U.S. v. Elashi

Decision Date12 July 2006
Docket NumberCriminal Action No. 3:02-CR-52-L.
Citation440 F.Supp.2d 536
PartiesUNITED STATES of America v. Bayan ELASHI, Ghassan Elashi, Basman Elashi, Infocom Corporation.
CourtU.S. District Court — Northern District of Texas

Michael Paul Gibson, Richard Alan Anderson, Burleson, Pate & Gibson, Dallas, TX, for Defendants.

Nathan Franklin Garrett, Barry Jonas, James T. Jacks, U.S. Attorney's Office, Dallas, TX, for Plaintiff.

MEMORANDUM OPINION AND ORDER

LINDSAY, District Judge.

Before the court are the following postverdict motions: (1) Rule 29(c) Renewal of Motion of Judgment of Acquittal, filed by Defendant Ghassan Elashi on April 19, 2005; (2) Motion for Judgment of Acquittal Pursuant to Rule 29, Federal Rules of Criminal Procedure, filed by Defendant Basman Elashi on April 19, 2005; (3) Defendant Basman Elashi's Motion for New Trial Pursuant to Rule 33, Federal Rules of Criminal Procedure, filed on April 19, 2005; and (4) Defendants' Motion Reurging Motion for Judgment of Acquittal Pursuant to Rule 29, Federal Rules of Criminal Procedure and Motion Adopting Other Defendants' Motions, filed by Defendants Bayan Elashi and Infocom Corporation on May 13, 2005 (collectively referred to as "postverdict motions"). On February 1, 2006, the court conducted a hearing concerning the post-verdict motions. Upon careful consideration of the motions, the record, and applicable law, for the reasons herein stated, the court denies Defendant Ghassan Elashi's Rule 29(c) Renewal of Motion of Judgment of Acquittal; denies Defendant Basman Elashi's Motion for Judgment of Acquittal Pursuant to Rule 29, Federal Rules of Criminal Procedure; denies Defendant Basman Elashi's Motion for New Trial Pursuant to Rule 33, Federal Rules of Criminal Procedure; and denies Defendants' Motion Reurging Motion for Judgment of Acquittal Pursuant to Rule 29, Federal Rules of Criminal Procedure and Motion Adopting Other Defendants' Motions, filed by Defendants Bayan Elashi and Infocom Corporation.

I. Procedural and Factual Background

This opinion addresses postverdict motions filed by the above-named Defendants in response to the jury verdict, returned April 13, 2005, regarding renumbered Counts 1 through 21 of the Revised Superseding Indictment ("revised superseding indictment"), filed April 14, 2005.1 Defendants Bayan Elashi ("Bayan"), Ghassan Elashi ("Ghassan"), and Basman Elashi ("Basman"), are employees of Infocom Corporation2 ("Infocom"), and are brothers. Bayan is the President; Ghassan is Vice-President of Marketing; and Basman is the Logistics and Credit Manager. The Elashi family owns 100% of In focom's stock.

Renumbered Counts 1 through 21 center upon alleged violations of law relating to financial transactions between Infocom and Nadia Elashi ("Nadia"), a cousin of Defendants. Nadia is married to Mousa Abu Marzook ("Marzook"), who is a leader in the Islamic Resistance Movement ("Hamas"). At trial, the Government contended that Defendants entered into an alleged scheme whereby they executed a contractual agreement with Nadia in order to conceal approximately $250,000 that Marzook had invested in Infocom, thereby creating the appearance that Nadia actually invested these monies. Further, it contended that Defendants conspired to deal, and dealt, in the property of Marzook after he received a terrorist designation; and that Defendants conspired to launder money, and laundered money, by using Infocom to make payments to Nadia during the years after the contractual agreement was executed, knowing that these monies represented the proceeds of unlawful activity, and structuring the payments to conceal the interest Marzook retained in the monies paid.

On March 22, 1993, Infocom and Nadia executed a "Murabaha Agreement," a contractual agreement, whereby Nadia agreed to pay $250,000 to Infocom "to be used in computer and trade business ..." Govt's Ex. 18 at 2. By its terms, the Murabaha Agreement was "valid for 12 months and renewable upon the agreement of the two parties." Id. Defendant Bayan Elashi signed the agreement on behalf of Infocorn; Nadia signed the agreement; and Marzook signed as a "Second Witness." Id. at 3.

On January 23, 1995, under the authority of the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-1706 (the "IEEPA"), President William J. Clinton issued Executive Order 12947. Executive Order 12947 specifies that, "notwithstanding any contract entered into ... prior to the effective date," all property and interests in property of specially designated persons "that are in the United States ... or that hereafter come within the possession or control of United States persons, are blocked...." Exec. Order 12947 § 1(a)(iii), 60 Fed.Reg. 5079 (Jan. 23, 1995).3 The Order further states that "any transaction or dealing by United States persons or within the United States in property or interests in property of the persons designated in or pursuant to this order is prohibited, including the making or receiving of any contribution of funds, goods, or services to or for the benefit of such persons." Id. § 1(b). The IEEPA, the enforcement mechanism for Executive Order 12947, provides, "[w]hoever willfully violates ... any license, order, or regulation issued under this chapter [shall be guilty of an offense.]" 50 U.S.C. § 1705(b).

As a result of Executive Order 12947, the Secretary of the Treasury promulgated regulations. One regulation provides:

Except as authorized by [law], no property or interests in property of a specially designated terrorist, that are in the United States ... or hereafter come within the possession or control of [United States] persons ... may be transferred, paid, exported, withdrawn or otherwise dealt in.

31 C.F.R. § 595.201(a).4 Another regulation sets forth prohibited conduct:

Any transaction for the purpose of, or which has the effect of, evading or avoiding, or which facilitates the evasion or avoidance of, any of the prohibitions set forth in this part, is hereby prohibited. Any attempt to violate the prohibition set forth in this part is hereby prohibited. Any conspiracy formed for the purpose of engaging in a transaction prohibited by this part is hereby prohibited. 31 C.F.R. § 595.205. The regulations further provide, "[w]hoever willfully violates any license, order, or regulation issued under the Act [commits an offense against the United States.]" 31 C.F.R. § 595.701(a)(2).

On January 25, 1995, the Department of the Treasury, Office of Foreign Assets Control ("OFAC"), designated llamas as a Specially Designated Terrorist Organization. On August 29, 1995, OFAC designated Marzook as a Specially Designated Terrorist pursuant to Executive Order 12947 and the IEEPA. According to the Government, this designation blocked as a matter of law any property in which Marzook held any interest that is subject to the jurisdiction of the United States. See Rev. Supers. Indict. ¶ 11. It alleged that, upon designation, any United States person or entity who possessed any funds in which Marzook held any interest should have reported such interest to the proper United States authorities. Id. The Government contended that Defendants' dealings in the $250,000 forming the basis of the Murabaha Agreement, and the proceeds therefrom, after Marzook received a terrorist designation, as well as their attempts to avoid acknowledgment of such monies, violated Executive Order 12947 and the IEEPA.

On July 25, 1995, Marzook was arrested at John F. Kennedy International Airport in Queens County, New York. The Eastern District of New York issued a subpoena to the Custodian of Records of Infocom on July 28, 1995. On July 31, 1995, FBI Special Agent Brian Harkins, among other agents, served the subpoena upon Infocom. On September 5, 2001, OFAC issued a Blocking Notice upon Bayan Elashi, as President of Infocom Corporation. Federal agents searched Infocom, pursuant to an executed search warrant, on September 5 through 7, 2001, collecting materials in both hard copy and electronic form. On September 24, 2001, Mr. Arch McColl, Infocom's then attorney, submitted a letter containing various attachments in response to OFAC's Blocking Notice. Federal authorities arrested Defendants Bayan and Ghassan Elashi on December 18, 2002, and arrested Defendant Basman Elashi on December 19, 2002.

After the conclusion of trial for counts 1 through 25, Defendants were tried under the 21-count revised superseding indictment. The charges included conspiracy to deal in the property of a Specially Designated Terrorist, 18 U.S.C. § 371, 50 U.S.C. §§ 1701-1706, and 31 C.F.R. §§ 595 et seq. (Count 1); dealing in the property of a Specially Designated Terrorist, 50 U.S.C. §§ 1701-1706, 31 C.F.R. §§ 595 et seq., and 18 U.S.C. § 2 (Count 2); substantive counts of dealing in the property of a Specially Designated Terrorist, 50 U.S.C. §§ 1701-1706, 31 C.F.R. §§ 595 et seq., and 18 U.S.C. § 2 (Counts 3 through 11); conspiracy to commit money laundering, 18 U.S.C. § 1956(h) (Count 12); and substantive counts of money laundering, 18 U.S.C. §§ 1956(a)(1)(B)(i), 2 (Counts 13 through 21).

On April 13, 2005, the jury returned its verdict, convicting Defendants Bayan Elashi, Ghassan Elashi, and Infocom on all counts, and convicting Defendant Basman Elashi on Counts 1, 2, and 12. The Defendants moved jointly for judgments of acquittal at the close of the Government's case-in-chief, and reurged the motions postverdict. The Government filed its Consolidated Response to Defendants' Motions for Judgment of Acquittal and New Trial on May 27, 2005. On February 1, 2006, the court held a hearing concerning the postverdict motions.

The parties acknowledge, as is evident, that this is a circumstantial evidence case. The Government contends that it presented evidence at trial which, when reviewed in the light most favorable to it, with all reasonable...

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