PEOPLE v. AGNELLO

SEYMOUR ROTKER, J.

An indictment was filed against the defendants on January 20, 2000 charging them with, inter alia, the crimes of enterprise corruption (Penal Law § 460.20). The defendants were arraigned on the indictment and bail for the defendant Agnello was fixed in the amount of $10 million dollars, and bail for the defendant Scala was set in the amount of $100,000 dollars.

Thereafter an application was made by Agnello to have his bail reduced and that application was granted. The defendant's bail was reduced to $2 million dollars cash or bond and the District Attorney, pursuant to CPL § 520.30 thereafter requested a bail sufficiency hearing.

At the bail sufficiency hearing, the defendant Agnello proceeded to call a number of witnesses who testified that they were either friends or relatives of Mr. Agnello. Their testimony was offered to demonstrate that they collectively owned property in excess of $2.2 million dollars. They further testified that they were freely and voluntarily pledging their property as indemnitors on the bond and also that they were aware that they were each jointly and severally liable for the face value of the bond in the event that the defendant absconded.

Mr. and Mrs. D'Alia, as indemnitors, offered their home, valued at $400,000, as security on the bond. They further testified that they were also willing to pay the premium and associated costs for the bond which totaled approximately $126,000 dollars. They testified that they were willing to assume this expense without hope of recompense from the defendant either directly or indirectly, but rather were doing so out of "friendship" for the defendant Agnello. Mr. D'Alia testified that he had met the defendant Agnello approximately 16 years ago at a racetrack where Mr. D'Alia worked as a security guard. He also testified that over the years, on approximately two separate occasions, he had borrowed a total of about $6,100 to cover the costs of a gambling debt and his medical bills, and that he promptly repaid these loans. Mr. D'Alia also stated that on occasion he had visited Mr. Agnello at his home and saw him at other social events. Mrs. D'Alia testified that she first met the defendant for the first time approximately two years ago, and had only seen him one other time thereafter. She also testified that she had "no problem" in paying the $126,000 dollars premium.

Mr. D'Alia testified that he was employed by a private firm as a security guard for the Aqueduct, Belmont and Saratoga Race Tracks and earned approximately $800 dollars weekly. He exhibited his bank books and statements which indicated that he had immediate access to approximately $300,000 dollars in cash and that his wife was collecting approximately $20,000 dollars a year from her 1992 winnings of $400,000 dollars from Harrah's gambling casino in Atlantic City.

At the conclusion of the testimony of all the witnesses, the Court reserved decision until the following court date. On the next court date and prior to the Court's ruling, the defendant Agnello made an application to the court to withdraw the D'Alia's as the payers of the bond premium and to substitute them with Victoria Gotti Agnello, Mr. Agnello's wife. Ms. Gotti testified that she was an author and currently had a contract with Crown Publishing Company, a subsidiary of Random House Publishing. According to the terms of her contract, which was exhibited to the Court, she was entitled to receive a sum of money, in excess of $125,000 dollars, payable in increments over the next several months. She testified that her fee would be used to pay the premium.

The agent for the bonding company, International Fidelity Insurance Company, was recalled to the stand and testified that his company would have no problem in issuing the bond for $2 million dollars and trusting that the premium would be paid by Ms. Gotti. At the conclusion of the hearing, the District Attorney withdrew his objection to the issuance of a bond for Mr. Scala.

The District Attorney, among other things, argued that the public policy provisions of Criminal Procedure Law § 520.30 allowed inquiry by the Court not only into the source of the property used to indemnify the bonding company, but also as to the source of the money that was used to pay for the bond premium and costs.

The defendant argued that the indemnitors were bona fide and that no legal basis existed for the Court to inquire into the source of the funds used to pay for the premium. Even assuming that the court could examine the source of the funds used to pay for the premium, the defendant maintained that no issue existed since the testimony of Ms. Gotti clearly demonstrated that the funds to be used to pay the premium were not tainted since her testimony revealed that those funds were derived from money owed to her by a reputable publishing company pursuant to a pre-existing work contract.

Section 520.30 Crim. Proc. of the Criminal Procedure Law sets forth the criteria for an examination by the Court to justify the issuance of a bail bond. The statute permits the Court to make an inquiry into the financial viability of the obligors and whether any feature of the undertaking contravenes public policy. Section 520.30 (1) specifically states that:

"[T]he Court may inquire into matters stated or required to be stated in the justifying affidavits (emphasis added), and may also inquire into other matters appropriate to the determination, which include but are not limited to the following: (a) The background, character, and reputation of any obligor . . .; (b) The source of any . . . property deposited by any obligor as security; (c) The source of any . . . property delivered or agreed to be delivered to any obligor as indemnification on the bond . . . (d) The background, character and reputation of any person who has indemnified an obligor upon the bond."

This statute as interpreted by People v. Esquivel, 158 Misc. 2 nd 720 [S.Ct N.Y. Co. 1993], places the burden of proof on the defendant to show by an preponderance of the evidence that the money or property posted as collateral is not the fruit of unlawful or criminal conduct. Esquivel (supra) further held that when an issue of public policy is involved, the inquiry by the Court may extend beyond the financial soundness of the obligor, such as the bonding company, and that the Court is empowered to examine the purpose of any indemnification.

The rationale behind this interpretation is that if the surety-obligor is fully indemnified then the risk on a defendant's default is borne by the indemnitor. Accordingly, logic would dictate that the Court be allowed to consider the indemnitor's motive in posting the bond. Since the indemnitor is assuming the risk of the defendant's flight, public policy requires that the Court be able to examine the nature of the relationship between the end indemnitor and the defendant, and the extent to which the collateral posted would deter the defendant from fleeing the jurisdiction.

The statute (CPL 520.30) permits an inquiry by the Court into any matter stated or required to be stated in the justifying affidavit. Section 520.20(4) identifies what constitutes a justifying affidavit". The affidavit ". . . must be subscribed and sworn to be the obligor affiant — and such affidavit must contain further statements as follows: "the amount of the premium paid to the obligor." (CPL 520.20 (4) (a) [i]). Following the reasoning of the Court in Esquivel (supra), and in the opinion of this Court under the above subdivision, in addition to reviewing the indemnitors, the Court may also review the source of the money used to pay the premium for the bond.

Accordingly, the Court finds that under the facts and circumstances as testified to at the bail sufficiency hearing, the Court is satisfied that the indemnitors in this case possess a financially secure background, that source of the funds used to indemnify the bonding company are not in violation of public policy, and that none of the property proffered as indemnification on the bond stems from any illegal or criminal activity.

This Court also finds that the source of the payment of the fee for the premium does not come from illegal or contraband sources.