX C42D, which shows 32 funds transfer transactions. That summary is, in turn, backed up by bank records, mostly evidencing wire transfers, from Bank of America. GX 1405A.

         The evidence does reflect what the immediate source of the funds was for each of these 32 transactions. So, strictly speaking, the government's proof adequately establishes the source of the funds comprising Line 3. In this respect, the quality of the government's evidence in support of Line 3 differs noticeably from the quality of that evidence in support of other money laundering items on GX C89.

         The transactions comprising Line 3 occurred between April 8, 2008 and January 12, 2009. They fall into three categories:

• One transfer from Global Data Payment Services to Platinum Advantage, Ltd. ($117, 530.00)
• Six transfers from Seven Capital Business, Inc. to Platinum Advantage, Ltd., totaling $1, 531, 125.00.
• Twenty-five transfers from Platinum Advantage, Ltd. to Virtual Automated Technologies, ...

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