United States v. Islam

1

UNITED STATES OF AMERICA v. ABDUR RAHIM ISLAM, SHAHIED DAWAN

CRIMINAL ACTION Nos. 20-45-1, 20-45-2

United States District Court, E.D. Pennsylvania

July 31, 2023

MEMORANDUM

Gerald Austin McHugh, United States District Judge

Defendants Abdur Rahim Islam and Shahied Dawan move to dismiss Count One of the Indictment, which charges them with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(d). They contend that their acquittal on bribery charges in Phase I of this bifurcated case renders any consideration of that acquitted conduct as a predicate act for the RICO charge impermissible under principles of collateral estoppel. They further contend that the Government committed legal error in the Indictment by identifying the purported racketeering enterprise as the victim of some of the criminal acts charged. Because of ambiguity as to the basis for the jury's acquittal, and the broad contours of the RICO statue, I am constrained to reject Defendants' collateral estoppel argument. But Defendants are correct that certain alleged acts of embezzlement cannot serve as predicate offenses on the RICO charge. I will therefore grant the motion in part and deny it in part, deferring further ruling on the proper scope of other evidence until closer to trial.^[1]

I. Relevant Background

The history of this criminal prosecution is complex and extensive, including two bifurcated trials. I review only the facts necessary for resolution of this motion.

In January 2020, the Government indicted Mr. Islam and Mr Dawan, alongside coDefendants Councilman Kenyatta Johnson, a Philadelphia City Councilmember, and his wife Ms. Dawn Chavous, charging them with various financial crimes and political corruption. According to the Indictment, Defendants Islam and Dawan ran Universal Community Homes (UCH) and Universal Education Companies (UEC), entities dedicated to real estate development and to operations for charter schools respectively and collectively known as “Universal Companies.” Counts One through Eight and Eleven through Twenty-Two of the Indictment focus on crimes Islam and Dawan allegedly committed while running these organizations including RICO conspiracy, bribery, tax evasion, and embezzlement. Counts Nine and Ten concern all four Defendants and allege that Councilman Johnson exercised a traditional power known as councilmanic prerogative to benefit Islam and Dawan in two real estate ventures. Islam and Dawan allegedly bribed Johnson to do so through his wife, Chavous, by hiring her as a consultant for Universal Companies.

On January 29, 2021, I granted a motion for severance filed by Defendants Johnson and Chavous, holding that Counts Nine and Ten would be severed and tried separately from the remaining counts against only Islam and Dawan. ECF 76 and 77. Instead of holding separate trials, I granted the request of the Government, one joined by Islam and Dawan, not to have separate trials but rather to proceed with a bifurcated trial, focusing first on the alleged Johnson-Chavous bribery scheme while limiting evidence bearing on the remaining charges.

Trial commenced on September 28, 2022.^[2]In accordance with my ruling, Counts Nine and Ten were tried first. After hearing five weeks of evidence regarding the alleged bribery scheme and deliberating for four days, the jury acquitted all four Defendants of these charges.

The second phase of trial began the next day, during which the Government sought to prove the remaining charges against only Islam and Dawan. Included in those charges is Count One, which alleges that Islam and Dawan conspired to commit acts of racketeering in violation of the RICO statute. See 18 U.S.C. § 1962(d); ECF 1 at ¶¶ 1-25. The Indictment details the “manner and means” of that alleged conspiracy, listing predicate acts like the Johnson-Chavous bribery scheme, a second alleged bribery scheme involving an official on the Milwaukee Board of School Directors, and embezzlement of Universal Companies' funds. After just a few days, Phase II ended in a mistrial when the twelfth juror contracted COVID-19 and Defendants refused to proceed with an eleven-person jury under Federal Rule of Criminal Procedure 23(b)(2)(B).^[3]About one month later, Defendants filed this motion seeking to dismiss Count One of the Indictment. Trial is scheduled to commence on October 2, 2023.

II. Legal Standard

“A district court's review of the facts set forth in the indictment is limited to determining whether, assuming all of those facts as true, a jury could find that the defendant committed the offense for which he was charged.” United States v. Huet, 665 F.3d 588, 595-96 (3d Cir. 2012). In addition to setting forth the elements of the offense, an indictment must set forth “sufficient factual orientation to permit a defendant to prepare his defense and invoke double jeopardy.” United States v. John-Baptiste, 747 F.3d 186, 196 (3d Cir. 2014) (citations and internal quotations omitted).

III. Discussion

A. Defendants' motion is timely.

The Government argues that Defendants' motion to dismiss is untimely, noting under the Case Management Order that all motions to dismiss were due on September 14, 2020, before this case was initially tried. ECF 36. I disagree. After being acquitted on the bribery scheme contained in Counts Nine and Ten, Islam and Dawan's view of the case reasonably changed. It is therefore appropriate for the defense to revisit the remainder of the charges following the jury's acquittal. Moreover, Defendants filed their motion just over one month after trial ended. Consequently, I find their arguments timely and will proceed to address the merits of their motion.

B. The Government is not collaterally estopped from referencing the acquitted conduct as a predicate act of racketeering in the retrial.

The Double Jeopardy Clause of the Fifth Amendment incorporates the doctrine of collateral estoppel. See Ashe v. Swenson, 397 U.S. 436, 442-45 (1970); Dowling v. United States, 493 U.S. 342, 347 (3d Cir. 1990). These principles “bar the relitigation of an issue actually decided in a defendant's favor by a valid and final judgment.” United States v. Merlino, 310 F.3d 137, 141 (3d Cir. 2002) (citing Ashe, 391 U.S. at 443).

To establish estoppel in a criminal case, a defendant must: (1) identify the specific factual issue he seeks to preclude; (2) show that the jury in the first trial “necessarily decided” that issue; and (3) establish that the issue is an “ultimate issue” in the retrial and not a collateral matter. See, e.g., Dowling, 493 U.S. at 350-51; United States v. Rigas, 605 F.3d 194, 217-18 (3d Cir. 2010); United States v. Console, 13 F.3d 641, 664-65 (3d Cir. 1993); Yeager v. United States, 557 U.S. 110, 119 (2009). To determine whether an issue has been “necessarily decided,” courts examine the record of the prior proceeding and evaluate “whether a rational jury could have grounded its verdict upon an issue other than that which the defendant seeks to foreclose from consideration.” Yeager, 557 U.S. at 120 (quoting Ashe, 397 U.S. at 444) (emphasis added). Although it may seem “impossible to determine with any precision upon what basis the jury reached a verdict in a criminal case,” Rigas, 605 F.3d at 218, the standard is not applied with a “hypertechnical and archaic approach . . . but with realism and rationality.” Ashe, 397 U.S. at 444. Further, to determine whether an issue is the “ultimate issue” in the retrial, courts consider whether the issue is one that must be proved beyond a reasonable doubt in both proceedings. See Dowling, 493 U.S. at 348-49.

My analysis begins by considering the specific issue decided in the prior acquittal. Unsurprisingly, the parties characterize the acquittal in different terms. Defendants argue that, in acquitting all four Defendants, the jury necessarily decided that the Government failed to prove beyond a reasonable doubt that any one of them “devised a scheme to commit ‘bribery.'” See ECF 515. The Government argues, alternatively, that the jury only decided that the four Defendants together did not agree to participate in a bribery scheme involving a quid pro quo, leaving open the possibility that such a scheme was intended by Islam and Dawan.^[4] Neither view is persuasive. First, as to the Government, the jury instructions made clear that the crime of honest services wire fraud does not depend on an agreement between all involved parties - it depends instead on what each individual defendant intended when that person provided or accepted payment. Indeed, the model jury instructions detail the elements of honest services wire fraud as follows:

(1) the defendant knowingly devised a scheme to defraud the public of their right to honest services through bribery, or willfully participated in such a scheme with knowledge of its fraudulent nature;

(2) the defendant acted with intent to defraud; and

(3) in advancing, furthering, or carrying out the scheme, the defendant transmitted a writing, signal, or sound by means of a wire, radio, or television communication in interstate commerce or caused the transmission of any writing, signal, or sound of some kind by means of a wire, radio or television communication in interstate commerce.

See 18 U.S.C. § 1343, 1346 (emphasis added). In this case, the parties stipulated to a wire transmission between the parties, and there was no dispute that Islam and Dawan paid Chavous for a consulting contract. See ECF 415. Necessarily, the jury did not base its acquittal on the government's failure to establish the third element of the crime. And, upon review of the first two elements, I see no requirement that all four defendants must agree to a quid pro quo for there to be a conviction of any...