U.S. v. Ismaili

• Citation: 828 F.2d 153
• Decision Date: 25 September 1987
• Docket Number: No. 86-5552,86-5552
• Parties: 24 Fed. R. Evid. Serv. 119 UNITED STATES of America v. ISMAILI, Lakbir Moulay. Appeal of Lakbir Moulay ISMAILI, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 153

828 F.2d 153

24 Fed. R. Evid. Serv. 119

UNITED STATES of America v. ISMAILI, Lakbir Moulay.

Appeal of Lakbir Moulay ISMAILI, Appellant.

No. 86-5552.

United States Court of Appeals,

Third Circuit.

Argued April 9, 1987.

Decided Sept. 2, 1987.

Rehearing and Rehearing In Banc Denied Sept. 25, 1987.

Thomas W. Greelish, U.S. Atty., Marion Percell (argued), Asst. U.S. Atty., Samuel P. Moulthrop, Chief, Appeals Div., U.S. Atty.'s Office, Newark, N.J., for appellee.

Alan Silber (argued), Peter Avenia, Mark B. Gombiner, Merrill N. Rubin, Silber & Rubin, P.C., New York City, for appellant.

Before SLOVITER, BECKER and GARTH, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge:

Lakbir Ismaili appeals from the denial of several pretrial motions that were preserved for appeal at the time he entered a plea of nolo contendere pursuant to a plea agreement. See U.S. v. Zudick, 523 F.2d 848 (3d Cir.1975). We affirm.

I.

A.

Between November 20, 1979 and December 31, 1980, the government claims that Lakbir Ismaili and the company that he operated, Incoser, allegedly engaged in a "bait and switch" fraud scheme which involved, inter alia, the promotion and sale of customized vans throughout the Middle East. According to the government, Ismaili would approach American manufacturers of customized vans and other vehicles, and claim that he could sell their products overseas through the use of a sales force which he maintained in several countries. He proposed to purchase their vans for resale abroad. The only commitment needed from the sellers, Ismaili indicated, was the money needed to produce "color separations." Color separations are sets of color negatives used to produce magazine quality photographs allowing them to be advertised abroad. Using this approach, Ismaili received payments totaling $43,210.80 from nearly twenty individual van manufacturers.

The government investigated the complaints which it received about Ismaili. The investigation disclosed that Ismaili had placed the color-separation money he had been paid into a Philadelphia bank account, and converted the money to his own personal use; that no color separations were made or brochures published; and that Ismaili never had purchased any vans from the manufacturers for resale. The investigations also revealed that Ismaili arranged visits for his customers at a New Jersey printing plant where he claimed color separations were to be made. In fact, that plant never processed any such color separations for Ismaili.

The government investigation concluded, further, that Ismaili had no sales force to sell Ismaili's vans in the Middle East; and that no advertising campaign for the vans had ever been planned. The government presented its case to a grand jury in January of 1981.

B.

In Ismaili's appearances before the first grand jury in 1981, he denied all allegations of fraud. Ismaili asserted that his company, Incoser, was a legitimate enterprise which failed as a consequence of difficulties created by the Iran-Iraq war. He claimed that he had been compelled to use for his personal purposes the funds received from the van manufacturers and Incoser's corporate account. He explained that he did so because the currency laws in Morocco prevented him from obtaining his personal funds that were located in Morocco, and that he therefore used the funds in Incoser's Philadelphia banking account for personal purposes. He claimed that he used his personal funds in Morocco for the purposes of advertising the vans.

It was for this reason, Ismaili claimed, that he decided to have the color separations made in Morocco instead of in New Jersey. He claimed further that his brother Rachid had helped to organize on his behalf, a Middle Eastern sales force; and that he, Ismaili, had arranged with a Moroccan named Ezzarai or Zarai to produce the color separations for Ismaili's sales brochures. In turn, Ismaili contends that Ezzarai engaged the Agadir Color studio to process the color separations.

The grand jury's 1981 investigation ended without the return of an indictment. In 1983, however, the grand jury investigation resumed. In September 1984, the grand jury returned a seventeen-count indictment, charging Ismaili with mail fraud under 18 U.S.C. Secs. 1341 and 1342.

C.

Following his indictment, Ismaili made three pretrial motions which the district court denied and which are the subject of this appeal.

Ismaili moved to depose a number of witnesses in Morocco, Syria and Saudi Arabia.

Ismaili moved to dismiss the indictment on the grounds of abuse of the grand jury process, alleging that the prosecutor failed in his obligation to present to the grand jury an exculpatory telex that Ismaili discovered during the course of requesting Brady material. Pursuant to that motion, he also has claimed that the prosecutor abused the grand jury process in the course of presenting hearsay to it.

Ismaili moved to dismiss the indictment because the government allegedly abused the grand jury process by its prejudicial pre-indictment delay in obtaining the indictment.

After denying Ismaili's motions, the district court on May 29, 1986 accepted Ismaili's nolo contendere plea pursuant to a plea agreement. In the agreement, Ismaili pleaded nolo contendere to one count of mail fraud, but he reserved the right to appeal from the denial of his pretrial motions. On August 12, 1986, the court sentenced Ismaili. In so doing, the court suspended sentence and placed him on probation for five years. Imposing a fine of $1,000 as a special condition, the court ordered Ismaili to repay as restitution the $43,210.80 paid by the victims of Ismaili's scheme, and recommended that Ismaili not be deported. Order of Aug. 4, 1986. Ismaili appealed.

II.

We turn first to the district court's denial of Ismaili's motions to depose witnesses in Morocco, Syria and Saudi Arabia.

A.

The first motion filed by Ismaili, which pertained to the Saudi Arabian witnesses, was supported by a telex exhibit designed to establish that the three witnesses constituted a part of Ismaili's sales force in the Middle East and would therefore refute the government's argument that no marketing or sales structure existed. The telex indicated that the witnesses were unwilling to spend "time or money to come to the U.S.A." App. at 34.

The government argued that these witnesses would not exonerate the defendant, that their testimony was not material, and that there was "no showing of a good faith effort to produce the witnesses in the United States," specifically because the witnesses seemed to be under the impression, "its up to them to pay their own way to the United States." App. at 122.

Ismaili contended that their testimony was material, that these were the marketing managers for the sale of the vans, and that the witnesses were not under the impression that they had to pay expenses.

In denying Ismaili's motion on June 5, 1985, the district court stated:

Having viewed the telex [which pointed to the reluctance of three Saudi Arabian witnesses to come to the United States], and considering the arguments which have been made by counsel, I find an inadequate basis for ordering the depositions under our court rules.

The witnesses should be brought to the United States and a showing should be made which is more convincing as to not only how they would assist in the defense, but that providing for them to come to the United States still is inadequate to get them here.

In both areas, I have concluded that the showing is inadequate. There is a distinct preference for having witnesses in criminal trials present for the jury to view, to assess, themselves confront. The concept of having depositions is an inferior technique for presenting these witnesses to a jury.

If there were a situation in which these witnesses could be shown to be essential to the defense and only available through depositions, the Court might order depositions. Indeed, I have ordered depositions in criminal cases in the past. However, viewing the papers and the arguments which have been made in this particular case, I do not find a basis for ordering depositions in a foreign country, and I would require that witnesses whose testimony is to be considered should be brought to the United States for trial.

App. at 124.

Thereafter, Ismaili changed counsel and on November 15, 1985, again sought depositions of foreign witnesses. Ismaili sought to depose Moroccan and Syrian witnesses and renewed his motion to depose Saudi Arabian witnesses. App. at 48-52. This time, however, Ismaili's motions sought to have the government bear all expenses in connection with the depositions. Trial at that juncture had been set for November 20, 1985.

In support of his second motion to depose witnesses abroad, Ismaili submitted two affidavits of Josiah Thompson, a private investigator retained by his new and present counsel. One affidavit included transcripts of interviews that Thompson conducted with four Syrian witnesses who were allegedly part of Ismaili's Middle Eastern sales team. In the interviews, the witnesses stated that they were familiar with Incoser, but their familiarity stemmed from second-hand or third-hand hearsay. This affidavit, which reported the testimony of all four witnesses, indicated that one Ahmed was about to organize or was organizing the alleged sales team, but that the van-selling venture collapsed because of warring elements in the region. App. at 88-110.

A second affidavit included an account by Thompson of conversations he had with Rachid and Ezzarai in Morocco. These conversations concerned the involvement of Rachid and Ezzarai with Ismaili and their willingness to come to the United States to testify on his behalf. Thompson's affidavit recited that Ezzarai had met Rachid about 1975. Rachid gave Ezzarai film to develop beginning in 1980. Some fifty films were given to Ezzarai by Rachid over a period of two to four months. Because the film...