The opinion of the court was delivered by: ASPEN
MARVIN E. ASPEN, UNITED STATES DISTRICT JUDGE.
The defendant, Alfred Elliott, has been convicted of, among other things, a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"). The government now seeks the forfeiture of the proceeds of Elliott's racketeering activity under 18 U.S.C. § 1963(a)(3). Elliott has waived his right to a jury trial on the forfeiture issue. Elliott and the government agree on the amounts involved, but they disagree on which amounts should be included as proceeds. It is that question which we consider in this opinion.
The seventy-count indictment charged that Elliott, a former partner in the law firm of Schiff, Hardin & Waite ("Schiff"), misused confidential client information for his personal benefit in nine sets of securities transactions. According to the government, when Elliott would learn confidential information about the planned acquisition of a large block of stock, he used this nonpublic information and purchased stock in the target company, in the expectation that the price would rise when the planned acquisition became public. The stock purchases were made through the Chicago office of Charles Schwab & Co. ("Schwab").
In connection with these stock transactions, the government charged Elliott with thirty-four counts of wire fraud, thirty-four counts of securities fraud, one count of filing a false tax return and, most importantly for this opinion, one count (Count 69) under RICO. Paragraph 3 of Count 69 charged that each of the nine sets of transactions in which Elliott illegally purchased stock was a racketeering act, and that the nine racketeering acts together constituted a pattern of racketeering activity, in violation of section 1962(c). In turn, paragraph 4 of Count 69 sought the forfeiture of the proceeds of the nine corresponding racketeering acts in paragraph 3.
At Elliott's request, we bifurcated the forfeiture proceedings for the guilt phase of the trial. After one mistrial, a jury convicted Elliott of all seventy counts charged in the indictment.
Before Elliott was found guilty, we dismissed five of the nine sections of Count 69's paragraph 4. United States v. Elliott, 714 F. Supp. 380 (N.D.Ill. 1989). We based our dismissal on a consent decree in an earlier civil action by the Securities and Exchange Commission. In the consent decree, Elliott agreed to pay, without admitting or denying liability, a sum of $ 271,312, "representing disgorgement of profits allegedly derived from the securities transactions alleged in the complaint." The "securities transactions alleged in the complaint" essentially correspond to the acts included in Count 69 as racketeering acts 1, 4, 5, 6, 8 and 9. We concluded that the forfeiture claims associated with racketeering acts 4, 5, 6, 8 and 9 had to be dismissed because they sought to disgorge what had already been disgorged. We concluded that the forfeiture claim associated with racketeering act 1 should not be dismissed, because Elliott had paid only $ 66,250 to the SEC, while the government claimed that Elliott's proceeds from racketeering act 1 amounted to $ 112,562.50. We will, however, deduct $ 66,250 from what we determine to be the proceeds from racketeering act 1.
In relevant part, section 1963(a)(3) provides:
Whoever violates any provision of section 1962 of this chapter . . . shall forfeit to the United States, irrespective of any provision of State law
(3) any property constituting, or derived from, any proceeds which the person obtained, directly or indirectly, from racketeering activity ...