USA sentencing memo for Jarrod Massey

7/31/2019 USA sentencing memo for Jarrod Massey

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UNITED STATES DISTRICT COURTMIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

UNITED STATES OF AMERICA )

)v. )

) CR. NO. 2:10cr186-MHTJARROD D. MASSEY, )

)Defendant. )

UNITED STATES SENTENCING MEMORANDUM

Defendant Jarrod Massey 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 -

Massey has signed a detailed factual basis, and has testified at trial, describing the corruption

scheme at length. All told, Massey has admitted offering bribes to six different state legislators.

The enormity and seriousness of Masseys crimes merit a lengthy term of imprisonment.

The United States agrees with the Probation Offices calculations under the United States

Sentencing Guidelines, which provide a Total Offense Level of 35 with a sentencing range of

168-210 months. Massey, 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

Masseys cooperation, the government recommends a sentence of imprisonment of 134 months.

I. Background

Beginning in April 2006, Defendant Massey owned his own lobbying firm in

Montgomery, Alabama. Massey employed lobbyist Jennifer Pouncy. One of Masseys largest

clients was Ronald Gilley. Gilley and his then business associate Milton McGregor both owned

Case 2:10-cr-00186-MHT-WC Document 2453 Filed 07/09/12 Page 1 of 14


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controlling interests in large entertainment projects that depended in part on electronic bingo.

When the Alabama state government began to challenge the ability of Gilley and others to

operate electronic bingo machines, Gilley turned to Massey for help protecting his investment in

electronic bingo, including by bribing state legislators when necessary.

In 2009 and 2010, Massey conspired with McGregor1, Gilley, 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, Massey, 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.

Although both Massey and Gilley pled to the same bribery conspiracy, Massey pled

guilty to fewer substantive counts based on the fact that he had only a minor role in Gilleys

bribery of Senator Harri Ann Smith, and no role in the money laundering Gilley committed in

order to disguise the true nature of $200,000 of Gilleys bribes to Smith.

1Although McGregor and many of Masseys 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 (Courtsconclusion that the evidence established a conspiracy among the charged defendants). The samepreponderance standard governs the Courts factual determinations at sentencing. United States v.Whitesell, 314 F.3d 1251, 1255 (11th Cir. 2002). Moreover, Massey himself has admitted conspiringwith McGregor, Thomas Coker, Jarrell Walker and others to bribe Larry Means, James Preuitt,Quinton Ross, and Harri Ann Smith.

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

In 2009, Massey helped Gilley offer attempted bribes to Representative Benjamin Lewis.

Unbeknownst to Massey, Lewis was cooperating with the governments investigation. In a

March 2009 conversation with Gilley, Lewis, and Massey, the group discussed Lewiss

problems with then pending pro-gambling legislation. Gilley then asked Lewis how much his

most recent campaign had cost. (Lewis Test., 6/22/11 Trans. at 28). When Lewis responded

$200,000, Massey said Lewiss next campaign would cost double, and Gilley told Lewis that one

of Gilleys contacts could write a check for that entire amount. (Id. at 29). Later, Gilley talked

separately with Lewis and, [T]o cut through all the rhetoric, I offered Mr. Lewis a bribe to vote

for our legislation. (Gilley Test., 6/24/11 Trans. at 130).

As part of his agreement, Massey 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.

B. February 2010: Attempted Bribery of Senator Scott Beason

In February 2010, Massey worked with Gilley and McGregor to attempt to bribe Senator

Scott Beason in return for his favorable vote on SB 380. On February 16, 2010, Massey paid an

unannounced visit to Beasons legislative office, telling Beason that, if Beason did not commit to

voting in favor of SB 380, he might miss an opportunity to really cut yourself a good deal.

(Doc. No. 300, Massey Fact Basis at 12). On February 18, Massey, McGregor, and Gilley met

with Beason. Unbeknownst to all three, Beason was cooperating with the governments

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

Beason public relations consulting work, with Massey telling Beason, [L]et me visit with them

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[McGregor and Gilley] and get a little bit deeper in the weeds. And you and I can come up with

a kind of template of sorts.... (J008 at 50:9-15). In the days that followed, Massey met with

Beason to expand on the details of the public-relations-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, Massey pled guilty to Count 4, a substantive 666 bribery count stemming

from Massey and Gilleys 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.

C. March 2010: Bribery of Senator Preuitt

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

on SB 380 - Massey called Gilley to suggest that Gilley purchase trucks from Preuitts

automobile dealership if necessary to secure Preuitts vote. (Ex. J-024 at 2). After the failed

BIR vote, Massey told Pouncy to communicate to Preuitt (1) that Gilley would fund Preuitts

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 24, in an intercepted call with Gilley, Massey

recounted how he had confirmed to Preuitt earlier offers of free campaign assistance from

political consultant Jarrell Walker and significant in-kind contributions in the form of free

country music concerts as campaign fundraisers. Massey said:

[Preuitt] told me point blank, he said, Well, as you know, Ive gone, come a longway, and you gotta know Preuitt to understand all this code. Ive come a longway. And, hes winking at me .... I told him, I said, Look, I know you rock solidwith Larry. I said, I know youre covering him. I said, Yall got, yall got thisthing locked up right now and its whatever yall want. And I said, So, thats, youknow, hey, thats great. Thats the way this process works.

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(Ex. J-78 at 4:42-5:6).

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

involving the cumulative 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.

D. 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 ... Hes

asking for $100,000, if he votes for this bill. (Ex. J-75). After getting approval from Gilley,

Massey told Pouncy to go back to Means and agree to the terms of the corrupt deal, thereby

committing to paying Means $100,000. (Pouncy Dir., 2/13/12 Trans. at 139).

As a result, Massey 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.

E. 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 Massey and Gilley already had provided. (Ex. J-44).

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Ultimately, Massey pled guilty to Count 10, charging him with 666 bribery for offering

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

F. Uncharged Conduct Involving State Representative Terry Spicer

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

Representative Terry Spicer. In particular, prior to 2006, Massey began paying Spicer

approximately $1,000 to $1,500 in cash per month, and in April 2006, Massey and Spicer agreed

that Massey would begin paying larger sums in exchange for Spicer using his legislative position

to obtain lobbying business for Massey. (Spicer Plea Agreement at 3). As a result, Massey

increased the cash payments to Spicer to roughly $2,000 to $3,000 per month beginning in June

2008 and continuing through January 2010. (Id. at 11). Massey also provided additional

things of value, such as an additional $9,000 cash payment in about December 2008, and a ski

trip for Spicer and his family to Breckenridge, Colorado, in or about January 2009. (Id. at 12).

Finally, Massey helped Gilley pay additional bribes to Spicer in return for Spicers use of 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

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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

defendants offense level. In addition, Massey 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.

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

additional one-level reduction of Mr. Masseys offense level due to his timely notice of his intent

to enter a plea of guilty.

In sum, Masseys 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

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

Final Sentencing Guidelines Level 35 (168-210 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 governments substantial

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assistance motion. U.S.S.G. 5K1.1. As explained below, Masseys cooperation - as measured

against those factors - merits a departure, and the government recommends a 20% reduction

from the low end of the final Sentencing Guidelines level. The recommended departure is less

than that recommended for Gilley and Pouncy given the difficulties experienced with Masseys

cooperation.

(1) The significance and usefulness of the defendants assistance.

The significance and usefulness of Masseys cooperation merits a downward departure,

although one tempered by the problems with Masseys reliability. In particular, Massey

deserves credit for the guilty pleas of two coconspirators, Ronald Gilley and Terry Spicer.

Gilleys decision to plead guilty undoubtedly was affected by the knowledge that much of

Masseys testimony at trial would directly implicate Gilley. Indeed, Gilley witnessed first hand

how Massey would implicate him when Massey testified at the February 12, 2011 bond

revocation hearing for Gilley.

Masseys cooperation also directly and substantially contributed to the guilty plea of

Representative Terry Spicer. Massey provided information that Spicer was accepting monthly

cash payments in exchange for official action that benefitted Masseys lobbying business. As a

result of Masseys cooperation (combined with Gilleys), Spicer plead guilty to a substantive

bribery charge.2

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

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Unfortunately, Massey severely undercut his usefulness by repeatedly violating

instructions he was given by the government. Massey was instructed not to read or listen to

anything about the trial. He, however, repeatedly violated that instruction. For example, during

the direct examination of Gilley in the first trial, on June 24, 2011, Massey called his wife from

jail and asked her, What did you hear on Gilley today? and then discussed with her what she

had gleaned from the news coverage. (Ex. J-750-11). Likewise, Massey was repeatedly

instructed not to discuss the case with anyone outside of his attorneys or immediate family.

Nevertheless, several months after the first trial, on October 27, 2011, Massey initiated contact

with a blog titled The Legal Schnauzer, offering to provide information on improprieties he had

observed. (Att. A - Legal Schnauzer article). When the blog failed to respond to Masseys offer,

Massey sent another solicitation on November 1, 2011. To his very limited credit, Massey wrote

that he was not interested in discussing anything ... directly related to pending trial points.

(Id.). In violating the clear instruction to avoid the press, Massey needlessly created additional

material with which to cross examine him, rendering less useful his cooperation and testimony in

a second trial.

More damaging to his usefulness, however, was how Massey responded to cross

examination during the first trial. Massey displayed contempt and disrespect for defense

counsel, notwithstanding contrary instruction by the government and, ultimately, the Court.

Within minutes of beginning to testify on cross, Massey told a defense attorney that he kept

answering in narrative fashion because, I have a dislike for you and I was getting a little fun out

of aggravating you. (Massey Cross, 7/12/12 Trans. at 143). This outburst required the first of

several increasingly strong admonishments from the Court, until the following day when the

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Court was forced to excuse the jury and threaten Massey with contempt if he continued to argue

with defense counsel. (Massey Cross, 7/13/12 Trans. at 105-106). In spite of this and other

stern admonishments, Massey continued to be disrespectful, culminating with his final exchange

with McGregors defense counsel, when Massey asked, Is that the best question you got to end

with? (Massey Cross, 7/14/12 Trans. at 78). Moreover, Massey later admitted that one answer

he had given during cross had been incorrect. On cross, Massey testified that he initially had

withheld information about Means solicitation of $100,000 out of a desire to protect Senator

Means till the eleventh hour when I found out I couldnt. (Massey Cross, 7/15/11 Trans. at

125). When pressed on the plausibility of this claim given that he did not personally know

Senator Means, Massey persisted, reaffirming not only that he had tried to protect Senator Means

but also claiming that he had been open and honest about that fact, informing the government

about it during a debriefing session. (Massey Cross, 7/19/11 Trans. at 49-52). In fact, Massey

later admitted that he had not explained to the government previously that he wanted to protect

Means.3 (Att. B - 2/2/12 302 of Massey).

All told, the significance and usefulness of Masseys cooperation particularly his

contribution to two guilty pleas weighs in favor of a departure, although one tempered by the

ways Massey hurt his usefulness by failing to follow the government and the Courts instructions

to display respect for defense counsel and to answer the questions posed to him.

3The government cites this admission only to illustrate how Massey damaged his usefulnessas a cooperator. The government does not content that this fact should be used by the Court tocalculate Masseys sentence. See U.S.S.G. 1B1.8(a) and Massey Plea Agreement 15 (other thanthe factual basis, self-incriminating information provided by the defendant pursuant to a pleaagreement may not be used in determining the applicable guideline range).

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

the defendant.

Masseys information and testimony largely was truthful, complete, and reliable. Unlike

both Gilley and Pouncy, Massey initially minimized his conduct, including by failing to disclose

the $100,000 solicitation by Senator Means and later claiming that the omission was caused by a

desire to protect Means as opposed to a hope of minimizing Masseys own conduct. In the end,

the government was able to corroborate much of the information and testimony Massey

provided. On balance, the truthfulness, completeness, and reliability of Masseys information

and testimony weighs in favor of a departure.

(3) The nature and extent of the defendants assistance.

The nature and extent of Masseys assistance was substantial. He made himself available

at the convenience of the government, meeting during the nights and on weekends for numerous

debriefings and trial prep sessions. Massey also devoted a significant amount of time to

preparing for the initial trial, including by spending many dozens of hours listening to recorded

conversations and then helping the government to understand the context and background for

each. Further, Massey testified in the first trial, spending all or part of 9 days on the witness

stand, cumulatively. The nature and extent of Masseys assistance weighs in favor of a

departure.

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(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 Masseys circumstances that should affect the

Courts analysis of the appropriate departure.

(5) The timeliness of his assistance.

Masseys cooperation was timely. Indeed, Massey first sat for a debriefing on October

12, only 12 days after indictment. Similarly, Massey pled guilty on December 20, months in

advance of the first trial. Because Massey began cooperating in time to provide useful

information and was the second witness in the door, the timeliness of his cooperation merits

substantial 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 governments recommendation of

a lengthy sentence of imprisonment, even after crediting Massey for the assistance he provided.

The nature and circumstances of Masseys crimes compel a sentence of incarceration.

See 18 U.S.C. 3553(a)(1). Masseys crimes were not crimes of necessity. He was not forced

to join Gilley in a conspiracy 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,

Massey was a willing partner in these crimes. He was motivated by greed, namely a desire to

please his largest client and increase his lobbying practice.

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

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

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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

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 134

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

Respectfully submitted,

LANNY A. BREUERAssistant Attorney GeneralCriminal DivisionAttorney for the United StatesActing Under Authority of 28 U.S.C. 515

JACK SMITHChief

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

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CERTIFICATE OF SERVICE

I hereby certify that on July 9, 2012, I provided, via the CM/ECF system, a copy of theforegoing to Brett Bloomston and Joseph Basgier, counsel of record for Jarrod Massey.

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

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USA sentencing memo for Jarrod Massey