LAWYERS FOR MONEY LAUNDERER ORDERED TO TURN OVER FEES

Lawyer Stephen O'Donnell, of Providence, is one of five lawyers being
ordered to turn over nearly $2 million in legal fees paid by Stephen
Saccoccia, money the U.S. attorney claims they should have know was
laundered drug profits.

Arguing that nearly $2 million that convicted money-launderer Stephen
Saccoccia paid to his lawyers came from drug dealers' money that he
laundered, the U.S. government has demanded that the money be turned over to
the government.

U.S. Attorney Sheldon Whitehouse has filed a motion in federal court in
Providence, arguing that certain legal fees paid to Kenneth O'Donnell, of
Providence; Robert Luskin, of Washington, D.C.; Jack Hill, of San Francisco;
Stephen Finta, of Fort Lauderdale, Fla., and Lawrence Semenza, of Nevada,
were paid in such a fashion that the lawyers should have known that the
monies were laundered drug profits.

The Supreme Court has held that such fees are covered by federal criminal
asset forfeiture laws, according to Thomas Connell, spokesman for
Whitehouse.

The monies in question, according to depositions given by the five lawyers,
came in forms ``such as gold bars, cash that was dropped off at hotels and
in the trunks of cars and money transfers from Swiss bank accounts,''
according to Connell.

In 1993, Saccoccia was sentenced to 660 years in federal prison for
laundering Colombian drug money. He was also fined $15.8 million and ordered
to forfeit $136.3 million.

Ten other defendants were also convicted in Rhode Island and imprisoned for
their roles in the money-laundering, including Saccoccia's wife, Donna, who
was sentenced to 14 years.

Evidence presented at trial showed that Saccoccia and his codefendants
received millions of dollars in cash from drug dealers and laundered it by
buying gold, bank checks and travelers' checks. Saccoccia kept a percentage
of the proceeds as his fee, and the rest was wired to Colombia.

After the Saccoccias were arrested in 1991, the court froze their assets,
including bank accounts, gold or other precious metals, up to $140 million.
Because they declined to submit a list of their assets, the court also
rejected the Saccoccias' argument that the government's actions had left
them unable to pay their lawyers.

After Saccoccia's conviction, the government continued to look for his
money-laundering proceeds. As part of that effort, the government received
court permission to depose several of the Saccoccias' lawyers.

During the course of those depositions, taken in March and April of 1996,
the five lawyers testified about the payments Saccoccia made to them.

The government, in a memorandum supporting its motion, argues that the
manner in which those payments were made put the lawyers on notice that
these were assets that Saccoccia had acquired through his racketeering and
money-laundering activities and that were frozen by the court's protective
order.

The government argues that the lawyers knew from the indictment and the
evidence presented at trial that virtually all of Saccoccia's assets were
subject to forfeiture.

``This should not be viewed as a broad-brush assault on defense counsels'
legitimate fees,'' said Whitehouse. ``The unusual circumstances of this
case, both the existence of a court order freezing Saccoccia's assets, and
the cloak-and-dagger nature of these anonymous and surreptitious payments,
make this an exceptional case.''

O'Donnell testified that he received $410,000 from Saccoccia, kept about
$107,500 and distributed the rest to other Saccoccia lawyers. According to
the memorandum, he received three cash payments totaling $125,000, which
were dropped off anonymously at his office.

The individual who dropped off the first cash payment of $50,000 refused to
identify himself and said only that the cash was ``money owed to
Saccoccia.'' O'Donnell also testified that he received a $285,000 wire
transfer from Switzerland, some of which he gave to various members of
Saccoccia's family. During the summer of 1993, Finta dropped off at
O'Donnell's office 15 gold bars for Luskin.

The other four lawyers received payments of hundreds of thousands of dollars
in similar fashion.

The Saccoccia case was investigated by the FBI, the Internal Revenue Service
Criminal Investigation Division, Rhode Island State Police, Cranston police
and the U.S. Customs Service.

Copyright © 1998 The Providence Journal Company