U.S. v. Quinn

• Decision Date: 23 November 2005
• Docket Number: No. CRIM. 05-0018(JDB).,CRIM. 05-0018(JDB).
• Parties: UNITED STATES of America v. Robert E. QUINN, Michael H. Holland, Mohammed A. Sharbaf, Defendants.
• Court: U.S. District Court — District of Columbia

401 F.Supp.2d 80

UNITED STATES of America v. Robert E. QUINN, Michael H. Holland, Mohammed A. Sharbaf, Defendants.

No. CRIM. 05-0018(JDB).

United States District Court, District of Columbia.

October 21, 2005.

Amended November 23, 2005.

COPYRIGHT MATERIAL OMITTED

Jay I. Bratt, Laura A. Ingersoll, Office of the U.S. Attorney for the District of Columbia, Washington, for the United States.

Aitan Dror Goelman, Zuckerman Spaeder, LLP, Washington, Larry A. Mackey, Barnes & Thornburg, LLP, Indianapolis, IN, for defendant Robert E. Quinn.

Richard E. Plymale, Frost Brown Todd, LLC, Lexington, KY, Robert Martin Adler, Paul L. Knight, O'Connor & Hannan, LLP, Washington, for defendant Michael H. Holland.

MEMORANDUM OPINION

BATES, District Judge.

On April 28, 2005, a federal grand jury in the District of Columbia handed up a six-count indictment charging Robert E. Quinn and Michael H. Holland ("defendants"), both of Lexington, Kentucky — as well as a third individual, Mohammed A. Sharbaf of Iran — with violating laws restricting the export of goods and technology from the United States to Iran. Trial of defendants is scheduled to begin on November 7, 2005. The parties have filed more than a dozen pre-trial motions, and the Court has received briefing on those motions and heard oral argument from counsel. For the reasons stated herein, the Court will (1) deny defendants' motion to transfer the case to the Eastern District of Kentucky; (2) grant the government's motion to strike portions of the indictment; (3) grant defendants' motion to dismiss Count One of the indictment for failing to properly charge the offense of conspiracy; (4) grant in part and deny in part defendants' motions to strike from the indictment alleged surplusage; (5) deny defendants' as-applied due process challenge to the laws underlying the offenses alleged; (6) deny defendants' motion to dismiss Counts Two through Six for failure to state an offense; (7) deny defendants' motion to dismiss the indictment as duplicitous; (8) defer ruling on the pending evidentiary motions; and (9) deny defendants' motion for a supplemental jury questionnaire.

BACKGROUND

Defendants were, at all relevant times, employees of Clark Material Handling Company ("CMHC"), a Kentucky-based manufacturer and distributor of lift trucks and lift-truck parts, or its affiliate company, Clark Material Handling International ("CMHI"), based in Seoul, South Korea. See Indict. at 1-2. Defendant Quinn was CMHC's vice president for global parts marketing and later became CMHI's executive vice president for global business. Id. at 2. Defendant Holland was employed by CMHC as a parts sales representative for its government/national accounts. Id. Mohammed Sharbaf, presently indicted but outside U.S. jurisdiction, was the president and managing director of Sepahan Lifter Company ("Sepahan"), based in Esfahan, Iran. Id. Alleged co-conspirator Khalid Mahmood "did business as Sharp Line Trading," based out of Dubai, United Arab Emirates. Id.

The origin of the laws that defendants are accused of violating can be traced back nearly 100 years to the Trading With the Enemy Act of 1917 ("TWEA"), considered to be the predecessor to the present-day International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701-06 (2005). See United States v. Arch Trading, 987 F.2d 1087, 1093 (4th Cir.1993) (describing IEEPA as an "extension to" the TWEA). IEEPA provides that the President may — upon declaration of a national emergency — "regulate ... prevent or prohibit, any... transfer ... or exportation of, or dealing in, ... or transactions involving, any property in which any foreign country or a national thereof has any interest," 50 U.S.C. § 1702(a)(1)(B). In effect, it gives the President sweeping authorization to impose economic sanctions on foreign countries to "deal with an unusual and extraordinary threat [that] has its source in whole or substantial part outside the United States," 50 U.S.C. § 1701(a). To ensure the effectiveness of those sanctions, IEEPA creates criminal penalties for violations of regulations issued under it. See 50 U.S.C. § 1705(b) ("Whoever willfully violates, or willfully attempts to violate, any license, order, or regulation issued under this chapter shall, upon conviction, be fined not more than $50,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both.")

Pursuant to the regulatory authority that IEEPA vests in the Executive Branch, see 50 U.S.C. § 1704 ("The President may issue such regulations, including regulations prescribing definitions, as may be necessary for the exercise of the authorities granted by this chapter."), and a series of executive orders invoking that authority and proclaiming emergencies based on threats to national security, the Department of Treasury has promulgated a series of rules governing trade with Iran. Collectively known as the Iranian Transaction Regulations ("ITR"), these rules are codified as Part 560 of Title 31 of the Code of Federal Regulations, and they form the basis for the bulk of the charges defendants face. The Treasury Department's Office of Foreign Assets Control ("OFAC") is responsible for administering these regulations and for granting licenses that authorize transactions with Iran otherwise prohibited by the ITR. See Indict. at 5.

Also relevant to the current charges is the Export Administration Act ("EAA"), which was originally passed in 1969, comprehensively rewritten in 1979, and subsequently amended. See 50 U.S.C.App. §§ 2101-2420. That statute empowers the President and the Secretary of Commerce to issue regulations, see § 2414(b), prohibiting or curtailing the export of any goods or technology for purposes of protecting national security, see § 2404, furthering foreign policy, see § 2405, or addressing supply shortages, see § 2406. The Commerce Department has promulgated a set of rules, known as the Export Administration Regulations ("EAR") to enforce the EAA, and those regulations are codified at Parts 730-774 of Title 15 of the Code of Federal Regulations. From its inception, the EAA has had "sunset" provisions, under which it would expire on a specified date unless Congress affirmatively acted to reauthorize the law. Such a lapse occurred on August 20, 2001.

In anticipation of the EAA's sunset, President George W. Bush issued Executive Order 13,222, which, in relevant part, declared that "[a]ll rules and regulations issued or continued in effect by the Secretary of Commerce under the authority of the Export Administration Act of 1979 ... and all orders, regulations, licenses, and other forms of administrative action issued, taken, or continued in effect pursuant thereto, shall ... remain in full force and effect as if issued or taken pursuant to this order ...." Exec. Order No. 13,222 § 2, 66 Fed.Reg. 44,025 (August 17, 2001). The order purported to be an exercise of executive authority pursuant to IEEPA. Id.

All of the events at issue in this case took place between February 2003 and December 2004, a period during which the EAA was in lapse. According to the indictment, defendants Quinn, Holland, and Sharbaf collaborated to export CMHC lift-truck parts from the United States to Iran, via Dubai. See Indict. at 6-8. The indictment alleges that Sharbaf and an unidentified co-conspirator would send requests to Quinn and Holland for price quotations on CMHC parts, sometimes using Mahmood as an intermediary. Id. at 7-8. Quinn and Holland, the indictment states, would provide the quotes and, if Sharbaf and his employer approved of the prices, Quinn and Holland would arrange to ship the parts to Mahmood in Dubai, knowing that Mahmood was simply a middleman and that the parts were destined for Iran. Id. at 8. All of this, the indictment asserts, was done without obtaining (or seeking) OFAC approval of the transactions. Id.

Count One of the indictment alleges the crime of "Conspiracy to Violate the United States Iranian Trade Embargo," and is based on a series of alleged overt acts in furtherance of that conspiracy, including a number of e-mail communications among the alleged conspirators. Id. at 6-16. Counts Two through Six allege "Violation of the United States Iranian Embargo," as well as the crime of "aiding and abetting" an offense against the United States, with each count addressing a separate export transaction. Id. at 17-20.

ANALYSIS

I. Motion for Transfer of Venue under Rule 21(b)

Defendants have filed a motion to transfer this case to the Eastern District of Kentucky, pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure, "for the convenience of the parties and witnesses and in the interest of justice." In Platt v. Minn. Mining & Mfg. Co., 376 U.S. 240, 84 S.Ct. 769, 11 L.Ed.2d 674 (1964), the Supreme Court provided federal courts with guidance on how to balance the conflicting interests of parties with regard to transfer-of-venue motions in criminal cases. The parties here agree that Platt states the relevant considerations. The ten so-called "Platt factors" are: (1) location of the defendant; (2) location of possible witnesses; (3) location of events likely to be in issue; (4) location of documents and records likely to be involved; (5) disruption of defendant's business unless the case is transferred; (6) expense to the parties; (7) location of counsel; (8) relative accessibility of place of trial; (9) docket condition of each district or division involved; and (10) any other special elements which might affect the transfer. See id. at 243-44, 84 S.Ct. 769.

The defendant, as the only possible moving party under Rule 21(b), bears the burden of proving that "all things considered, the case would be better off transferred to another district." See In re Balsimo, 68 F.3d 185, 187 (7th Cir.1995). The...