Capoccia maintains his innocence as judge declares “worst white-collar crime”

BRATTLEBORO, Vt. — Five-and-a-half years after being sentenced to 16 years in prison, former Albany attorney and Guilderland resident Andrew Capoccia learned on Tuesday he wouldn’t be getting out early, despite the many appeals and the re-sentencing he was granted.

Capoccia, 69, appeared in front of United States District Court Judge J. Garvan Murtha in a federal courthouse in Brattleboro, Vt., on Tuesday — under the same judge and in the same place where he was originally sentenced — to ask the government to reconsider the length of his sentence, which was 188 months, or 15 years and eight months.

Murtha said in court on Tuesday that Capoccia committed “the worst white-collar crime” he had ever seen.

In April 2005, a jury convicted Capoccia of money laundering, wire fraud, mail fraud, conspiracy, interstate transportation of stolen property, and receipt of interstate stolen property.  He was sentenced on Feb. 3, 2006.

After Tuesday’s five-and-a-half-hour session, Capoccia’s wife, Carol, called the ordeal “political, prosecutorial, and judicial misconduct at its best.” Her husband told her after the re-sentencing that he was “getting tired” of fighting.

Aside from the original probation officer assigned to the case, and an Enterprise reporter, only Mr. Capoccia’s family — his wife and two grown stepchildren — and two friends sat and watched the hearing. Mrs. Capoccia said he was like a father to her children. In between the proceedings, they whispered news back and forth. Mr. Capoccia’s stepson told him that his grandson had run his first race and received a medal; his stepdaughter told him he looked good, and he laughed. 

Mrs. Capoccia took a bottle of Holy Water out of her coat pocket and made the sign of the cross in the air.

As the re-sentencing began, Mr. Capoccia stood alone at a table, wearing standard-issue orange pants, with his ankles shackled. He was representing himself.

“The government gave false information to the jury, and that should be recognized by the court. I can’t stand convicted by false information,” he said.

Mr. Capoccia also said the government had made sentencing guideline errors when they enhanced his offense level on several different counts. These were his arguments for asking the court to reconsider his original sentence.

A ruling in 2007 from a panel that included Sonia Sotomayor, now on the United States Supreme Court, but then on the Second Circuit federal court, found problems with the original sentencing, which helped lead to Tuesday’s session.

That 2007 decision said that any of the assets obtained by Mr. Capoccia prior to his selling his firm in 2000 should not have been seized.  Murtha said they could be seized because they were obtained by “relevant conduct.”

Layers of charges

Mr. Capoccia owned the Law Centers for Consumer Protection, formerly known as the Andrew F. Capoccia Law Centers, in Albany from 1997 to 2000, offering clients debt reduction services. According to his testimony in earlier court records, Mr. Capoccia’s clients would pay his law firm instead of bill collectors, and Mr. Capoccia would negotiate with the creditors to accept less money to settle the debts.

If he got creditors to agree to a discount, he would keep 25 percent of the money he saved a client, as his fee. If a bank or credit card company sued Mr. Capoccia or a client for non-payment, he would file a countersuit, saying the company had broken consumer disclosure rules.

Records show that Mr. Capoccia filed so many countersuits over the three-year period he owned LCCP that he was fined more than $2 million by judges around the state for filing frivolous suits.

In 2000, Mr. Capoccia sold his firm to two colleagues, Howard Sinnott and Tom Daly, for $12 million; they moved the law center to Bennington, Vt. Shortly after the sale, Mr. Capoccia was disbarred for filing so many suits.

Investigation into his business, though, began in 1999, when then-Attorney General Eliot Spitzer sued Mr. Capoccia, charging fraud and deceptive business practices, after the Consumer Frauds and Protection Bureau received as many as 900 complaints from clients.

Mr. Capoccia was accused and convicted of diverting over $7 million from the general and escrow funds of the company, both in Albany and Vermont, into personal accounts in his wife’s name; offering the owners and other employees of the Vermont firm bonuses if they conducted unethical business practices; and instituting an illegal overdraft procedure.

The government charged him with taking “unearned retainers” and funds marked for escrow and using the money to his own benefit.

Of the seven people implicated in the crimes, all but Mr. Capoccia pleaded guilty. Sinnott received a sentence of three months, Daly was sentenced to one month, and the others received probation.

Maintaining innocence

Mr. Capoccia has served 68 months — five years and eight months — of his sentence, maintaining his innocence for the entire length of that time. He has written letter after letter to the courts, and sought help from the Inter-American Convention of Human Rights in Costa Rica, asserting that the United States violated his Fifth and Sixth Amendment rights and arrested and detained him illegally.

Mrs. Capoccia said she believes the government is punishing her husband for fighting back.

“Mr. Capoccia remains defiantly unrepentant about his behavior,” Murtha commented during the re-sentencing.

Gregory Waples, assistant United States Attorney, representing the government in Mr. Capoccia’s case, said, “Nothing has changed; he shows no contrition or remorse. I see no reason to impose a different sentence.” 

“I just wonder what they were looking for?” Mrs. Capoccia asked later. “Did they want him to go in there with his tail between his legs? To say, ‘I’m so sorry, I did nothing wrong, but I’m sorry?’”

In court on Tuesday, Mr. Capoccia called the disparity between his sentence and the sentences of his colleagues “inexplicable and unwarranted.”

“The length of my sentence is Draconian. Am I 60 times more responsible than the others?” Mr. Capoccia wanted to know.

“Yes,” replied Judge Murtha.

Mr. Capoccia’s base offense level was a six, which would carry a sentence of zero to six months in jail, but it was enhanced 30 levels for a variety of reasons, including loss to more than 50 victims; abuse of trust; obstruction of justice; perjury; and leading or organizing five or more people in criminal conduct.

During Tuesday’s re-sentencing, Judge Murtha told Mr. Capoccia that an enhancement level increase had been overlooked during his original sentencing — Murtha described it as an enhancement for the exploitation of vulnerable victims.

“A precarious financial situation can be the sole basis for finding vulnerability; your clients were desperate and vulnerable to fraudulent financial solicitation,” said Murtha. The judge indicated that he might apply the vulnerable victim enhancement level at the re-sentencing.

“You can’t, Judge,” said Mr. Capoccia.

“Well, I can,” replied Murtha.

“An iron fist”

Criminal activity did occur, Mrs. Capoccia told The Enterprise this week, but not until after her husband sold his company, and he had no knowledge of it.

Mrs. Capoccia said that she believes Spitzer started going after the company in Albany because the business was hurting the banks. Mr. Capoccia filed the suits against credit card companies because they were abusing his clients, she said.

“The judges started to complain that he was clogging the courts with too many lawsuits…God forbid you clog the courts with suits representing people’s rights,” said Mrs. Capoccia. When he was sanctioned for filing too many suits, he decided to sell the company, because he was worried about what would happen to his 11,000 clients, she said.

“He was so worried about them and who would represent them,” Mrs. Capoccia said.

She said Sinnott and Daly approached her husband with the idea of buying the company, and told him they knew of a place in Bennington, Vt. that they could rent. Even though Mr. Capoccia was disbarred, Sinnott and Daly said they would keep him on as a consultant, Mrs. Capoccia said. 

“My husband’s problem was that he trusted people too much,” Mrs. Capoccia said. She believes the real trouble began when Sinnott and Daly took over.

In a report of a polygraph examination that Mr. Capoccia submitted to the court, it states, “Allegedly unknown to Mr. Capoccia, they apparently paid him from the clients’ trust accounts. Mr. Capoccia has advised his attorneys he did not know it was trust money…Mr. Capoccia advised his attorney that he did not commit any crime.” 

“I am sure they saw money; they were opportunists,” said Mrs. Capoccia, of Sinnott’s and Daly’s interest in buying the firm. She said her husband had no control over the accounts once he sold the company. The bonuses that the government said Mr. Capoccia paid to Sinnott and Daly to persuade them to engage in unethical business practices were really funds stolen by the men without Mr. Capoccia’s knowledge, his wife claimed.

The money that the government said Mr. Capoccia embezzled and then placed into his wife’s accounts between 2000 and 2002, which amounted to roughly $2.1 million, was simply the payments from Sinnott and Daly for the purchase of the firm, and not stolen funds, she said. Mrs. Capoccia was indicted, but no charges were brought against her.

She described her family’s shock when, in 2002, she answered the door of their Guilderland home to find representatives of the Federal Bureau of Investigation, the State Police, and the Albany County District Attorney’s Office outside.

“They came in and started going through everything in the house; they ordered pizza and stayed all day. They made us feel like we were in prison in our own home,” said Mrs. Capoccia. All of the Capoccias’ bank accounts were frozen and their assets seized.

“All of a sudden, overnight, we had no money,” Mrs. Capoccia said. “When we finally realized, about two weeks down the road, that they weren’t going to release the money, my husband was sick over it.” He was in such shock, he even suffered a nervous breakdown, she said.

“We kept saying, ‘There’s got to be a mistake; they made a mistake somewhere,’” said Mrs. Capoccia.

Judge Murtha, however, said he did not believe Sinnott and Daley were operating without Mr. Capoccia’s knowledge; he thinks Mr. Capoccia was the ringleader. He said Mr. Capoccia ruled the firm “with an iron fist” even after it was sold.

“He ruined the lives of many of his co-workers,” said Murtha during the re-sentencing Tuesday. “They led law-abiding lives before falling under his spell. They were bullied, cajoled, and convinced to make terrible decisions.”

Assets to be given  to crime victims

Sinnott and Daly were among the law firm’s employees to testify against Mr. Capoccia in his original trial. Stephanie Gardener, the Vermont firm’s chief financial officer, also testified. During the investigation, she told authorities that she was ordered to take money from client escrow accounts and use it to pay law center salaries.

Mrs. Capoccia said she believes Sinnott, Daly, and Gardener pleaded guilty and testified against her husband because they were offered plea bargains, and were afraid of going to jail.

She said her family’s repeated requests for the release of their money spurred the government to begin handing out indictments.

“We started asking for the accounts to be returned because there was no basis for the seizure, so they had to start charging people; otherwise they would have to give the money back,” said Mrs. Capoccia.

The money and assets, which have been held since 2006 due to the number of appeals Mr. Capoccia filed over the past five years, were ordered on Tuesday to be forfeited to the government, so it could begin to distribute it to the victims of the crime.

As part of his sentence, Mr. Capoccia was ordered to pay $7,256,445.60 in restitutions. He presented the court with a letter detailing the amount in refunds he had given to his clients, which he said negated the amount of loss.

“The only losses to clients were related to the Vermont center’s bankruptcy, and I had no connection to that,” said Mr. Capoccia. “When the law firm was sold, no money was owed to any client.”

Murtha, however, said that, because the firms co-mingled money inappropriately, all clients experienced loss equally.

“The misappropriation of funds affected all clients equally since all the money was put in one big pot,” said Murtha. “Mr. Capoccia brazenly objects to any restitution.” 

“Even though the sentence I will impose is severe — and it is, especially for someone of Mr. Capoccia’s age — there are several reasons I feel he deserves a severe sentence,” said Murtha.

“Many people saw their lives ruined; these damages cannot be calculated,” said the judge, as he handed down the same exact sentence Tuesday that he handed down in 2006 — 188 months, or almost 16 years, of which Mr. Capoccia has served just short of six.

Mr. Capoccia, who had his head in his hands as his sentence was read, told the judge, “You look at some of these counts and they make you cry.”

He turned to his wife and stepchildren as he was handcuffed at the end of the hearing and said, “Well, you won’t be seeing me anymore.” His wife clutched her bottle of Holy Water in one hand, and his stepdaughter cried.

“He’s almost 70 years old; this is a death sentence,” said Mrs. Capoccia, who went to the jail to speak to her husband after the hearing. “He was so drawn; he used to have a sparkle in his eye, and he just looked so beaten down.”