Judge says Carollo’s wages should not be garnished to satisfy $63M Ball & Chain verdict

A federal magistrate judge has recommended that Joe Carollo’s Miami City Commission wages not be garnished to satisfy a portion of a multimillion-dollar judgment, marking the second major win for Carollo this summer as he seeks to protect his assets from seizure.

Since January, the city has held 25% of Carollo’s paychecks in escrow after the court ordered his wages to be garnished in the wake of a $63.5 million judgment against him . Last year, a jury found that Little Havana businessmen Bill Fuller and Martin Pinilla, the owners of the Ball & Chain nightclub, were victims of a political retaliation campaign pushed by Carollo.

Carollo has said the garnishment has caused a significant financial hardship for himself and his wife, Marjorie, who stopped working in May of last year, a few weeks before a jury handed down its verdict. His legal team sought to dissolve the writ of garnishment under a Florida statute that protects the “head of family” from having their wages garnished.

In a report issued Wednesday, U.S. Magistrate Judge Lauren Louis determined that, from May 2023 to the present, “Mr. Carollo’s salary from the City of Miami accounted for nearly all his wife’s support.”

The recommendation follows three lengthy hearings in July and August where Carollo, his wife and an accountant hired by Carollo’s legal team testified in detail about the couple’s finances, with the opposing side picking apart tax returns and bank statements from 2023 and 2024.

Louis issued the recommendation to U.S. District Court Judge Rodney Smith, who is presiding over the case. Last month, Louis also recommended to Smith that Carollo’s Coconut Grove home , valued at $2.5 million in Carollo’s most recent financial disclosure form, be protected from seizure.

Post-trial spending habits

During the hearings, Carollo testified that, with his salary and additional benefits, his gross income is about $100,000 per year as a city commissioner — his only source of income. The accountant testified that Carollo’s major expenses are about $30,000 per year in property taxes and a monthly mortgage payment of about $2,500.

Prior to the writ of garnishment, Carollo’s City Commission paychecks were about $7,800 per month, but after the city began withholding a portion, they decreased to $4,490, according to Louis’ report.

According to testimony, Marjorie Carollo’s company, MTC Group, had about $34,000 in the bank at the start of 2023. But those funds were spent on various expenses, including $1,000 checks that Marjorie wrote to herself. By May of last year, nearly all of that money had been depleted.

Carollo’s team argued repeatedly that Marjorie could not support herself without her husband’s income.

But attorney Jeff Gutchess, who represents Fuller and Pinilla, raised questions about whether Carollo actually covered the majority of expenses. Based on his legal team’s calculations, Gutchess said Marjorie paid about $50,000 of the couple’s expenses — or more than half “by a long shot” — in the first half of 2023 before the trial ended.

Carollo’s attorney Mason Pertnoy, however, accused Gutchess of “double counting” money that moved between the couple’s accounts in order to inflate Marjorie’s household contribution. (The couple testified that Carollo would withdraw cash, which he would then give to Marjorie to pay various expenses.)

Gutchess argued that the bank records show the Carollos’ spending habits changed “dramatically” after the trial for the “express purpose” of thwarting the plaintiffs’ efforts to collect on the judgment. Pertnoy accused Gutchess and his team of offering up “ conspiracy theories” instead of evidence.

In a statement issued Wednesday night, Gutchess said the records show that the family’s annual household expenses exceeded Carollo’s commissioner earnings by over $120,000, “and that if you extrapolate that back for the 7 years in which he served as a Commissioner, that is more than $800,000 in expenses that were paid by someone other than Joe Carollo.”

Gutchess said in the statement that the post-trial changes in spending habits included Carollo “depleting all the funds in his accounts, and Mrs. Carollo testified that she ceased working for money at that point, expressly due to the trial and verdict.”

“We do not believe the law allows a judgment debtor to manipulate the family income or spending habits in that manner to defeat a Writ of Garnishment,” Gutchess added.

Gutchess’ team had sought to expand their scope to analyze the Carollos’ finances prior to 2023, as well as financial records for MTC Group. But Louis wrote in her recommendation that the relevant time period begins when the writ of garnishment was served on the city, which was late 2023. By that point, the records show that Marjorie was financially dependent on her husband.

READ MORE: Facing legal woes, Miami Commissioner Joe Carollo reports negative $64 million net worth

Attorney Marc Sarnoff, who represents Carollo, said the commissioner and his family “are thrilled that the federal court validated his exemption as the head of his family because he provides more than half of his wife’s support.”

“Today, the Head of Family wages of Florida residents are protected by a Federal Magistrate ruling against predatory creditors’ attempt to garnish a judgment debtor’s wages,” Sarnoff said in a statement.

Gutchess said his team plans to object to Louis’ recommendation.

Smith will next rule on Louis’ recommendations for the wage garnishment, as well as Carollo’s home.