United States v. Khan

575 F.Supp.3d 490

UNITED STATES of America,

v.Sohail KHAN, Defendant.

09-cr-1067 (JSR)

United States District Court, S.D. New York.

Signed December 15, 2021

Sarah Y. Lai, Assistant US Attorney, U.S. Attorney's Office, New York, NY, for United States of America.

OPINION AND ORDER

JED S. RAKOFF, U.S.D.J.:

Before the Court is the motion of defendant Sohail Khan seeking dismissal of the two-count indictment, which was filed under seal on November 3, 2009 and unsealed following Khan's arrest at Chicago's O'Hare International Airport on June 3, 2021. ECF 16 ("Mot."). Khan argues that the period of eleven years and seven months that elapsed between his indictment and arrest was so long that the Government's continued prosecution of this case would violate his right to a speedy trial under the Sixth Amendment to the United States Constitution. The delay arose because Khan, a citizen of Pakistan and a legal permanent resident of the United States, left the United States in September 2004 and did not return for approximately 17 years.

Upon consideration of the motion, the Government's opposition thereto, and the parties’ presentations at oral argument, the Court determined that there were two disputed factual issues that were material to determining if prosecution of this indictment would violate Khan's Sixth Amendment right to a speedy trial: (i) whether Khan left the United States for Pakistan in September 2004 to flee potential criminal prosecution for the alleged scheme to defraud, or for another innocent reason; and (ii) whether it would have been futile for the Government to have formally requested Khan's extradition from Pakistan. The Court accordingly held an evidentiary hearing on November 16, 2021, at which Khan and three Government witnesses testified regarding the two disputed factual issues.

After consideration of the evidence adduced at the hearing, the parties’ post-hearing submissions, and the original motion papers, the Court denies the motion to dismiss.

I. Background

A. The Alleged Fraudulent Scheme

Sohail Khan was the owner and manager of Telecorp, Inc. and Saisma Telecommunications, Inc. (Saisma), New York companies that were in the business of providing international call connection services. ECF 1 ("Indictment") ¶ 1. Since phone companies frequently do not have direct relationships with local providers in foreign countries, international calls are often routed through intermediary routers to connect calls placed to such countries. Indictment ¶ 2. Call connection providers aggregate traffic from several sources and direct calls toward local providers in destination countries, often through several intermediate companies. These services are coordinated through brokerage houses that provide anonymous marketplaces for call connection services to buy, sell, route, manage, and settle international voice traffic by connecting with local providers and with each other. Indictment ¶ 3. Arbinet and Frontline are two such brokerage houses, and Saisma was a member of each. Indictment ¶ 4.

From 2002 through 2004, Khan is alleged to have orchestrated a scheme to defraud major U.S. phone companies, including Verizon, AT&T, and XO Communications. Indictment ¶ 8. The scheme allegedly involved setting up numerous shell companies controlled by nominees and purporting to be call connection providers, through which Khan would route traffic to the U.S. phone companies without paying millions of dollars in call connection fees that were due. Khan allegedly used Saisma to aggregate traffic from Frontline and Arbinet, for which Saisma was paid millions of dollars. Indictment ¶ 9. Saisma would then route traffic to Telecorp and the shell companies, which would connect the calls to the U.S. phone companies. For each shell company, Khan would start by routing a small amount of traffic to the U.S. phone companies for a time to establish a relationship. Indictment ¶ 10. Khan would then shift a large volume of call traffic to that shell company for 2-3 months but would pay none or only a small portion of the millions of dollars in connection fees due to the U.S. phone companies, keeping the remainder of the fees paid by the brokerages. In addition, Khan would move millions of dollars through the bank accounts of the shell companies to make them appear to be legitimate businesses. Indictment ¶¶ 11-12.

B. The Investigation and Khan's Departure From the United States

The Government's investigation arose out of an investigation by Verizon corporate security, which detected suspected fraud by Khan's companies in the summer of 2003. ECF 19-1, Declaration of Allison Kirshner ¶ 4. In June 2004, Verizon investigators visited two locations listed as business addresses of Khan's companies, including in the Empire State Building, where there were a series of interconnected suites apparently occupied by several of Khan's companies. Id. Although defense counsel had previously acknowledged that Khan "was aware that Verizon investigators came to his place of business," ECF 22 at 6, Khan, when he took the stand, denied being "aware of any kind of investigation [Verizon was] doing." Tr. 94-95.

Then, on September 25, 2004, Khan flew from John F. Kennedy International Airport to Dubai International Airport. GX-20 at 2. He did not return to the United States until approximately 17 years later, on June 2, 2021, when he was arrested at O'Hare International Airport. See generally GX-20 (U.S. Dep't of Homeland Sec. border crossing history). Previously, Khan, a citizen of Pakistan but with legal permanent resident status in the United States, see Tr. 24, had last left the United States in 1992. GX-20 at 3. After arriving in Pakistan in September 2004, Khan repeatedly traveled internationally during his 17-year absence, but he never reentered the United States during that time. See ECF 17, Affirmation of Valerie Gotlib ¶¶ 13-17.

Khan testified that the reason he traveled to Pakistan in September 2004 was to care for his ailing mother. Tr. 86. He further testified that at the time he left the United States in 2004, he had no knowledge that he was under government investigation for suspected criminal conduct and that he had not been approached by law enforcement. Tr. 88-90. Gotlib Aff. ¶ 11. Khan maintains that he initially planned to stay in Pakistan for a limited time to care for his mother, who was suffering from mental illness, but that after his arrival, his mother implored him to stay, threatening to harm herself if he left Pakistan again. Tr. 86, 103. Although the Court permitted hearsay to be introduced at the hearing, see Fed. R. Evid. 1101(d)(3), Khan provided no corroboration of this testimony, either in the form of documentary evidence or declarations or testimony from others.

The Government presented no direct evidence that Khan fled criminal prosecution, but it adduced significant circumstantial evidence suggestive of such motive. FBI Special Agent Brian Gander was assigned to the Khan investigation at the time of Khan's departure, and Gander interviewed approximately 30 witnesses. Tr. 16. Gander testified that none of the 30 reported knowing anything about Khan leaving the United States for family reasons. Id. Rather, Gander testified that several of Khan's business partners told him that Khan's departure was abrupt and without warning.

Four of the witnesses about whom Gander and FBI Special Agent Allison Kirshner¹ testified were people who had allegedly opened shell companies involved in the charged fraud. ECF 28 at 3. Each reportedly learned of Khan's departure after he had already left; some spoke to Khan while he was in Pakistan and expected him to return within a matter of months. Id. at 3-4. One, Omar Mushtaq, reported that he traveled to Pakistan in December 2004 and had several meetings scheduled with Khan, but Khan did not appear at any. Tr. 12. Another, Nazir Hashmi, told Kirshner that he had spent $15,000 to $20,000 to set up an office for the company Khan asked him to open but had seen no sign of corporate activity after three months. Tr. 33-34. Hashmi reported that Khan never told him in advance about departing for Pakistan, and Hashmi only learned that Khan was abroad when he tried, unsuccessfully, to get reimbursed for his setup costs. Id. A third, Tariq Malik, told Gander in January 2005 that he had known Khan for nine years and understood from a mutual acquaintance that Khan had left to produce a movie in India named Nazar with a Bollywood director, and that he would return to the United States in February 2005.² Tr. 14-15.

Gander and Kirshner also testified about interviews with four witnesses who were Khan's consultants or employees at the time; none of them reported that Khan had told them in advance about his departure for Pakistan. ECF 28 at 4. One, Khandokar Kader, told Kirshner that he had received notifications from Verizon that Khan owed Verizon money. Tr. 33. After trying unsuccessfully to reach Khan by phone, he visited Khan's Empire State Building offices to find that everything had been shut down. Id. Another, Salahuddin Ahmad, was Khan's accountant. Ahmad reportedly learned of Khan's departure from his brother, a travel agent who had agreed to supply Khan with an airplane ticket to Pakistan without prepayment reportedly because Khan said there was an emergency in Pakistan he had to address. Tr. 30. Unlike in past transactions, Ahmad told Kirshner that Khan never repaid Ahmad's brother, though Khan insists he paid for the ticket. Id. at 30, 101.

Kirshner also testified about her interview of Noshin Hassan, an employee of Telecorp from 2003 until 2004, when Telecorp stopped operating, employees stopped showing up to work, and she had gone one to two months without a paycheck. Tr. 35. Hashmi told Kirshner that Khan had not informed her he would be leaving the United States, but she recalled hearing rumors at the time that his departure was related to something going on with Verizon and some fraudulent activity related to...