Defendants Dmitry Firtash and Andras Knopp were indicted in 2013 on charges
BACKGROUND
I. The Allegations
At the heart of this case is the proposed sale of titanium sponge to an American company headquartered in Chicago. Titanium is an abundant element present in a variety of minerals, including ilmenite,
In connection with the Project, Defendants Firtash and Knopp allegedly worked with at least four co-conspirators: Suren Gevorgyan, Gajendra Lal, Periyasamy Sunderalingam, and K.V.P. Ramachandra Rao. (Id. at 1, 5). All four are named as co-defendants and remain at large. (Id. at 1.) Firtash is alleged to have been the leader of this group. (Id. at 5, 6-7.) In this capacity, he is alleged to have met with Indian public officials to discuss the Project, authorized the payment of bribes to Indian public officials, and directed subordinates, including Knopp, to carry out the logistics of paying those bribes. (Id. at 6-7.) Knopp, too, is alleged to have "occupied a supervisory role." (Id. ) He allegedly met with Indian public officials and directed the activities of co-conspirators. (Id. ) Additionally, Knopp is alleged to have met personally
Much of the relevant conduct is alleged to have taken place abroad, although several allegations against Firtash, Knopp, and their purported co-conspirators involve the United States. For example, several co-conspirators allegedly attended meetings with representatives of Company A, which is incorporated in Delaware and has its principal executive offices in Chicago, Illinois. (Id. at 2.). Two of these meetings, purportedly attended by Gevorgyan, allegedly took place in Seattle, Washington. (Id. at 17.) Another named co-conspirator, Lal, allegedly traveled interstate at least five times in June, July, and August 2009. (Id. at 17-18.) The alleged purpose of one of these trips, from Greensboro, North Carolina to Flushing, New York on July 14, 2009, was to solicit the participation of another company ("Company D") in the Project. Additionally, an unidentified co-conspirator allegedly used a cellphone located in Chicago, Illinois to discuss that conspirator's activities related to the project and "direct future activity." (Id. at 19.) Finally, United States financial institutions were allegedly utilized to transfer several million dollars of bribe payments before they reached Indian public officials. (Id. at 6.)
II. The Indictment
On June 30, 2013, the government filed a five-count indictment against the six alleged conspirators, including Firtash and Knopp. (Indictment [2] at 1.)
Count One charges a conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"),
Count Two charges a conspiracy to violate the MLCA that relates to the same conduct, and Counts Three and Four charge conspiracy and aiding and abetting Travel Act violations.
Count Five charges Firtash, Knopp, Gevorgyan, Lal, and Sunderalingam with conspiracy and with aiding and abetting a violation of the Foreign Corrupt Practices Act (the "FCPA"), 15 U.S.C. §§ 78dd-2(a) and 78dd-3(a), which criminalizes the payment of money by a "domestic concern" to a "foreign official" for the purpose of influencing an official act. (Id. at 24-27.) It alleges that Lal, a permanent resident of the United States, was a "domestic concern" within the meaning of the FCPA,
Notably, the Indictment does not allege that Firtash or Knopp were ever physically present in the United States, either in connection with or unrelated to the Project. The government has since alleged that it has evidence showing Knopp took an act to further the conspiracy while he was physically present in the United States, although it has not specified what this act was. (See Gov't's Resp. [40] at 79 n.40; Gov't's 2nd Supp. Resp. [70] at 2.)
III. Post-Indictment Proceedings
Neither Firtash, Knopp, nor any other Defendant has appeared before this court since the filing of the Indictment.
On March 12, 2014, Firtash was arrested in Vienna by Austrian law enforcement on request of the United States. (Gov't's Resp. [40] at 5.) He was released on bond several days later, but barred from leaving Austria. (Id. ) The United States thereafter submitted a request to the Republic of Austria to extradite Firtash, which was denied by the Vienna Regional Court for Criminal Matters on April 30, 2015. (Id. at 6.) The Austrian government appealed this decision to the Vienna Higher Regional Court, which reversed the decision of the lower court on February 21, 2017, ordering Firtash be extradited to the United States. (Id. at 6.)
Firtash submitted a writ to the Austrian Supreme Court requesting a "retrial."
During the course of all of these proceedings, on May 9, 2017, Firtash filed a motion in this court to dismiss the Indictment. (Firtash MTD [24].) On May 15, 2017, Knopp joined Firtash's motion.
DISCUSSION
I. Venue
Defendants first argue that the court lacks venue over the charges in the Indictment.
Applying the substantial contacts approach to cases of criminal conspiracy, the Seventh Circuit has recognized several different adequate bases for venue. The "traditional rule" for such cases is that venue is proper in "any district in which an overt act of the conspiracy occurred," even if there is no evidence that the defendant ever entered that district or that the conspiracy was formed there. United States v. Ochoa ,
Where a defendant challenges venue, the government bears the burden of proving venue is proper for each count charged. United States v. Tingle ,
The government has met that generous test. Because the Seventh Circuit recognizes venue in cases of criminal conspiracy where the illegal activity was "intended to have an effect" in the district, United States v. Muhammad ,
Defendants urge that the court consider an additional "foreseeability" requirement, arguing that the Indictment does not allege that it was foreseeable to Defendants "that a coconspirator was ever in the Northern District of Illinois or that a cell phone was used there." (Firtash MTD [24] at 7.) They cite a concurring opinion from Andrews v. United States , in which Judge Cudahy wrote that "[i]t would seem ... to violate basic concepts of criminal responsibility and due process to deem a crime committed at places unknown to the defendant, places the very existence of which he may not have had any reason to suspect."
This argument fails for multiple reasons. First, Judge Cudahy's concurrence was expressly not the holding of the Seventh Circuit, as he acknowledged himself that he "would go further" in setting venue requirements than the other two judges of the panel. Andrews ,
Accordingly, Defendants' venue objection is overruled.
II. Failure to State an Offense - Count One
Defendants next ask the court to dismiss Count One of the Indictment-which charges Defendants with participation in a RICO conspiracy, in violation of
In assessing this argument, the court notes the limited purpose indictments are intended to serve: "inform[ing] the defendant of the nature of the accusation against him." Russell v. United States ,
"Because a court's 'use[ ] [of] its supervisory power to dismiss an indictment ... directly encroaches upon the fundamental role of the grand jury,' dismissal is granted only in unusual circumstances." United States v. Ballestas ,
When a defendant moves to dismiss an indictment as impermissibly extraterritorial, this practice of deferring to the province of the grand jury must be reconciled with the longstanding principle that "in general, 'United States law governs domestically but does not rule the world.' " RJR Nabisco, Inc. v. European Cmty. , --- U.S. ----,
Ballestas moved to dismiss the indictment arguing, inter alia, "that the MDLEA's conspiracy provision did not extend extraterritorially to reach individuals (like Ballestas) who never came 'on board' [a vessel subject to the jurisdiction of the United States]."
As Ballestas illustrates, a pre-trial motion to dismiss an indictment is not a means through which to dispute the government's allegations or demand the presentation of all relevant facts. Although the government may only charge extraterritorial conduct that falls within the purview of a statute, an indictment is not necessarily rendered insufficient for lack of factual allegations conclusively demonstrating the requisite connection. And where there is a credible disagreement over what conduct the government is criminally charging, or whether that conduct falls within the extraterritorial scope of a statute, it is not impermissible for the court to reach beyond the indictment to factual allegations in the government's pleadings. With these principles in mind, the court turns to the substance of Defendants' arguments on extraterritoriality.
A. RJR Nabisco
The Supreme Court addressed the extraterritoriality of RICO's substantive provisions, §§ 1962(a) - (c), in RJR Nabisco, Inc. v. European Community , --- U.S. ----,
The Court further stressed that, under its holding, not every foreign enterprise would qualify for prosecution under RICO; RICO's substantive provisions by their own terms require proof of an enterprise that is "engaged in, or the activities of which affect, interstate or foreign commerce." Id. at 2105 (quoting
Significantly, the Court expressly confined this analysis to RICO's substantive provisions. The Court voiced the possibility that § 1962(d), the RICO section at issue in this case, "should be treated differently from the provision ( § 1962(a), (b), or (c) ) that a defendant allegedly conspired to violate," but the Court did not flesh out this possibility.
B. Effect on United States Commerce
Defendants now ask this court to extend RJR Nabisco 's holding beyond RICO's substantive provisions to its conspiracy provision, § 1962(d). Defendants first contend that the RJR Nabisco Court's comment on the effect of its holding on foreign enterprises-that for such an enterprise to fall within RICO's purview, it "must engage in, or affect in some significant way, commerce directly involving the United States"-applies without modification to RICO conspiracy cases. Defendants therefore argue that the Indictment is insufficient in that it "does not set forth sufficient facts to establish an enterprise significantly affecting United States commerce." (Firtash MTD at 9-10.) But this appears to be an overstatement of the Court's holding in RJR Nabisco ; as discussed above, the Court there explicitly reserved judgment on the extraterritorial application of § 1962(d). Indeed, the segment of the opinion to which Defendants refer is a discussion of RICO's substantive provisions, §§ 1962(a) - (c), which expressly "require[ ] proof of an enterprise that is 'engaged in, or the activities of which affect, interstate or foreign commerce.' "
In essence, Defendants are arguing that § 1962(d) should cease to be read as a conspiracy statute when applied extraterritorially, and instead should be interpreted
Additionally, Defendants' contention that the facts alleged in the Indictment are not sufficient to establish the necessary connection to United States commerce misstates the standard to which indictments are held upon a motion to dismiss. "A motion to dismiss is not intended to be a 'summary trial of the evidence.' Such a motion is directed only to the validity of the indictment or the information, and it tests only whether an offense has been sufficiently charged." United States v. Yasak ,
The indictment here does so: it "sets out" the effect-on-commerce element of the RICO charge and provides "adequate notice of the nature of the charge" sufficient to enable Defendants to prepare a defense. It exhaustively lays out the nature of the grand jury's finding that Defendants were members of a "criminal organization" that "was engaged in, and the activities of which affected, interstate commerce." (Indictment [2] at 5.) It alleges that this criminal organization used "facilities of interstate and foreign commerce to coordinate, plan, facilitate, and promote the bribery of Indian public officials," and that its members "travel[ed] in interstate and foreign commerce to further the goals of the criminal enterprise." (Id. at 6.) And it details that this enterprise allegedly conspired to illegally obtain and then sell five to twelve million pounds of titanium sponge to a company headquartered in the United States. (Id. at 3.) To the extent Defendants dispute the government's ability to prove their case, that is a matter for trial, not a basis for dismissal.
C. Predicate Statutes
Citing RJR Nabisco 's central holding-that RICO's substantive provisions may only be applied extraterritorially where the predicate statutes reach a defendant's extraterritorial conduct-Defendants further argue that the RICO charge must be dismissed because neither of the predicates cited in the indictment apply extraterritorially in this case. Specifically, Defendants argue that the relevant conduct is strictly extraterritorial and not indictable under either the MLCA or the Travel Act.
The Seventh Circuit has held, however, that indictments charging RICO conspiracy need not even list predicate acts, stressing that the "outer boundary" of what is sufficient would be, for instance, a "mere allegation of 'various acts of bribery.' " United States v. Glecier ,
1. The Money Laundering Control Act
The Money Laundering Control Act,
"Congress enacted the [MLCA] 'to criminalize the use of United States financial institutions as clearinghouses for criminal money laundering and conversion into United States currency.' " United States v. All Assets Held at Bank Julius ,
The Indictment charges that Defendants "conspired ... to transport, transmit, and transfer a monetary instrument and funds" (1) from a foreign country to New York, and (2) from New York and California "to and through a place outside
In challenging this conclusion, Defendants cite a February 16, 2017 letter from the prosecutors (the "USAO") to the Republic of Austria Federal Ministry of Justice, in which the government presented it its basis for asserting jurisdiction in the United States. As Defendants read that letter, the government asserts extraterritorial jurisdiction based solely on the transfer of funds from a foreign country to another foreign country through a correspondent bank in the United States. (Firtash MTD [24] at 11-12.) Defendants argue that such transactions do not amount to conduct occurring within the United States under Section 1956(f), and therefore that the MLCA does not reach Defendants' conduct. (Id. )
But this argument does not support dismissal of the Indictment at this stage, where the court reviews the Indictment on a practical basis and in its entirety, accepting all allegations as true. Because the Indictment does not specify that the government's proof is limited to correspondent bank transactions-and, indeed, the government has proffered that its proof is not so limited-Defendants are effectively challenging the government's ability to prove its case. Such merit-based arguments, even when intermeshed with jurisdictional questions, should be determined at trial. Cf. United States v. Alfonso ,
D. The Travel Act
The Travel Act,
The Indictment sets out the elements of a domestic Travel Act violation, charging that on two occasions-once on July 5, 2009, and again on August 16, 2009-Defendants "traveled and caused another person to travel in interstate commerce from Chicago, Illinois, to Greensboro, North Carolina, with intent to promote, manage, carry on, and facilitate the promotion, management, establishment, and carrying on of an unlawful activity, namely, violation of [the MLCA]; and thereafter, the defendants did perform, cause to be performed and did aid and abet the performance of acts to promote manage, establish, and carry on and facilitate the promotion, management, establishment, and carrying on of said unlawful activity." (Indictment [2] at 22.)
Defendants contend that these allegations are insufficient because "[n]one of the travel listed in the Indictment is relevant to the Travel Act's focus," which, they argue, should be "the alleged conduct of non-U.S. companies and foreign nationals bribing Indian officials in India for a project to be undertaken in India." (Firtash MTD [24] at 15.) Specifically, Defendants claim that because Defendant Lal lived in North Carolina, his travel there in 2009 was "incidental to any other purpose he may have had." (Id. at 17.) They further assert that any travel done to meet with Company A was "not intended to advance and did not advance an illegal purpose." (Id. at 18.) These claims cannot be inferred from the text of the Indictment, and indeed directly contradict the Indictment's allegation that the relevant travel was in fact carried out with intent to promote unlawful activity.
The crux of Defendants' argument appears to be that if the Indictment does not defeat the possibility that the government's evidence will ultimately be insufficient for a conviction, then dismissal is appropriate. This is not the standard to which Indictments are held. The allegations in the Indictment, presumed to be true, sufficiently set out the elements of domestic Travel Act violations. Defendants' motion to dismiss the RICO charge as impermissibly extraterritorial is denied.
III. Failure to State an Offense - Counts Two, Three, and Four
Defendants further argue that Count Two, which alleges a conspiracy to violate the MLCA, and Counts Three and Four, which allege violations of the Travel Act, should be dismissed. This section of Defendants' brief simply restates the arguments made to dismiss the RICO charge, and can be disposed of on the same grounds. For the reasons discussed above, the Indictment is sufficient as to all three counts.
IV. Failure to State an Offense - Count Five
Defendants next argue that the court should dismiss Count Five. Count Five alleges that Defendants conspired, in violation of the federal aider and abettor statute,
Defendants dispute that the government has set out all the elements of these charges. According to Defendants, although the indictment charges only secondary liability under Sections 2 and 371, it must nevertheless also allege that Defendants each belong to the class of individuals capable of committing a substantive FCPA violation. Because the Indictment does not charge that either Firtash or Knopp is the agent of a domestic concern or a qualified foreign national, accepting Defendants' argument would necessarily imply that the Indictment fails to set out an essential element of the offense.
Two doctrines are relevant to Defendants' argument: limits to secondary liability imposed by the common law, see generally Gebardi v. United States ,
No such allegation is included in Count Five of the indictment for Firtash or Knopp; the government does not dispute this fact. The government observes, however, that controlling Seventh Circuit case law declines to impose the requirement recognized in Hoskins . The government is correct. Indeed, although the Seventh Circuit has not yet ruled on this precise question, its disagreement with the Second Circuit's approach in Hoskins is evident from a pair of existing cases discussing exceptions to secondary liability: United States v. Amen ,
In Amen , the Second Circuit considered the use of secondary liability to convict a defendant under the "Continuing criminal enterprise" statute,
The Second Circuit approached this problem by analyzing legislative history to determine whether Congress had intended for the kingpin statute to be covered by the already-existing aider and abettor and conspiracy laws. Amen ,
Two years later, in United States v. Pino-Perez , the Seventh Circuit considered the same question, en banc , although only with regard to the federal aider and abettor statute.
The Seventh Circuit held, therefore, that exclusions to the aider and abettor statute may only be derived from statutory text, and are limited to three circumstances. First, where "a 'crime is so defined that participation by another is necessary to its commission,' that other participant is not an aider and abettor."
The Seventh Circuit also noted an apparent tension between the Second Circuit's approach and Supreme Court precedent. In Gebardi v. United States ,
United States v. Hoskins follows closely in the footsteps of Amen and, with it, the reasoning rejected by the Seventh Circuit in Pino-Perez . There, the Second Circuit considered whether Hoskins, a foreign national, could be convicted under conspiracy or complicity theory for violating the FCPA, even if he belonged to none of the categories of persons expressly targeted by the FCPA.
By its own terms, the Hoskins opinion "focuse[d] on two cases": Gebardi and Amen . Hoskins ,
Moreover, Pino-Perez lists only three circumstances in which "an inference can confidently be drawn that Congress in enacting a criminal statute meant to protect a class of accomplices from being charged as aiders and abettors." Pino-Perez ,
Defendants correctly note that Pino-Perez did not deal with issues of extraterritoriality, and that the presumption against extraterritoriality arguably undermines assumptions on which Pino-Perez was based. The Pino-Perez court noted that "once that determination [that someone is an aider and abettor] is made, liability is automatic by virtue of section 2(a)," but that may not always be true where the defendant's actions are extraterritorial and the underlying statute has no extraterritorial application. Pino-Perez ,
V. Due Process
Finally, Defendants Knopp and Firtash assert that their prosecution in the United States violates the Fifth Amendment's Due Process Clause. (Firtash MTD [24] at 1-2; Knopp MTD [30] at 11.) They argue that their contacts with the United States are so tenuous that prosecution here violates their constitutional rights. The parties debate whether the Defendants, who are aliens not present in the United States, and who are not detained by the United States, are entitled to due process protections at all. The court need not decide this issue here, however, as it concludes that prosecution of Firtash and Knopp in the United States does not violate the Fifth Amendment's Due Process Clause.
A. Restatement § 402 - Grounds for Jurisdiction
Section 402 of the Restatement recounts the principles of international law that limit a state's ability to reach conduct outside of its own borders. Section 402 of the Restatement provides that:
Subject to § 403 [discussed below], a state has jurisdiction to prescribe law with respect to
(1) (a) conduct that, wholly or in substantial part, takes place within its territory;
(b) the status of persons, or interests in things, present within its territory;
(c) conduct outside its territory that has or is intended to have substantial effect within its territory;
... [and]
(3) certain conduct outside its territory by persons not its nationals that is directed against the security of the state or against a limited class of other state interests.
Any single ground under § 402 is sufficient to support jurisdiction in accordance with the Due Process Clause. United States v. Kashamu ,
Further, the Indictment lists millions of dollars of alleged bribe money that went to, from, or through the United States. (Id. at 11-16;
These acts are sufficient to subject the Defendants to prosecution in the United States in accordance with the requirements of due process. While there is little case law discussing § 402(1)(a), cases discussing jurisdiction and extraterritoriality generally support this conclusion. In Leija-Sanchez , the Seventh Circuit reversed the dismissal of an indictment of a defendant who, from the United States, "arrang[ed] and pa[id] for the murder" of a business competitor in Mexico.
In contrast, the district court in United States v. Sidorenko ,
The court recognizes that, unlike the defendant in Leija-Sanchez , Defendants Knopp and Firtash may not have personally been in the United States during the conspiracy.
There is no basis for jurisdiction over the defendant ... He is not a United States citizen. He has not threatened the security of this country or interfered with its governmental function. Although the objective territorial theory applies,20 the fact that no conspiracy has been alleged means that the theory does not support jurisdiction in the case.
Had a conspiracy been demonstrated, the defendant could be said to have been engaged in a criminal enterprise, an essential element of which, the theft, occurred in the United States. Had [Defendant] Columba-Colella's intent anticipated and embraced the car theft in Texas, that act could be imputed to him.
The Defendants make several counterarguments. First, they list types of activity that did not occur in the United States: no meetings with Indian officials took place in the United States, none of the project's mining operations took place in the United States, and the government makes no allegations that "the titanium sponge meant for sale to Company A was improperly priced based on the alleged bribery scheme." (Dfs.' Joint Reply [47] at 38.) That many events did not happen in the United States does not alter the fact that a substantial part of the conspiratorial activity did take place in the United States. Defendants also argue that Mr. Lal's enterprise-related activity in the United States was "incidental[ ] because he resided there," and that it should therefore not be considered "substantial criminal activity in the United States."
Though the court need not reach this ground, this prosecution also satisfies the Fifth Amendment's due process requirements under Restatement § 402(1)(c)-providing for laws that proscribe conduct outside of a nation's territory when that conduct "has or is intended to have substantial effect within its territory." This is also called the objective territorial theory of international law. Hijazi ,
The Defendants claim that, because the agreement with Company A never resulted in an actual purchase, it is insufficient to constitute conduct that had or was intended to have a substantial effect in the United States. Again, the court disagrees. Section 402(1)(c) only requires that behavior be intended to have a substantial effect within the United States. Defendants also argue that if their "minor incidental 'connections' to the United States could serve as the basis of jurisdiction, almost any business transaction could, rendering ... the presumption against United States jurisdiction voice by the Supreme Court in Microsoft [v. AT & T Corp. ,
The Defendants also cite several cases that analyze jurisdiction and due process under the sufficient nexus test instead of under international law principles. For example, in United States v. Perlaza ,
Defendants attempt to liken their case to those where the court has found jurisdiction lacking. In Abelesz v. OTP Bank ,
Finally, the Defendants attempt to distinguish this prosecution from others in which courts have exercised jurisdiction. They point out that the In re Hijazi defendant's fraudulent agreements with a U.S. Army subcontractor "were intended to
Ultimately, the court finds that the Defendants' conspiracy was intended to have a substantial effect in the United States. This further supports the court's assertion of jurisdiction over Defendants without violating the Due Process Clause.
B. Restatement § 403 - Reasonability
Even if a court has jurisdiction pursuant to a principle of international law laid out in Restatement § 402, a state is prohibited from exercising that jurisdiction when it would be unreasonable. Restatement § 403(1). Reasonability "is determined by evaluating all relevant factors," including, but not limited to:
(a) the link of the activity to the territory of the regulating state, i.e., the extent to which the activity takes place within the territory, or has substantial, direct, and foreseeable effect upon or in the territory;
...
(c) the character of the activity to be regulated, the importance of regulation to the regulating state, the extent to which other states regulate such activities, and the degree to which the desirability of such regulation is generally accepted;
(d) the existence of justified expectations that might be protected or hurt by the regulation;
...
(f) the extent to which the regulation is consistent with the traditions of the international system; [and]
(g) the extent to which another state may have an interest in regulating the activity;
Restatement § 403(2). Defendants claim that their prosecution is unreasonable under these factors, and that the court's exercise of jurisdiction over them therefore violates their right to due process. This argument, too, fails. As discussed above, Defendants' alleged activity was intended to have a substantial effect within the United States. The facts establishing jurisdiction under §§ 402(1)(a) and (c) similarly establish a link between Defendants and the United States sufficient to render jurisdiction reasonable.
Defendants make their most lengthy reasonability argument under § 403(2)(g), arguing that "India, not the United States" has an interest in regulating the alleged conduct. (Firtash MTD [24] at 34.) India very well may have a significant interest in the alleged criminal activity in this case. But that interest does not require the conclusion that the United States must stand
In United States v. Lloyds TSB Bank PLC ,
Briefly ruling in the alternative, the Lloyds court also noted Restatement "§ 403(3)(g)" (presumably an erroneous reference to § 403(2)(g)). See Lloyds ,
Finally, Defendants cite United States v. Javino ,
Ultimately, the prosecution of Defendants Knopp and Firtash in the United States is not unreasonable under any combination of § 403(2) factors and does not violate any of their rights to due process granted by the United States Constitution.
CONCLUSION
For the reasons stated herein, Defendants' motions to dismiss [24, 30] are denied.
Notes
See Titanium , Encyclopedia Britannica , https://www.britannica.com/science/titanium (Nov. 22, 2018). See also Titanium Metal (Ti) / Sponge / Titanium Powder , Reade , https://www.reade.com/products/titanium-metal-ti-sponge-titanium-powder (Jun. 21, 2019) (defining "titanium sponge" as "a porous, brittle form of titanium, a highly ductile metal which has a high strength-to-weight ratio").
See M. Somasekhar, Andhra Pradesh renews moves to exploit beach sands , The Hindu BusinessLine , https://www.thehindubusinessline.com/news/national/andhra-pradesh-renews-moves-to-exploit-beach-sands/article21043563.ece1 (Mar. 12, 2018).
Y.S. Rajasekhara Reddy was killed in a helicopter crash in 2009. India politician killed in crash , BBC News , http://news.bbc.co.uk/2/hi/8235115.stm (Sept. 3, 2009).
Although the Indictment does not indicate where this meeting took place, evidence presented to the court under seal suggests that it occurred outside the United States. See (Sealed Affidavit [20] at 2.)
The two counts relate to alleged travel occurring on two different days. Count Three charges a violation related to travel from Chicago to North Carolina on July 5, 2009, whereas Count Four charges a violation related to travel on the same route on August 16, 2009.
As defined in the FCPA, the term "domestic concern" encompasses individuals who are citizens, nationals, or residents of the United States. 15 U.S.C. § 78dd-2(h)(1)(A). There is no allegation that Firtash, Knopp, or Gevorgyan were also domestic concerns.
Following the decision of the Vienna Higher Regional Court, Firtash was re-arrested in Austria at the request of the Spanish government, which itself sought Firtash's extradition based on separate charges filed in Spain. An Austrian trial court denied this request, and an Austrian appellate court affirmed. According to Firtash's counsel, this decision is "final and binding" with regard to the charges in Spain. (Webb Letter 1 [56] at 2.)
The court is unsure what sort of "trial" this refers to.
The meaning of this ruling is not entirely clear, and neither party has enlightened the court.
Knopp currently resides in Russia, with which the United States has no extradition agreement. Although he is not currently facing extradition proceedings, he argues that he "suffers the adverse consequence of not being able to travel because of the likely existence of an Interpol red notice regarding him." (Knopp MTD [30] at 11.)
In conspiracy cases brought under the federal money laundering statute,
The court is not aware of any case from this district or the Seventh Circuit construing Section 1956(f).
Domestic concern is defined as either a "citizen, national, or resident of the United States" or a "corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a State of the United States or a territory, possession, or commonwealth of the United States." 15 U.S.C. § 78dd-2(h)(1).
Specifically, "any officer, director, employee, or agent of such domestic concern or any stockholder thereof acting on behalf of such domestic concern." 15 U.S.C. § 78dd-2(a).
The Pino-Perez court was not asked to consider the applicability of the conspiracy statute, but this court concludes that its reasoning compels an identical conclusion, as discussed below.
For reasons not made clear in the opinion, the Second Circuit "assume[d] that Hoskins was neither an employee nor an agent of a domestic concern and therefore does not fall within the terms of the statute." Hoskins ,
Instead of turning to international law principles, some circuits instead employ a "sufficient nexus" test of due process: "[i]n order to apply extraterritorially a federal criminal statute to a defendant consistently with due process, there must be a sufficient nexus between the defendant and the United States, so that such application would not be arbitrary or fundamentally unfair." United States v. Yousef ,
Other circuits have approached the question through a lens of international law. See, for example , United States v. Cardales ,
Though the companies listed in Indictment Schedule A are almost entirely organized and based outside of the United States, the transfers were allegedly completed using United States financial institutions. (See, for example , Sealed Affidavit [16] Ex. D, at ¶¶ 41, 55-59.)
As noted earlier, however, the Government claims that its "evidence at trial will show that Knopp took acts in furtherance of the conspiracy within the territory of the United States." (Gov't's Resp. [40] at 79 n.40.)
"The objective territorial theory ... requires that before a state may attach criminal consequences to an extraterritorial act, the act must be intended to have an effect within the state." United States v. Columba-Colella ,
In fact, Defendants recognize their potential liability for their co-conspirators' actions. (Dfs.' Joint Reply [47] at 38 (arguing that "the allegations in the Indictment reveal that the actions of others in the United States, for which Defendants would be responsible only under the layers of conspiracy charges crafted into the Indictment, were minimal, incidental, and non-criminal").)
This phrasing by the Defendants is misleading. Pursuant to Restatement § 402(1)(a), a nation has the power to prescribe laws regarding "conduct that, wholly or in substantial part, takes place within its territory."
Defendants also feebly argue that Company A "could not have suffered" as a result of the alleged enterprise. This misconstrues the requirement under § 402-the pertinent provision asks whether the defendant's conduct "has or is intended to have a substantial effect in [the] territory," not whether there has been a substantial effect on any particular party. Restatement § 402(1)(c).
Defendants also cite Europe & Overseas Commodity Traders, SA v. Banque Paribas London ,