U.S. v. Levy Auto Parts of Canada, s. 85-5006

• Decision Date: 10 April 1986
• Docket Number: 85-5026,Nos. 85-5006,s. 85-5006
• Citation: 787 F.2d 946
• Parties: UNITED STATES of America, Appellant, v. LEVY AUTO PARTS OF CANADA, Appellee. UNITED STATES of America, Appellant, v. Morris P. LEVY, Al Raskin, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 946

787 F.2d 946

UNITED STATES of America, Appellant, v. LEVY AUTO PARTS OF CANADA, Appellee.

UNITED STATES of America, Appellant, v. Morris P. LEVY, Al Raskin, Appellees.

Nos. 85-5006, 85-5026.

United States Court of Appeals, Fourth Circuit.

Argued Oct. 10, 1985.

Decided April 10, 1986.

William G. Otis, Asst. U.S. Atty. Gen. (Joseph J. Aronica, Asst. U.S. Atty., Elsie L. Munsell, U.S. Atty., Alexandria, Va., on brief), for appellant.

Milton Eisenberg (Jack B. Gordon, Fried, Frank, Harris, Shriver & Jacobson, Plato Cacheris, Hundley & Cacheris, Walter J. Bonner, Thomas A. Guidoboni, Bonner, O'Connell & Scheininger, Washington, D.C., on brief), for appellees.

Before WINTER, Chief Judge, RUSSELL, Circuit Judge, and HAYNSWORTH, Senior Circuit Judge.

HAYNSWORTH, Senior Circuit Judge:

We are confronted with the difficult question of whether venue for the prosecution of a foreign conspiracy may properly be laid, under 18 U.S.C.A. Sec. 3238, in the district in which a co-conspirator was first arrested, when the indictment alleges minimal contacts with another district arguably sufficient to have warranted prosecution there under 18 U.S.C.A. Sec. 3237(a). The district court held the contacts with the Western District of Michigan preempted venue in the Eastern District of Virginia, where the co-conspirator was first arrested, and dismissed the indictment. Because the contacts with the Western District of Michigan were belated and only ancillary to the primary purpose of the conspiracy, we conclude that venue was properly laid in the Eastern District of Virginia under Sec. 3238.

I.

Levy Auto Parts of Canada and Morris P. Levy and Al Raskin, Canadian nationals and executive officials of Levy Auto Parts, were indicted in the Eastern District of Virginia and charged with having conspired among themselves and with one Saeed Zakaria, a citizen of Pakistan, to violate the Arms Export Control Act and its implementing regulations. 22 U.S.C.A. Secs. 2751-2794. The alleged object of the conspiracy was to procure the exportation of M60 tank engines to Iran under export licenses obtained on the basis of false certificates showing the ultimate destination of the tank engines to be Pakistan.

The indictment alleged 26 overt acts performed in furtherance of the conspiracy. Twenty-four of these acts were alleged to have occurred in April, May and June of 1981. Most of these alleged acts were communications between Levy or Raskin in Toronto or Athens, Greece and Zakaria or others in Pakistan or Iran. During this period, the only hints of domestic activity are allegations that Raskin sent a telex to Zakaria advising that certain requested manuals and other documents containing technical information were being sent to him by an American Airlines flight from Toronto to New York and thence by Pakistan International Airlines to Pakistan, and that, four days later, Zakaria was informed by PIA of the arrival of the parcel in Pakistan from Toronto.

This flurry of communications, as alleged in the indictment, ended in June 1981 with a telex from Zakaria to a deputy minister of defense for the Islamic Republic of Iran advising him of transportation costs from Athens, Greece to Bandar Abbas, Iran. Then, somewhat inexplicably, the indictment charges that eight months later, on February 3, 1982, Benjamin Levy, the unindicted president of Levy Auto Parts, telephoned a Mr. Rouse of Teledyne Continental Motors requesting price quotations on parts necessary to convert a 1790-2A engine to a 1790-2D engine. That was overt act number 25 in the indictment.

Overt act number 26 alleges that Mr. Rouse sent price quotations to Benjamin Levy on February 3, 1982, the day of the telephonic request.

While it does not appear on the face of the indictment, it is agreed that the headquarters of Teledyne Continental Motors is in Muskegon in the Western District of Michigan.

Elsewhere in the indictment, it appears that Iran's M60 tanks were equipped with 1790-2A engines. Production of those engines had been discontinued, and the replacement engines discussed in the communications charged as the first 24 overt acts were 1790-2D engines. There is no reference to conversion kits in the indictment until it is charged that price information was requested and sent in overt acts numbers 25 and 26.

It is thus unapparent on the indictment what, if any, relationship there was between Benjamin Levy's request for price information on conversion kits and the earlier allegations of overt acts in furtherance of the conspiracy involving the exportation of complete model 1790-2D engines. Benjamin Levy is said to have been the president of Levy Auto Parts, but it is not alleged that he was a co-conspirator with Morris Levy, Al Raskin and Zakaria. There is no suggestion that Mr. Rouse of Teledyne Continental was, or might have been, a conspirator. The indictment does not disclose the reason for Benjamin Levy's request for price information on conversion kits or what he did with the information when he received it. Generally, the indictment charges that the purpose of the conspiracy was the illegal exportation of tank parts to Iran, but there is no allegation that any of the alleged conspirators attempted to sell conversion kits to Iran. The communications charged as the first 24 overt acts all are concerned with the exportation of complete tank engines.

II.

On March 25, 1982, Zakaria arrived at Dulles International Airport in the Eastern District of Virginia. He was detained when a routine customs inspection revealed that he was carrying documents concerned with the exportation of M60 tank engines, transmissions and spare parts for both to Iran. Among them were communications from Levy Auto Parts in Toronto. The agent in charge of the field office of the Customs Service was summoned and, according to the agent's affidavit in support of an arrest warrant, Zakaria apparently talked readily to him. He admitted that he had dealt with the Iranians, and he had reached an agreement with them for the sale of M60 tank parts upon his obtaining false end user certificates from Pakistan. He said that his son-in-law, Amin Din, of the District of Columbia, was to have been in charge of the American end of the venture.

According to the affidavit, the agent then called Mr. Din and told him of the detention of his father-in-law on suspicion of violating the export laws in connection with the sale of M60 tank parts to Iran. Din responded that the deal had not gone through because Pakistan had declined to supply the false end user certificates. Din agreed to go to the airport, where there was further conversation with the agent.

Zakaria and Din were arrested on a complaint charging them with conspiring among themselves and with others to sell munitions to Iran in violation of the general conspiracy statute. 18 U.S.C.A. Sec. 371.

Later, pursuant to a plea agreement, Zakaria entered a plea of guilty to an information charging him and Kabanza, Inc. with counseling, aiding and abetting the use of a false end user certificate in an application for an export license for goods on the United States Munitions Control List in violation of 22 U.S.C.A. Sec. 2778 and 22 C.F.R. Secs. 127.01(c) and 127.02. Zakaria appears to have been chairman of the board of Kabanza, and his son-in-law, Din, was one of its officers. So far as appears, Din was not prosecuted.

III.

Initially, the court was concerned with the applicability of Sec. 3238 to this case, on the possibility that Zakaria was not "arrested" or was not a "joint offender" within the meaning of that statute. Neither statutory argument has merit. Although Zakaria pled guilty to a charge of counseling, aiding and abetting, he was arrested upon a complaint charging a conspiracy in violation of 18 U.S.C.A. Sec. 371. Given the complaint and the affidavit on which it was based, Zakaria was "restrained of his liberty in connection with the offense" with which these defendants were charged, see United States v. Erdos, 474 F.2d 157, 160 (4th Cir.1973); United States v. Catino, 735 F.2d 718, 724 (2d Cir.1984), and therefore was "arrested" within the meaning of Sec. 3238.

Similarly, we do not think that Zakaria's plea to a lesser, but closely related, substantive offense changes his status as a "joint offender." The customs agent's affidavit clearly discloses that Zakaria and the present defendants were suspected of concerted criminal activity. There is nothing in Sec. 3238 which prevents the prosecution from reaching a plea agreement with a suspected joint offender in exchange for information aiding the prosecution of other offenders. Thus, it is entirely appropriate to treat Zakaria's arrest as that of a joint offender within the meaning of Sec. 3238.

IV.

The defendants do not contend that venue might be laid in the Eastern District of New York because the air shipment of the parcel containing manuals and other documents was through that district. They do not contend that Zakaria or Din did anything in the District of Columbia to support venue in that district. They do contend that venue could and should have been laid in the Western District of Michigan on the basis of the 25th and 26th alleged overt acts.

Article III, Sec. 2 of the Constitution of the United States provides that "the Trial of all Crimes ... shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed." Congress has implemented the first clause by various statutory provisions addressing situations in which a crime involves more than one district. The general provision is 18 U.S.C.A. Sec. 3237(a), authorizing prosecution in any district in which an offense "was begun, continued, or completed." The second clause was implemented by the predecessors of what is now Sec. 3238. As revised and enacted into positive law in 1948, it reads:

Sec....