MEMORANDUM OPINION AND ORDER
Amit
P. Mehta United States District Judge.
I.
INTRODUCTION
After
an eight-day trial, a jury returned a verdict of guilty
against Defendant Azam (“Adam”) Doost on (1)
three counts of major fraud against the United States in
violation of 18 U.S.C. § 1031(a); (2) eight counts of
wire fraud in violation of 18 U.S.C. § 1343; (3) four
counts of making a false statement on a loan application or
an extension in violation of 22 U.S.C. § 2197(n); and
(4) five counts of money laundering in violation of 18 U.S.C.
§ 1956(a)(1)(B)(i). The jury acquitted Defendant on
three counts of money laundering. Following the jury's
verdict, Defendant's trial counsel withdrew, and
Defendant retained new counsel for the purpose of filing
post-trial motions and sentencing. With the assistance of new
counsel, Defendant now files a motion pursuant to Rules 29
and 33 of the Federal Rules of Criminal Procedure, seeking
entry of a judgment of acquittal as to all counts or, in the
alternative, a new trial.
For the
reasons discussed below, the court denies Defendant's
motion in large part. The only exception is Defendant's
contention that trial counsel was ineffective for failing to
move to dismiss the false statements and money laundering
counts as time barred. The court defers ruling on that issue
until after the parties develop a factual record concerning
the performance prong of the ineffectiveness claim and
Defendant has had an opportunity to respond to arguments
raised for the first time in the government's sur-reply.
II.
BACKGROUND
A
high-level summary of the trial evidence is sufficient for
present purposes. These facts are recited in the light most
favorable to the government. See United States v.
Kayode, 254 F.3d 204, 212 (D.C. Cir. 2001).
Defendant
Adam Doost and his brother owned a company named Equity
Capital Group, LLC (“ECG”) located in Dubai,
United Arab Emirates. In or around 2006, an ECG subsidiary,
Equity Capital Mining, LLC (“ECM”) secured a
10-year lease on a marble mine located in Cheshti-i-Sharif,
Afghanistan. At about the same time, the Doost brothers began
to construct a marble processing factory in Herat,
Afghanistan. The factory opened in May 2011.
On or
about February 19, 2010, to finance the mining operations,
Defendant executed a loan agreement between ECM and the
Overseas Private Investment Corporation (“OPIC”),
an agency of the United States government. The agreement
called for OPIC to loan $15.8 million to ECM to develop,
maintain, and operate the marble mine. Defendant was
personally responsible for a matching capital contribution.
As part of the loan agreement, Defendant promised that, on a
quarterly basis, he would disclose “all transactions
between the borrower”-ECM-“on the one hand,
” and “a Shareholder” of ECM-Defendant or
his brother-or “any Affiliate of a Shareholder, on the
other hand . . .” There was testimony presented at
trial that accurate disclosure of these so-called
“affiliate transactions” was a material to OPIC.
After
OPIC approved the loan, Defendant and a business consultant
submitted three requests to OPIC to disburse loan funds: (1)
$7 million on April 18, 2010; (2) $7 million on July 15,
2010; and (3) $1.8 million on November 28, 2010. OPIC did not
provide these funds directly to ECM. Rather, the loan
agreement required ECM to submit purchase orders from vendors
confirming the sale price of equipment, and OPIC in turn
would pay the vendor directly for the invoiced amount.
The
trial evidence showed that Defendant carried out a fraudulent
scheme against OPIC in two related ways. First, Defendant
failed to disclose any affiliate transactions to OPIC, when
in truth there were many. Second, Defendant submitted
invoices for equipment purchases that were demonstrably false
or exhibited badges of fraud, such as sequential numbering or
the absence of detail. The evidence showed that several of
the purported vendors were owned or controlled by Defendant,
his brother, and/or another relative. A reasonable jury could
have concluded that these vendors were no more than shell
companies. Financial records presented by the government
established that these purported vendors did not conduct any
actual business, and that within days of receiving a wire
transfer from OPIC to pay for purported equipment, the money
would be transferred to bank accounts in Dubai, after which
the money could not be traced. In another instance, Defendant
arranged to have an Italian equipment supplier submit false
invoices to OPIC.
Ultimately,
the OPIC loan went into default. ECM did not make any
principal payments on the loan and left unpaid nearly $2
million more in interest.
III.
LEGAL STANDARD
On a
motion under Rule 29, the court must consider the evidence in
the light most favorable to the government and determine
whether such evidence “it is sufficient to permit a
rational trier of fact to find all of the essential elements
of the crime beyond a reasonable doubt.'”
Kayode, 254 F.3d at 212 (quoting United States
v. Harrington, 108 F.3d 1460, 1464 (D.C. Cir. 1997)).
The court must “accord[ ] the government the benefit of
all legitimate inferences.” United States v.
Weisz, 718 F.2d 413, 437 (D.C. Cir. 1983). Granting a
motion for judgment of acquittal after a jury verdict is
appropriate only where “a reasonable juror must
necessarily have had a reasonable doubt as to the
defendant['s] guilt.” Id.
Under
Rule 33, “the court may vacate any judgment and grant a
new trial if the interest of justice so requires.” Fed.
R. Crim. P. 33(a). Courts enjoy “broad
discretion” in deciding whether to grant a new trial.
United States v. Wheeler, 753 F.3d 200, 208 (D.C.
Cir. 2014). “A new trial motion is warranted only in
those limited circumstances where ‘a serious
miscarriage of justice may have occurred.'”
Id. (citation omitted).
IV.
ANALYSIS
Defendant
offers a battery of reasons why the court must vacate the
guilty verdicts and enter judgments of acquittal or a new
trial in his favor. The court takes these arguments in the
order in which they appear in Defendant's motion.
A.
The Alleged False Statement Underlying Count Fifteen is not
Fundamentally Ambiguous.
Defendant
begins by challenging the sufficiency of the evidence as to
the false statements charge in Count Fifteen. The false
statement at issue is Defendant's certification contained
in an email to John Aldonas of OPIC, dated December 12, 2010,
stating that “[t]here is no affiliate transaction have
accurred [sic] during the quarter ending september 30th
2010.” Def.'s Mot., Ex. 13, ECF No.
105-13.[1] In truth, multiple transactions took place
between ECM and affiliated companies during the quarter in
question. Defendant nevertheless argues that, as to Count
Fifteen, he is entitled to judgment of acquittal because the
exchange with Aldonis was “‘fundamentally
ambiguous' such that a rational juror could not have
found Doost guilty beyond a reasonable doubt.”
Def.'s Combined Rule 29 and 33 Mot., ECF No. 105
[hereinafter Def.'s Mot.], at 6. Defendant's argument
is without merit.
Although
the D.C. Circuit has recognized that “some questions .
. . may be so vague as to prohibit the government from even
attempting to prove that the defendant knowingly answered
falsely, ” United States v. Chapin, 515 F.2d
1274, 1279 (D.C. Cir. 1975), such questions will be rare.
“‘[M]ere vagueness or ambiguity in the questions
is not enough to establish a defense . . . [for] [a]lmost any
question or answer can be interpreted in several ways when
subjected to ingenious scrutiny after the fact.'”
Id. (quoting United States v. Ceccerelli,
350 F.Supp. 475, 478 (W.D. Pa. 1972)). Instead, the alleged
false answer must be “consider[ed] [ ] in context,
taking into account the setting in which it appeared and the
purpose for which it was used. This [is] a matter for the
jury.” United States v. Milton, 8 F.3d 39, 45
(D.C. Cir. 1993). It is up to the jury “to determine
how the defendant construed the question or answer and to
decide, in that light, whether the defendant knowingly gave a
false answer.” Id. at 46; see also
Chapin, 515 F.2d at 1280 (observing that “the
possibility that a question or an answer may have a number of
interpretations does not invalidate either an indictment or a
conviction after a jury charge which, as here, requires the
jury to determine that the question as the defendant
understood it was falsely answered in order to
convict.”).
Applying
these principles, the court cannot override the jury's
verdict on Count Fifteen. The jury could have reasonably
found, and did find beyond a reasonable doubt, that Defendant
knew he was making a false statement when he represented that
there were “no affiliate transaction[s]” for the
quarter ending September 30, 2010. To start, Defendant's
exchange with Aldonis did not occur in a vacuum. It must be
read in the context of the loan agreement with OPIC. That
agreement required ECM to disclose, on a quarterly basis,
“all transactions between [ECM], on the one hand, and a
Shareholder or any Affiliate of a Shareholder, on the other
hand.” Def.'s Mot., Ex. 14, ECF No. 105-14
[hereinafter Loan Agreement], at 14. The loan agreement
defined “Affiliate” to mean “with respect
to any Person, (i) any other Person that is directly or
indirectly controlled by, under common control with, or
controlling such Person; . . . (iii) any officer or director
of such Person; or (iv) any spouse or relative of such
Person.” Id. at 34. The loan agreement further
defined “Person” to include an “individual,
a legal entity, including a partnership, a joint venture, a
corporation, a trust, and an unincorporated
organization[.]” Id. at 40. Defendant and his
brother were shareholders of ECM, therefore the loan
agreement required ECM to disclose any transactions between
ECM and an “Affiliate” controlled by him or his
brother. When Defendant's answer is read together with
the loan agreement and its definitions, the jury reasonably
could have concluded that Defendant knew exactly what he was
being asked when Aldonis referred to “Affiliated
Transactions.”
To the
extent Aldonis created any confusion, he also gave guidance
on what he precisely meant by “Affiliated
Transactions.” In the last sentence of his email,
Aldonis directed Defendant to the loan agreement's
“definition of Affiliated Transactions so you can
consider what if any types of transactions might fit the
reportable category.” Def.'s Mot., Ex. 13, ECF No.
105-13. The jury could have found that this statement
dispelled any ambiguity or vagueness about what Aldonis was
asking Defendant to report.
Finally,
this was not the first time Defendant had certified to OPIC
that there were no transactions to disclose between the
shareholders of ECM and “affiliates.” Defendant
made a similar disclosure five months earlier, on July 15,
2010, affirming that “[f]or the financial quarters
ending March 31st and June 30th 2010,
there were no affiliate transactions that occurred.”
Trial Tr., Sept. 11, 2018 AM, at 391. Defendant does not
contend that there was any fundamental ambiguity about
OPIC's June 2010 “affiliate transaction”
inquiry, and the jury found him guilty of providing a knowing
false response in that instance. The same jury that found
Defendant guilty of making a false certification in June 2010
reasonably could have concluded that Defendant knew he was
making a nearly identical false certification five months
later.
Defendant
makes various arguments to support his assertion of
“fundamental vagueness, ” but none are
convincing. He contends that “it is nearly impossible
to tell what the precise question was or to which question
Defendant was responding.” Def.'s Mot. at 9. But,
as discussed above, when viewing the email in the context of
all the evidence, a reasonable jury could have found
Defendant knowingly provided a false answer to the inquiry
concerning affiliate transactions. Additionally, Defendant
asserts that the email exchange with Aldonis, and other
referenced emails, demonstrate his “weak proficiency in
the English language, ” id. at 10, which would
have exacerbated his confusion about Aldonis's inquiry,
id. at 12. Defendant's claimed “limited
proficiency in the English language, ” id.,
however, is nothing more than a self-serving statement that
lacks any evidentiary support. And, in any event, he was free
to make such an argument to the jury but did not. The court
will not draw that conclusion now to override the jury's
verdict. Finally, Defendant contends that the portion of his
response in which he states that no affiliate transactions
“have accurred”-a clear misspelling-is ambiguous
and could be construed to mean “no affiliate
transactions have accrued.” (Emphasis added.)
Once more, Defendant could have made this argument to the
jury but did not, and, given the context, the jury readily
could have understood Defendant to mean that “no
affiliate transactions have occurred.” Mere
conjecture as to how the jury might have understood a
misspelling cannot reverse its considered judgment.
Accordingly,
for the foregoing reasons, the court denies Defendant's
motion to enter a judgment of acquittal as to Count Fifteen.
B.
Ineffective Assistance of Counsel
Defendant
advances multiple grounds of ineffective assistance of
counsel that he insists require the court to enter a judgment
of acquittal as to all or certain counts, or to grant him a
new trial. Two of Defendant's ineffectiveness claims
concern trial counsel's failure to move to dismiss counts
of the indictment. See Def.'s Mot. at 15-19
(asserting ineffectiveness for not moving to dismiss certain
counts as multiplicitous and all but two counts as time
barred). The court considers those arguments not in this
section, but in the next one concerning alleged defects in
the indictment that warrant dismissal. In this section, the
court addresses only those claims of ineffectiveness that
relate to alleged shortcomings in counsel's performance
at the trial itself.
The
standard under Strickland v. Washington for an
ineffectiveness claim is a familiar one. To be entitled to
relief, a defendant must show “both that his counsel
provided deficient assistance and that there was prejudice as
a result.” Harrington v. Richter, 562 U.S. 86,
104 (2011) (citing Strickland v. Washington, 466
U.S. 669, 688 (1984)). As to the performance prong, a court
must apply a “strong presumption” that
counsel's performance was within the “wide
range” of reasonable professional assistance.
Id. (citation omitted). To overcome that strong
presumption and prevail, a defendant must show that
“counsel made errors so serious that counsel was not
functioning as the ‘counsel' guaranteed the
defendant by the Sixth Amendment.” Id.
(citation omitted). The standard against which to assess
trial counsel's performance is one of objective
reasonableness. See id.
As for
the prejudice prong, the defendant must show “a
reasonable probability that, but for counsel's
unprofessional errors, the result of the would have been
different.” Id. (internal quotation marks and
citation omitted). “A reasonable probability is a
probability sufficient to undermine confidence in the
outcome.” Id. (internal quotation marks and
citation omitted). Some conceivable effect on the outcome is
not sufficient, see id., but rather, counsel's
error “must be so serious as to deprive the defendant
of a fair trial, a trial whose result is reliable, ”
id. (internal quotation marks and citation omitted).
Ultimately, under Strickland, the “question is
whether an attorney's representation amounted to
incompetence under ‘prevailing professional norms,'
not whether it deviated from best practices or most common
custom.” Id. at 105 (quoting
Strickland, 466 U.S. at 690).
1.
Failure to Present Evidence of Equipment Value
Defendant
maintains that his trial counsel was ineffective for failing
to present evidence to contradict the government's
suggestion that ECM had not purchased equipment using the
OPIC loan funds, when the produced discovery contained
records showing that ECM possessed equipment valued at
millions of dollars. Specifically, Defendant points to
audited financial statements showing that EMC had assets
valued at over $23 million in 2010 and over $25 million in
2011 and 2012. See Def.'s Mot. at 15 (citing
Def.'s Mot., Exs. 15-17, ECF Nos. 105-15-105-17).
Defendant also identifies two records that appear to be
correspondence on the letterhead of the company that
eventually acquired ECM, Greengate Group, that itemize
various pieces of equipment that Greengate received from ECM.
One record, dated July 18, 2017, lists the equipment that ECM
transferred to Greengate in 2017. See Def.'s
Mot., Ex. 19, ECF No. 105-19. The other, dated November 7,
2017, “confirm[s]” that Greengate
“received” certain equipment, though it does not
say from whom. See Def.'s Mot., Ex. 18, ECF No.
105-18. Although both letters bear signatures of Greengate
officials, the recipient of neither letter is identified on
its face and the circumstances under which the letters were
drafted is not apparent. Finally, Defendant proffers that his
new counsel hired forensic accountants who, based on the
available records, were able to show “that most, if not
all, of the equipment alleged to have never been purchased
was accounted for in the sale to Greengate.”
See Def.'s Mot. at 17 (citing Def.'s Mot.,
Exs. 20-22, ECF Nos. 105-20-105-22). Ultimately, Defendant
posits that, had his trial counsel presented the foregoing
evidence, it would have undermined the government's
suggestion that the OPIC funds were used for purposes other
than to purchase equipment, and it would have
“completely negated intent.” Id.
The
court holds otherwise, finding that the failure to present
the foregoing evidence does not undermine the court's
confidence in the outcome of trial. The financial records in
question are of limited probative value in multiple respects.
For starters, those records in no way undermine the
government's case that Defendant defrauded OPIC by
purposely concealing affiliate transactions and by lying
about them. See Indictment, ECF No. 1, at 8
(“Doost would report to OPIC that he did not have an
affiliation with any companies [other than those he
identified], . . . when in fact he had financial
relationships with several vendors from which he purported to
purchase equipment for the Marble Mine . . .”);
id. (“Doost and his Business Partner would
cause . . . transfer of funds from those vendors to companies
and individuals with whom Doost was associated . . .”).
The government's proof as to that theory of prosecution,
by itself, is sufficient to sustain all but two of the
convictions in this case.[2] Second, neither the certified audit
reports nor the inventory lists compiled by Greengate can
erase the false and misleading nature of the invoices
submitted to OPIC. The government's proof established
numerous badges of fraud associated with the invoices
submitted to OPIC, such as the sequential numbering, the
absence of detail, and the omission of VIN numbers. The
evidence presented at trial further showed that Defendant
participated in preparing these invoices, requested that a
vendor in Italy prepare and transmit false invoices to OPIC,
and submitted invoices to OPIC for expenses already paid by
other aid organizations. Evidence regarding equipment
possessed by EMC would not diminish the damaging nature of
these facts. Finally, neither the records in question nor the
proffered expert testimony would show that ECM bought the
actual equipment that Defendant represented to OPIC was being
purchased with the loan proceeds. Indeed, the experts
themselves candidly acknowledge the limitation of their
opinion and the evidence upon which they relied: “[Our
services] did not include - physically observing the
equipment, matching of serial numbers of the equipment from
the purchase orders, tracing funds from either OPIC or Doost
entities to bank accounts to the vendors . . .”
See Def.'s Mot., Ex. 20, ECF Nos. 105-20, at 1.
Thus, the mere fact that Greengate received some
equipment when it purchased ECM does not establish that these
acquired assets match the equipment that Defendant told OPIC
that ECM was purchasing, or that Defendant in fact used the
specific OPIC funds to make equipment purchases at all.
In
short, Defendant was not prejudiced by trial counsel's
failure to offer, at best, ambiguous records relating to the
existence and value of equipment.
2.
Failure to Object to the Admission of Foreign Business
Records
Part of
the government's evidence at trial included records
obtained from Gaspari Menotti, an Italian vendor of marble
finishing equipment. The government gave the defense written
notice under 18 U.S.C. § 3505 that it intended to offer
these foreign records into evidence, and it obtained a
certification as to their authenticity, as the statute
permits. See Gov't Notice, ECF No. 21. The
government also obtained a certification that the Gaspari
Menotti records met the requirements of a “foreign
record of regularly conducted activity” records,
rendering them admissible notwithstanding the rule against
hearsay. 18 U.S.C. § 3505(a). The court admitted the
Gaspari Menotti records without objection from the defense.
Defendant now claims that reasonable counsel would have
objected to the admissibility of the Gaspari Menotti records.
He contends that the records do not qualify as foreign
business records under section ...