United States District Court, M.D. Pennsylvania
Christopher C. Conner Chief Judge
NOW, this 29th day of May, 2018, upon consideration of the
government's motion (Doc. 74) for preliminary order of
forfeiture in the amount of $1, 170, 940 against defendant
Louis F. Petrossi (“Petrossi”), and it appearing
that the indictment sought forfeiture of any real or personal
property constituting or derived from proceeds Petrossi
obtained directly or indirectly as a result of the violations
alleged in said indictment, and further provided that, should
the described property have been dissipated by Petrossi prior
to forfeiture, the United States shall be entitled to
forfeiture of substitute property pursuant to 21 U.S.C.
§ 853(p), (see Doc. 1 ¶ 22), and it further
appearing that Petrossi was tried before a jury of his peers
and convicted on all charges in the indictment, (see Doc.
65), and the court having jurisdiction pursuant to 21 U.S.C.
§ 853, and recognizing that, per Federal Rule of
Criminal Procedure 32.2(b)(1)(A), the court shall,
“[a]s soon as practicable after a verdict or finding of
guilty . . . on any count in an indictment . . . regarding
which criminal forfeiture is sought, . . . determine what
property is subject to forfeiture under the applicable
statute” and “[i]f the government seeks a
personal money judgment, . . . must determine the amount of
money that the defendant will be ordered to pay, ” Fed.
R. Crim. P. 32.2(b)(1)(A), and the court noting that Petrossi
filed an opposition to the motion wherein he argues:
first, that the government miscalculated the
forfeiture amount by failing to credit Petrossi with the 2%
annual management fee for years 2017 and 2018 owed to
Petrossi pursuant to the Chadwicke Ventures LLC subscription
agreements, (Doc. 81 at 3-4); and second, that the
government's forfeiture calculation of criminal proceeds
received by Petrossi fails to credit him for the value of
GROM Social (15, 000 shares) and Search Initiatives, Inc.
(100, 000 shares) stock, obtained by Chadwicke Partners LLC
at no cost thereto, as payment to Petrossi for lawful
services rendered to the companies that transferred the
stock, (id. at 4-7), and the motion having been fully
briefed, (Docs. 74, 81, 82), and taking Petrossi's
arguments in turn: first, the court observing that
Petrossi was indicted in June 2017 in connection with the
receipt and management of investor funds for which he now
seeks credit in the form of a 2% annual management fee for
the years 2017 and 2018, (see Doc. 1), and that the jury
found that Petrossi was receiving and managing said investor
funds from January 2015 through January 2017, (id.
¶¶ 7, 9, 15-16, 18; Doc. 65), and the court
concluding that Petrossi is therefore not entitled to credit
for the 2% annual management fee for the years 2017 and 2018
under the Chadwick Ventures LLC subscription agreements; and
second, as to Petrossi's argument that the
government's forfeiture calculation incorrectly fails to
credit to Petrossi for the value of GROM Social and Search
Initiatives, Inc. shares, the court finding that neither the
government nor Petrossi has established a connection between
these shares and the $1, 811, 000 in investor funds Petrossi
placed in the Chadwicke Partners LLC bank account,
the court concluding that any value ascribable to these
stocks shall not be deducted from the criminal forfeiture
amount,  and turning to the government's
request for preliminary order for forfeiture, the court
finding, based upon the jury verdict and the record at trial,
that Petrossi acquired the property at issue-to wit: $1, 170,
940 in United States Currency-during the period of his
violations of 15 U.S.C. § 78j(b), 15 U.S.C. §
80b-6, and 18 U.S.C. § 1343 and that there was no likely
source for such property other than the violations of 15
U.S.C. § 78j(b), 15 U.S.C. § 80b-6, and 18 U.S.C.
§ 1343, and the court thus concluding that the property
is subject to forfeiture because the government has
established the requisite nexus between the property and the
offenses, see Fed. R. Crim. P. 32.2(b)(1), it is hereby
government's motion (Doc. 74) is GRANTED as set forth in
the following paragraphs.
court has determined, based upon the jury's guilty
verdict, that the following property is subject to forfeiture
pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C.
§ 2461 and that the government has established the
requisite nexus between such property and such offenses:
a. Petrossi personally obtained $1, 170, 940 in United States
Currency through securities fraud in violation of 15 U.S.C.
§ 78j, investment adviser fraud in violation of 15
U.S.C. § 80b-6, and wire fraud in violation of 18 U.S.C.
§ 1343; and
b. Because Petrossi dissipated the above-described proceeds
derived from his criminal violations, the United States may
seek, as a substitute asset pursuant to 21 U.S.C. §
853(p), forfeiture of any of Petrossi's property up to
the value of $1, 170, 940 in United States Currency.
After the disposition of any motion filed under Federal Rule
of Criminal Procedure 32.2(c)(1)(A) and before a hearing on
the petition, discovery may be conducted in accordance with
the Federal Rules of Civil Procedure upon a showing that such
discovery is necessary or desirable to resolve factual
United States shall have clear title to the subject
properties, following the court's disposition of all
third-party interests, or, if none, following the expiration
of the period provided in 21 U.S.C. § 853(n) for the
filing of third party petitions.
claim filed with the seizing agency in an administrative
proceeding and any petition filed in a related civil action
are not a substitute for the claim that must be filed in this
action which meets the requirements of and within the time
allowed under 21 U.S.C. § 853(n), as described above.
adjudication of all third-party interests, the court will
enter a final order of forfeiture pursuant to 21 U.S.C.
§ 853(n), in which all interests will be addressed.
court shall retain jurisdiction to enforce this order and to
amend it as necessary, pursuant to Federal Rule of Criminal
Clerk of Court shall provide certified copies of this order
to Assistant U.S. Attorneys Mark E. Bini and John O. Enright
U.S. Attorney's Office Eastern District of New York.