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In re Extradition of Lanzani

February 18, 2010


The opinion of the court was delivered by: Marc L. Goldman United States Magistrate Judge


Before the Court is a request for extradition under 18 U.S.C. § 3184 brought by the Government of Spain against Massimiliano Lanzani. Spain seeks the extradition of Lanzani for his alleged participation in a tax fraud scheme involving nonpayment of value added taxes (VAT). Pursuant to the extradition treaty between the United States and Spain, the United States acts on behalf of Spain in this matter. See Extradition Treaty Between the United States of America and Spain, Mar. 29, 1970, art. 17, T.I.A.S. No. 7136.

I. Procedural Background

On August 11, 2009, Massimiliano Lanzani, a citizen of Italy, was arrested in this district pursuant to a provisional arrest warrant issued by Magistrate Judge Paul L. Abrams. On August 12, Lanzani appeared before the Honorable Carla Woehrle, United States Magistrate Judge, who continued Lanzani's detention hearing to August 17, 2009. At the conclusion of the August 17 hearing, Magistrate Judge Woehrle continued the detention hearing to August 25, 2009 and invited the parties to file supplemental briefing. At the August 25 hearing, Magistrate Judge Woehrle denied Lanzani's motion for bail without prejudice.

On October 1, 2009, the United States filed a copy of Spain's formal extradition request with the Court, and the matter was assigned to United States District Judge Gary A. Feess and this United States Magistrate Judge.

On October 30, 2009, Lanzani filed a motion for revocation of the order of detention entered by Magistrate Judge Woehrle, which the United States opposed. The Court held a hearing on November 24, 2009, and denied the motion and ordered Lanzani detained pending further proceedings.

On November 5, 2009, supplemental formal extradition papers were submitted by Spain and filed by the United States. On November 5, the United States also filed its memorandum in support of extradition. On December 4, Lanzani filed his opposition to extradition. The United States filed its Reply on December 18, 2009. An extradition hearing was scheduled for January 7, but continued to January 14 at the request of the United States.

On January 12, the United States filed second supplemental extradition papers submitted by Spain. On January 13, Lanzani filed a response and opposition to the Government's filing of these papers. The parties appeared before this Court on January 14, at which time Lanzani requested that the extradition hearing be continued until January 21. The Court granted the continuance. On January 20, 2010, Lanzani filed a supplemental response to the Government's second supplemental formal extradition papers.

An extradition hearing was held before this Court on January 21, 2010. Assistant United States Attorney Daniel S. Goodman appeared on Spain's behalf, and David A. Kettel and Cynthia Catalino appeared on behalf of Lanzani. Mr. Lanzani was present and testified with the aid of an interpreter. The matter was taken under submission, and the Court has carefully considered the parties' respective pleadings, evidence, testimony, and oral arguments. For the reasons discussed below, the Court issues this Memorandum and Order denying Spain's request for Lanzani's extradition.

II. Factual Background*fn1

A. Alleged Crime

Spain has accused Lanzani of committing Art. 305, "Crimes against the Public Treasury and the 'Welfare and Social Security' system," which provides in relevant part:

1. Any person who through action or omission, defrauds the national, autonomous or local Treasury by evading payment of taxes, amounts retained at source or amounts that should have been retained or payments derived from remuneration in kind, obtaining fraudulent tax rebates or enjoying other forms of improper fiscal benefits through the same action or omission, when the amount of the defrauded tax payable, or the amount not paid in retained taxes or the amount of the fraudulently obtained rebate or other fiscal benefit improperly enjoyed, exceeds the amount of 120.000 Euros, will be punished with a prison sentence of one to four years and a fine of up to six times said amount. (Formal Extradition Papers ("FEP") at 75.) Specifically, Spain alleges that Lanzani participated in a scheme to defraud the treasury of VAT during the fiscal years 2006 and 2007. (FEP at 84, 91, 99, 102-04; Second Supplemental FEP at 50-60.)

The alleged scheme involved the purchase, transport, and subsequent sale of alcoholic beverages. Massimiliano Lanzani owns a company, which was known as Itamax Trading in 2006 and as Massimiliano Lanzani S.L. in 2007. (FEP at 92; Extradition Hr'g, Jan. 21, 2010.) Spain alleges that this company was fictitious, lacking any real activity or infrastructure. (FEP at 79-80.) According to Spain, Lanzani's businesses purchased alcoholic beverages within the European Community from two Spanish companies through its representative Cargonet S.L. and its administrator Jose Rodriguez Andres. (FEP at 85-87.) While the merchandise was purchased via bank transfers from a bank account under the name of Massimiliano Lanzani, Lanzani was allegedly supplied with capital for the purchases by Luis Ramon de la Torre Gordo, Jose Antonio Rodriguez Andres, the administrator of Cargonet S.L. and Cargopat S.L., and Carlos Calvo Pelayo, the chief executive officer and administrator of Cedilla S.L. (FEP at 93-94.)

Spain alleges that these beverages were placed in what are known as "deposito fiscal" or "fiscal deposits" in Madrid and Gerona, Spain. (FEP at 86.)*fn2 Spain alleges that beginning in 2006, Lanzani and his co-conspirators would transport the beverages from a tax-free warehouse in Spain to a tax-free warehouse in Hendaya, France, claiming that the beverages would be sold in another EU country. (FEP at 86-87; Supplemental FEP at 6.) But shortly thereafter a truck would arrive to transport the beverages to a tax-free warehouse in Zamora, Spain. (FEP at 86-87.) The transport was arranged by Cargonet S.L. through its representative, Jose Antonio Rodriguez Andres, on behalf of Lanzani. (FEP at 92.) Once in Spain, the beverages might be moved among Spanish fiscal deposits. (FEP ...

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