U.S. Department of Justice United States Attorney Southern District of New York The Siva Malo Ballin One Sain Andrew's Plasa ‘New York Nev Tork 10007, December 19, 2011 Benjemin Brafinan, Esq Brafman & Associates, P.C. 767 Third Avenue, 26th Floor New York, NY 10017 Re: United States v. Carl Kruger, $3 11 Cr. 300 (JSR) Dear Mr. Brafman: On the understandings specified below, the Office of the United States Attomey for the Southern District of New York (“this Office”) will accept a guilty plea from Carl Kruger (“the defendant”) 1o Counts One through Four of the above-referenced indictment (“Indictment”). Count One charges that between in or about 2007 and in or about March 2011, the defendant conspired to commit honest services mail and wire fraud by receiving bribes, in violation of Title 18, United States Code, Sections 1341, 1343, 1346 and 1349. Count One carries a maximum term of imprisonment of 20 years, a maximum term of supervised release of 3 years, a maximum fine, pursuant to Title 18, United States Code, Section 3571 of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to persons other than the defendant resulting from the offense, and a $100 mandatory special assessment. ‘Count Two charges that between in or about 2007 and in or about March 2011, the defendant conspired to commit bribery in violation of Title 18, United States Code, Section 371. Count Two carries a maximum term of imprisonment of 5 years, a maximum term of supervised release of 3 years, a maximum fine, pursuant to Title 18, United States Code, Section 3571 of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniaiy loss to persons other than the defendant resulting from the offense, and a $100 mandatory special assessment. Count Three charges that between in or about 2007 and in or about March 2011, the defendant conspired to commit honest services mail and wire fraud by receiving bribes, in violation of Title 18, United States Code, Sections 1341, 1343, 1346 and 1349, Count Three carries a ‘maximum term of imprisonment of 20 years, a maximum term of supervised release of 3 years, a ‘maximum fine, pursuant to Title 18, United States Code, Section 3571 of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to persons other than the defendant resulting from the offense, and a $100 mandatory special assessment.‘Count Four charges that between in or about 2007 and in or about March 2011, the defendant conspired to commit bribery in violation of Title 18, United States Code, Section 371. Count Four carries a maximum term of imprisonment of 5 years, a maximum term of supervised release of 3 ‘years, a maximum fine, pursuant to Title 18, United States Code, Section 3571 of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to persons other than the defendant resulting from the offense, and a $100 mandatory special assessment, In addition to the foregoing, the Court must order restitution as specified below. The total maximum term of imprisonment on Counts One through Four is 50 years’ imprisonment. Itis understood that, prior to the date of sentencing, the defendant shall file, as necessary, amended U.S. Individual Income Tax Returns for calendar years 2006 through 2010, The defendant will also pay any past taxes determined to be due and owing to the United States by him, including any applicable penalties and interest, on such terms and conditions as will be agreed upon between him and the Internal Revenue Service (“IRS”). In addition, the defendant stipulates to the applicability of civil fraud penalties should they be deemed to be applicable by the IRS. The defendant agrees to cooperate fully with the IRS in the determination of any income taxes, penalties and interest owing, including the provision of any documents and information requested by the IRS in that determination, In consideration of the defendant's plea to the above offense and his admission of relevant conduct, the defendant will not be further prosecuted criminally by this Office and, with respect to any potential tax offenses, the Tax Division, Department of Justice, for any crimes relating to: (1) the conduct alleged in 11 Mag. 648; (2) the conduct alleged in 11 Cr. 300 (JSR) or its superseding indictments; (3)any other payments made to Olympian and/or Bassett; (4) any income that Olympian and/or Bassett received but failed to report to relevant tax authorities; and (5) any payments to Olympian and/or Bassett that are determined by the IRS to be “income” attributable to him, but which he failed to report to relevant tax authorities. In addition, at the time of sentencing, the Government will move to dismiss any open Count(s) against the defendant, The defendant agrees that with respect to any and all dismissed charges he is not a “prevailing party” within the meaning of the “Hyde Amendment,” Section 617, P.L. 105-119 (Nov. 26, 1997), and will not file any claim under that law. ‘The defendant hereby admits the forfeiture allegations with respect to Counts One through Four of the Indictment and agrees to forfeit to the United States, pursuant to Title 18, United States Code, Section 981 and Title 28, United States Code, Section 2461, a sum of money not to exceed $450,000 in United States currency, representing the amount of proceeds traceable to the commission of the offenses alleged in Counts One through Four of the Indictment. It is further understood that any forfeiture of the defendant's assets shall not be treated as satisfaction of any fine, coeaen 2restitution, cost of imprisonment, or any other penalty the Court may impose upon him in addition to forfeiture. The defendant further agrees to make restitution in an amount not to exceed $450,000 and that the obligation to make such restitution shall be made a condition of probation, see 18 USC §3563(b)(2), or of supervised release, see 18 USC §3583(d), as the case may be. In consideration of the foregoing and pursuant to United States Sentencing Guidelines (‘USS.G.” or *Guidelines”) Section 6B1.4, the parties hereby stipulate to the following: A. Offense Level 1. The applicable Guidelines manual is the Guidelines manual that went into effect on November 11, 2010. 2. Pursuant to U.S.S.G. § 3D1.1, Counts One through Four are grouped because they involve @ common criminal objective and because the offense levels for these offenses are determined largely on the basis of the total amount of loss. 3. __ The base offense level applicable to Counts One through Four is 14, pursuant to USSG. § 2C1.1(@)(1). 4. Because the offenses involved more than one bribe, 2 levels are added pursuant to US.S.G. § 2C1.1(6(1). 5. Because the value of the bribes and/or a reasonable estimate of the benefits received in exchange for the bribes is greater than $400,000 but less than $1,000,000, 14 levels are added pursuant to U.S.S.G. § 2BL.1(6)(1)(H). 6. Because the offenses involved an elected public official, 4 levels are added pursuant to US.S.G. § 2C1.10)G). 7. Assuming the defendant clearly demonstrates acceptance of responsibility, to the satisfaction of the Goverment, through his allocution and subsequent conduct prior to the imposition of sentence, a 2-level reduction will be warranted, pursuant to U.S.S.G. § 3E1.1(@), Furthermore, assuming the defendant has accepted responsibility as described in the previous sentence, an additional 1-level reduction is warranted, pursuant to U.S.S.G. § 3E1.1(b), because the defendant gave timely notice of his intention to enter a plea of guilty, thereby permitting the Government to avoid preparing for trial against him and permitting the Cour to allocate its resources efficiently. In accordance with the above, the applicable Guidelines offense level is 31. ososzent 3