United States v. Hasston, Inc. , 185 F. Supp. 3d 55 ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA :
:
v. :
: Criminal Action No.: 13-0274 (RC)
SHANTIA HASSANSHAHI, :
also known as Shantia Hassan Shahi, : Re Document Nos.: 89, 104
also known as Shahi, :
also known as Shantia Haas, :
also known as Sean Haas, :
:
and :
:
HASSTON, INC., :
:
Defendants. :
MEMORANDUM OPINION
DENYING DEFENDANT’S SUPPLEMENTAL MOTION TO TRANSFER VENUE AND DENYING
DEFENDANT’S REQUEST TO DISMISS FOR IMPROPER VENUE
I. INTRODUCTION
Defendant Shantia Hassanshahi is charged with one count of conspiracy to violate the
International Economic Emergency Powers Act, 50 U.S.C. § 1705, and the Iranian Transactions
and Sanctions Regulations, 31 C.F.R. §§ 560.203–204, commonly referred to as the United
States’ trade embargo against Iran. Mr. Hassanshahi previously filed a motion to transfer venue,
for the convenience of himself and his witnesses, from this District to the Central District of
California in Los Angeles. See Def.’s Mot. to Transfer Venue, ECF No. 69. The Court denied
that motion on November 19, 2015. See Order, ECF No. 84; Mem. Op., ECF No. 85; United
States v. Hassanshahi, No. 13-0274, 2015 WL 7307079 (D.D.C. Nov. 19, 2015). In its
memorandum opinion, the Court also rejected Mr. Hassanshahi’s claim—raised for the first time
in his reply brief—that venue in this Court is improper because 18 U.S.C. § 3238 mandates that
trial take place in Los Angeles. See Hassanshahi, 2015 WL 7307079, at *5–7. Thereafter, the
Court permitted Mr. Hassanshahi to file a new motion addressing alleged factual discrepancies
between the Indictment and the Government’s surreply in opposition to Mr. Hassanshahi’s
motion to transfer venue. See Scheduling Order, ECF No. 87. That motion (ECF No. 89), and
an additional response to the Government’s opposition, which Mr. Hassanshahi styles as a
“further request to dismiss for improper venue” (ECF No. 104), are now before the Court. Once
again, Mr. Hassanshahi argues that venue is proper only in the Central District of California—
where he was arrested and resides. For the reasons that follow, the Court finds that venue is
proper in this District under 18 U.S.C. § 3237(a), and will deny Mr. Hassanshahi’s motion. 1
II. ANALYSIS
Mr. Hassanshahi’s arguments involve the relationship between two venue statutes. The
first, 18 U.S.C. § 3237(a), states that:
Except as otherwise expressly provided by enactment of Congress, any offense
against the United States begun in one district and completed in another, or
committed in more than one district, may be inquired of and prosecuted in any
district in which such offense was begun, continued, or completed.
18 U.S.C. § 3237(a). The other, 18 U.S.C. § 3238, entitled “Offenses not committed in any
district” provides that:
The trial of all offenses begun or committed upon the high seas, or elsewhere out
of the jurisdiction of any particular State or district, shall be in the district in
which the offender, or any one of two or more joint offenders, is arrested or is
first brought; but if such offender or offenders are not so arrested or brought into
any district, an indictment or information may be filed in the district of the last
known residence of the offender or of any one of two or more joint offenders, or
1
The Court does not reproduce the factual background in this case, and assumes
familiarity with its earlier memorandum opinion. See Hassanshahi, 2015 WL 7307079, at *1.
2
if no such residence is known the indictment or information may be filed in the
District of Columbia.
18 U.S.C. § 3238. The Indictment against Mr. Hassanshahi asserts two separate bases for venue
in this District pursuant to these provisions: it states that venue is proper under § 3237(a) because
“[t]he conduct alleged in this Indictment occurred within the District of Columbia and
elsewhere,” and also that venue is proper under § 3238, because “the conduct alleged in this
Indictment began outside the jurisdiction of any particular state or district of the United States,
but within the jurisdiction of the United States.” 2 Indictment ¶ 2.
Mr. Hassanshahi asserts two arguments for why venue is improper in this District and
why this case must therefore be dismissed. First, he claims that venue in this case can only be
governed by 18 U.S.C. § 3238 and that the Government’s argument to the contrary, in any event,
contradicts the Indictment’s factual allegation that Mr. Hassanshahi’s conduct “began outside the
jurisdiction of any particular state or district.” See Indictment ¶ 2; see also Def.’s Supp. Mem. &
Mot. for Venue Transfer at 4–6, ECF No. 89 [hereinafter “Def.’s Mot.”]; Def.’s Resp. to Gov’t’s
Feb. 16 Mem. & Further Request to Dismiss for Improper Venue at 4–9, ECF No. 104
[hereinafter “Def.’s 2d Mot.”]. Second, Mr. Hassanshahi contends that venue is improper even
under § 3237(a) because his failure to secure a license from the Office of Foreign Assets Control
(OFAC) does not suffice to show that the offense was “begun, continued, or completed” in the
District of Columbia and, thus, provides no basis for his prosecution in this District. See Def.’s
Mot. at 1–4; Def.’s 2d Mot. at 9–12.
2
For this reason, Mr. Hassanshahi is incorrect when he states that the Government
originally argued venue only under § 3238. See Def.’s Supp. Mem. & Mot. for Venue Transfer
at 1, ECF No. 89.
3
Taking the second contention first, the Court rejects it because venue is proper in this
District under § 3237(a). “Venue may be proper in more than one district,” United States v. Lam
Kwong-Wah, 924 F.2d 298, 301 (D.C. Cir. 1991), and, here, Mr. Hassanshahi is charged with
exporting goods and services to Iran “without having first obtained the required license from
[OFAC], located in the District of Columbia,” Indictment ¶ 1. Although Mr. Hassanshahi’s
failure to secure a license is admittedly only a part of the criminal offense with which he has
been charged, it is a critical one. “Except as otherwise authorized” by a license pursuant to
OFAC regulations (or by certain exceptions not relevant in this case), any exportation by a
United States person of “goods, technology, or services” to Iran “is prohibited.” 31 C.F.R.
§ 560.204. Therefore, “venue is proper here because of the alleged omissions that are part of the
crimes charged (namely the failure to secure licenses for exports to Iran from OFAC).” United
States v. Quinn, 401 F. Supp. 2d 80, 87 (D.D.C. 2005); see also United States v. Montgomery,
441 F. Supp. 2d 58, 60–61 (D.D.C. 2006) (concluding, in an analogous case, that venue was
proper in the District of Columbia over the defendant’s charge of exporting arms and other goods
to Macedonia in violation of a Department of Commerce Office of Export Administration denial
order because the defendant’s “failure to ask for authorization to export . . . occurred in the
District of Columbia”).
Mr. Hassanshahi claims that Quinn and Montgomery cannot support the Government’s
venue argument because Montgomery relied only on Quinn for support, and the issue was not
contested in Quinn. Mr. Hassanshahi is correct insofar as Quinn noted that the defendants there
had conceded venue in this District. See Quinn, 401 F. Supp. 2d at 87 (noting that defendants
“do not dispute that venue is proper here”). But even if the issue was conceded in Quinn, the
Court’s discussion is undoubtedly correct as a matter of law, as Montgomery makes clear.
4
Contrary to Mr. Hassanshahi’s suggestion, Montgomery cited far more than just Quinn in support
of the principle that an omission can support a prosecution “in the district in which the actions
were to have occurred,” or that “venue in cases involving a failure to make [a] required filing is
typically in the district in which that failure occurred.” See 441 F. Supp. 2d at 61 (citing, e.g.,
Johnston v. United States, 351 U.S. 215, 221 (1956) (noting that, “where the crime charged is a
failure to do a legally required act, the place fixed for its performance fixes the situs of the
crime”); United States v. DiJames, 731 F.2d 758, 762 (11th Cir. 1984) (concluding that venue
was proper in the District of Columbia for a charge of failure to file the Labor Department
trusteeship report required when an international union took over a local union)); accord United
States v. Bugai, No. 97-1280, 1998 WL 553168, at *2 (6th Cir. Aug. 21, 1998) (noting that “the
omission of a legally required act occurs where the act was required to be performed”). Nor does
the Court find convincing Mr. Hassanshahi’s contention that, because a defendant can apply for
an OFAC license on the Internet, his failure to apply can take place anywhere in the world. See
Def.’s Mot. at 3–4 & Attach.; Def.’s 2d Mot. at 11. To secure a license from OFAC, any
application must be sent to, received by, and then approved by the Department of the Treasury.
Therefore the place of performance of the request—regardless of from where that request is
sent—remains the District of Columbia. Accordingly, venue in this case is proper under
§ 3237(a).
In the alternative, Mr. Hassanshahi contends that § 3237(a)’s venue provision is merely
permissive, and claims that even if venue could be supported under that section, it is trumped by
§ 3238, which he reads as mandatory. Mr. Hassanshahi highlights § 3237(a)’s language
instructing that the section applies “[e]xcept as otherwise expressly provided by enactment of
Congress,” 18 U.S.C. § 3237(a), and contrasts that language with § 3238’s admonition that “trial
5
of all offenses begun or committed upon the high seas, or elsewhere out of the jurisdiction of any
particular State or district, shall be in the district” where the defendant is first arrested or last
resided, 18 U.S.C. § 3238 (emphasis added). Because the bulk of this case allegedly took place
overseas, and because Mr. Hassanshahi was arrested in and resides in Los Angeles, California,
he claims that venue is only proper in the Central District of California. See Def.’s Mot. at 4–6;
Def.’s 2d Mot. at 4–9.
The Court acknowledges that there exist only a limited number of cases considering the
relationship between § 3237(a) and § 3238. Nevertheless, every court that the Court is aware of
to have considered the issue has concluded that § 3238 is not a mandatory exception to
§ 3237(a). Both sections have been described as “generic venue-laying statutes” that “serve in
some measure to provide a default basis for setting venue.” United States v. Miller, 808 F.3d
607, 614 (2d Cir. 2015). The Fifth Circuit, for example, has held that “[t]here is [a] significant
difference between the phrases ‘shall be tried’ and ‘may be prosecuted only,’” and, therefore,
that § 3238 “is not to be construed as an express exception to the broad provision for venue
under § 3237(a).” United States v. Zabaneh, 837 F.2d 1249, 1256 (5th Cir. 1988) (citing United
States v. Williams, 589 F.2d 210, 213 (5th Cir. 1979)). And courts have likewise concluded that
the two venue statutes are “not mutually exclusive.” Williams, 589 F.2d at 213. It may be that
technology and international communication have increased the possibility that both provisions
might apply to a single charged crime. But, beyond his emphasis on the term “shall,” Mr.
Hassanshahi has identified no case in which a court has held that § 3238 constitutes an express
exception to § 3237(a).
To be sure, most cases involve the converse of Mr. Hassanshahi’s argument—that is, a
defendant argues that venue is improper under § 3238 because part of the crime took place in the
6
United States such that venue would also be proper elsewhere under § 3237(a). In those cases,
courts rejected the arguments. See, e.g., United States v. Levy Auto Parts of Can., 787 F.2d 946,
951 (4th Cir. 1986) (endorsing Fifth Circuit precedent holding that “there is an overlap between
the two sections, and that venue under § 3238 is appropriate notwithstanding the fact that venue
in another district also could have been appropriate under § 3237(a)”); United States v. Williams,
589 F.2d 210, 213 (5th Cir. 1979), adopted in pertinent part, 617 F.2d 1063, 1071 (5th Cir.
1980) (en banc) (“The venue statutes are not mutually exclusive, and a suggestion that venue is
proper under § 3237(a) will not serve to divest venue from another judicial district if venue is
proper in that district under § 3238.”). Nevertheless, the mere fact that those courts entertained
the argument at all indicated that they did not view § 3238 as a mandatory, express exception to
§ 3237(a). Had they thought so, each court’s inquiry would have been at an end once they
determined that § 3238 properly applied.
If anything, a recent Second Circuit decision issued after this Court’s November 19, 2015
memorandum opinion only strengthens the Court’s preliminary conclusion that it “would not
find [Mr. Hassanshahi’s] argument persuasive.” See Hassanshahi, 2015 WL 7307079, at *6. In
United States v. Miller, the Second Circuit considered whether a defendant could be tried under
§ 3238 in the District of Vermont for aiding and abetting the removal of a child from the United
States. See 808 F.3d 607, 611 (2d Cir. 2015). The child’s mother had traveled from Virginia,
through Maryland and Pennsylvania, and across the Canadian border by way of Buffalo, New
York. Id. The defendant, Kenneth Miller, had organized the mother’s departure and arranged
for her travel. Id. At the time he was charged, however, Mr. Miller was in Ireland. Id. He was
arrested only upon his return to the United States the next month, in Vermont. Id. He was
7
indicted a few days later, and the government secured that indictment, and tried Mr. Miller, in
Vermont. Id. at 611–13.
Although Mr. Miller moved to dismiss the indictment for improper venue, the
government argued that venue was proper in Vermont for several reasons, including under
§ 3238 because “the crux of the underlying offense,” the child’s removal into Canada, “occurred
outside of the jurisdiction of any particular State or district.” Id. at 612. The Second Circuit
ultimately found this argument persuasive and concluded that the statute could apply to crimes
that begin inside the United States but are, in their essence, committed abroad. See id. at 619. In
doing so, however, the court noted that it did not believe “venue becomes improper under § 3238
simply because it might also have been properly laid elsewhere pursuant to § 3237(a),” and did
not “foreclose the possibility that venue might also have been proper in” Virginia, Maryland,
Pennsylvania, or New York “under § 3237(a).” Id. at 620 & n.9. The Miller court also clarified
a statement in one of its prior cases, United States v. Gilboe, which stated that § 3238 applies
only to offenses “not committed in any district,” by explaining that in Gilboe the circuit had
concluded that venue was nevertheless proper in the Southern District of New York under
§ 3237(a). Id. at 621 (citing United States v. Gilboe, 684 F.2d 235, 238–39 (2d Cir. 1982)). As
the Miller court noted, “[w]ith that conclusion, our passing comments regarding § 3238, whose
applicability the defendant had urged as an exclusive alternative to § 3237, were rendered dicta.”
Id. (emphasis added). Yet again, that the Second Circuit believed it did not need to consider
§ 3238, having found venue proper under § 3237(a), reiterates its conclusion that the venue
statutes are not mutually exclusive and that § 3238 is not an express exception to § 3237(a).
This conclusion also absolves any concern regarding the discrepancy Mr. Hassanshahi
raises between the Indictment’s allegation that the conspiracy “began outside the jurisdiction of
8
any particular state or district,” Indictment ¶ 2, and the Government’s more recent contention
that that it now plans to prove that the conspiracy began while Mr. Hassanshahi was in the
United States, see, e.g., Gov’t’s Opp’n at 4, ECF No. 93. Even accepting the Indictment’s
factual allegation as true, because § 3238 is not an express exception to § 3237(a), venue in this
District does not become improper simply because venue might also be proper elsewhere under
§ 3238. The Indictment stated two alternative grounds for venue; the first was § 3237(a), and
venue under that provision is proper.3 Accordingly, Mr. Hassanshahi’s motions are denied. 4
III. CONCLUSION
For the foregoing reasons, Defendant’s motions to dismiss for improper venue (ECF Nos.
89, 104) are DENIED. An order consistent with this Memorandum Opinion is separately and
contemporaneously issued.
Dated: May 13, 2016 RUDOLPH CONTRERAS
United States District Judge
3
As the Court stated before, the Government’s discrepancy is readily apparent, and “the
Court questions whether, for clarity, the Government should consider correcting this apparent
misstatement by striking” the Indictment’s sentence discussing § 3238. Hassanshahi, 2015 WL
7307079, at *6 n.2. Because the Government’s first venue allegation is sufficient, the
Indictment’s second, seemingly boilerplate allegation concerning § 3238 is unnecessary.
Moreover, the § 3238 statement is erroneous in any event because Mr. Hassanshahi was both
arrested and resides in California. Thus, given the facts of this case, venue under § 3238 would
be proper in California. Venue is only available in the District of Columbia under § 3238 if “no
such [prior United States] residence [of the defendant] is known.” 18 U.S.C. § 3238.
4
In his most recent filing, Mr. Hassanshahi argues that the need to transfer is particularly
“acute” in light of several recent developments regarding his inability to pay counsel and other
circumstances. See Def.’s 2d Mot. at 3–4. Whatever relevance these arguments have for
resolution of counsel’s pending motions to withdraw, they are not informative in resolving the
specific statutory arguments made here.
9