U.S. v. Ismail

• Citation: 97 F.3d 50
• Decision Date: 26 September 1996
• Docket Number: 95-5325 and 95-5326,Nos. 95-5299,95-5324,s. 95-5299
• Parties: -901, 96-2 USTC P 50,510 UNITED STATES of America, Plaintiff-Appellee, v. Mohammed ISMAIL, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Shakeel AHMAD, a/k/a Javed Iqbal, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Mian Tauqir AHMED, a/k/a Tauqir Ahmed, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Mohammad BASHIR, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 50

97 F.3d 50

79 A.F.T.R.2d 97-901, 96-2 USTC P 50,510

UNITED STATES of America, Plaintiff-Appellee, v. Mohammed ISMAIL, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Shakeel AHMAD, a/k/a Javed Iqbal, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Mian Tauqir AHMED, a/k/a Tauqir Ahmed, Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellee, v. Mohammad BASHIR, Defendant-Appellant.

Nos. 95-5299, 95-5324,

95-5325 and 95-5326.

United States Court of Appeals, Fourth Circuit.

Argued May 10, 1996.

Decided Sept. 26, 1996.

ARGUED: Frank Willard Dunham, Jr., Cohen, Gettings, Dunham & Harrison, Arlington, Virginia, for Appellant Ahmad; Jonathan Shapiro, Jonathan Shapiro & Associates, Alexandria, Virginia, for Appellant Bashir; J. Frederick Sinclair, J.F. Sinclair, P.C., Alexandria, Virginia, for Appellant Ahmed; Peter David Greenspun, Peter D. Greenspun & Associates, Fairfax, Virginia, for Appellant Ismail. Gregory Victor Davis, Tax Division, United States Department of Justice, Washington, DC, for Appellee. ON BRIEF: Stewart Todd Leeth, Cohen, Gettings, Dunham & Harrison, Arlington, Virginia, for Appellant Ahmad; Michael W. Lieberman, Jonathan Shapiro & Associates, Alexandria, Virginia, for Appellant Bashir. Loretta C. Argrett, Assistant Attorney General, Robert E. Lindsay, Helen F. Fahey, United States Attorney, Tax Division, United States Department Of Justice, Washington, DC, for Appellee.

Before NIEMEYER, WILLIAMS, and MOTZ, Circuit Judges.

Nos. 95-5299 and 95-5326 are affirmed, and Nos. 95-5324 and 95-5325 are affirmed in part and reversed in part by published opinion. Judge MOTZ wrote the opinion, in which Judge NIEMEYER joined. Judge WILLIAMS wrote a concurring opinion.

OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

These consolidated appeals arise out of a complex enterprise involving the transfer of funds from the United States to Pakistan. In connection with that enterprise, appellants, Mohammed Ismail, Shakeel Ahmad, Mian Tauqir Ahmed, and Mohammad Bashir, were charged in a fifty-one count indictment and convicted of most of the crimes charged, including structuring financial transactions to evade currency reporting requirements, conspiracy to make false statements to the United States Customs Service, and tax fraud. Appellants raise numerous issues on appeal, most of which are meritless. However, because the Government failed to offer evidence sufficient to prove that Shakeel Ahmad and Mian Tauqir Ahmed willfully violated the antistructuring laws or that Shakeel Ahmad knowingly made a material false statement in a matter within the jurisdiction of a federal agency, we must reverse the convictions and vacate the sentences imposed in connection with those offenses. We affirm in all other respects.

I.

A.

Shakeel Ahmad, a Pakistani national, emigrated to the United States on January 25, 1986, using a visa in the name of Javed Iqbal. He subsequently obtained a driver's license and social security card, also in the name of Javed Iqbal. In addition to working as a Washington, D.C. taxi driver, Ahmad operated a business whereby he transferred the funds of other Pakistanis in the United States back to their families in Pakistan. Approximately fifty Pakistanis living in New York and Washington, D.C. regularly provided Ahmad with money that they wished to send to Pakistan. They utilized his services because other options, such as wire transfers through the Bank of Pakistan or direct mailing of checks or money orders, were either too expensive or too slow, and because Ahmad offered a better exchange rate than was otherwise available. For his services, Ahmad kept one Pakistani rupee for every U.S. dollar transferred.

Also participating in this business were Ahmad's brothers, Mian Tauqir Ahmed, and Zamir Ahmed, a/k/a Choudrey Hussein, who is not an appellant herein but is a fugitive. Shakeel Ahmad and Zamir Ahmed shared an apartment in Alexandria, Virginia where they received shipments of cash, checks, and money orders from various Pakistanis, usually by express mail. They deposited this money into checking accounts at the Van Dorn Street branch of First Virginia Bank, an FDIC insured institution. Bank officials knew that the three men, who were signatories on three First Virginia accounts, were brothers, but knew them as Javed Iqbal, Tauqir Ahmed, and Choudrey Hussein.

On September 25, 1989, when Ahmad deposited $18,400 into one of the three accounts, Jenny Fadoul, the Branch Manager at First Virginia, informed Ahmad that she would have to file a Currency Transaction Report (CTR) because the deposit exceeded $10,000. She also told him that she did not have to file CTRs for deposits under $10,000, but that she could file a CTR for such a deposit. Ahmad proceeded with the $18,400 transaction anyway, and Fadoul filed a CTR. After Ahmad's conversation with Fadoul regarding the CTRs, all of the brothers' subsequent cash deposits were in amounts less than $10,000.

On a later occasion, Jenny Fadoul again explained to the brothers the circumstances triggering the filing of a CTR. Some time around late April, 1992, Zamir Ahmed attempted to make two deposits of $9,800 each into two separate accounts. After checking with the bank's main office, Fadoul informed Zamir Ahmed that she would have to file a CTR if one individual made the transaction, even though it involved two different accounts. Zamir Ahmed told her "no report," so Fadoul said that they would have to refuse the transaction. Because Zamir Ahmed did not speak English very well, they called Ahmad at home so that Fadoul could explain the situation. Fadoul explained to Ahmad that if one person tried to make two transactions totalling over $10,000, she would have to file a CTR, but if the deposits were made by two people into the two accounts, she would not have to file a CTR. At no time did Fadoul ever tell any of the brothers that structuring deposits so as to avoid the bank's reporting requirements was illegal.

Over a four year period, the brothers deposited cash, checks, and money orders into their accounts as often as four times a week. The deposits were regularly in amounts greater than $9,000 but less than $10,000. From January 1, 1990 to October 25, 1993, the brothers deposited $5.6 million in cash, cashier's checks, and wire transfers into their First Virginia accounts.

As noted above, one of the reasons the brothers were successful in their currency transfer business was that they offered a better exchange rate from dollars to rupees than did other currency transfer options. Certain features of Pakistani trade law enabled them to do so. Pakistani law requires manufacturers to collect the full invoice price of exported goods in foreign currency, within 120 days of shipment. In cases where the buyer of the goods cannot pay in full within the 120 days, or wants to pay on an installment basis, the exporting company may obtain a "bridge loan" from a currency exchanger so that it can satisfy this requirement. To obtain these bridge loans, the exporters pay an exchange rate higher than the official rate. Additionally, in order to encourage exports, the Pakistani government rebates to Pakistani manufacturers a percentage of their gross exports. This percentage has fluctuated between 12% and 30%. It is this rebate that enables the exporters to afford the higher exchange rate paid to currency exchangers supplying bridge loans.

In order to obtain a competitive exchange rate to attract customers to their currency exchange business, the brothers supplied bridge loans to many different companies using the money received from Pakistanis living in the United States. Rather than repaying the brothers directly, the Pakistani companies repaid the bridge loans by distributing rupees to the family members of Ahmad's clients in accordance with Ahmad's faxed instructions, at a better exchange rate than the official rate. In addition, the brothers were able to reduce the costs of transferring money to Pakistan by "bundling" many different transfers into one transaction, thus saving on the per-transaction fee charged for wire transfers.

B.

The second part of this case involves the brothers and a company called Falcon Instruments, of which appellants Mohammed Ismail and Mohammad Bashir were President and quality control manager, respectively. Though the brothers dealt with many different Pakistani companies, it is only through their relationship with Falcon that they were charged with making false statements to the U.S. Customs Service.

Falcon Instruments is a reseller of surgical instruments that imports large quantities of inventory from Pakistan for sale in the United States. During the relevant time period, the importation of surgical equipment was duty-free. Like the brothers, Falcon maintained an account at First Virginia Bank. With the help of financing from the brothers, Ismail and Bashir implemented the following plan. Falcon would order surgical supplies from Pakistani exporters, who would ship the products ordered, but list on the invoice a purchase price usually twice the actual market value of the products. After receiving the shipment, Falcon would send a letter to the manufacturer requesting a "discount" on the invoice price. The "discount" requested was generally the difference between the inflated invoice price and the price at which the Pakistani company would make a small profit on the goods. The brothers would deposit into Falcon's account an amount equal to the discount received from the Pakistani company. Falcon would then wire to the exporter, through the Bank of Pakistan, the full amount of the invoice. The Pakistani exporter would keep the amount due, the "discounted" price for the goods shipped, and would distribute Ahmad's portion to his clients' families, according to faxed instructions.

During the period covered by the indictment, the brothers transferred approximately $1.3...