USA sentencing memo for Ronnie Gilley

UNITED STATES DISTRICT COURTMIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

UNITED STATES OF AMERICA ))

v. )) CR. NO. 2:10cr186-MHT

RONALD E. GILLEY, ))

Defendant. )

UNITED STATES’ SENTENCING MEMORANDUM

Defendant Ronald Gilley is before the Court for sentencing, having pled guilty to a long

running bribery conspiracy that is unparalleled in scope – in both the number of public officials

it targeted as well as the sheer value of the bribes. The facts of his crimes are not in dispute –

Gilley has signed a detailed factual basis, and has testified on two occasions, describing the

corruption scheme at length in separate trials. All told, Gilley has admitted offering bribes to

seven different state legislators and, in one instance, attempting to launder the bribe payments so

as to hide their illicit purpose.

The enormity and seriousness of Gilley’s crimes merit a lengthy term of imprisonment.

The United States agrees with the Probation Office’s calculations under the United States

Sentencing Guidelines, which provide a Total Offense Level of 39 with a sentencing range of

262-327 months. Gilley, however, has offered substantial assistance in the investigation and

prosecution of others, and the government hereby moves for a downward departure.

Based on the relevant factors under 18 U.S.C. § 3553, balanced against the totality of

Gilley’s cooperation, the government recommends a sentence of imprisonment of 131 months.

Case 2:10-cr-00186-MHT-WC Document 2452 Filed 07/09/12 of 13

I. Background

In the mid to late part of the last decade, Gilley was a man of substantial financial means,

who owned and operated entertainment and development businesses. In his quest for more,

Gilley decided to invest in the electronic bingo business and the unparalleled profits it would

bring him. When the Alabama state government began to challenge the ability of Gilley and

others to operate electronic bingo machines, Gilley resolved to protect his investment in

electronic bingo, including by bribing state legislators when necessary.

In 2009 and 2010, Gilley conspired with Milton McGregor1, Jarrod Massey, Jennifer

Pouncy, and others to commit bribery to pass pro-gambling legislation, which in 2010 took the

form of Senate Bill 380 (“SB 380”). Had SB 380 become law, its effects would have been

extraordinarily far reaching – a state-wide referendum to amend the Alabama constitution. Not

only could the corrupt scheme have changed the bedrock of Alabama law, but it likely would

have led to limitless profits for Gilley and McGregor. Their joint financial motive meant they

and their coconspirators were prepared to pay colossal sums of money to buy the votes they

needed, promising millions of dollars of bribes to public officials.

1Although McGregor and many of Gilley’s other coconspirators were acquitted by a jury,it is appropriate for the Court to consider their conduct in sentencing Massey. First, as the Courtfound on two separate occasions, the evidence at trial proved by a preponderance the existence ofa bribery conspiracy involving all of the acquitted defendants. (See, e.g., Doc. No. 1916 (Court’sconclusion that the evidence established a conspiracy among the charged defendants). The samepreponderance standard governs the Court’s factual determinations at sentencing. United States v.Whitesell, 314 F.3d 1251, 1255 (11th Cir. 2002). Moreover, Gilley himself has admitted conspiringwith McGregor, Thomas Coker, Jarrell Walker and others to bribe Larry Means, James Preuitt,Quinton Ross, and Harri Ann Smith.

2


A. December 2009 - March 2010: Bribery of Senator Harri Ann Smith

Gilley’s bribery of legislators essentially began when he funelled two $20,000 checks

through Jarrod Massey to Senator Harri Ann Smith’s Congressional campaign in the summer of

2008. Smith came to Gilley’s office after receiving the fruits of this $40,000 contribution – in

the form of conduit campaign contributions – and declared, “‘I’m yours. From here on you just

tell me what you want and I’m yours.’” (Gilley Test., 6/23/11 Trans. at 282). From that point

forward, Gilley understood and intended to give Smith campaign contributions in return for her

official action and assistance, including her yes vote on SB 380 as well as her assistance in

recruiting other legislators to support the proposal.

Ultimately, Gilley pled guilty to Count 13 of the Indictment, a substantive count of § 666

bribery arising from Gilley’s promise to give Senator Smith “at least $400,000 in campaign

funds” to influence and reward her in connection with an upcoming vote on SB 380.

B. March 2010: Money Laundering of $200,000 in Bribe Payments to Smith

On March 11, 2010, Smith solicited an enormous sum from Gilley - $400,000 in

campaign contributions. (Ex. J-172). To hide the true nature of this money (i.e., that it was a

bribe payment from Gilley), Smith and her campaign manager dictated a series of maneuvers.

At Smith’s request, the first installment of $200,000 was broken up into four separate $50,000

checks, each of which was directed to a different political action committee (“PAC”). (See Ex.

1066 (email from Heartsill to Gilley with names of four PACs)). Then, Smith directed that those

PACs pass the money through yet another series of PACs. (See Ex. J-197 (Smith telling Gilley

not to worry about the $50,000 payment to the Real Democrat PAC “‘cause what we’re gonna do

is put it through another’”). In the end, the money laundering was interrupted when the

3


investigation went overt, and the $200,000 remained with the intermediate PACs rather than

being paid out to Smith’s campaign.

Gilley pled guilty to Counts 34-37 of the Indictment, charging him with a substantive

count of money laundering for each of the four $50,000 checks.

C. March-April 2009: Attempted Bribery of Representative Benjamin Lewis

Gilley used Smith to identify other legislators that might be receptive to exchanging their

votes on pro-bingo legislation for bribes. In 2009, Gilley attempted to bribe Representative

Benjamin Lewis. Unbeknownst to Gilley, Lewis was cooperating with the government’s

investigation and secretly recorded a call during which Gilley assured Lewis that the “level of

support” Lewis had been getting “ain’t but a drop into the bucket to what you will get ... all we’d

ask you to do is give to people opportunity to vote on it.” (Ex. J-16 at 4).

As part of his agreement, Gilley pled guilty to Count 2, a substantive count of § 666

bribery involving the offer of $200,000 to Lewis to influence and reward Lewis in connection

with a vote on the 2009 pro-gambling legislation.

D. February 2010: Attempted Bribery of Senator Scott Beason

In February 2010, Smith led Gilley to believe that he could purchase a yes vote from

Senator Scott Beason on SB 380. On February 18, 2010, Gilley, McGregor, and Massey met

with Beason. Unbeknownst to all three, Beason was cooperating with the government’s

investigation and tape recorded the meeting. During that meeting, the group discussed giving

Beason public relations consulting work, with Gilley telling Beason, “We’ll tie you in our, we’ll

tie you into our ... our entertainment ... PR firm, which is the biggest in the country.” (J008 at

47:14-15). In the days that followed, Massey – with Gilley’s knowledge and consent – met with

4


Beason to expand on the details of the PR firm bribe, offering “a million dollars of business that

is going to come through that PR entity, one way or the another [sic], you know, annually.”

(Docket No. 300, Massey Fact Basis at ¶ 16).

As a result, Gilley pled guilty to Count 4, a substantive § 666 bribery count stemming

from Gilley and Massey’s promise to Beason of $1 million annually “as income from, or an

equity interest in, a public relations entity, to influence and reward” Beason in connection with

his vote on SB 380.

E. March 2010: Bribery of Senator Preuitt

On March 2, 2010 – the day before the initial Budget Isolation Resolution (“BIR”) vote

on SB 380 – Gilley’s attention focused on Senator James Preuitt. During an intercepted phone

call with Massey, Gilley essentially endorsed Massey’s suggestion that they purchase trucks

from Preuitt’s automobile dealership if necessary to secure Preuitt’s vote. (Ex. J-024 at 2).

After the failed BIR vote, Gilley approved Massey’s idea to have Pouncy communicate to Preuitt

(1) that Gilley would fund Preuitt’s reelection campaign, and (2) that Gilley had “$1 million to

$2 million ‘to play with.’” (Doc. No. 300, Massey Fact Basis at ¶ 32). On March 22, in a 22-

minute call from a drop phone, Gilley himself confirmed to Preuitt that, in return for Preuitt’s

yes vote, Gilley would provide (1) significant in-kind campaign contributions (in the form of a

country music concert fundraiser); (2) free campaign assistance from political consultant Jarrell

Walker; and (3) a free political poll.

Gilley pled guilty to Count 8 of the Indictment, a substantive § 666 bribery count

involving the global offer of at least $2 million in direct and in-kind campaign contributions to

Senator Preuitt to influence and reward Preuitt in connection with the upcoming vote on SB 380.

5


F. March 2010: Bribery of Senator Means

Late in March, 2010, Senator Larry Means asked Jennifer Pouncy for $100,000 in

campaign contributions, a request that Pouncy, Massey, and Gilley all viewed as the solicitation

of a bribe. On March 24, Massey called Gilley to tell him, “with regard to Means ... He’s asking

for $100,000, if he votes for this bill.” (Ex. J-75). True to form, Gilley immediately

disconnected the call, switched to his drop phone, called Massey back, and told Massey that

Means “can 100% count on our support.” (Ex. J-76).

As a result, Gilley pled guilty to Count 5, charging him with a substantive count of § 666

bribery involving the offer of $100,000 in campaign contributions in return for Means’ yes vote

on SB 380.

G. December 2009 - March 2010: Bribery of Senator Ross

In late December 2009 or early January 2010, Senator Quinton Ross called Pouncy to

solicit $5,000 to $10,000 in campaign contributions, telling Pouncy that he felt he deserved the

contribution because he had sponsored the pro-gambling legislation in the 2009 legislative

session and was no longer “‘feeling the love.’” (Pouncy Plea Agreement at ¶ 23). On March 14,

2010, Massey told Gilley that Ross was seeking an additional $20,000 in campaign

contributions, over and above the $15,000 Gilley and Massey already had provided. (Ex. J-44).

Ultimately, Gilley pled guilty to Count 10, charging him with § 666 bribery for the offer

to Ross of $25,000 in campaign contributions in connection with his yes vote on SB 380.

H. Uncharged Conduct Involving State Representative Terry Spicer

In a separate uncharged bribery conspiracy, Gilley and Massey gave things of value to

Representative Terry Spicer. In particular, Spicer solicited a $20,000 bribe payment from

6


Gilley, which Gilley paid. Gilley also provided between 200 and 300 Bama Jam tickets to

Massey for Spicer’s use, and Spicer in turn gave them away. The total value of the tickets

exceeded approximately $22,500 (Spicer Plea Agreement at ¶ 20). In return for these and other

things of value given by Massey, Spicer steered lobbying business to Massey and agreed to use

his official position to assist Gilley. (See id. at ¶¶ 15-20).

II. Guidelines Calculations

The goal of sentencing is to achieve a sentence that is “sufficient but no greater than

necessary.” 18 U.S.C. § 3553(a). A district court “should begin all sentencing proceedings by

correctly calculating the applicable Guidelines range.” United States v. Gall, 128 S. Ct. 586, 596

(2007) (citation omitted). The Sentencing Guidelines represent a “heartland” for a particular

criminal offense – “a set of typical cases embodying the conduct that each guideline describes.”

See U.S.S.G., ch. 1, pt. A, comment 4(b). Imposing a sentence within this heartland promotes

fairness by helping to ensure that individuals who engage in similar conduct are treated similarly

in the federal criminal justice system.

As noted above, the Presentence Report contains an accurate calculation of the

defendant’s offense level. In addition, Gilley has stipulated that these calculations and

enhancements are correct. Finally, the facts supporting these calculations were the subject of

testimony (from Gilley, Massey, Pouncy, and others), court authorized interceptions of telephone

calls, consensual recordings, and other additional evidence, all of which is familiar to the Court

after two jury trials.

7


Pursuant to Sentencing Guidelines § 3E1.1, the government hereby moves for an

additional one-level reduction of Mr. Gilley’s offense level due to his timely notice of his intent

to enter a plea of guilty.

In sum, Gilley’s Sentencing Guidelines Range should be calculated as follows:

2C1.1(a)(1) Base Offense Level 12

2C1.1(b)(1) More than One Bribe +2

2C1.1(b)(2) and 2B1.1(b)(J) Value of Amount Offered +20Between $7,000,000 and $20,000,000

2C1.1(b)(3) Payment Was for Purpose of +4Influencing an Official Act of An Elected Official

3B1.1(a) Organizer or Leader of Criminal Activity that Involved +4Five or More Participants or was Otherwise Extensive

3E1.1 Reduction for Timely Notice of Intent to Plead Guilty -3

Final Sentencing Guidelines Level 39 (262-327 months)

III. Motion for a Downward Departure Pursuant to § 5K1.1 for Substantial Assistance

The Sentencing Guidelines identify a non-exhaustive set of five factors as an aid to the

Court in considering the amount of a departure to be granted on the government’s substantial

assistance motion. U.S.S.G. § 5K1.1. As explained below, Gilley’s cooperation - as measured

against those factors - merits a significant departure, and the government recommends a 50%

reduction from the low end of the final guidelines sentencing level.

(1) The significance and usefulness of the defendant’s assistance.

The significance and usefulness of Gilley’s cooperation was substantial. He was the only

witness to have regular, direct conversations with McGregor, and he was a very important

witness in the case against Smith. In addition, Gilley met with the government on numerous

8


occasions, explaining evidence that the government already had in its possession and suggesting

other avenues of investigation. Moreover, Gilley regularly assisted the government in

identifying additional calls that had not been initially identified as exhibits.2

Unfortunately, Gilley’s usefulness was somewhat reduced by the difficulty he initially

displayed in following government instructions. For instance, he occasionally became

combative on cross examination during the first trial, notwithstanding clear instructions to

remain polite and respectful. Similarly, at the time of his guilty plea, the government

admonished Gilley not to say anything to the press or otherwise make a statement. Gilley,

however, made a long, self-serving statement during his change of plea hearing, to the effect that

he had started with virtuous, “naive” intent, “but the closer I got to the flames, it seems as if I

became engulfed in that fire as opposed to putting it out.” (Apr. 22, 2011 Trans. at 24). To

make matters worse, Gilley then lied about this incident to his wife in a recorded call from jail,

claiming that the government had asked him to make the statement, a lie which provided

unnecessary fodder for cross examination.

All told, however, the significance and usefulness of Gilley’s cooperation weighs in favor

of a departure.3

2Gilley also has cooperated in an ongoing corruption investigation by the Alabama AttorneyGeneral’s Office. The undersigned have been unable to obtain an assessment of the value ofGilley’s cooperation to the state investigation, so the instant recommendation does not includeadditional consideration for his cooperation with the state.

3The government does not discount its departure recommendation based on the jury’sconclusion that there was not evidence to convict Gilley’s co-conspirators beyond a reasonabledoubt. Gilley did what was asked of him, and he deserves credit irrespective of the jury’s verdict.

9


(2) The truthfulness, completeness, and reliability of any information and testimony provided by

the defendant.

Gilley’s information and testimony uniformly was truthful, complete, and reliable. His

information and testimony consistently was corroborated by other evidence in the case, including

recorded conversations and bank records. Indeed, unlike many cooperators who often deny and

obfuscate when first questioned by investigators, Gilley’s initial debriefings were notable for the

candor he displayed in admitting his own misconduct. The truthfulness, completeness, and

reliability of Gilley’s information and testimony weighs in favor of a departure.

(3) The nature and extent of the defendant’s assistance.

The nature and extent of Gilley’s assistance also was substantial. He made himself

available at the convenience of the government, driving more than an hour each way to meet the

government in Montgomery for numerous debriefings and trial prep sessions. Gilley also

devoted a significant amount of time to preparing for the retrial in this case, including by

spending dozens of hours listening to recorded conversations and then helping the government to

understand the context and background for each. Further, Gilley testified in two trials, spending

all or part of 11 days on the witness stand, cumulatively. The nature and extent of Gilley’s

assistance weighs strongly in favor of a generous departure.

(4) Any injury suffered, or any danger or risk of injury to the defendant or his family resulting

from his assistance.

Other than the reputational and economic injuries regularly suffered by white collar

cooperators, there was nothing unique about Gilley’s circumstances that should affect the

Court’s analysis of the appropriate departure.

10


(5) The timeliness of his assistance.

Gilley’s cooperation was timely, but significantly later than the cooperation of two other

witnesses, Jennifer Pouncy and Jarrod Massey. On April 13, 2011, roughly two months prior to

the start of the first trial, Gilley first met with investigators and began a series of debriefings. On

April 22, Gilley changed his plea to guilty and entered his cooperation agreement with the

United States. Because Gilley began cooperating in time to provide useful information but much

later than two of his coconspirators, this factor merits only slight consideration in terms of a

departure.

IV. Application of the § 3553(a) Factors

The factors set forth in 18 U.S.C. § 3553(a) support the government’s recommendation of

a lengthy sentence of imprisonment, even after crediting Gilley for the substantial assistance he

provided.

The nature and circumstances of Gilley’s crimes compel a sentence of incarceration. See

18 U.S.C. § 3553(a)(1). Gilley’s crimes were not crimes of necessity. He was not forced to

offer millions of dollars in bribes out of fear, or because he was a victim of corrupt public

official extorting bribes from an innocent businessman. Rather, Gilley was a willing partner in

these crimes. He was motivated by greed, by a base desire to maintain and increase his wealth.

Moreover, the corruption offenses committed by Gilley and his coconspirators were

serious, and Gilley deserves substantial punishment. See 18 U.S.C. § 3553(a)(2)(A). Bribery

strikes at the heart of our system of government, which depends on the participation of citizens.

When wealthy businessmen purchase the votes of public officials, democracy is undermined

because ordinary citizens become disenchanted and less likely to participate in the system. A

11


lengthy sentence of imprisonment will properly promote respect for the law, serving as a

reminder of the seriousness with which our system of government treats threats to its integrity.

V. Conclusion

For the foregoing reasons, the government respectfully recommends a sentence of 131

months imprisonment, combined with such other conditions as the Court deems necessary.

Respectfully submitted,

LANNY A. BREUER Assistant Attorney General Criminal Division Attorney for the United States Acting Under Authority of 28 U.S.C. § 515

JACK SMITHChief

By: /s/ M. Kendall Day M. Kendall DayE. Rae WoodsMarquest MeeksPublic Integrity SectionU.S. Department of Justice1400 New York Ave., NW, 12th FloorWashington, DC 20005(202) [email protected]

12


CERTIFICATE OF SERVICE

I hereby certify that on July 9, 2012, I provided, via the CM/ECF system, a copy of theforegoing to David Harrison, counsel of record for Ronald Gilley.

/s/ M. Kendall Day M. Kendall DayDeputy ChiefPublic Integrity SectionU.S. Department of Justice1400 New York Ave., NW, 12th FloorWashington, DC 20005(202) [email protected]

13


USA sentencing memo for Ronnie Gilley

Documents

Transcript of USA sentencing memo for Ronnie Gilley