A federal magistrate this week upheld former Palm Beach County Commissioner Tony Masilotti's conviction on honest services fraud but opened the possibility that he could get back land once valued at roughly $7 million.
In an initial step in what is expected to be a long process, U.S. Magistrate Ann Vitunac found that Masilotti's 2007 conviction meets a new U.S. Supreme Court definition of what constitutes honest services fraud.
However, in upholding his conviction, she said the government failed to prove that bribery or kickbacks were involved in Masilotti's biggest secret land deal - the acquisition of roughly 300 acres in Brevard County from Palm Beach Aggregates.
That means that while Masilotti, 54, would remain a convicted felon, he could claim that he was unjustly forced to forfeit the land when he was sentenced to five years in prison and it should be returned to him, said his attorney, David Weinstein.
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However, Weinstein cautioned, Vitunac's ruling is only a recommendation to U.S. District Judge Kenneth Ryskamp, who has voiced misgivings about the honest services fraud statute. Further, Weinstein said, Vitunac could change her mind once he and federal prosecutors respond to her preliminary recommendation. They have until Feb. 4 to file any objections.
"It could have been better," Weinstein said of the recommendation. "But it's not bad news."
In hopes of persuading Vitunac to throw out the conviction, he said he will continue to argue that there were no bribes or kickbacks involved in any of the land deals. The Supreme Court in June ruled that honest services fraud must involve either a bribe or a kickback.
Vitunac found that Masilotti got a kickback when he was paid $50,000 by developer Daniel Miteff for using his influence as a county commissioner and former Royal Palm Beach mayor to pressure the Diocese of Palm Beach to sell Miteff 50 acres on Southern Boulevard in the village. The land ultimately was flipped to GL Homes for a nearly $1 million profit for Miteff and partner Jeff Lee.
However, she said, there's no evidence that the kickbacks or bribes propelled the complex deal involving the Palm Beach Aggregates land. "There are insufficient facts in the record to demonstrate that Masilotti received side payments or any other compensation from a third party in exchange for his efforts in advancing the development of the Aggregates Property," she wrote.
Federal prosecutors declined to comment on the recommendation.
However, a former prosecutor said he doubted Masilotti will be able to get back the property if the recommendation stands. Unless his conviction is thrown out, there is no way Masilotti can challenge his sentence, said Bruce Reinhart, who was involved in the prosecution before he went into private practice.
"The forfeiture is part of the sentence," he said. "Because the sentence wasn't vacated, it's still there. I'm just not sure there's any legal and proper way to open up the sentencing.
"It's like saying I crashed my car and I want to uncrash it," he said. "You can't uncrash it."
Weinstein countered that the punishment must fit the crime. Masilotti, a former insurance company owner who works at a small business answering phones since completing his sentence, shouldn't be forced to forfeit $7 million in land if he didn't get it illegally, he said.
Former Commissioner Warren Newell also is challenging his conviction for honest services fraud. His attorney, Bruce Rogow, said Vitunac's findings pleased him. He likened Newell's land deals and votes that benefited a marina where he kept his boat to Masilotti's acquiring the Aggregates property.
"This was really a conflict of interest - not kickbacks or bribes," he said.