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U.S. v. CITARELLI

February 25, 2002

UNITED STATES OF AMERICA
V.
LOUIS J. CITARELLI, DEFENDANT.



The opinion of the court was delivered by: Stephen M. Orlofsky, United States District Judge.

OPINION

I. INTRODUCTION

The sentencing of Defendant, Louis J. Citarelli ("Citarelli"), presents an unusual case in that Citarelli does not challenge the Probation Department's calculation of his Total Offense Level, Criminal History Category, or Sentencing Guideline Range. Rather, he strenuously objects to any award of restitution to the victims of his crimes. Citarelli's objections bring into sharp focus the important goals embodied in the Victim and Witness Protection Act, 18 U.S.C. § 3663-64 ("VWPA") and this Court's obligation to achieve them whenever possible. For the reasons that follow, I am unmoved by Citarelli's vehement contention that this Court should decline to calculate how restitution, if any, to his former spouse, a victim of his fraudulent scheme, should be calculated, because that calculation might require more extrapolation than would an award of restitution for a crime involving a theft of a sum certain. I conclude that I am compelled to order restitution here, despite any potential "complication or prolongation of the sentencing process" because of the circumstances of Citarelli's crimes, the harm suffered by the victims of his crimes, and the purpose of an award of restitution under the VWPA.

BACKGROUND

On August 14, 1998, Citarelli pled guilty to Count One of a 32-Count Indictment, which charged a violation of 18 U.S.C. § 371, Conspiracy to Commit Bribery, and to a Three Count Information, which charged: (1) a violation of 18 U.S.C. § 666 (Bribery) in Count One; (2) a violation of 18 U.S.C. § 371 (Conspiracy to Commit Mail Fraud and Wire Fraud) in Count Two; and, (3) a violation of 18 U.S.C. § 371 (Conspiracy to Defraud the Internal Revenue Service) in Count Three. See Tr. of Plea Allocution before The Honorable Stephen M. Orlofsky, United States v. Louis J. Citarelli and Donato Marucci, Criminal Nos. 98-225-01, 98-225-02, of August 14, 1998.
Citarelli and his co-conspirator, Donato Marucci ("Marucci"), were medical doctors practicing medicine as Franklin Medical Association, P.A. ("FMA"), North Jersey Pain & Rehabilitation ("North Jersey Pain"), Nutley Diagnostics ("Nutley"), and Mag-Dan Diagnostics ("Mag-Dan"). See Pre-Sentence Report ("PSR") at ¶ 17. The relevant conduct underlying Citarelli's crimes is grouped under two fraudulent schemes: (1) a bribery scheme involving the City of Newark Board of Education, and its payment of Workmen's Compensation benefits; and, (2) a scheme to defraud the Internal Revenue Service, ("IRS"), the New Jersey Superior Court, and Citarelli and Marucci's former spouses by underreporting income on their federal tax returns and on the Case Information Statements ("CIS") they filed with the Superior Court in their divorce proceedings.*fn1

The Workmen's Compensation Bribery Scheme

Citarelli and Marucci were approved Workmen's Compensation panel doctors for the City of Newark Board of Education ("Board of Education"), and, as such, were eligible to treat its employees who had been injured on the job and receive payment for those services directly from the Board of Education. Id. at ¶ 20. From August 5, 1993 through April 5, 1996, Citarelli and Marucci made 33 payments totaling $65,088.41 to Louis Monaco ("Monaco"), a Workmen's Compensation Coordinator, in exchange for Monaco's assistance in "steering" Workmen's Compensation business from the Board of Education to their medical practice and for assisting them in receiving payment. Id. at ¶¶ 21, 22.

IRS Fraud and Divorce Fraud

In the summer of 1993, it became clear to Citarelli and Marucci that their marriages were ending. In contemplation of the impending divorce actions, they entered into an agreement with their accountant, Michael Cortese ("Cortese"), to hide portions of their income and assets from their wives. Id. at § 25.
Citarelli's wife, C.C., filed for divorce on October 5, 1993; Marucci's wife filed for divorce on September 27, 1993. Id. at ¶¶ 27, 28. Immediately thereafter, Citarelli and Marucci created the sham corporation, Mag-Dan, through which they funneled earnings from their medical practice, to conceal those assets from their wives and the Superior Court. With the assistance of Cortese, Citarelli and Marucci filed false CIS's with the Family Court which failed to disclose the existence of Mag-Dan or any of the income that had been diverted to Mag-Dan. Id. at ¶¶ 29-34. Cortese also assisted Citarelli and Marucci in filing false individual tax returns and a corporate tax return for Mag-Dan, all of which failed to portray accurately the ownership of Mag-Dan and the true net worth of Citarelli and Marucci. Id. at 35-40. In addition, Citarelli secreted $190,700 in cash and Marucci, $750,000 in cash, in their respective homes. Id. at ¶¶ 25, 65, 66.

DISCUSSION

The Sentencing Guidelines Calculation

The Probation Department has determined that the Total Offense Level for Citarelli's crimes is 21 and that his Criminal History Category is I. Citarelli has not objected to the Sentencing Guidelines calculation. Pursuant to the 1995 Sentencing Guidelines which have been used in this case, this results in a Sentencing Guideline Range of 37 to 46 months.
The Government has filed a motion pursuant to § 5K1.1 of the Sentencing Guidelines seeking a downward departure because of Citarelli's substantial assistance in the Government's investigation and prosecution of other persons who committed offenses. Citarelli has not moved for a downward departure, but has submitted a substantial number of letters from family, friends, and business associates attesting to his good character.
I shall not address the Government's motion for a downward departure at this time, but shall defer a ruling on that motion to the sentencing hearing. I now turn to the question of restitution under the VWPA.

Restitution

Pursuant to the VWPA, which is incorporated into the Sentencing Guidelines by § 5E1.1, a sentencing court may order a criminal to make restitution to any victim of his offense. See United States v. Maurello, 76 F.3d 1304, 1316 (3d Cir. 1996); 18 U.S.C. ยง ...

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