845 F. Supp. 2d 874
C.D. Ill.2011Background
- Hijazi, a Kuwaiti resident and Lebanese citizen, is charged with Major Fraud Act and wire fraud for inflating a U.S. military subcontract in Kuwait (Subcontract 39) and directing kickbacks tied to U.S. payments.
- Second Superseding Indictment alleges a scheme involving Mazon and LaNouvelle to defraud the U.S. government of over $3.5 million via inflated invoices and government payments.
- Hijazi voluntarily surrendered in Kuwait; Kuwait refused to extradite; there is no U.S.–Kuwait extradition treaty.
- Mazon’s conduct in the U.S. is alleged to be part of Hijazi’s scheme, and co-conspirator acts can support jurisdiction over Hijazi.
- Court previously deferred ruling until Hijazi appeared for arraignment; Seventh Circuit mandamus directed district court to decide on motions to dismiss.
- Court concludes the statutes apply extraterritorially and jurisdiction is consistent with international law; motions to dismiss denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Extraterritorial reach of the Major Fraud Act and wire fraud | Hijazi argues lack of extraterritorial reach | Hijazi contends statutes do not apply extraterritorially | Statutes apply extraterritorially; jurisdiction proper |
| Jurisdiction under international law and due process | Hijazi argues lack of substantial U.S. nexus; due process concerns | Government contends substantial effect in U.S. and international-law basis | Jurisdiction valid under international-law principles; due process satisfied |
| Effect of the Defense Cooperation Agreement (DCA) | DCA bars U.S. criminal jurisdiction | DCA not applicable or controlling | DCA inapplicable; does not bar prosecution |
| MEJA applicability to Hijazi | MEJA would extend U.S. jurisdiction | MEJA not applicable to foreign residents | MEJA not controlling for this determination; no bar to extraterritorial reach |
| Sixth Amendment speedy-trial and Rule 48(b) challenges | Delay violates speedy-trial rights and Rule 48(b) | Delay attributable to Hijazi’s refusal to travel; government diligent | No Sixth Amendment violation; Rule 48(b) claim denied |
Key Cases Cited
- Bowman v. United States, 260 U.S. 94 (1922) (extraterritoriality inferred for offenses against the U.S. when aimed at defending against fraud wherever perpetrated)
- United States v. Leija-Sanchez, 602 F.3d 797 (7th Cir. 2010) (Bowman remains viable; extraterritorial reach under international-law principles)
- United States v. Dawn, 129 F.3d 878 (7th Cir. 1997) (extraterritorial reach analyzed under Bowman framework)
- United States v. Yousef, 327 F.3d 56 (2d Cir. 2003) (nexus-based and international-law considerations for extraterritorial prosecutions)
- United States v. Philip Morris USA Inc., 566 F.3d 1095 (D.C. Cir. 2009) (substantial domestic effects can justify extraterritorial reach of certain statutes)