Case 1:19-cr-00765-JSR Document 19 Filed 11/09/21 Page 1 of 5

U.S. Department of Justice

[Type text]
United States Attorney
Southern District of New York

The Silvio J. Mollo Building

One Saint Andrew’s Plaza
New York, New York 10007

November 9, 2021

BY ECF

The Honorable Jed S. Rakoff

United States District Judge
Southern District of New York
500 Pearl Street
New York, New York 10007

Re: United States v. Bruce Bagley, 19 Cr. 765 (JSR)

Dear Judge Rakoff:

The Government respectfully submits this letter in connection with the sentencing of
defendant Bruce Bagley, which is currently scheduled for November 16, 2021, at 3:30 p.m. The
defendant entered a guilty plea pursuant to a plea agreement with a stipulated guidelines range of
46 to 57 months’ imprisonment. For the reasons set forth below, the Government submits that a
sentence of incarceration below the applicable guidelines range is appropriate.

A. Offense Conduct

This case arises from an investigation of the laundering of proceeds of a foreign bribery
and corruption scheme into the United States. PSR ¶ 11. Alex Saab is a Colombian businessman
who has been charged in the Southern District of Florida with laundering the proceeds of violations
of the Foreign Corrupt Practices Act. See United States v. Saab, No. 19 Cr. 20450 (S.D. Fla.).1
Beginning in November 2017, Bagley began receiving regular international wire transfers into a
bank account in the name of a company he controlled that had no significant prior business activity.
PSR ¶¶ 12-14. From November 2017 through August 2018, Bagley received 12 wire transfers,
typically in the amount of $200,000, totaling approximately $2.5 million. PSR ¶¶ 16-17, 28. These
funds came from companies located overseas that were controlled by Alex Saab. PSR ¶¶ 20. The

1
Saab was extradited to the United States on October 16, 2021, and the case against him is
pending. See “Colombian Businessman Charged with Money Laundering Extradited to the United
States from Cabo Verde,” Department of Justice Press Release, October 18, 2021, available at
https://www.justice.gov/opa/pr/colombian-businessman-charged-money-laundering-extradited-
united-states-cabo-verde.
 Case 1:19-cr-00765-JSR Document 19 Filed 11/09/21 Page 2 of 5

Page 2

money being transferred was the proceeds of a foreign bribery scheme that involved embezzlement
from a food aid program in Venezuela. PSR ¶ 21.

When he received the wire transfers, Bagley wired a portion of the proceeds, typically ten
percent, to his own personal account. He then withdrew the remainder of the funds in the form of
a cashier’s check payable to a company controlled by another individual (“Individual-1”) who was
an associate of both Bagley and Saab. PSR ¶¶ 16-17. Between November 2017 and September
2018, Bagley personally reaped $192,000 in proceeds from the scheme. PSR ¶ 29. Bagley and
Individual-1 executed sham contracts in an attempt to justify this pattern of transactions. In the
contracts, Bagley claimed to be providing “technical advisory services” to Individual-1 relating to
“extrajudicial process”; in fact, Bagley provided no such services to Individual-1. PSR ¶ 18. In
October 2018, the bank closed Bagley’s business account due to suspicious activity. PSR ¶ 19.

In or around November 2018, the FBI approached Individual-1, who agreed to become a
confidential informant. At the direction of law enforcement, Individual-1 met with Bagley on
December 4, 2018, to discuss their ongoing agreement to move funds into the United States for
Alex Saab. In the conversation, which was audio recorded, Bagley and Individual-1 discussed the
fact that the funds involved in the scheme represented the proceeds of a foreign bribery scheme.
Bagley in particular made statements indicating his awareness not just of the general existence of
the scheme, but also the specifics of how it operated. After Individual-1 stated that “all the money
from [Alex Saab] … all that money is from corruption … it’s dirty money,” Bagley responded by
saying “Yes. It is corruption.” Bagley then provided additional detail, stating that “[Alex Saab] is
in deep in the importing of food … of food into Venezuela. And they have imported the worse
quality products with inflated prices, and they have filled their pockets with money.” PSR ¶ 22.

Despite his awareness that he was moving criminal proceeds, Bagley continued to engage
in the scheme. In December 2018, he provided Saab and Individual-1 with the information for a
new bank account, and he then received two wire transfers for a total of $474,000 in January and
February 2019. From these transfers, Bagley transferred $64,000 to his personal account, and sent
the rest to the Individual-1 company. PSR ¶¶ 24-26.

B. Procedural History

On October 24, 2019, a grand jury returned a three-count indictment charging Bagley with
one count of money laundering conspiracy, in violation of 18 U.S.C. § 1956(h), and two counts of
money laundering, in violation of 18 U.S.C. § 1956(a)(3)(B). Bagley was arrested on November
18, 2019. On June 1, 2020, Bagley entered a plea of guilty, pursuant to a plea agreement, to two
counts of money laundering, with a stipulated guidelines range of 46 to 57 months’ imprisonment.
On August 24, 2020, the United States Probation Office issued the presentence report in this case,
which calculates the same guidelines range stipulated in the plea agreement and recommends a
below-guidelines sentence of 12 months’ imprisonment. PSR at 29.
 Case 1:19-cr-00765-JSR Document 19 Filed 11/09/21 Page 3 of 5

Page 3

C. Discussion

The sentencing factors most applicable here are the nature, circumstances, and seriousness
of the offense, the personal characteristics of the defendant, and the need for adequate deterrence,
primarily general deterrence. The Government submits that these factors support the imposition of
a sentence of incarceration, but below the guidelines range of 46 to 57 months’ imprisonment.

The defendant’s criminal conduct in this case was serious. Bagley played a critical role in
a sophisticated scheme to launder millions of dollars of criminal proceeds, and was compensated
handsomely for his participation in the scheme. To conceal the movement of these funds, Bagley
used a business account he had created for an otherwise inactive company and executed sham
contracts with Individual-1 to attempt to make the transactions appear legitimate. He persisted in
the scheme even after his first bank account was closed by the bank. More importantly, he
continued to move hundreds of thousands of dollars even after he made it clear in his conversations
with Individual-1 that he fully understood that these were proceeds of Saab’s scheme to bribe
Venezuelan officials so that Saab could siphon money out of Venezuela’s food aid program that
was intended to benefit the poor in Venezuela. In other words, Bagley knowingly transferred
criminal proceeds, and took his own generous portion of those proceeds, knowing that this money
was ultimately being taken from some of the poorest and most vulnerable people in the world.

The defendant’s personal characteristics further underscore the seriousness of his conduct.
Bagley is a highly sophisticated individual who holds a Ph.D. from UCLA and was a tenured
university professor. As detailed in the PSR, he had served as a visiting professor in Colombia,
Bolivia, Ecuador, and Mexico, and he provided expert witness testimony on cases involving drug
trafficking and the recovery of criminal proceeds from a Colombian guerilla organization, among
others. Indeed, he had specifically devoted some of his academic career to issues of money
laundering and corruption. Bagley was thus in a position to be well aware of the wrongful nature
of his conduct, and yet he used his sophistication and expertise to knowingly participate in the
laundering of criminal proceeds with a corrupt Colombian businessman. Moreover, Bagley had
far more financial and personal security than the typical criminal, with no reason apart from greed
to participate in this crime. He made a conscious decision to participate in repeated transactions
over the course of months, including by creating false documents to conceal his actions and by
persisting in the conduct even after having a bank account shut down. His recorded comments
from his December 2018 meeting with Individual-1 make it clear that he continued in this conduct
with full knowledge of the nature of the underlying criminal scheme.

Nor does Bagley appear to show serious remorse for his conduct. In his interview with
probation, Bagley makes several claims that are inconsistent with the evidence in the case and that
appear to be calculated to minimize his role in the offense. First, he claims that the more than
$200,000 in personal proceeds he made in the scheme were actually payment for consulting work
he was performing for Alex Saab. That is inconsistent with the actual pattern of transactions, in
which Bagley received a percentage from each of the wire transfers that passed through his account
from Saab to the Individual-1 company. There is no evidence that Bagley received payments from
Saab before or after he engaged in the scheme to pass criminal proceeds from Saab through his
bank account, which indicates that he was being paid for his participation in the money laundering,
not for “consulting.” Additionally, Bagley’s account of his purported work for Saab is not
 Case 1:19-cr-00765-JSR Document 19 Filed 11/09/21 Page 4 of 5

Page 4

supported by any evidence. He states that he was initially hired to “facilitate” a visa for Saab’s
son, and that he was later retained to provide “consulting work on investment possibilities for Saab
in Guatemala.” PSR ¶¶ 35-36. Bagley does not explain why a professor who specialized in the
study of narcotics trafficking would have been well suited to advise on investment possibilities in
Guatemala, which is not similar to any prior work he appears to have performed. Nor is the
Government aware of any documentation of the purported consulting work that Bagley performed
for Saab.

Bagley also claims that he did not know that Saab’s money stemmed from his corrupt
activities in Venezuela until after the conversation with Individual-1 in December 2018. PSR ¶ 37.
That claim is inconsistent with the actual recording of the conversation, in which Bagley expressed
no surprise about the discussion of Saab’s involvement in corruption and offered additional details
about Saab’s corrupt scheme that went beyond the statements made by Individual-1. PSR ¶ 22.
Bagley’s claim is also difficult to square with his general level of sophistication regarding criminal
enterprises and corruption in Latin America. While these issues do not affect the guidelines range
in this case, they cast doubt on whether Bagley has fully acknowledged his role in serious criminal
conduct.

Despite the aspects of Bagley’s personal characteristics that counsel in favor of a

substantial sentence, the Government acknowledges that his advanced age and health conditions
should be taken into account, and that it would be reasonable for the Court to impose a sentence
below the guidelines range due to these factors. Nonetheless, Bagley’s age and health are just some
of the characteristics for the Court to consider, and these factors in and of themselves should not
outweigh the other 3553(a) factors that counsel in favor of a term of incarceration in this case.2
See, e.g., United States v. Matera, 489 F.3d 115, 123 (2d Cir. 2007) (affirming 25-year sentence
imposed on 65-year-old defendant when district court found that the other 3553(a) factors
outweighed the defendant’s arguments about his age and health); United States v. Pica, 692 F.3d
79, 89 (2d Cir. 2012) (affirming 108-month sentence imposed on 75-year-old defendant).

Finally, a sentence of incarceration is also necessary here to “afford adequate deterrence to

criminal conduct. 18 U.S.C. § 3553(a)(2)(B). General deterrence is of particular relevance in a
case such as this, where the conduct was deliberate, sophisticated, and unfolded over a period of
months. Additionally, though Bagley’s academic expertise on money laundering and corruption is
unusual, many money launderers are, like Bagley, motivated primarily by greed and more likely
to engage in such schemes if the perceived benefits outweigh the potential costs. A sentence of
incarceration is needed in order to deter similarly situated individuals from pursuing similar
schemes, which are highly lucrative and difficult to detect by law enforcement.

2
 Case 1:19-cr-00765-JSR Document 19 Filed 11/09/21 Page 5 of 5

Page 5

For the reasons set forth above, the Government respectfully submits that a sentence of
incarceration, but below the guidelines range of 46 to 57 months’ imprisonment, is appropriate for
the defendant.

Very truly yours,

DAMIAN WILLIAMS
United States Attorney

by: _____________________________
Thane Rehn/Sheb Swett
Assistant United States Attorneys
(212) 637-2354