U.S. v. Elashyi

• Decision Date: 29 December 2008
• Docket Number: No. 06-10176.,06-10176.
• Citation: 554 F.3d 480
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ihsan ELASHYI, also known as Sammy Elashyi; Hazim Elashi; Bayan Elashi; Basman Elashi; Ghassan Elashi, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

554 F.3d 480

UNITED STATES of America, Plaintiff-Appellee, v. Ihsan ELASHYI, also known as Sammy Elashyi; Hazim Elashi; Bayan Elashi; Basman Elashi; Ghassan Elashi, Defendants-Appellants.

No. 06-10176.

United States Court of Appeals, Fifth Circuit.

December 29, 2008.

Susan B. Cowger, Nathan Franklin Garrett, Dallas, TX, J. Cam Barker (argued), Jeffrey Peter Singdahlsen, U.S. Dept. of Justice, Crim., Div., Washington, DC, for U.S.

Gregory Sherwood (argued), Austin, TX, for Ihsan Elashyi.

Bertrand C. Moser (argued), Law Office Bertrand C. Moser, Houston TX, for Hazim Elashi.

Joseph L. Hood, Jr. (argued), Windle, Hood, Alley, Norton, Brittain & Jay, LLP, El Paso, TX, for Bayan Elashi

Camille M. Knight (argued), Smith Amundsen, Chicago, IL, for Basman Elashi.

Robert Jackson Herrington (argued), Plano, TX, for Ghassan Elashi

Appeals from the United States District Court for the Northern District of Texas.

Before JOLLY, BARKSDALE and HAYNES, Circuit Judges.

HAYNES, Circuit Judge:

Defendants Ihsan Elashyi, Hazim Elashi, Bayan Elashi, Basman Elashi, and Ghassan Elashi¹ were convicted of illegally exporting computer equipment to Libya and Syria, conspiracy to illegally export computer equipment, laundering funds derived from the export violations, making false statements on export documents, conspiracy to make false statements on export documents, dealing in property of a Specially Designated Terrorist, and related offenses. Defendants each raise several challenges to their convictions. As to the prosecution against Ihsan, we REVERSE, based upon a prior plea agreement with the Government. In all other respects, we AFFIRM.

I. FACTUAL AND PROCEDURAL HISTORY

Defendants are five brothers who ran a small, family-owned computer business. Born in the Gaza Strip, they moved to Saudi Arabia, and then to Egypt, and ultimately to the United States. Their business partnership started in California in the 1980s when Bayan and Ghassan formed International Computers and Communications, which exported computers to the Middle East, and which each brother eventually joined. In 1992, all five Defendants relocated to Texas, where they formed InfoCom. Bayan was CEO; Ghassan was Vice President of Marketing; Hazim and Ihsan were salesmen and provided technical support; and Basman was Logistics Manager. The underlying events leading to the conviction of Defendants fall into two categories: (1) violations relating to export regulations; and (2) transactions in the property of a specially designated terrorist.

A. Export Transactions

Defendants were accused of engaging in a number of export transactions that form the basis for their convictions.

1. Shipments to Libya Through Malta

In early November 1996, Ghassan met with Yousef Elamri at a computer conference in Dubai, United Arab Emirates. Elamri owned a computer company in Libya called Computers & Information Technology ("CIT"). Although CIT maintained no independent, physical presence in Malta, it hired a Maltese company, Medfinco, to perform "nominee services" on its behalf. Employees of Medfinco answered the phone for CIT and forwarded any messages to Libya, and CIT used Medfinco's Malta address as its own.

InfoCom made four shipments to CIT via Malta. The first was on March 5, 1997. InfoCom filed a Shipper's Export Declaration ("SED") for that shipment in which it declared that SMS Air Cargo was the ultimate consignee and that Malta was the ultimate destination. InfoCom shipped additional computer goods to CIT via Malta on March 7, June 6, and July 16, 1997.

2. Shipments to Libya Through Rome

In June and July 1999, InfoCom made three shipments to Rome. Defendants' brother-in-law, Khaled Bugrara, ordered the goods. Khaled was a naturalized citizen, computer science professor, and owner of a computer company in Massachusetts.

Nureddin Abugrara, Khaled's brother, lived in Libya. In 1995, with Khaled's assistance, Nureddin established a computer business in Libya called Namatel. Khaled purchased computer equipment for Nureddin, including computers from InfoCom, that Khaled personally delivered to Nureddin in Libya in 1995. In 1999, Khaled again ordered computer goods from InfoCom. InfoCom sent these goods in three shipments, on June 25, June 30, and July 2, 1999, each addressed to the Rome airport on behalf of Nureddin. The shipments were collected and held by a customs clearing agent at the airport. Nureddin then picked them up and took them back to Libya. The SEDs InfoCom filed with the first two shipments listed Nureddin as the ultimate consignee and Italy as the ultimate destination.

3. Shipments to Syria

InfoCom sent four shipments to Syria on the following dates: May 14, 1998; March 19, 1999; April 6, 1999; and July 31, 2000. For each shipment, InfoCom was required to obtain a transaction-specific license from the Commerce Department. It failed to do so. In addition, InfoCom filed SEDs with the March 19, 1999 and April 6, 1999 shipments declaring that no license was required and understating the values of goods being exported.

B. Transactions in Property of Mousa Abu Marzook

Separate from the export transactions, some of the Defendants were also accused of dealing in the property of a specially designated terrorist. Mousa Abu Marzook, a leader of Hamas, is married to Defendants' cousin, Nadia Elashi. Many years ago, Marzook made multiple investments in Defendants' computer businesses. Relevant to the present case, Marzook loaned InfoCom $150,000 in July 1992. InfoCom paid Marzook two interest payments during 1992.

In February 1993, the New York Times published a front-page article reporting that Marzook was a leader of Hamas. Two days later, Nadia moved several hundred thousand dollars from the United States to a bank account for Marzook in the United Arab Emirates. Sometime during the next several weeks, InfoCom drafted a "Murabaha Agreement," a form of investment contract under Islamic law, providing that Nadia would invest $250,000 in InfoCom. The agreement was for a term of one year and was renewable by the parties. Bayan signed for InfoCom; Nadia signed for herself; and Marzook signed as a "witness."

The evidence at trial indicated that Nadia never made a payment to InfoCom under the Murabaha Agreement. The first $150,000 of the $250,000 investment was satisfied by Marzook's prior loan. In preparing its annual ledger for 1993, InfoCom deleted Marzook's name from its books and attributed his $150,000 payment to Nadia. The remaining $100,000 came in two installments. On March 25, 1993, two days after the Murabaha Agreement was executed, InfoCom deposited a $50,000 check from Marzook. InfoCom labeled the check "Marzook" on the deposit slip, but recorded it on its books as a loan from Nadia. On April 16, 1993, InfoCom received approximately $50,000 from an unknown source, which it also recorded on its books as a loan from Nadia.

From May 1993 through 2001, InfoCom sent Nadia interest payments. The payments were often for $3,000, but varied from $1,000 to $15,000. Whether sent to Marzook or Nadia, all payments from September 1992 to June 1995 were deposited in their joint bank account.

In July 1995, Marzook was arrested while entering the country. On August 16, 1995, the Department of the Treasury's Office of Foreign Asset Control ("OFAC") designated Marzook as a Specially Designated Terrorist ("SDT"). 60 Fed. Reg 44932 (Aug. 29, 1995). After that date, no person in the United States could, without a license from OFAC, lawfully deal in the property of Marzook. 60 Fed.Reg. 5079 (Jan. 23, 1995); see also 31 C.F.R. §§ 595.201(a), 595.204.

Nadia did not receive payments July through October 1995. In November 1995, the payments resumed, but were deposited into a bank account that Nadia opened in her name. The payments continued until September 2001, when OFAC issued a blocking order directing InfoCom's banks to freeze funds in which OFAC determined Marzook had an interest.

C. Proceedings in District Court

On August 21, 2003, a federal grand jury in the Northern District of Texas returned a 46-count second superseding indictment ("Indictment"). Counts 1 through 25 charged violations associated with Defendants' computer export business under the Export Administration Regulations ("EAR"), 15 C.F.R. pts. 730-774 (2007), Libyan Sanctions Regulations ("LSR"), 31 C.F.R. pt. 550 (2003), and International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701-1707 (2006).² Counts 26 through 46 charged three of the Defendants—Bayan, Ghassan, and Basman—with dealing in property of an SDT and related offenses in violation of Executive Order 12947 and the IEEPA.³ See 50 U.S.C. §§ 1701-1707; 60 Fed.Reg. 5079; 31 C.F.R. §§ 595.201(a), 595.204.

The district court severed the charges in the Indictment and ordered separate trials on Counts 1 through 25 and Counts 26 through 46. In the first trial, the jury convicted Ihsan on Counts 1-2, 7-9, 11, 15-19, 21, 23-25; Hazim on Counts 1, 4-6, 10, 13-15, 20, 22; Bayan on Counts 1-2, 4-6, 8-10, 13-15, 22; Basman on Counts 1-2, 4-11, 13-25; and Ghassan on Counts 1, 10, 13-15, 20. Defendants filed joint post-trial motions for judgments of acquittal and new trial, which the court denied. In the second trial, the jury convicted Bayan and Ghassan on Counts 26-46 and Basman on Counts 26, 27, and 37. Following trial, Defendants moved for judgments of acquittal, which the district court denied. These consolidated appeals followed.

II. SUFFICIENCY OF THE EVIDENCE

A. Standard of Review

Hazim, Bayan, Basman, and Ghassan each challenge the sufficiency of the evidence in support of their convictions. This court's review of the sufficiency of the evidence is "`highly deferential to the verdict.'" United States v. Gulley, 526 F.3d 809, 816 (5th Cir.), cert. denied, ___ U.S. ___, 129 S.Ct. 159, ___ L.Ed.2d ___ (2008), (quoting United States v. Harris, 293 F.3d 863, 869 (5th Cir.2002)). "The court asks `whether the evidence, when reviewed...