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The Platinum Case: How One Defendant Lost Even Though He Won

by | Dec 4, 2020 | Firm News, SanFilippo

Increasingly, judges and lawyers are calling attention to the excesses of white-collar sentencing under the federal sentencing guidelines.  Defendants found guilty of economic crimes have never been especially sympathetic, to put it mildly, so this trend is noteworthy and long overdue.  However, even white-collar defendants who are acquitted and do not face sentencing can pay a heavy price in our system of justice, as the Platinum case shows.

The Ultimate Resolution

On July 9, 2019, after a nine-week federal trial, Joseph SanFilippo, the Chief Financial Officer of Platinum Partners, was acquitted of all counts in an indictment charging him with securities fraud, investment adviser fraud, mail fraud, and two counts of conspiracy.  Joe was defended by Ford O’Brien Landy.  Two other defendants successfully moved to have their partial convictions on ancillary charges set aside, and the government is now appealing.

The Personal Toll On Joe

Two-and-a-half years earlier – a world ago – Joe was arraigned on the indictment.  He faced up to 25 years in prison and hundreds of thousands of dollars in penalties.  Joe had not previously been told he was a target of an investigation, let alone that he was about to be indicted, so the force of the charges, served on him in his home, hit him hard.  The events set in motion that day, while ending in victory in the courtroom, cost Joe dearly.

Before his indictment Joe was, to those who knew him, an employee with a spotless record, a loving father and husband, a generous neighbor and friend.  Now he was a fraudster who “schemed” to rob Platinum’s investors of millions of dollars.  Because the indictment was unveiled in a sensational government press conference, in which defendants were accused of operating “a Ponzi-like scheme,” the charges instantly overshadowed a lifetime of decency and mocked Joe’s solid reputation in his community.  Ponzi schemes operators, after all, are the most cynical of criminals, winning the trust of investors they know will lose everything.  The accusation, absurd as it proved to be, was meant to mark the accused as beyond the pale.  It worked in Joe’s case.  Even old friends dropped away.

Trying To Make Sense Of The Nonsensical

Personal insolvency nipped at Joe’s heels.  Far from a wealthy man, entirely self-made, he ran through his savings, sold what he could, mortgaged what he couldn’t, and went hat in hand to family, friends, and their friends.  Meaningful new employment was out of the question.  All the while, our defense team had no answer to Joe’s increasingly insistent question:  How could this have happened?

The indictment’s allegations against Joe were largely boilerplate.  We’d hoped that the government’s pretrial production of millions of pages of electronic records – over 3500 pages of material, and other documents – in a process that eventually took almost two years – would clarify why he had been indicted.  Just as Puritan diarists used to scour the details of their sinful lives to assure themselves that an avenging God was just, so Joe and our defense team poured through the government’s discovery materials to try and make sense of it all.  However, the ways of an all-powerful authority remained shrouded in mystery.  Joe figured in a relatively small number of conversations and transactions, buried in a mountain of electronic records, appeared in large part to be irrelevant.

A Guilty Plea Was Not An Option

Although Joe scorned a guilty plea, as his defense lawyers we had an obligation to pursue all possible avenues toward a resolution.  Our discussions with the government went nowhere.  The prosecutors refused to explain what Joe had done wrong – apart from one example that was incorrect on its face – and fell back on the fact that Joe was Platinum’s CFO and had an office near the other defendants’ offices.  At the start of the trial, one prosecutor cut short this discussion, saying “it’s better to let the jury decide.”

Ordinarily, the government has an interest in previewing at least some of its proof – one or more incriminating conversations or transactions – to encourage guilty pleas or test its theory of the case.  Not so here.  We learned during the trial that the emperor had no clothes, yet prosecutors persisted in calling Joe a fraudster and seeking huge penalties against him.  Even now, after a lengthy trial, we remain as mystified by his indictment as ever.

A Government Power Play Unraveled

In Platinum, the government put Joe on trial for no apparent reason other than because it could do so.  His acquittal on all counts doesn’t excuse the government’s conduct.  In any criminal trial, from the first day of jury selection, there is a strong, often irresistible undertow toward conviction.  Most jurors want to believe in the rightness of the prosecution’s case if only to rationalize the sacrifices they agree to make in order to serve.  As the days turn into weeks, the prosecution’s view of the case becomes ingrained.  It doesn’t take much for a jury caught up in this atmosphere to convict, even when the prosecutors misbehave, or their case fails to hold up as advertised.

Joe, with time and his customary work ethic, may regain his status in his community and even a comfortable way of life, although those goals now seem distant.  Weaker souls have been broken by his experience.  What will stay with Joe, no matter what, is that he once was at the mercy of a powerful government that toyed with his life.

Now he is free from the fear of prosecution and can begin the painstaking process of rebuilding his life – and his reputation.