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United States v. Hawit

United States District Court, E.D. New York

February 17, 2017

UNITED STATES OF AMERICA,
v.
ALFREDO HAWIT, ARIEL ALVARADO, RAFAEL CALLEJAS, BRAYAN JIMENEZ, EDUARDO LI, JULIO ROCHA, RAFAEL SALGUERO, COSTAS TAKKAS, HECTOR TRUJILLO, REYNALDO VASQUEZ, JACK WARNER, JUAN ANGEL NAPOUT, MANUEL BURGA, CARLOS CHAVEZ, LUIS CHIRIBOGA, MARCO POLO DEL NERO, EDUARDO DELUCA, RAFAEL ESQUIVEL, EUGENIO FIGUEREDO, NICOLAS LEOZ, JOSE MARIA MARIN, JOSE LUIS MEISZNER, ROMER OSUNA, RICARDO TEIXEIRA, AARON DAVIDSON, HUGO JINKIS, and MARIANO JINKIS, Defendants.

          MEMORANDUM & ORDER

          PAMELA K. CHEN, United States District Judge

         The Superseding Indictment (Dkt. 102) alleges ninety-two criminal counts against twenty-seven individuals based on their alleged involvement in conspiratorial racketeering, wire fraud, money laundering and other offenses allegedly undertaken to enrich themselves by virtue of their various positions in the Federation Internationale de Football Association (“FIFA”), its continental, regional, and national affiliates, and certain sports marketing companies.[1] Discovery is underway and trial is scheduled to begin on November 6, 2017.

         The following pre-trial motions are before the Court: (1) Defendant José Maria Marin's motion to dismiss Count One of the Superseding Indictment (Dkt. 487), (2) Defendant Juan Angel Napout's motion to dismiss all charges against him for lack of extraterritorial jurisdiction (Dkt. 491), and (3) Defendant Napout's motion for a bill of particulars (Dkt. 490). The Court heard oral argument on Defendants' motions on February 14, 2017.

         For the reasons stated below, the Court denies Marin's motion to dismiss Count One, denies Napout's motion to dismiss the counts against him, and denies in part and grants in part Napout's motion for a bill of particulars. The Government shall file the bill of particulars required by this Order no later than March 10, 2017.

         I. Marin's Motion to Dismiss Count One

         Defendant Marin moves to dismiss Count One of the Superseding Indictment on the grounds that (1) the indictment does not adequately plead an “enterprise, ” an essential element of a charge under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(d), (2) even assuming the indictment adequately alleges an enterprise, the indictment does not adequately allege that Marin knowingly participated in that enterprise, and (3) Count One is duplicitous of the other counts against Marin. (Dkts. 487-1, 519.) For the reasons stated below, the Court disagrees with Marin on each of these grounds.

         First, the Superseding Indictment adequately alleges an association-in-fact enterprise with respect to Count One. The Supreme Court has explained that “an association-in-fact enterprise is simply a continuing unit that functions with a common purpose, ” and “need not have a hierarchical structure or a ‘chain of command.'” Boyle v. United States, 556 U.S. 938, 948 (2009); accord United States v. Pierce, 785 F.3d 832, 838 (2d Cir. 2015). With respect to Count One, the very first paragraph of the Superseding Indictment expressly alleges an enterprise consisting of FIFA, specified continental confederations, specified regional federations, specified national associations, specified sports marketing companies, and certain related persons and entities. (SI ¶ 1.) Subsequent paragraphs in the Superseding Indictment provide additional detail on the constituents of this enterprise (SI ¶¶ 4-93), and various other paragraphs specifically allege collaboration among the constituents in the enterprise (e.g., SI ¶¶ 15 (alleging that the continental confederations work closely with “one another” to organize international soccer competitions), 22 (similar), 98 (alleging that the constituents of the enterprise “became increasingly intertwined with one another” over time)).

         Marin's argument that these allegations are insufficient because they “do[] not fit” the other factual allegations set forth in the indictment (Dkt. 487-1 at 8), which is the thrust of his challenge to the “enterprise” element of Count One (see Dkt. 487-1 at 8-10, Dkt. 519 at 1-4)[2], appears to invite the Court to disregard the Government's express allegations of a global, association-in-fact enterprise (see SI ¶¶ 1-93), merely because the Superseding Indictment contains comparatively more detailed allegations concerning the interaction among constituents of the smaller, continental enterprises that relate to other counts in the indictment (SI ¶¶ 142-361). This kind of parsing is not consistent with the standards that govern the sufficiency of a criminal indictment, which require only that the indictment contain a “plain, concise and definite written statement of the essential facts constituting the offense charged.” Fed. R. Crim. P. 7(c)(1); see United States v. Flaharty, 295 F.3d 182, 198 (2d Cir. 2002) (“In order to state an offense, an indictment need only track the language of the statute and, if necessary to apprise the defendant of the nature of the accusation against him, state time and place in approximate terms.” (internal quotations and alterations omitted)); see also United States v. Yannotti, 541 F.3d 112, 127 (2d Cir. 2008) (reciting the lenient pleading standards that apply to criminal indictments). Under these governing standards, the Superseding Indictment clearly alleges an association-in-fact enterprise with respect to Count One.[3]

         Second, the Superseding Indictment adequately alleges Marin's involvement in the enterprise alleged with respect to Count One. As the parties agree (Dkt. 487-1 at 11; Dkt. 516 at 20), to allege a defendant's involvement in a RICO conspiracy, an indictment need allege only that a defendant agreed to further “the general criminal objective of a jointly undertaken scheme.” Yannotti, 541 F.3d at 122; see also United States v. Ciccone, 312 F.3d 535, 542 (2d Cir. 2002) (“[I]t suffices that [the defendant] adopted the goal of furthering or facilitating the criminal endeavor” (quoting Salinas v. United States, 522 U.S. 52, 65 (1997) (brackets omitted)). The Superseding Indictment satisfies this requirement by alleging, inter alia, that Marin and others “conspired with one another to use their positions within the enterprise to engage in schemes involving the solicitation, offer, acceptance, payment, and receipt of undisclosed and illegal payments, bribes, and kickbacks.” (SI ¶ 95; see also SI ¶¶ 50, 364.) Marin's claim that these allegations are insufficient because they “fall far short of establishing that Marin could have joined the conspiracy” (Dkt. 487-1 at 11 (emphasis added)) is premised on the incorrect notion that the indictment's allegation of Marin's involvement in the conspiracy must be demonstrated through specific factual allegations. The law simply does not require that kind of factual substantiation in an indictment. See Flaharty, 295 F.3d at 198; see also, e.g., United States v. Frias, 521 F.3d 229, 235-36 (2d Cir. 2008).

         Third, Count One is not duplicitous of other counts against Marin.[4] An indictment is duplicitous “when a single offense is alleged in more than one count”-i.e., where two charges in an indictment “are the same in fact and in law.” United States v. Jones, 482 F.3d 60, 71-72 (2d Cir. 2006) (quotations omitted). Marin contends that Count One is duplicitous because the indictment, by failing to plead an “enterprise” with respect to Count One, “fail[s] to tie . . . together” the six predicate conspiracies alleged against Marin in other counts. (Dkt. 487-1 at 12-13; Dkt. 519 at 6-7.) But, contrary to Marin's position, the Superseding Indictment does adequately allege an enterprise, supra, so even assuming that Marin's articulation of the duplicity doctrine is correct, Count One is not duplicitous. Moreover, Count One is not duplicitous because the global RICO conspiracy alleged in Count One of the Superseding Indictment has a different scope and different objectives than the smaller conspiracies alleged in other counts of the Superseding Indictment. See Jones, 482 F.3d at 72 (rejecting defendant's claim of duplicity where the indictment alleged separate conspiracies in separate counts-even though some factual “overlap[]” existed between the alleged conspiracies-because “multiple agreements to commit separate crimes constitute multiple conspiracies”).

         For the foregoing reasons, the Court denies Marin's motion to dismiss Count One of the Superseding Indictment.

         II. Napout's Motion to Dismiss Based on Extraterritoriality

         Napout moves to dismiss all charges against him as impermissible extraterritorial applications of the federal wire fraud statute (Counts 9 and 83), the federal money laundering statute (Counts 10 and 84), and the federal RICO statute (Count 1).

         A. Supreme Court's Decision in RJR Nabisco

         Just last year, in RJR Nabisco, Inc. v. European Community, 136 S.Ct. 2090 (2016), the Supreme Court clarified the “two-step framework for analyzing extraterritoriality issues”:

At the first step, we ask whether the presumption against extraterritoriality has been rebutted-that is, whether the statute gives a clear, affirmative indication that it applies extraterritorially. We must ask this question regardless of whether the statute in question regulates conduct, affords relief, or merely confers jurisdiction. If the statute is not extraterritorial, then at the second step we determine whether the case involves a domestic application of the statute, and we do this by looking to the statute's “focus.” If the conduct relevant to the statute's focus occurred in the United States, then the case involves a permissible domestic application even if other conduct occurred abroad; but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.

136 S.Ct. at 2101 (two-step framework as reflected in Morrison v. Nat'l Aus. Bank Ltd., 561 U.S. 247 (2010) and Kioebel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013)). Where there is a clear indication at step one that the statute applies extraterritorially, the court should not proceed to step two or consider the statute's focus. Id. at 2103.

         Reviewing the Second Circuit's decision in a civil RICO action, [5] the Supreme Court affirmed the Circuit's holding that RICO's criminal provisions, including its conspiracy provision, 18 U.S.C. § 1962(d), may be applied extraterritorially “to the extent that the predicates alleged in [the] case themselves apply extraterritorially.” 136 S.Ct. at 2102 (as to §§ 1962(b) and (c)); id. at 2103 (assuming without deciding that “§ 1962(d)'s extraterritoriality tracks that of the provision underlying the alleged conspiracy”). The Court emphasized that the predicate statute must “manifest[] an unmistakable congressional intent to apply extraterritorially, ” that not all RICO predicates have extraterritorial effect, and that “[t]he inclusion of some extraterritorial predicates does not mean that all RICO predicates extend to foreign conduct.” Id. at 2102 (emphasis in original). If a predicate statute does not apply extraterritorially, “then conduct committed abroad is not ‘indictable' under that statute and so cannot qualify as a predicate under RICO's plain terms.” Id.[6] The Court also held that while there is no requirement that the alleged RICO enterprise be domestic, it still must “engage in, or affect in some significant way, commerce directly involving the United States-e.g., commerce between the United States and a foreign country.” 136 S.Ct. at 2105. “Enterprises whose activities lack that anchor to U.S. commerce cannot sustain a RICO violation.” Id.

         With these legal principles in mind, the Court turns to Napout's challenge to Counts One, Nine, Ten, Eighty-Three and Eighty-Four of the Superseding Indictment.

         B. Wire Fraud Conspiracy (Counts Nine and Eighty-Three)[7]

         a. Legal Standards

         As the parties recognize, the federal wire fraud statute, 18 U.S.C. § 1343, does not apply extraterritorially. (See Dkt. 491-1 at 11 (citing RJR Nabisco, 764 F.3d at 140-41); Dkt. 516 at 26-31.) It does apply “domestically, ” however, to certain schemes to defraud, even if those schemes also involve foreign conduct. See RJR Nabisco, 764 F.3d at 141-43; see also Petroleos Mexicanos v. SK Eng'g & Constr. Co., 572 F. App'x 60, 61 (2014) (summary order). With respect to Napout's motion to dismiss the wire fraud conspiracy counts in which he is charged, the central inquiry therefore is whether the Superseding Indictment sufficiently alleges that Napout participated in a conspiracy to commit a “domestic” violation of the wire fraud statute.

         As the Supreme Court instructed in RJR Nabisco, in determining whether a case involves a domestic or extraterritorial application of a given law, a court should “look[] to the statute's focus, ” and “[i]f the conduct relevant to the statute's focus occurred in the United States, then the case involves a permissible domestic application even if other conduct occurred abroad; but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.” 136 S.Ct. at 2101. As further guidance, the Second Circuit instructed in RJR Nabisco that, “[i]f domestic conduct satisfies every essential element to prove a violation of a United States statute that does not apply extraterritorially, that statute is violated even if some further conduct contributing to the violation occurred outside the United States.” 764 F.3d at 142.

         The Government does not argue that the Superseding Indictment alleges a fraudulent scheme in which domestic conduct satisfies “every essential element” to prove the wire fraud underlying the conspiracy charges of Counts Nine and Eighty-Three.[8] The Government instead argues that the “focus” of the wire fraud statute is “the misuse of [U.S.] wires” (Dkt. 516 at 29), and, therefore, that the wire fraud statute can be applied “domestically” to any sequence of events satisfying the elements of wire fraud, so long as the events involved the use of U.S. telecommunications systems (id. (quoting United States v. Trapilo, 130 F.3d 547, 552-53 (2d Cir. 1997) and emphasizing that “[n]othing more is required”)). By contrast, Napout asks the Court to center its analysis on the “fraudulent scheme” element of a wire fraud charge, arguing that the wire fraud statute can be applied “domestically” only if the relevant fraud scheme has its focus in the United States. (E.g., Dkt. 491-1 at 17.)

         As a preliminary matter, the Court does not accept Napout's proposed test for determining the bounds of a domestic application of the wire fraud statute. Contrary to Napout's construction, step two of the RJR Nabisco framework clearly requires the Court to determine the focus of the statute in question, not the focus of the alleged course of criminal conduct. 136 S.Ct. at 2101. At the same time, the Court is skeptical of the Government's position that “nothing more” than a single transmission across U.S. wires is sufficient to sustain a “domestic” application of the wire fraud statute. This extreme position appears to be foreclosed by the Second Circuit's decision in Petroleos Mexicanos, which held that “three minimal contacts” with the United States-including the use of U.S. wires to transfer of illicit funds-were insufficient to establish a domestic application of the wire fraud statute. 572 F. App'x at 61. The natural implication of PetroleosMexicanos is that, in determining whether the wire fraud statute is being applied ...


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