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United States v. Hassanshahi

United States District Court, District of Columbia

June 24, 2016

UNITED STATES OF AMERICA
v.
SHANTIA HASSANSHAHI, also known as Shantia Hassan Shahi, also known as Shahi, also known as Shantia Haas, also known as Sean Haas, and HASSTON, INC., Defendants. Re Document Nos. 94, 102

          MEMORANDUM OPINION

          RUDOLPH CONTRERAS, United States District Judge

         Granting the Government’s Motion to Introduce Evidence of Prior Bad Acts; Denying Defendant’s Motion to Exclude Documents

         I. INTRODUCTION

         Defendant Shantia Hassanshahi is charged with one count of conspiracy to violate the International Economic Emergency Powers Act, 50 U.S.C. § 1705, and the Iranian Transactions and Sanctions Regulations, 31 C.F.R. §§ 560.203–204, commonly referred to as the United States’ trade embargo against Iran. The Government alleges that Mr. Hassanshahi and a company he owns, co-defendant Hasston, Inc., conspired with others known and unknown to export “protection relays”-a type of circuit breaker for use in electrical power grids-to Iran without obtaining a license from the Office of Foreign Assets Control (“OFAC”), located in the District of Columbia, as required by federal law.

         The Government has provided notice of its intent to introduce certain evidence of prior bad acts against the defendants pursuant to Federal Rule of Evidence 404(b), and has moved to introduce such evidence. Specifically, the Government intends to elicit evidence that Mr. Hassanshahi had knowledge that a license from OFAC was required to do business in Iran. See Gov’t’s Mot. & Notice Intention Introduce Evid. Prior Bad Acts, ECF No. 94 [hereinafter “Gov’t’s Mot.”]. Separately, Mr. Hassanshahi has moved to exclude certain documentary evidence that the Government anticipates seeking to introduce at trial. See Def.’s Corr. Mot. Exclude Docs. Evidentiary Grounds, ECF No. 102 [hereinafter “Def.’s Mot.”].

         For the foregoing reasons, the Court will grant the Government’s motion to introduce evidence of prior bad acts and deny Defendant’s motion to exclude evidence.

         II. FACTUAL BACKGROUND

         Shantia Hassanshahi is a dual citizen of Iran and the United States. On January 9, 2013, following an investigation of over a year, the Government filed a Criminal Complaint in this Court against Mr. Hassanshahi and a warrant was issued for his arrest. See Criminal Compl., ECF No. 1. On September 16, 2013, Mr. Hassanshahi was arrested at Los Angeles International Airport (“LAX”), and on September 26, 2013, a Grand Jury returned an Indictment in this Court against him and co-defendant Hasston, Inc., a company that Mr. Hassanshahi owns. See Indictment, ECF No. 7. The Indictment alleges that, beginning in or around March 2009, Mr. Hassanshahi engaged in a conspiracy to export and cause the exportation of goods and technology from Canada to Iran, as well as related services from the United States to Iran, without first obtaining the requisite license from OFAC, located in the District of Columbia, and therefore in violation of federal law. See Id. ¶ 1. Specifically, the Government alleges that Mr. Hassanshahi and Hasston, Inc. conspired to export “protection relays”-a type of circuit breaker for use in electrical power grids-from Canada to Armenia or Iraq. From those countries, the relays would then be transported to customers in Iran. See, e.g., Aff. Supp. Criminal Compl. ¶¶ 22, 26, ECF No. 1-1 [hereinafter “Akronowitz Aff.”].

         As part of the Government’s investigation, and prior to Mr. Hassanshahi’s arrest, the Department of Homeland Security’s Homeland Security Investigations division (“HSI”) was alerted that Mr. Hassanshahi would be returning to the United States through Los Angeles International Airport (“LAX”) on January 12, 2012. See Id. ¶ 18. When he arrived, Mr. Hassanshahi was referred for a secondary screening. Id. ¶ 19. During that secondary screening, United States Customs and Border Protection officers seized several electronic devices in Mr. Hassanshahi’s possession-including a laptop computer, multimedia cards, thumb drives, a camcorder, SIM cards, and a cell phone. Id. Those items were sent to Washington, D.C., where HSI conducted a forensic examination of the laptop and discovered numerous documents relating to Mr. Hassanshahi’s apparent business activities in Iran. Id. ¶¶ 19–20. Among those documents was a PDF file of a September 19, 2011 letter on Hasston letterhead and addressed from Shantia Hassanshahi to the Iranian Minister of Energy, in which Mr. Hassanshahi asked the Iranian government for payment for “protective relays for transmission lines.” Id. ¶ 22 n.1; see also Def.’s Mot. Attach., Ex. D, ECF No. 101-1 (reproducing translated copy of letter).

         Since that time, the Government has also obtained e-mails sent by or to Mr. Hassanshahi, or among his alleged co-conspirators. In one e-mail, dated October 26, 2009, an individual named “Mark Babaei” writes to a man identified as “Shantia Haas, ” the latter of whom has an email address listed as “shantia34@gmail.com.” See Def.’s Mot. Attach., Ex. C, ECF No. 101-1. The Government contends that Mr. Hassanshahi used that e-mail account during the time period relevant to this case. See Revised Aff. of Joshua J. Akronowitz ¶¶ 15, 18, ECF No. 42-1. In the e-mail, Mr. Babaei indicates that he has “talked with jabber, he is good and is working to solve the problems and we hope up to tomorrow night the goods will be in [sic] Iran border.” Def.’s Mot. Attach., Ex. C. A second e-mail, dated February 2, 2012, was sent from Mark Babaei to individuals identified as “Aoub Shaban” and “Arash Zandi, ” but not Mr. Hassanshahi. Id. Ex. E. In that e-mail, Mr. Babaei states that he traveled to Armenia to deal with a shipment of goods that was seized at the Armenian border. Id. The e-mail states: “Please tell Shantia that we didn’t let anything be traced back to Canada and they didn’t even track this to Canada.” Id.

         By letter, the Government has informed Mr. Hassanshahi’s counsel that it anticipates introducing at trial the letter to the Iranian Minister of Energy and these e-mails, and that the documents are, overall, “representative of the types of documents the government will seek to admit at trial.”[1] Def.’s Mot. Attach at 1–2. Mr. Hassanshahi has moved to exclude these documents as inadmissible hearsay, and he further claims that the letter lacks authentication. See Def.’s Mot. at 6, 15, 19.

         The Government has also provided notice under Federal Rule of Evidence 404(b) that it will seek to elicit evidence that “defendant Hassanshahi previously attempted to do business in Iran without the required license from the government” and that he was “made aware that his attempt to do business in Iran . . . violated [the] laws of the United States.” Gov’t’s Mot. at 1. The Government contends that Mr. Hassanshahi obtained this knowledge after a California court ruled against him and two other plaintiffs in a lawsuit in which the plaintiffs sought to enforce a contract with a Chinese company. See Gov’t’s Mot. at 2–3. In that case, the plaintiffs alleged that the company, Tsann Kuen Enterprise Co., Ltd. (“Tsann”), had granted them the exclusive right to manufacture and sell Tsann’s computers in Iran. See generally Kashani v. Tsann Kuen China Enter. Co., Ltd., 118 Cal.App.4th 531 (2004); see also Id. at 536 (noting that “Shantia Hassanshahi” was among the three plaintiffs, and listing counsel identical to Mr. Hassanshahi’s California-based co-counsel in this case). After Tsann purportedly ceased manufacturing computers or otherwise doing business in that industry, see Id. at 536, 538, the plaintiffs filed a breach of contract action, alleging that Tsann had breached the parties’ contract without cause and was liable for the damages plaintiffs incurred as a result, id. at 538–39.

         Tsann asserted that the contract was unenforceable as contrary to public policy because it violated the Iranian Transactions and Sanctions Regulations. Id. at 539. The trial court agreed, and the California Court of Appeals affirmed. Id. at 537. The appellate court explained that, under the regulations, there exist “only two ways to avoid the prohibitions on dealing with Iran: coverage under a general license authorizing certain categories of transactions and issuance of a specific license.” Id. at 546 (citations omitted). The court noted that the plaintiffs were United States citizens residing in California and that the “express purposes of the agreement were to supply goods, technology, and services to Iran and even to sell products to the Government of Iran.” Id. at 547. Furthermore, the court stated that the plaintiffs “d[id] not contend that they had obtained authorization for their activities pursuant to any specific license.” Id. Accordingly, the court concluded that plaintiffs’ anticipated performance was “in clear violation” of the Iranian Transactions and Sanctions Regulations and, therefore, the International Economic Emergency Powers Act.[2] Id. at 548.

         Mr. Hassanshahi’s motion to exclude evidence raised several “preliminary” grounds for excluding the Rule 404(b) evidence. See Def.’s Mot. at 20. He has since filed a formal opposition opposing the introduction of any evidence under Rule 404(b). See generally Def.’s Opp’n to Gov’t’s Mot. at 1, 4 (“Def.’s Opp’n”), ECF No. 114.

         III. ANALYSIS

         The Court will analyze each item of challenged evidence in turn.[3]

         A. Prior Bad Acts Evidence

         The Government seeks to introduce evidence that Mr. Hassanshahi previously attempted to do business in Iran and was aware that doing so violated the laws of the United States. The Government contends that such evidence is admissible to show Mr. Hassanshahi’s knowledge, intent, motive, and a lack of mistake or accident.

         Up front, the Court notes that the precision of its analysis is somewhat frustrated by the Government’s failure to articulate the specific evidence it seeks to introduce under Rule 404(b)(1). The Government attached a certified copy of the Kashani opinion to its notice, but did not indicate whether it would seek to introduce the opinion in whole or in part.[4] In addition, the Government’s notice did not clarify whether, or if, it would seek to offer other evidence concerning the prior conduct that is discussed in the Kashani opinion. This ambiguity led defense counsel to assume that the Government seeks to introduce the entirety of the opinion into evidence. See, e.g., Def.’s Opp’n at 1, 4. It was not until its reply that the Government indicated that it plans to introduce only the cover page and the first and last pages of the opinion. See Gov’t’s Reply at 2, ECF No. 116. In addition, the Government stated for the first time that it intends to introduce a Letter of Intent describing the transaction with Tsann and purportedly bearing Mr. Hassanshahi’s signature. Mr. Hassanshahi had no opportunity to respond to or dispute the letter of intent, so the Court declines to consider it in this motion. The Court will, however, consider the Rule 404(b)(1) issue, taking into account the limited portion of the opinion that the Government represents it will seek to introduce. That said, while the Court finds below that the knowledge demonstrated by the Kashani opinion ...


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