U.S. v. Schultz

• Decision Date: 03 January 2002
• Docket Number: No. 01 CR 683 JSR.,01 CR 683 JSR.
• Citation: 178 F.Supp.2d 445
• Parties: UNITED STATES of America, v. Frederick SCHULTZ, Defendant.
• Court: U.S. District Court — Southern District of New York

178 F.Supp.2d 445

UNITED STATES of America, v. Frederick SCHULTZ, Defendant.

No. 01 CR 683 JSR.

United States District Court, S.D. New York.

January 3, 2002.

Marcia Isaacson, New York City, Peter Neiman, New York City, for U.S.

Linda Imes, Daniel C. Zinman, Richards Spears Kibbe & Orbe, New York, NY, for defendant.

OPINION AND ORDER

RAKOFF, District Judge.

The marvelous artifacts of ancient Egypt, so wondrous in their beauty and in what they teach of the advent of civilization, inevitably invite the attention, not just of scholars and aesthetes, but of tomb-robbers, smugglers, black-marketeers, and assorted thieves. Every pharaoh, it seems, has a price on his head (at least if the head is cast in stone); and if the price is right, a head-hunter will be found to sever the head from its lawful owner. So, at least, is the theory of the instant indictment, which alleges, in effect, that the defendant and one or more co-conspirators arranged to steal highly valuable ancient Egyptian artifacts — including a million-dollar head of Amenhotep III — and "fence" them in New York. This, says the indictment, makes the defendant guilty of conspiracy to violate section 2315 of Title 18, United States Code, which provides, in pertinent part, that "[w]hoever receives, possesses, conceals, stores, barters, sells, or disposes of any goods, wares, or merchandise ... which have crossed a State or United States boundary after being stolen ... knowing the same to have been stolen ... [is guilty of a crime]."

The defendant has pleaded not guilty and is presumed innocent. For purposes of this pre-trial motion, however, he assumes the facts as stated in the indictment and maintains that the indictment nonetheless fails to state a conspiracy to violate section 2315 because it presupposes, wrongly in his view, that someone who conspires to smuggle ancient artifacts out of Egypt is thereby guilty of, among other things, dealing in stolen goods, by virtue of Egyptian Law 117. See Indictment ¶¶ 1-6. That law provides that, as of 1983, all Egyptian "antiquities" — that is, objects over a century old having archeological or historical importance (Law 117, Art. 1)¹ — "are considered to be public property," that is, property of the state. Law 117, Art. 6. The defendant principally argues: (i) that Law 117, despite its assertion of state ownership, is really more in the nature of a licensing and export regulation, the violation of which does not constitute theft of property in the sense covered by section 2315; (ii) that, assuming Law 117 really does work an expropriation of property by Egypt, the special kind of property thereby vested in that foreign state does not give rise to interests entitled to protection under United States law; and (iii) that even if such foreign interests might sometimes be entitled to such protection, here Congress, in enacting the Cultural Property Implementation Act of 1983, 19 U.S.C. §§ 2601 et seq., chose to substitute a civil enforcement regime for criminal prosecution.

The primary problem with defendant's first argument — that Law 117 is really regulatory in nature — is the language of the law itself, which unequivocally asserts state ownership of all antiquities (Art. 6), requires their recording by the state (Art. 26), prohibits (with certain practical exceptions) private ownership, possession, or disposal of such antiquities (Arts.6-8), and requires anyone finding or discovering a new antiquity to promptly notify the Antiquities Authority (Arts.23-24), which, in the case of movable antiquities, then takes physical possession and stores the antiquities in the museums and storage facilities of the Authority (Art. 28). Thus, so far as Egyptian antiquities are concerned, Law 117 on its face vests with the state most, and perhaps all, the rights ordinarily associated with ownership of property, including title, possession, and right to transfer. This, on its face, is far more than a licensing scheme or export regulation.

To be sure, Law 117 qualifies certain aspects of state ownership where obvious practicalities so require. For example, while every newly-discovered but immovable antiquity is still deemed state owned, nonetheless "where the find is located on private property, the Authority shall decide within three months whether to remove the find, to initiate measures for expropriating the land upon which it is located, or to leave the antiquity in its place and register it in accordance with the provisions of this law." (Art. 23). Similarly, pre-1983 owners or possessors of antiquities, though now required to register their antiquities with the state if they have not already done so, may in certain circumstances maintain possession or even dispose of their antiquities, but only with permission of the Authority. See, e.g. Arts. 7, 8, 9, 13. These adjustments to physical and historical circumstances only serve to confirm, however, that the statute's primary purpose is to transfer ownership to the state to the extent reasonably practicable.²

Despite the plain language of Law 117, however, defendant argues that, in practice, even those antiquities discovered after 1983 have been left in the hands of their discoverers or other private transferees and that the law in operation really works more like a licensing or export regulation than like a transfer of property. But when, in response to these and other defense assertions, the Court convened an evidentiary hearing, pursuant to Rule 26.1 of the Federal Rules of Criminal Procedure, the defendant was unable to adduce any material, let alone persuasive evidence to support this contention. The most he could offer in this respect was the opinion of Professor Abou El Fadl, a professor of Islamic and Middle Eastern law at UCLA Law School, to the effect that nothing in Law 117 definitively prevents the Antiquities Authority from leaving physical possession of even an antiquity discovered after 1983 in the hands of a private finder, so long as the private finder promptly notifies the Authority of his find. See transcript of hearing of November 20, 2001 ("Tr."), at A20.³

In response to this purely hypothetical opinion, the Government presented, among much else, the testimony of Dr. Gaballa Ali Gaballa, Secretary General to the Supreme Council of Antiquities, that in fact the state takes immediate physical custody of newly discovered antiquities, sometimes by the tens of thousands, tr. A77-79. Another Government witness, General Ali Sobky, Director of Criminal Investigations for the Antiquities Police (which employs more than 400 police officers), testified that his department regularly investigates and prosecutes dozens of serious violations of Law 117, of which relatively few are for smuggling and most are for trafficking within Egypt (including unlawfully possessing and disposing of state-owned antiquities), tr. B51-55.⁴ General Sobky also testified that even in the case where someone is acquitted of stealing a newly discovered antiquity, the antiquity is confiscated by the state as the lawful owner, tr. B69.

It is clear, therefore, that Law 117, far from being a disguised licensing scheme or export regulation, is precisely what it purports to be: a transfer of ownership of Egyptian antiquities to the state, effective 1983.

As for defendant's second argument — to the effect that American law does not, or should not, recognize the kind of "special" property interest created by "patrimony" laws like Law 117, see United States v. McClain, 545 F.2d 988, 994 (5th Cir.1977) (Wisdom, J.) (rejecting such an argument) — it should first be noted that section 2315, which expressly...