United States v. Elfgeeh, No. 06-0638-cr (2d Cir. February 14, 2008) (Kearse, Sack, CJJ, Mills, DJ)
Abad Elfgeeh, assisted by his nephew, Aref, ran a money-transfer business out of an ice cream parlor in Brooklyn that funneled money to Yemen and a host of other countries. Although the case had early on been linked to a large-scale terrorism investigation, the defendants were charged only with financial crimes. The district judge took pains to keep the issue of terrorism out of the trial, and the main issues on appeal related to the defendants’ concerns that the trial was nevertheless tainted by its specter.
A. The Terrorism Stuff
During the trial, an FBI agent mentioned terrorism in response to two of a defense attorney’s questions on cross-examination. The district judge promptly instructed the jury that this was a case about “banking,” and “ha[d] noting to do with terrorism.” Later, when Abad took the stand, the AUSA asked several him questions about whether money he sent was used to purchase weapons or ammunition in connection with tribal violence in Yemen; Abad denied knowing whether this was true.
On appeal, the defendants argued that these events required a new trial, but the circuit disagreed. It found no reason to conclude that the jury could or would not heed the judge’s curative instructions with respect to terrorism. As for Abad’s testimony, the district judge had warned the defendants that he would permit evidence of what the money had been used for if they claimed that they were merely helping immigrants send money to their families. Since Abad clearly opened this door, there was no error.
Just after the trial began, several of the local tabloids published highly inflammatory articles that linked the defendants to terrorism, and that mentioned evidence that the jury would not otherwise hear. Oddly enough, neither the judge nor any of the attorneys seemed to know what to do in this situation, and no one seemed familiar with the Second Circuit cases that outlined the correct procedures. After a good deal of fumbling around, Aref’s attorney ultimately requested that the jury as a whole be asked whether anyone had read the articles, while Abad’s attorney asked the court not to. The judge sided with Abad’s counsel, and did not poll the jury. He merely told the jurors not to read any press accounts.
Even the circuit recognized that the lower court’s handling of the issue was “a bit haphazard.” But nevertheless a majority found no error. Since the judge was faced with one attorney who wanted the jury questioned and one who did not, the appellate court found no abuse of discretion in the district court’s decision not to poll the jury.
On this issue, Judge Sack dissented. He concluded that there was a real risk that one or more jurors had read the articles and that “there was an extraordinary danger of actual prejudice” if they did. His view was that the district court should have granted Aref’s attorney’s request to poll the jury and that Aref – but not Abad, who was bound by his attorney’s position – should receive a new trial on this ground.
B. Mens Rea
The panel also split on the issue of the district court’s instructions on one of the money-transferring counts. Both Aref and Abad were charged with operating an unlicensed money transfer business after October 2001, under a recently amended statute that required the government to prove that they knew the business was unlicensed. Aref asked the court to so instruct the jury, but it, erroneously, did not.
The circuit held that the error was harmless. As to Abad, this was easy – the government produced (1) a letter from the New York State Banking Department informing him that he needed a license to run a money-transmitting business, (2) evidence from that same agency that the business lacked a license, and (3) testimony from his attorney that he told him the business needed to be licensed.
As to Aref, the majority held that, while the evidence that he knew the business was unlicensed was “more circumstantial” – that is, nonexistent – there was enough. First, his attorney did not put the matter at issue by arguing this point either in his opening or summation. Moreover, Aref did not testify that he was unaware that the business was unlicensed. He claimed that he did not participate in the money-transfer business at all. The majority held that evidence of the “furtiveness” of Aref’s actions constituted “overwhelming evidence that he knew” that the business was unauthorized. Since a license “would indicate authorization, the jury was entitled to find” that he knew it was unlicensed.
Judge Sack once again dissented with respect to Aref. The judge did not believe that there was “overwhelming” evidence of Aref’s knowledge of the “intricacies of an operation run by his uncle.” He saw the evidence as supporting an inference that Aref was merely doing his uncle’s bidding, and that a properly instructed jury might have concluded that Aref believed that his uncle “must have licensed the business,” since he displayed other business licenses in his store.
C. Sentencing Issues
Although Aref struck out on his two seemingly valid trial issues, he eked out a small sentencing victory. The district judge imposed an obstruction of justice enhancement without making any specific findings, and the circuit remanded for that purpose.
The court also vacated the above-Guidelines fine that the district court imposed on Abad. Even under plain error review, the procedural irregularities were severe enough to warrant a remand.