United States v. Doost

UNITED STATES OF AMERICA, Plaintiff, v. AZAM DOOST, Defendant.

Criminal No. 1:17-CR-00109-APM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

April 10, 2019

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

After an eight-day trial, a jury returned a verdict of guilty against Defendant Azam ("Adam") Doost on (1) three counts of major fraud against the United States in violation of 18 U.S.C. § 1031(a); (2) eight counts of wire fraud in violation of 18 U.S.C. § 1343; (3) four counts of making a false statement on a loan application or an extension in violation of 22 U.S.C. § 2197(n); and (4) five counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(i). The jury acquitted Defendant on three counts of money laundering. Following the jury's verdict, Defendant's trial counsel withdrew, and Defendant retained new counsel for the purpose of filing post-trial motions and sentencing. With the assistance of new counsel, Defendant now files a motion pursuant to Rules 29 and 33 of the Federal Rules of Criminal Procedure, seeking entry of a judgment of acquittal as to all counts or, in the alternative, a new trial.

For the reasons discussed below, the court denies Defendant's motion in large part. The only exception is Defendant's contention that trial counsel was ineffective for failing to move to dismiss the false statements and money laundering counts as time barred. The court defers ruling on that issue until after the parties develop a factual record concerning the performance prong of the ineffectiveness claim and Defendant has had an opportunity to respond to arguments raised for the first time in the government's sur-reply.

II. BACKGROUND

A high-level summary of the trial evidence is sufficient for present purposes. These facts are recited in the light most favorable to the government. See United States v. Kayode, 254 F.3d 204, 212 (D.C. Cir. 2001).

Defendant Adam Doost and his brother owned a company named Equity Capital Group, LLC ("ECG") located in Dubai, United Arab Emirates. In or around 2006, an ECG subsidiary, Equity Capital Mining, LLC ("ECM") secured a 10-year lease on a marble mine located in Cheshti-i-Sharif, Afghanistan. At about the same time, the Doost brothers began to construct a marble processing factory in Herat, Afghanistan. The factory opened in May 2011.

On or about February 19, 2010, to finance the mining operations, Defendant executed a loan agreement between ECM and the Overseas Private Investment Corporation ("OPIC"), an agency of the United States government. The agreement called for OPIC to loan $15.8 million to ECM to develop, maintain, and operate the marble mine. Defendant was personally responsible for a matching capital contribution. As part of the loan agreement, Defendant promised that, on a quarterly basis, he would disclose "all transactions between the borrower"—ECM—"on the one hand," and "a Shareholder" of ECM—Defendant or his brother—or "any Affiliate of a Shareholder, on the other hand . . ." There was testimony presented at trial that accurate disclosure of these so-called "affiliate transactions" was a material to OPIC.

After OPIC approved the loan, Defendant and a business consultant submitted three requests to OPIC to disburse loan funds: (1) $7 million on April 18, 2010; (2) $7 million on July15, 2010; and (3) $1.8 million on November 28, 2010. OPIC did not provide these funds directly to ECM. Rather, the loan agreement required ECM to submit purchase orders from vendors confirming the sale price of equipment, and OPIC in turn would pay the vendor directly for the invoiced amount.

The trial evidence showed that Defendant carried out a fraudulent scheme against OPIC in two related ways. First, Defendant failed to disclose any affiliate transactions to OPIC, when in truth there were many. Second, Defendant submitted invoices for equipment purchases that were demonstrably false or exhibited badges of fraud, such as sequential numbering or the absence of detail. The evidence showed that several of the purported vendors were owned or controlled by Defendant, his brother, and/or another relative. A reasonable jury could have concluded that these vendors were no more than shell companies. Financial records presented by the government established that these purported vendors did not conduct any actual business, and that within days of receiving a wire transfer from OPIC to pay for purported equipment, the money would be transferred to bank accounts in Dubai, after which the money could not be traced. In another instance, Defendant arranged to have an Italian equipment supplier submit false invoices to OPIC.

Ultimately, the OPIC loan went into default. ECM did not make any principal payments on the loan and left unpaid nearly $2 million more in interest.

III. LEGAL STANDARD

On a motion under Rule 29, the court must consider the evidence in the light most favorable to the government and determine whether such evidence "it is sufficient to permit a rational trier of fact to find all of the essential elements of the crime beyond a reasonable doubt.'" Kayode, 254 F.3d at 212 (quoting United States v. Harrington, 108 F.3d 1460, 1464 (D.C. Cir. 1997)). The court must "accord[ ] the government the benefit of all legitimate inferences." United States v.Weisz, 718 F.2d 413, 437 (D.C. Cir. 1983). Granting a motion for judgment of acquittal after a jury verdict is appropriate only where "a reasonable juror must necessarily have had a reasonable doubt as to the defendant['s] guilt." Id.

Under Rule 33, "the court may vacate any judgment and grant a new trial if the interest of justice so requires." Fed. R. Crim. P. 33(a). Courts enjoy "broad discretion" in deciding whether to grant a new trial. United States v. Wheeler, 753 F.3d 200, 208 (D.C. Cir. 2014). "A new trial motion is warranted only in those limited circumstances where 'a serious miscarriage of justice may have occurred.'" Id. (citation omitted).

IV. ANALYSIS

Defendant offers a battery of reasons why the court must vacate the guilty verdicts and enter judgments of acquittal or a new trial in his favor. The court takes these arguments in the order in which they appear in Defendant's motion.

A. The Alleged False Statement Underlying Count Fifteen is not Fundamentally Ambiguous.

Defendant begins by challenging the sufficiency of the evidence as to the false statements charge in Count Fifteen. The false statement at issue is Defendant's certification contained in an email to John Aldonas of OPIC, dated December 12, 2010, stating that "[t]here is no affiliate transaction have accurred [sic] during the quarter ending september 30th 2010." Def.'s Mot., Ex. 13, ECF No. 105-13.¹ In truth, multiple transactions took place between ECM and affiliatedcompanies during the quarter in question. Defendant nevertheless argues that, as to Count Fifteen, he is entitled to judgment of acquittal because the exchange with Aldonis was "'fundamentally ambiguous' such that a rational juror could not have found Doost guilty beyond a reasonable doubt." Def.'s Combined Rule 29 and 33 Mot., ECF No. 105 [hereinafter Def.'s Mot.], at 6. Defendant's argument is without merit.

Although the D.C. Circuit has recognized that "some questions . . . may be so vague as to prohibit the government from even attempting to prove that the defendant knowingly answeredfalsely," United States v. Chapin, 515 F.2d 1274, 1279 (D.C. Cir. 1975), such questions will be rare. "'[M]ere vagueness or ambiguity in the questions is not enough to establish a defense . . . [for] [a]lmost any question or answer can be interpreted in several ways when subjected to ingenious scrutiny after the fact.'" Id. (quoting United States v. Ceccerelli, 350 F. Supp. 475, 478 (W.D. Pa. 1972)). Instead, the alleged false answer must be "consider[ed] [ ] in context, taking into account the setting in which it appeared and the purpose for which it was used. This [is] a matter for the jury." United States v. Milton, 8 F.3d 39, 45 (D.C. Cir. 1993). It is up to the jury "to determine how the defendant construed the question or answer and to decide, in that light, whether the defendant knowingly gave a false answer." Id. at 46; see also Chapin, 515 F.2d at 1280 (observing that "the possibility that a question or an answer may have a number of interpretations does not invalidate either an indictment or a conviction after a jury charge which, as here, requires the jury to determine that the question as the defendant understood it was falsely answered in order to convict.").

Applying these principles, the court cannot override the jury's verdict on Count Fifteen. The jury could have reasonably found, and did find beyond a reasonable doubt, that Defendant knew he was making a false statement when he represented that there were "no affiliate transaction[s]" for the quarter ending September 30, 2010. To start, Defendant's exchange with Aldonis did not occur in a vacuum. It must be read in the context of the loan agreement with OPIC. That agreement required ECM to disclose, on a quarterly basis, "all transactions between [ECM], on the one hand, and a Shareholder or any Affiliate of a Shareholder, on the other hand." Def.'s Mot., Ex. 14, ECF No. 105-14 [hereinafter Loan Agreement], at 14. The loan agreement defined "Affiliate" to mean "with respect to any Person, (i) any other Person that is directly or indirectly controlled by, under common control with, or controlling such Person; . . . (iii) anyofficer or director of such Person; or (iv) any spouse or relative of such Person." Id. at 34. The loan agreement further defined "Person" to include an "individual, a legal entity, including a partnership, a joint venture, a corporation, a trust, and an unincorporated organization[.]" Id. at 40. Defendant and his brother were shareholders of ECM, therefore the loan agreement required ECM to disclose any transactions between ECM and an "Affiliate" controlled by him or his brother. When Defendant's answer is...