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

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 July 19, 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 each filed a motion for a judgment of

acquittal, or in the alternative, for a new trial, and the Court denied these motions in an

Opinion and Order dated June 7, 2012. Presently before the Court is Defendant Fawaz’s

motion for reconsideration of this order, filed on June 21, 2012. Defendant Safiedine has

joined in this motion. For reasons set forth below, the motion is denied.

The Court grants a motion for reconsideration only if the movant demonstrates that
2

the Court and the parties have been misled by a palpable defect and that correcting the

defect will result in a different disposition of the case. E.D. Mich. LR 7.1(h)(3). A

“palpable defect” is one that is “obvious, clear, unmistakable, manifest, or plain.” Fleck v.

Titan Tire Corp., 177 F. Supp. 2d 605, 624 (E.D. Mich. 2001). “[T]he court will not grant

motions for rehearing or reconsideration that merely present the same issues ruled upon by

the court, either expressly or by reasonable implication.” E.D. Mich. LR 7.1(h)(3). The

purpose of a motion for reconsideration is not “‘to give an unhappy litigant one additional

chance to sway the judge.’” Pakideh v. Ahadi, 99 F. Supp. 2d 805, 809 (E.D. Mich. 2000)

(quoting Durkin v. Taylor, 444 F. Supp. 879, 889 (E.D. Va. 1977)).

In her motion for reconsideration, Fawaz argues that the government’s case is based

on her participation in legitimate business transactions at her employer’s request. Fawaz

notes that it is not illegal to satisfy financial obligations by negotiating checks to third

parties and asserts that this practice is common in the industry. Defendant Safiedine raised

this argument in his motion for a new trial. In addressing this argument, the Court noted

that “‘an overt act in furtherance of a conspiracy need not be illegal itself.’” 6/7/12 Op. &

Order at 11 (quoting United States v. Jerkins, 871 F.2d 598, 602-03 (6th Cir. 1989)). The

Court concluded that even the legitimate negotiation of checks could satisfy the overt act

element of conspiracy if it advanced a conspiracy to conceal income from the IRS. Id.

The evidence presented by the government was sufficient to infer such a purpose. It is

undisputed that checks issued by Sunoco, Inc. (“Sunoco”) to JSC Corporation (“JSC”)

were negotiated to Mansour Kassabri, a contractor who had performed services for JSC. 

Kassabri testified that both Fawaz and Safiedine asked him to deposit the Sunoco checks
3

into his business’s bank account and then write certain checks to third parties. See Trial

Tr. vol. 2, 56-58. Allan Cohen, the accountant who prepared JSC’s tax returns, testified

that he was unaware of these Sunoco checks because the checks were never deposited into

JSC’s bank account, and he obtained his figures from JSC’s bank statements. Trial Tr.

vol. 3, 85-88. Cohen further testified that he met with Fawaz and Safiedine annually to

discuss any necessary adjustments to these figures. Trial Tr. vol. 3, 90-92. The jury could

have concluded that given Safiedine and Fawaz’s 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 therefore could have concluded that the Sunoco checks were negotiated

to third parties in order to conceal the receipt of funds from the Internal Revenue Service

(“IRS”). This would satisfy the overt act element of conspiracy, even though the

negotiation of a check to a third party is not illegal.

Fawaz also argues that her participation in the real estate closing for the sale of a gas

station was not illegal. She notes that she did not sign the document presented by the

government showing a sale price of $700,000. Yet the government introduced testimony

indicating that several months after the sale, Fawaz and Safiedine asked the buyer, Ali

Awada, to falsify the price and instructed Awada to tell the government that part of the

purchase price was used to pay for new fuel pumps. Trial Tr. vol. 1, 49-53. Awada also

testified that during a meeting, Fawaz asked him to agree that the purchase price was

$700,000, while indicating that their conversation was being overheard by another person. 

Trial Tr. vol. 1, 53. This evidence suggests that Fawaz and Safiedine shared a common

plan to understate the sale price of the gas station. Fawaz’s asking Awada to understate
1

 A Klein conspiracy is “[a] Section 371 conspiracy where the victim is the IRS and the

objective is to defeat its lawful functioning.” United States v. Adkinson, 158 F.3d 1147,

1154 (11th Cir. 1998) (citing United States v. Klein, 247 F.2d 908 (2d Cir. 1957)).

4

the sale price satisfies the overt act element of conspiracy and also establishes her

voluntary participation in the plan. Because the $700,000 sale price was subsequently

reported to the IRS, the jury could reasonably infer that one purpose of the conspiracy was

to conceal income from taxing authorities.

Fawaz argues that to the extent a conspiracy was proven, its purpose was to deceive

Safiedine’s business partner, and the obstruction of tax collection by the IRS was merely a

collateral effect. It is true that a Klein conspiracy1

 does not lie where “‘impeding the IRS

is only a collateral effect of an agreement, rather than one of its purposes.’” Adkinson, 158

F.3d at 1155 (11th Cir. 1998). Put differently, “the tax purpose must be the object of a

Klein conspiracy, and not merely a foreseeable consequence of some other conspiratorial

scheme.” Id. (citing Dennis v. United States, 384 U.S. 855, 861, 86 S. Ct. 1840, 1844

(1966)) (emphasis in original). “On the other hand, a conspiracy may have multiple

objectives, and ‘if one of its objectives, even a minor one, be the evasion of federal taxes,

the offense is made out, though the primary objective may be concealment of another

crime.’” Id. (quoting Ingram v. United States, 360 U.S. 672, 679-80, 79 S. Ct. 1314, 1320

(1959)). Adkinson provides an example clarifying the distinction between a multipleobjective conspiracy and a conspiracy that has the collateral effect of impeding tax

collection. The court indicated that “the robbery of a bank by two or more persons who

subsequently fail to report this income on their tax returns” should not be considered a tax
5

conspiracy. Id. at 1155 n.17. 

The Court believes that the government presented evidence sufficient to infer that

impeding tax collection was an object of the alleged conspiracy rather than a collateral

effect. Awada testified that Safiedine asked him to sign a document understating the sale

price of the gas station so that Safiedine could show the document to his partner. Trial Tr.

vol. 1, 49. However, he also testified that Fawaz asked him to lie to the government about

the purchase price if he was contacted by investigators. Trial Tr. vol. 1, 53. This suggests

that Safiedine’s partner was not the only intended target of the deception. The obvious

purpose for understating the sale price was to conceal the true amount of the gain derived

from the sale. The understatement of income is not the consequence of some other

misconduct; it is the heart of the charged conspiracy. The government presented evidence

from which the jury could conclude that Defendants’ deception served dual purposes,

allowing Safiedine to defraud both his partner and the IRS. So long as one purpose of the

scheme was to impede tax collection, Defendants may be convicted of a Klein conspiracy.

Fawaz also argues that Cohen did not obtain information from her in compiling tax

returns for MTK and KLC, the partnership which sold the gas station to Awada. Fawaz

contends that this indicates that she lacked the intent to participate in a conspiracy to

impede tax collection. The government was not required to prove that Fawaz was the

source of the information reported on the tax returns. The government instead presented

evidence that Fawaz attempted to secure Awada’s cooperation in concealing the true sale

price from both Safiedine’s partner and the government. This evidence was sufficient to

establish Fawaz’s participation in a conspiracy to impede taxing authorities. A conspiracy
6

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.’” United States v. Christian, 786

F.2d 203, 211 (6th Cir. 1986) (quoting United States v. Cuni, 689 F.2d 1353, 1356 (11th

Cir. 1982)).

Fawaz argues that the government has failed to produce evidence of conversations or

meetings between Fawaz and Safiedine in which a scheme to avoid taxes was discussed. 

“‘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.’” United States v. Blackwell, 459 F.3d 739, 760 (6th Cir. 2006) (quoting United

States v. Walls, 293 F.3d 959, 967 (6th Cir. 2002)). Thus, it was unnecessary to show that

Fawaz and Safiedine actually discussed the alleged scheme. The Court believes that the

evidence presented was sufficient to infer participation in a common plan to impede tax

collection. See 6/7/12 Op. & Order at 4-7.

Fawaz next contends that the government’s case was based on “inconsistent, vague

statements of a less than credible witness.” Def.’s Br. 6. Presumably, this refers to Mr.

Awada. For purposes of Defendants’ motions for judgment of acquittal, the Court is not

permitted to “‘re-evaluate the credibility of witnesses.’” United States v. Fisher, 648 F.3d

442, 450 (6th Cir. 2011) (quoting Brown v. Konteh, 567 F.3d 191, 205 (6th Cir. 2009)). 

The Court is, however, permitted to consider witnesses’ credibility in the context of a

motion for new trial. United States v. Lutz, 154 F.3d 581, 589 (6th Cir. 1998) (citing
7

United States v. Ashworth, 836 F.2d 260, 266 (6th Cir. 1988)). In its Opinion and Order,

the Court noted that Defendants raised a number of challenges to Mr. Awada’s credibility. 

See 6/7/12 Op. & Order at 11-12. Yet the Court also observed that the government did not

use Awada’s testimony to establish the scheme of understating income via the negotiation

of Sunoco checks to third parties. The Court therefore concluded that the jury could have

found Defendants guilty of conspiracy even if it disregarded Awada’s testimony. For this

reason, Awada’s credibility does not provide sufficient grounds for granting a new trial.

The Court has carefully considered each of the arguments raised in the motion for

reconsideration, but finds no palpable defect in its conclusions.

Accordingly,

IT IS ORDERED that Defendants’ motion for reconsideration 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.