United States v. Sidorenko

102 F.Supp.3d 1124

United States of America, Plaintiff,

v.Yuri Sidorenko, Alexander Vassiliev, and Mauricio Siciliano, Defendants.

No. 3:14–cr–00341–CRB

United States District Court, N.D. California.

Signed April 21, 2015

Wai Shun Wilson Leung, Damali A. Taylor, United States Attorney's Office, San Francisco, CA, for Plaintiff.

Martha A. Boersch, Boersch Shapiro LLP, San Francisco, CA, Daniel Benjamin Olmos, Nolan Barton Bradford & Olmos LLP, Palo Alto, CA, Varell Laphalle Fuller, Federal Public Defender, San Jose, CA, for Defendants.

ORDER GRANTING MOTIONS TO DISMISS

CHARLES R. BREYER, District Judge

In this case, the United States government urges the application of federal criminal statutes to prosecute foreign defendants for foreign acts involving a foreign governmental entity. The government has charged Defendants Yuri Sidorenko, Alexander Vassiliev, and Mauricio Siciliano with five counts: (1) Conspiracy to Commit Honest Services Wire Fraud, in violation of 18 U.S.C. § 1349; (2) Honest Services Wire Fraud, in violation of 18 U.S.C. §§ 2, 1343; (3) Conspiracy to Solicit and to Give Bribes Involving a Federal Program, in violation of 18 U.S.C. § 371; (4) Soliciting Bribes Involving a Federal Program, in violation of 18 U.S.C. §§ 2, 666(a)(1)(B); and (5) Giving Bribes involving a Federal Program, in violation of 18 U.S.C. §§ 2, 666(a)(2). Two of the three defendants¹move to dismiss the Indictment (“Ind.”), arguing: (1) that the Indictment fails to state an offense because the wire fraud and bribery charges do not apply extraterritorially; (2) that the charges violate due process because there is an insufficient domestic nexus to prosecute Defendants in the United States; (3) that the wire fraud and bribery charges are defective as alleged; and (4) that Defendant Siciliano enjoys immunity from prosecution by virtue of his employment with a United Nations specialized agency. See generallyMotions to Dismiss (“MTDs”) (dkts.32–33).

The Court hereby GRANTS the Motions to Dismiss based on Defendants' first two arguments, and does not reach the second two arguments.

I. BACKGROUND²

The International Civil Aviation Organization (“ICAO”) is a United Nations specialized agency headquartered in Montreal, Canada. Ind. ¶¶ 1, 8. One of ICAO's responsibilities is standardizing machine-readable passports. Id.¶ 2. The standards that ICAO established were used to determine which features would be utilized in passports in a variety of countries, including the United States. Id.From 2005–2010, the United States, a member of ICAO, made annual monetary contributions to ICAO exceeding $10,000 per year. Id.¶¶ 1, 3. Those contributions constituted 25% of ICAO's annual budget.³Id.

Siciliano was an employee of ICAO and was specifically assigned to work in the Machine Readable Travel Documents Programme. Id.¶ 8. Siciliano worked and resided in Canada, where ICAO is headquartered. Id.He held a Canadian passport but is a Venezuelan national. Id.Sidorenko and Vassiliev⁴were chairmen of a Ukranian conglomerate of companies that manufactured and supplied security and identity products, called the EDAPS Consortium (“EDAPS”). Id.¶¶ 4, 7–8.⁵Sidorenko is a citizen of Ukraine, Switzerland, and St. Kitts & Nevis, but he primarily resided in Dubai during the relevant time period. Id.¶ 6. Vassiliev also resided in Dubai, but he is a citizen of Ukraine and St. Kitts & Nevis. Id.¶ 7.

Sidorenko and Vassiliev provided money and other things of value to Siciliano in exchange for Siciliano using his position at ICAO, in Canada, to benefit EDAPS, in Ukraine, as well as Sidorenko and Vassiliev, in Dubai, personally. Id.¶ 10. Siciliano, working in Canada, sought to benefit the Ukrainian conglomerate EDAPS by introducing and publicizing EDAPS to government officials and entities, by arranging for EDAPS to appear at ICAO conferences, and by endorsing EDAPS to other organizations or business contacts. Id.¶¶ 11–12.

Siciliano assisted Vassiliev's girlfriend in obtaining a visa to travel to Canada in 2007. Id.¶ 15. Around the same time, Siciliano also considered arranging to obtain a visa for Sidorenko by hiring Sidorenko as a consultant for ICAO. Id.¶ 16. Additionally, the three defendants arranged to have Defendant Siciliano's son sent to Dubai to work for Sidorenko. Id.¶ 20. During this time period, Siciliano, who worked in Canada, wrote an e-mail message to Vassiliev, residing in Dubai, seeking payment of “dues” via wire transfer to a Swiss bank account. Id.¶ 17.

A few years later, Siciliano, still in Canada, sent an e-mail advising Vassiliev and Sidorenko, still in Dubai, that they owed him three months' payment. Id.¶ 18. A few weeks after this email, Siciliano sent another email to Vassiliev referencing future projects, receiving “the fruits of [their] marketing agreement[,]” and inquiring about picking up his dues. Id.¶ 19.

All of this conduct occurred outside of the United States between three defendants who are not United States citizens, who never worked in the United States, and whose use of wires did not reach or pass through the United States. See generally id.

II. LEGAL STANDARD

On a motion to dismiss pursuant to Federal Rule of Criminal Procedure 12(b), the allegations of the indictment must be viewed as a whole and taken as true. SeeBoyce Motor Lines, Inc. v. United States,342 U.S. 337, 343 n. 16, 72 S.Ct. 329, 96 L.Ed. 367 (1952); Buckley,689 F.2d at 897. The indictment “shall be a plain, concise[,] and definite written statement of the essential facts constituting the offense charged.” Fed.R.Crim.P. 7(c). The Ninth Circuit has held that “an indictment setting forth the elements of the offense is generally sufficient.” United States v. Fernandez,388 F.3d 1199, 1220 (9th Cir.2004); see alsoUnited States v. Woodruff,50 F.3d 673, 676 (9th Cir.1995)(“In the Ninth Circuit, ‘[t]he use of a “bare bones” information—that is one employing the statutory language alone—is quite common and entirely permissible so long as the statute sets forth fully, directly[,] and clearly all essential elements of the crime to be punished.’ ”) Additionally, when considering a motion to dismiss the indictment, the indictment “should be read in its entirety, construed according to common sense, and interpreted to include facts which are necessarily implied.” United States v. Berger,473 F.3d 1080, 1103 (9th Cir.2007)(citing United States v. King,200 F.3d 1207, 1217 (9th Cir.1999)). Finally, in reviewing a motion to dismiss, the Court “is bound by the four corners of the indictment.” United States v. Boren,278 F.3d 911, 914 (9th Cir.2002).

III. DISCUSSION

A. Extraterritorial Application of Criminal Statutes

Siciliano and Vassiliev both argue that the Indictment should be dismissed because the crimes charged do not apply extraterritorially. See generallyMTDs. The Court agrees.

1. Morrison

In Morrison v. Nat'l Australia Bank Ltd.,the Court considered the extraterritorial application of Section10(b) of the Securities Exchange Act. 561 U.S. 247, 254, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010). In reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court held without dissent that “[w]hen a statute gives no clear indication of an extraterritorial application, it has none.” Id.at 255, 130 S.Ct. 2869(emphasis added). Although Morrisonwas a civil case, the Court stated that it applies “the presumption [against extraterritorial application] in all cases.” Id.at 261, 130 S.Ct. 2869. Additionally, the Court held that inferences regarding what Congress might have intended are insufficient; for a court to apply a statute extraterritorially, Congress must give a “clear” and “affirmative indication” that the statute applies extraterritorially. Id.at 265, 130 S.Ct. 2869; see alsoKiobel v. Royal Dutch Petroleum Co.,–––U.S. ––––, 133 S.Ct. 1659, 1665, 185 L.Ed.2d 671 (2013)(holding that the Alien Tort Claims Act does not have extraterritorial effect because “nothing in the textof the statute suggests that Congress intended causes of action recognized under it to have extraterritorial reach”) (emphasis added).

After Morrison,lower courts began to reconsider the extraterritorial application of various federal statutes. See, e.g.,Loginovskaya v. Batratchenko,764 F.3d 266, 271–72 (2d Cir.2014)(holding that the Commodities Exchange Act cannot be applied extraterritorially). Post–Morrison,the Ninth Circuit held that “RICO does not apply extraterritorially in a civil or criminal context.” United States v. Chao Fan Xu,706 F.3d 965, 974 (9th Cir.2013). The Ninth Circuit also recognized that Morrisoncreated a “strong presumption that enactments of Congress do not apply extraterritorially.” Keller Found./Case Found. v. Tracy,696 F.3d 835, 844 (9th Cir.2012). However, the Ninth Circuit has yet to decide whether the bribery and wire fraud statutes at issue in this case have extraterritorial reach. SeeUnited States v. Kazzaz,592 Fed.Appx. 553, 554 (9th Cir.2014)(holding, as to a defendant charged with numerous counts, one of which was wire fraud, that the court need not reach the issue of extraterritorial application: “Because the stipulated facts show a sufficient domestic nexus with the United States for the mail-fraud and wire-fraud counts, we need not address whether these statutes have extraterritorial application.”).⁶

Relying on Morrison,Vassiliev and Siciliano argue that because the statutes, as enacted, do not contain “a clear indication of an extraterritorial application[,]” the Indictment fails to state an offense. See561 U.S. 247, 254, 130 S.Ct. 2869; Vassiliev MTD at 5–9.

Two provisions of the bribery statute are charged here. Ind. ¶¶ 34–37. The first bribery provision is violated when a defendant

corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving any

...