UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

D-1 ELSAYED KAZEM SAFIEDINE a/k/a

“Tom”,

D-2 MARY FAWAZ,

Defendants.

 /

Case No. 08-20148-2

Honorable Patrick J. Duggan

OPINION AND ORDER

 At a session of said Court, held in the U.S.

District Courthouse, Eastern District 

of Michigan, on_June 7, 2012.

PRESENT: THE HONORABLE PATRICK J. DUGGAN

U.S. DISTRICT COURT JUDGE

After a jury trial held during September 2011, Defendants Elsayed Kazem Safiedine

and Mary Fawaz were each convicted of one count of conspiracy to defraud the United

States, in violation of 18 U.S.C. § 371. Defendants have each moved for a judgment of

acquittal, or in the alternative, for a new trial, and these motions are presently before the

Court. These matters have been fully briefed, and the Court heard oral argument on May

14, 2012. For reasons set forth below, the Court denies Defendants’ motions.

I. Background
2

The indictment in this case alleged that Defendants conspired to obstruct and impede

the assessment and collection of income taxes by the Internal Revenue Service (“IRS”). 

This case involves a number of business entities: JSC Corporation (“JSC”), MTK Family

Investments, and a Michigan partnership named MTK & KLC. These entities owned and

operated gas stations in the metro Detroit area.

At trial, the government introduced testimony indicating that Defendants’ actions in

connection with the sale of a gas station led to the understatement of income in tax returns

filed with the IRS. Witnesses also testified that income was understated as a result of

Defendants’ concealment of certain checks issued to JSC by Sunoco, Inc. (“Sunoco”).

After the government concluded its case-in-chief, Defendants each reserved the right

to move for a judgment of acquittal. The Court indicated that Defendants’ motions would

be considered timely filed at the close of the government’s case. Defendants did not call

any witnesses, and rested their case. The jury subsequently found Defendants Safiedine

and Fawaz guilty of conspiracy to defraud the United States. The Court indicated that it

would take Defendants’ motions for a judgment of acquittal under advisement, and

permitted Defendants to remain free on bond.

II. Governing Law

The statute under which Defendants were charged prohibits a conspiracy “to defraud

the United States, or any agency thereof in any manner or for any purpose.” 18 U.S.C. §

371. “To prove conspiracy, the government must establish: (1) the existence of an

agreement to violate the law; (2) knowledge and intent to join the conspiracy; and (3) an

overt act constituting actual participation in the conspiracy.” United States v. Blackwell,
3

459 F.3d 739, 760 (6th Cir. 2006).

“The essence of a conspiracy is the agreement to commit the offense and not the

commission of the substantive offense.” United States v. Hughes, 505 F.3d 578, 588 (6th

Cir. 2007). “Proof of a formal agreement is unnecessary.” United States v. Pearce, 912

F.2d 159, 161 (6th Cir. 1990). “‘A tacit or material understanding among the parties to a

conspiracy is sufficient to establish the agreement, and conspiracy may be inferred from

circumstantial evidence which may reasonably be interpreted as participation in a common

plan.’” Blackwell, 459 F.3d at 760 (quoting United States v. Walls, 293 F.3d 959, 967 (6th

Cir. 2002)). Mere association with conspirators, however, will not suffice. Hughes, 505

F.3d at 588.

With respect to the second element, the government must prove that each defendant

was aware of the essential object of the conspiracy. United States v. Christian, 786 F.2d

203, 211 (6th Cir. 1986). The defendant “‘need not be an active participant in every phase

of the conspiracy, so long as he is a party to the general conspiratorial agreement.’” Id.

(quoting United States v. Cuni, 689 F.2d 1353, 1356 (11th Cir. 1982)). “‘The connection

of the defendant to the conspiracy need only be slight, if there is sufficient evidence to

establish that connection beyond a reasonable doubt.’” Id. (quoting United States v.

Batimana, 623 F.2d 1366, 1368 (9th Cir. 1980)). “A defendant’s guilty knowledge and

voluntary participation may be inferred from surrounding circumstances.” Id.

“It is a basic tenet of conspiracy law that an overt act in furtherance of a conspiracy

need not be illegal itself.” United States v. Jerkins, 871 F.2d 598, 602-03 (6th Cir. 1989). 

The overt act, however, “must accompany or follow the agreement and must be done in
4

furtherance of the object of the agreement.” Sandroff v. United States, 174 F.2d 1014,

1018 (6th Cir. 1949). This element may be satisfied by the action of only a single

conspirator. Braverman v. United States, 317 U.S. 49, 53, 63 S. Ct. 99, 101 (1942).

III. Motions for Judgment of Acquittal

A. Standard of Review

If the defendant moves for a judgment of acquittal after the government concludes its

case, the Court “must enter a judgment of acquittal of any offense for which the evidence

is insufficient to sustain a conviction.” Fed. R. Crim. P. 29(a). “The relevant inquiry is

whether, ‘viewing the evidence in the light most favorable to the prosecution, any rational

trier of fact could have found the essential elements of the crime beyond a reasonable

doubt.’” United States v. Fisher, 648 F.3d 442, 450 (6th Cir. 2011) (quoting Jackson v.

Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789 (1979)) (emphasis in original). “Under

the Jackson v. Virginia standard, a reviewing court does ‘not reweigh the evidence,

re-evaluate the credibility of witnesses, or substitute [its] judgment for that of the jury.’” 

Id. (quoting Brown v. Konteh, 567 F.3d 191, 205 (6th Cir. 2009)). “‘Substantial and

competent circumstantial evidence by itself may support a verdict and need not remove

every reasonable hypothesis except that of guilt.’” Id. (quoting United States v. Lee, 359

F.3d 412, 418 (6th Cir. 2004)).

B. Agreement to Defraud the United States

To establish the alleged agreement, the government introduced testimony concerning

the sale of a gas station in late 1999. The purchaser, Ali Awada, testified that the sale

price was $875,000. Trial Tr. vol. 1, 51, Sep. 7, 2011. Awada testified that in April 2000,
5

Safiedine and Fawaz met with him and asked him to sign a document stating that the sale

price was $700,000. Trial Tr. vol. 1, 49-51. Safiedine allegedly stated that he wanted to

show his “partner” that the gas station was sold for $700,000. Trial Tr. vol. 1, 51. Awada

signed this document, but denied that the price was ever reduced. Trial Tr. vol. 1, 51. Tax

returns for MTK & KLC indicated that the sale price was $700,000. Trial Tr. vol. 3, 115-

16, Sep. 12, 2011. Awada testified that Safiedine and Fawaz later instructed him that if he

was contacted by the government, to explain that part of the purchase price was used to

pay for new fuel pumps. Trial Tr. vol. 1, 52-53. Awada apparently refused to comply,

stating, “that’s not [what] happened.” Trial Tr. vol. 1, 53. Awada indicated that during

another meeting with Defendants, Fawaz asked Awada to state that the price paid for the

gas station was $700,000. Trial Tr. vol. 1, 53. Awada testified that Fawaz looked up at

the ceiling while speaking in a loud voice, indicating that the conversation was being

overheard by another person. This testimony, when viewed in a light favorable to the

prosecution, suggests that Defendants shared a common plan to understate the sale price of

the gas station in returns filed with the IRS. The government’s theory was that this would

result in the understatement of income. Awada’s testimony, if believed, establishes that

Safiedine and Fawaz attempted to secure his cooperation in reporting a transaction so as to

conceal income. This evidence is sufficient to infer an agreement to conceal income from

taxing authorities.

The government also introduced testimony concerning a number of checks issued to

JSC by Sunoco. These checks were “up-front consideration” paid as an incentive to enter

into certain long-term supply agreements. Trial Tr. vol. 1, 154. Instead of being deposited
6

into JSC’s bank account, several of these checks were negotiated to third parties. Mansour

Kassabri, whose business performed construction services for JSC, testified that he

received several of these checks. Trial Tr. vol. 2, 46-56, Sep. 8, 2011. According to

Kassabri, Safiedine and Fawaz instructed him to deposit these checks into his business’s

bank account and then to write certain checks to third parties, including contractors that

had performed services for JSC. Trial Tr. vol. 2, 56-58. On one occasion, Fawaz

instructed Kassabri to deposit a Sunoco check and then write a check to Safiedine’s

brother, to whom Safiedine owed money. Trial Tr. vol. 2, 56. Allan Cohen, the

accountant who prepared JSC’s tax returns, testified that he would obtain the business’s

revenue figures based on reconciliations of JSC’s bank statements and meetings with

Defendants. Trial Tr. vol. 3, 85-88. Cohen further testified that he was unaware of any of

the checks that were negotiated to third parties when he prepared JSC’s tax returns. Trial

Tr. vol. 3, 96-102. 

The testimony presented suggests that both Safiedine and Fawaz were aware that

Sunoco checks were being negotiated to third parties and that these transactions would

result in the checks being excluded from JSC’s tax returns. It does not appear that either

Safiedine or Fawaz informed Cohen about all of the Sunoco checks. Moreover, on one

occasion, two checks of $125,000 each were negotiated to Kassabri, ostensibly for

payment of $75,000 owed to Kassabri by JSC. If the true purpose of this arrangement

were convenience, one of these checks would have sufficed. The fact that two checks

were used and that Kassabri was directed to use the remaining funds to pay Safiedine’s

brother and a contractor for JSC indicates that another purpose accounted for the structure
7

of the transaction. Viewing this evidence in a light favorable to the prosecution, it was

possible for the jury to rationally conclude that the true purpose of negotiating the checks

to Kassabri’s business was to avoid reporting the receipt of funds on JSC’s tax returns. 

Because both Safiedine and Fawaz are alleged to have participated in this activity, Trial

Tr. vol. 2, 56; Trial Tr. vol. 3, 161, the testimony suggests a common plan to conceal the

receipt of funds. The government’s theory of the case was that the negotiation of the

Sunoco checks directly to third parties allowed JSC to avoid reporting revenue, leading to

an understatement of its income. Again, the evidence is sufficient to establish at least a

tacit agreement between Safiedine and Fawaz to obstruct the collection of income taxes by

the IRS. The Court concludes that the evidence was sufficient for a rational trier of fact to

find an agreement to defraud the United States.

C. Knowledge and Intent to Join the Conspiracy

The evidence presented to the jury was also sufficient to infer that both Safiedine and

Fawaz were aware of the conspiracy’s objective and voluntarily participated in it. With

respect to the sale of the gas station to Awada, it is difficult to imagine a legitimate reason

for reporting a fictitious sale price to the IRS. The jury could certainly infer that this was

intended to avoid income tax obligations, and that both Safiedine and Fawaz were aware

of this result. The testimony at trial indicated that both Safiedine and Fawaz participated

in efforts to conceal the true sale price. This is sufficient to find voluntary participation. 

As for the negotiation of checks to third parties, the jury could have concluded that given

Safiedine and Fawaz’s respective roles at JSC and their interactions with Cohen, they were

aware of the process Cohen used to obtain information for JSC’s tax returns. The jury
8

could have concluded that the decision to use third-party checks to pay expenses was

calculated to ensure that JSC’s receipt of these funds was hidden from the IRS. Because

these actions directly supported the alleged conspiracy’s objectives, a rational trier of fact

could have found that the government satisfied its burden with respect to the knowledge

and intent element.

D. Overt Act in Furtherance of the Conspiracy

As noted above, the testimony presented at trial indicated that both Safiedine and

Fawaz took actions directly furthering the alleged conspiracy. For example, Awada stated

that both Safiedine and Fawaz asked him to sign a document falsifying the sale price of the

gas station, and to tell investigators if he was contacted that part of the sale price was used

to pay for new fuel pumps. Trial Tr. vol. 1, 49-51, 52-53. In light of the fact that the

$700,000 sale price was reported to the IRS, this testimony is sufficient to establish an

overt act taken in furtherance of a scheme to conceal income. Kassabri testified that both

Safiedine and Fawaz instructed him to deposit Sunoco checks into his business’s bank

account and then to write checks to third parties. Trial Tr. vol. 2, 56-58. The negotiation

of these checks to Kassabri, when coupled with Defendants’ failure to otherwise disclose

the checks to Cohen, ensured that JSC’s receipt of funds from Sunoco was excluded from

tax returns. Thus, the negotiation of these checks would also satisfy the overt act element

of conspiracy.

E. Conclusion

The Court concludes that the evidence presented at trial, when viewed in a light most

favorable to the prosecution, was sufficient for a rational trier of fact to find the essential
9

elements of conspiracy beyond a reasonable doubt. The Court accordingly denies

Defendants’ motions for a judgment of acquittal.

IV. Motions for New Trial

A. Standard of Review

A motion for a new trial is governed by Federal Rule of Criminal Procedure 33. The

Rule provides that the Court may “vacate any judgment and grant a new trial if the interest

of justice so requires.” Fed. R. Crim. P. 33(a). “The paradigmatic use of a Rule 33 motion

is to seek a new trial on the ground that ‘the jury’s verdict was against the manifest weight

of the evidence.’” United States v. Munoz, 605 F.3d 359, 373 (6th Cir. 2010) (quoting

United States v. Crumb, 187 F. App’x 532, 536 (6th Cir. 2006)). “Generally, such motions

are granted only ‘in the extraordinary circumstance where the evidence preponderates

heavily against the verdict.’” United States v. Graham, 125 F. App’x 624, 628 (6th Cir.

2005) (quoting United States v. Turner, 490 F. Supp. 583, 593 (E.D. Mich. 1979)). The

district judge may act as a thirteenth juror, assessing the credibility of witnesses and the

weight of the evidence. United States v. Lutz, 154 F.3d 581, 589 (6th Cir. 1998). “The

defendant bears the burden of proving the need for a new trial and such motions should be

granted sparingly and with caution.” United States v. Turner, 995 F.2d 1357, 1364 (6th

Cir. 1993).

B. Analysis

In support of his motion for a new trial, Safiedine first points to Cohen’s allegedly

inconsistent accounting treatment of the various checks received from Sunoco. He notes

that some Sunoco checks were deposited into JSC’s bank account and treated entirely as
1

 Cohen explained that in the instances where income was recorded entirely in the year in

which the check was received, Defendants had explained to him that the check was not

related to a multi-year contract. Trial Tr. vol. 3, 95.

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income in the year received. Trial. Tr. vol. 3, 94-95. Defendants elicited testimony at trial

indicating that the proper accounting treatment of such funds is to amortize them over five

years, so as to recognize that a portion of the funds is earned each year throughout the

five-year supply agreement.1

 Trial Tr. vol. 3, 122-24, 138-39. On cross-examination,

Cohen testified that this could have resulted in the overpayment of tax in certain years. 

Trial Tr. vol. 3, 138-39. Assuming this is true, it still does not account for the checks that

were never reported to the IRS. By the terms of Cohen’s engagement letter, JSC was

required to disclose to Cohen all expenses and revenues. Trial Tr. vol. 3, 77. According

to Cohen’s testimony, he was never made aware of five checks from Sunoco to JSC

totaling $565,000, as these checks were not deposited into JSC’s bank accounts or

otherwise reported to Cohen. See Trial Tr. vol. 3, 97-102. Cohen testified that as a result,

these funds were never included in tax returns filed with the IRS. Trial Tr. vol. 3, 97-102. 

The jury could have concluded that the repeated failure to disclose the receipt of funds

from Sunoco established a plan on the part of Defendants to conceal income from the IRS. 

Cohen’s accounting for the up-front consideration checks that he was aware of may have

been flawed, but it does not excuse Defendants’ alleged failure to disclose several other

up-front consideration checks. The Court is not persuaded that Cohen’s accounting

practices establish sufficient grounds for granting a new trial.

Safiedine contends that the renegotiation of third-party checks does not amount to
11

illegal activity. That may be generally true, but the transactions in this case were allegedly

undertaken in furtherance of a conspiracy to conceal income from the IRS. Such actions

could satisfy the overt act element of conspiracy, even though there is no indication that

they would be illegal when standing alone. See Jerkins, 871 F.2d at 602-03 (holding that

“an overt act in furtherance of a conspiracy need not be illegal itself”).

Safiedine argues that the facts surrounding the sale of the gas station to Awada fail to

support a finding of conspiracy. At trial, the defense advanced a theory that Awada had

negotiated an actual sale price of $700,000, despite the stated price of $875,000. The

defense suggested that because Awada could finance the majority (but not all) of the stated

price, he would have been able to obtain 100% financing of the actual price. There was no

evidence presented, however, indicating that this actually occurred. The most that was

established is that Awada could have obtained 100% financing if the price had actually

been $700,000. Trial Tr. vol. 1, 76-77. Awada repeatedly denied that the purchase price

was $700,000.

Of course, Awada’s trial testimony was not uncontroverted, and Defendants raised a

number of challenges to his credibility. On cross-examination, Defendants’ counsel

questioned Awada about his tax returns, suggesting that he may not have been entirely

truthful in his tax filings. Trial Tr. vol. 1, 55-58. Defendants highlighted inconsistencies

in Awada’s explanation for how he obtained the funds used to purchase the gas station. 

Trial Tr. vol. 1, 59-62, 85-86. Defendants suggested that Awada was biased because

Safidine and Fawaz had at one point discovered that Awada’s brother had overstated bottle

returns. Trial Tr. vol. 1, 90-91. Defendants also elicited testimony from Kassabri
12

indicating that he had seen thousands of dollars’ worth of illegal cigarettes in Awada’s

home. Trial Tr. vol. 2, 94. This evidence suggests that Awada’s testimony was not

credible, but Awada’s testimony was not the only evidence of a conspiracy to understate

taxable income. The government did not use Awada’s testimony to establish the alleged

scheme to understate income via the negotiation of Sunoco checks to third parties. The

jury could have found Defendants guilty of conspiracy even if Awada’s testimony was

completely disregarded. The Court does not believe that the evidence weighs heavily

against the jury’s verdict.

V. Conclusion

For reasons set forth above, the Court finds that sufficient evidence was presented at

trial for the jury to conclude that the government satisfied its burden of proof with respect

to each element of the charged conspiracy. The Court is also not persuaded that the jury’s

verdict was against the manifest weight of the evidence.

Accordingly,

IT IS ORDERED that Safiedine’s motion for a judgment of acquittal, or in the

alternative, for a new trial, is DENIED;

IT IS FURTHER ORDERED that Fawaz’s motion for a judgment of acquittal, or

in the alternative, for a new trial, is DENIED.

s/PATRICK J. DUGGAN

UNITED STATES DISTRICT JUDGE

Copies to:

Ben Gonek, Esq.

James C. Thomas, Esq.

Tiwana L. Wright, Esq.

Mark W. Kotila, Esq.