## Facts

- Antony Alexander Blarek II and Frank V. Pellecchia were New York interior decorators who provided services to José Santacruz Londoño, a leader of the Cali cartel.
- Over several years, they participated in a profitable money-laundering scheme designed to conceal the source and ownership of cartel drug proceeds through domestic and international financial transactions.
- The scheme included moving funds through accounts, structuring transactions, and using purchases (including real estate) to disguise proceeds.
- The court found both defendants knew Santacruz’s identity, that he led a major drug organization, and that the funds were derived from drug trafficking, yet agreed to launder the proceeds.
- Neither defendant used violence or weapons, and both lacked prior criminal records.
- They were arrested in March 1996 and charged with racketeering, racketeering conspiracy, and conspiracy to launder monetary instruments.

## Issues

1. How should the Sentencing Guidelines apply to non-violent professionals who knowingly launder large sums of drug proceeds for a major cartel?
2. Whether guideline enhancements (including for knowledge of unlawful source, amount of funds, role, and obstruction) were warranted on the sentencing record.
3. Whether the case fell outside the Guidelines’ “heartland,” justifying downward departures.
4. Whether individual circumstances—vulnerability to the criminal organization’s influence, duress-like pressures short of legal duress, medical impairment, family responsibilities, and relative culpability—supported departure.
5. What sentence was “sufficient, but not greater than necessary” under 18 U.S.C. § 3553(a) given punishment, deterrence, public protection, and treatment considerations.

## Decision

- After a jury trial, both defendants were convicted of racketeering (18 U.S.C. § 1962(c)), racketeering conspiracy (18 U.S.C. § 1962(d)), and conspiracy to launder monetary instruments (18 U.S.C. §§ 371, 1956(h)).
- The court largely accepted guideline calculations that produced a high offense level based on the scope of laundering, defendants’ knowledge of the drug source, and other adjustments reflected in the presentence report.
- The court rejected most attempts to substantially reduce guideline exposure by minimizing the seriousness of the conduct or the applicability of enhancements.
- The court found the case outside the heartland of typical money-laundering/racketeering cases and granted downward departures on a combination of grounds, including non-heartland characteristics and defendant-specific mitigating circumstances.
- The court imposed substantial imprisonment, along with severe monetary penalties and forfeitures designed to strip defendants of assets and deter other professionals from assisting drug traffickers.

## Legal Principles

- Under 18 U.S.C. § 3553(a), a federal sentence must be sufficient, but not greater than necessary, to reflect the offense’s seriousness, provide just punishment, afford deterrence, protect the public, and provide needed treatment.
- The Sentencing Guidelines establish a typical “heartland” of cases; when a case materially differs from that set, a court may depart if authorized by guideline policy statements and consistent with statutory purposes.
- Knowing laundering of drug proceeds for a major trafficking organization supports substantial guideline punishment, including enhancements tied to knowledge of the unlawful source and the magnitude of funds involved.
- Departures may be warranted based on atypical combinations of circumstances, including non-violent first-offender status paired with unusual pressures and vulnerabilities affecting decision-making, even if those pressures do not constitute legal duress.
- Extraordinary physical impairment may justify mitigation at sentencing, including through a downward departure, when incarceration would impose atypical hardship or impair appropriate care.
- General deterrence can justify significant incarceration and financial sanctions for professionals who enable organized crime by lending legitimate skills and access to financial channels.

## Conclusion

The court sentenced two non-violent, first-offender professionals who knowingly laundered cartel proceeds by applying substantial guideline enhancements but departing downward because the case’s atypical features, combined with individualized mitigating factors (including medical impairment for one defendant), made unadjusted guideline sentences greater than necessary under § 3553(a) while still requiring meaningful imprisonment and asset-stripping penalties to punish and deter.


United States v. Blarek, 7 F. Supp. 2d 192 (E.D.N.Y. 1998)