502 F.3d 1281 (11th Cir. 2007), 05-11689, United States v. Khanani

Docket Nº:05-11689, 05-15014.
Citation:502 F.3d 1281
Party Name:UNITED STATES of America, Plaintiff-Appellee Cross-Appellant, v. M. Saleem KHANANI, David Portlock, Defendants-Appellants Cross-Appellees.
Case Date:October 02, 2007
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

Page 1281

502 F.3d 1281 (11th Cir. 2007)

UNITED STATES of America, Plaintiff-Appellee Cross-Appellant,


M. Saleem KHANANI, David Portlock, Defendants-Appellants Cross-Appellees.

Nos. 05-11689, 05-15014.

United States Court of Appeals, Eleventh Circuit

Oct. 2, 2007

Page 1282

[Copyrighted Material Omitted]

Page 1283

[Copyrighted Material Omitted]

Page 1284

Lawrence S. Robbins, Alan Edward Untereiner, Gregory L. Poe, Robbins, Russell, Englert, Orseek & Untereiner,

Page 1285

Washington, DC, David Alan Henson, Kirkconnell, Lindsey & Shure, P.A., Brevard, NC, Chandler Robinson Muller, Law Offices of Muller & Sommerville, P.A., Winter Park, FL, for Defendants.

Linda Julin McNamara, Tampa, FL, for U.S.

Appeals from the United States District Court for the Middle District of Florida.

Before EDMONDSON, Chief Judge, and BIRCH and WILSON, Circuit Judges.

BIRCH, Circuit Judge:

M. Saleem Khanani and David Portlock appeal their convictions both arguing that the district court erred in refusing to give their "mere employment" theory of defense jury instruction and that the warrant searches conducted at Portlock's accounting business and storage facility and other locations violated the Fourth Amendment. Khanani also separately contends that the district court abused its discretion by failing to grant a mistrial because of an alleged extrinsic influence on the jury, and by admitting into evidence Portlock's statement that he "would not be surprised" by Khanani's involvement in the charged offenses. Portlock separately asserts that: the evidence was legally insufficient to prove the offense of conspiracy to harbor or shield illegal aliens from detection; or, alternatively, the offense of conspiracy to encourage or induce illegal aliens to reside in the United States when the government's evidence only showed that unauthorized workers were knowingly employed; the evidence was legally insufficient to prove guilt beyond a reasonable doubt as to Counts 54, and 56 through 71; and cumulative error exists that warrants the grant of a new trial. Additionally, the government cross-appeals, arguing that the district court erred by entering judgments of acquittal on the money-laundering conspiracy count (Count 55). For the reasons set forth below, we AFFIRM the district court in all respects.


Khanani was a 40% owner of Big Bargain World, Inc. ("BBW"), SS Mart, Inc., and several retail stores, including Jeans Unlimited, Inc., and Denim Unlimited, Inc. Jesse Maali owned the remaining 60% stake. Portlock was an accountant and worked for Khanani and Maali as a comptroller. At least some of the employees at Jeans Unlimited and Denim Unlimited were aliens who were not authorized to work in the United States.

In November 2002, law enforcement agents raided and searched fourteen locations, including seven BBW stores, two Sports Dominator stores, a BBW corporate office/warehouse, the office of Maali Enterprises, Maali's residence, Portlock's office, and a storage unit rented by Portlock. The government seized multiple computer hard drives, as well as related equipment and software from the businesses and homes. An agent mirrored the computer hard drives after they were seized so that the data contained therein could be reviewed by investigators.

The search warrants were based on an FBI agent's affidavit, which alleged that the computers were "integral tools" of the claimed violations. The master affidavit limited the search to specified categories of documents pertaining to a number businesses and four individuals, and limited the chronological reach of the search to documents and records dating back to 1997. The affidavit also required the search activity to be focused on materials related to specified immigration and tax violations.

On 21 July 2004, a federal grand jury returned a third superceding indictment charging Saleem Khanani and David Portlock, among others, with offenses relating to Khanani's employment of aliens who were not authorized to work the United

Page 1286

States and to the related failures to pay state and federal taxes. The first 53 counts charged that Khanani, Portlock, and others had "encouraged and induced" named, unauthorized aliens to reside in the United States, in violation of 8 U.S.C. § 1324(a)(1)(A)(iv). R552 at 1-4. Count 54 charged that the defendants had participated in a conspiracy to "conceal, harbor, and shield" these aliens from detection, also in violation of § 1324(a)(1)(A)(iii). Counts 56-58 charged that the defendants had mailed and e-mailed fraudulent state and federal tax forms, in violation of 18 U.S.C. §§ 1341 and 1343 and 18 U.S.C. § 2. Count 55 charged the defendants with conspiracy to launder the proceeds of the crimes charged in Counts 1-54 and 56-58, in violation of 18 U.S.C. § 1956(h). Counts 59-71 charged that the defendants had evaded federal employment and income taxes, in violation of 26 U.S.C. § 7201 and 18 U.S.C. § 2. The government also sought the forfeiture of any assets the defendants had obtained through their crimes. Khanani and Portlock moved to suppress the evidence uncovered in the computer searches, arguing, among other things, that the warrants were deficient because they failed to articulate any search protocol. After an evidentiary hearing, the court denied the motions to suppress.

At trial, Khanani's primary defense was that he merely employed undocumented workers and that mere employment, at most, constitutes a misdemeanor under a separate and uncharged provision of the immigration laws, 8 U.S.C. § 1324a. Khanani and Portlock requested that the court instruct the jury that "[t]he employment of an illegal alien in and of itself does not constitute" encouragement or harboring under § 1324(a). R755 at 4, 9. The requested instruction was denied.

Portlock testified during the defense's case. Portlock's counsel questioned him about his prior statements regarding Maali and Khanani's motives for hiring unauthorized aliens. Portlock denied telling agents that the reason for the separate entities was to facilitate Maali and Khanani's employment of unauthorized aliens to gain a competitive advantage. On cross-examination, the following colloquy occurred:

Q. You said on your direct testimony . . . that you told the agents the reason for hiring [illegal aliens] was because Mr. Khanani was a charitable guy or a charitable person?

A. That was my perception, that he had met these people in his religious responsibilities as a leader in his religious community and they came to . . . him.

. . .

Q. Well, didn't you tell the agents that you wouldn't be surprised by anything that Mr. Khanani did?

R965 at 4216-17. After an objection and discussion with the court, the government rephrased its question, asking: "Did you tell the agents that you would not be surprised at Mr. Khanani's involvement because Mr. Khanani was much more interested in finding ways around employing the illegal aliens?" Id. at 4224. Portlock answered "I may have said that, yes." Id.

At the close of the evidence at trial, the district court denied the defendants' motions for judgment of acquittal on most counts but reserved judgment on Count 55, the money-laundering conspiracy count.

In instructing the jury regarding 8 U.S.C. § 1324(a), the district court charged the jury:

The elements of a violation of Section 1324[(a)(1)(A)(iv)] are as follows: First, that the defendant knowingly encouraged or induced a person who was, in fact, an alien to reside in the United States; and second, that the defendant

Page 1287

either knew or acted in reckless disregard of the fact that the alien's residence in the United States was or would be in violation of law.


The elements of a violation of section 1324(a)(1)(A)(iii) are as follows: That an alien entered or remained in the United States in violation of law; second, that the defendant knowingly concealed, harbored or shielded from detection the alien within the United States; and third, that the defendant either knew or acted in reckless disregard of the fact that the alien entered or remained in the United States in violation of law.

R992 at 5518-19; see also id. at 5521. The court instructed the jury that:

To act knowingly means to act voluntarily and intentionally and not because of mistake or accident.

To act with reckless disregard means to be aware of, but consciously and carelessly ignore facts and circumstances clearly indicating that the person residing in the United States was an alien [that] had entered or remained in the United States in violation of law.

. . .

To conceal, harbor, or shield from detection includes any knowing conduct by the defendant tending to substantially facilitate an alien's escaping detection as an illegal alien, thereby remaining in the United States illegally.

Id. at 5519-20; see also id. at 5522. The court also instructed the jury that "[t]he word willfully, as that term is used in the indictment or in these instructions, means that the act was committed voluntarily and purposely, with the specific intent to do something the law forbids, that is, with bad purpose either to disobey or disregard the law." Id. at 5555. The court also gave the jury instructions regarding the defendants' good faith defenses. Id. at 5549-54.

Before the jury retired to deliberate the forfeiture counts, the district court entered judgments of acquittal on the money-laundering conspiracy count, stating that the court later would enter a written order.1

The jury found Khanani guilty on all counts except 11 counts of encouraging or inducing aliens to reside in the United States, and Portlock guilty of Counts 54-71. The jury acquitted Khanani and Portlock of the remaining charges.

After the...

To continue reading