| Importer of Clothes From
China Bailey Pled Guilty Now Starts 6 Months
In Otisville in May
By Matthew
Russell Lee
SDNY COURTHOUSE,
Dec 22 – A business man
accused of defrauding the U.S.
government of over $1 million
in customs fees on children's
clothing from China, Joseph
Bailey, on June 6 was brought
in shackles into the U.S.
District Court
for the
Southern
District of
New York Magistrates
Court. Inner City Press was
the only media there.
The
government agreed to a $1
million bond; his wife Lisa
and his nearly identical son
Morris, in the gallery, were
given his medicines in a
plastic bag.
After
that, the case was repeatedly
adjourned, with the
adjournment memo-endorseds
being virtual the only
documents in the docket: from
June to September, from
September to October, and and
October to November 13 at 3:30
pm. Inner City Press went to
this long delayed conference
before SDNY Judge William H.
Pauley, with only one other
person in the gallery, and
heard Bailey's attorney ask
for permission for Bailey to
travel to Florida for
Thanksgiving.
In mid
January Bailey quietly pled
guilty to only one of the
counts initially and more
loudly brought against him.
And now on
December 22, Bailey was
sentenced by Judge Pauley.
Bottom line: he got six months
in prison, with Otisville
recommended, to start in May.
Inner City Press live tweeted
it, here:
Defense lawyer
Sharon McCarthy: My client
pled guilty to wire fraud,
under-reporting value of
imports of Stargate, $1.6
million understated. COVID
hit, so sentencing was delayed
until today. Mr. Bailey wanted
to expedite it, the stress is
exacting a toll.
McCarthy:
Mr Bailey suffers from
depression and alcoholism. He
is a broken man. He defrauded
the government of $1.6
million. He's ready to accept
judgment. Probation suggests
24 months, less than the plea
agreement.
McCarthy: Mr.
Bailey poses no threat of harm
to anyone. The only threat
here is to Mr. Bailey if he is
sent to jail. He would face a
1 in 5 change of contracting
COVID, four times higher than
if he is out.
McCarthy:
Mr. Bailey is owed $29 million
from his companies. If he is
incarcerated he will not
recoup it. He has spread the
word to others not to do what
he did. He has spoken at three
schools and would do more,
once it is safe. There is a
video, it has gone viral
McCarthy:
Mr Bailey has spread the word
within his Syrian Sephardic
community in Brooklyn. If he
goes to prison, his 21
employees will be out of work.
He will speak directly to the
Court later in this
proceeding. Assistant US
Attorney Dina McLeod: Mr
Bailey implicated others in
his scheme. Two of his
employees are cooperating
witnesses. In the beginning it
was identical invoices except
for the bottom line number.
Next was sample invoices.
AUSA McLeod
brings up the victim who wrote
in, citing Inner City Press. here.
Unclear if
they'll be allowed to speak.
AUSA: "US Customs is the
victim here." So, no.
AUSA: Customs
relies on honesty. Mr. Bailey
got away with it for a long
time. It's unfair to the other
businesses he competes with.
Now Mr. Bailey is asking for
the same sentence as the
cooperator, Mr. Fry. Fry was
the CFO. It would be an
unwarranted disparity
Bailey himself:
"Your Honor, my action cause
harm to the government, my
wife and children, and my
community. I violated
government law and the law of
my own religion, Thou shalt
not steal.
Bailey: I've
joined AA. I have many
check-ins. I attend Zoom
meetings several times a week.
I shared my story publicly. I
have learned about repentance.
I am the patriarch of the
family. I ask for mercy. Thank
you, Your Honor.
Judge
Pauley: Mr. Bailey pled guilty
to defrauding the US out of
customs duties. He was the
leader of the criminal
activity. Total offense level
24, criminal history category
1. So, 51 to 63 months
guideline.
Judge
Pauley: Mr. Bailey dropped out
of high school at 16. He built
a successful company. His
crime is puzzling. He has
agreed to pay restitution. But
a loss of liberty is
warranted. The guideline is
too high, Probation is
excessive. So, six months of
imprisonment
Judge Pauley:
After the six months in
prison, three years of
supervised release. On
restitution, I do not think
10% of income is appropriate,
given his assets. Propose an
order in two weeks. Surrender
will not be soon. It will be
May 6, 2021. Or send me a
letter
McCarthy: We'd
like Otisville camp, so he can
have Kosher meals and
religious services. Judge
Pauley: I'm going to grant
that. Mr. Bailey, I think you
and your family and business
can work through this. Stay
safe.
But how
much might the whistleblower
get? Watch this site, @InnerCityPress
and the new @SDNYLIVE.
***
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