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United States v. Vaghari

July 27, 2009

UNITED STATES OF AMERICA
v.
MOHAMMAD REZA VAGHARI A/K/A "MITCH VAGHARI" MIR HOSSEIN GHAEMI



The opinion of the court was delivered by: DuBOIS, J.

MEMORANDUM

I. BACKGROUND

On November 13, 2008, the government filed a six-count Indictment against defendants Mohammad Reza Vaghari and Mir Hossein Ghaemi. Vaghari is named in all six counts of the Indictment; Ghaemi is named in Count One. The Indictment charges defendants with conspiracy to violate the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1705 et seq., in violation of 18 U.S.C. § 371 (Count One); three substantive counts of violating IEEPA, in violation of, inter alia, 50 U.S.C. §§ 1701 et seq., and aiding and abetting, in violation of 18 U.S.C. § 2 (Counts Two, Three and Four); naturalization fraud, in violation of 18 U.S.C. § 1425 (Count Five); and possession of immigration documents procured by fraud, in violation of 18 U.S.C. § 1546(a) (Count Six). In particular, the government alleges that "[d]efendants together conducted business under the name Saamen Company , LLC ('Saamen'), . . . through which the defendants conspired to export goods, technology, and services from the United States for ultimate delivery to Iran . . . ." (Indict. ¶ 3.)

Defendants now move to dismiss all six counts of the Indictment. Defendants further move to strike certain overt acts from the conspiracy charge, Count One of the Indictment. For the reasons that follow, defendants' Motion to Dismiss is denied. Defendants' Motion to Strike is granted in part and denied in part. The Motion to Strike is granted to the extent that Overt Acts 1--10 are stricken from the substantive counts charging violations of IEEPA, Counts Two, Three, and Four. In all other respects, defendants' Motion to Strike is denied.

II. DEFENDANT MOHAMMAD REZA VAGHARI'S OMNIBUS MOTION TO DISMISS COUNTS ONE THROUGH SIX OF THE INDICTMENT*fn1

Defendants' Motion to Dismiss presents two arguments in favor of dismissal of Counts One through Four (the IEEPA counts) and two arguments in favor of dismissal of Counts Five and Six (the immigration counts). This Memorandum will discuss each argument in turn.

A. The IEEPA Counts (Counts One through Four)

1. Unconstitutional Delegation

Defendants argue that "IEEPA delegates essentially unbridled discretion to the Executive Branch to promulgate regulations that amount to criminal laws. . . . Yet, the IEEPA provides no real 'intelligible principles' on which the Executive Branch can base its promulgation of criminal regulations . . . ." (Defs.' Mot. to Dismiss ("MTD") 14.) Courts that have considered this non-delegation challenge to IEEPA have repeatedly upheld the statute's constitutionality. See, e.g., United States v. Dhafir, 461 F.3d 211, 215--17 (2d Cir. 2006); United States v. Arch Trading Co., 987 F.2d 1087, 1092--94 (4th Cir. 1993); United States v. Amirnazmi, No. 08-CR-429-01, 2009 WL 32481, at *2--3 (E.D. Pa. Jan. 5, 2009); Clancy v. Office of Foreign Assets Control, No. 05- C-580, 2007 WL 1051767, at *20--21 (E.D. Wis. Mar. 31, 2007), aff'd, 559 F.3d 595 (7th Cir. 2009); United States v. Chalmers, 474 F. Supp. 2d 555, 566--68 (S.D.N.Y. 2007); United States v. Esfahani, No. 05-CR-0255, 2006 WL 163025, at *1--4 (N.D. Ill. Jan. 17, 2006); United States v. Anvari-Hamedani, 378 F. Supp. 2d 821, 827--30 (N.D. Ohio 2005); Global Relief Found., Inc. v. O'Neill, 207 F. Supp. 2d 779, 807 (N.D. Ill. 2002), aff'd, 315 F.3d 748 (7th Cir. 2002).

In Dhafir, for example, the Second Circuit first noted that "impermissible delegation has rarely been found" and that in the sphere of foreign affairs, "delegation is afforded even broader deference." 461 F.3d at 215. In light of these principles and Supreme Court precedent upholding Congressional delegation to the executive, the court held that "IEEPA 'meaningfully constrains the [President's] discretion' by requiring that '[t]he authorities granted to the President . . . may only be exercised to deal with an unusual and extraordinary threat with respect to to which a national emergency has been declared." Id. at 215--17 (quoting Touby v. United States, 500 U.S. 160, 166 (1991); 50 U.S.C. § 1701(b)). Moreover, "[t]he IEEPA delegation is . . . subject to the President's periodic re-affirmation of necessity and is conditioned on reporting to Congress." Id. at 217 (citing 50 U.S.C. § 1703.) Congress has the authority to "terminate the President's declaration of emergency" and has "endorsed the President's actions and enacted legislation codifying the sanctions." Id. (citing 50 U.S.C. § 1706). The Dhafir court concluded that with respect to IEEPA, "[t]here is . . . no question that the will of Congress has been obeyed." Id. (internal quotation marks & citations omitted).

The reasoning of Dhafir and the other cases cited above is persuasive, and the Court likewise concludes that IEEPA does not represent an unconstitutional delegation of power. Defendants' non-delegation challenge to IEEPA is rejected, and the Motion to Dismiss the IEEPA counts on this ground is denied.

2. Unconstitutional Vagueness

Defendants argue that the Office of Foreign Assets Control ("OFAC") regulations, which effectuate the President's Executive Orders pursuant to IEEPA, are unconstitutionally vague. (Defs.' MTD 17--20.) According to defendants, the OFAC regulations both fail to provide clear notice as to what conduct is prohibited and authorize arbitrary and discriminatory enforcement. (Id.)

Courts to have addressed this vagueness challenge to IEEPA, the related Executive Orders, and the OFAC regulations have uniformly rejected it. In United States v. Ehsan, 163 F.3d 855, 860 (4th Cir. 1998), the Fourth Circuit held that the defendant's vagueness challenge failed on the ground that "Executive Order 12959 and the Iranian Transaction [OFAC] Regulations are not ambiguous . . . ." Accord United States v. Quinn, 401 F. Supp. 2d 80, 100 (D.D.C. 2005); Anvari-Hamedani, 378 F. Supp. 2d at 830--31.

Moreover, "[a] scienter requirement may mitigate a law's vagueness, especially with respect to the adequacy of notice to the complainant that his conduct is proscribed." Vill. of Hoffman Estates v. Flip-side, Hoffman Estates, 455 U.S. 489, 499 (1982). IEEPA contains such a scienter requirement: "A person who willfully commits, willfully attempts to commit, or willfully conspires to commit, or aids or abets in the commission of, an unlawful act described in subsection (a) of this section shall, upon conviction, be fined not more than $1,000,000, or if a natural person, may be imprisoned for not more than 20 years, or both." 50 U.S.C. § 1705(c) (emphasis added). "[I]t is well settled that a requirement of willfulness makes a vagueness challenge especially difficult to sustain because a mind intent on willful evasion is inconsistent with surprised innocence." United States v. Lindh, 212 F. Supp. 2d 541, 574 (E.D. Va. 2002) (internal quotation marks & citations omitted) (rejecting a vagueness challenge to IEEPA as a conviction would require proof of specific intent). As § 1705(c) imposes a willfulness requirement, IEEPA and the related Executive Orders and OFAC regulations are not unconstitutionally vague. Defendants' Motion to Dismiss the IEEPA counts on the ground of vagueness is denied.

B. The Immigration Counts (Counts Five and Six)

1. Facial Sufficiency of the Indictment

According to Vaghari, Counts Five and Six of the Indictment do not sufficiently appraise him of what he must be prepared to meet at trial and must ...


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