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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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