Opinion ID: 2967649
Heading Depth: 2
Heading Rank: 3

Heading: tri-city’s claims

Text: Tri-City argues that the sole reason it was added to the indictment was in retaliation for the exercise of its right to protect its assets during pre-trial forfeiture proceedings against Clinton Auto Sales and Najjar and thus stemmed from prosecutorial vindictiveness. The district court found that Tri-City did not establish a presumption of vindictiveness and that it also failed to show actual vindictiveness. We review the district court’s decision for abuse of discretion and find no error. See United States v. Fiel, 35 F.3d 997, 1007 (4th Cir. 1994). A defendant . . . may not be punished for exercising a protected statutory or constitutional right. United States v. Goodwin, 457 U.S. 368, 372 (1982). Although the Court has presumed an improper vindictive motive on the part of a prosecutor where the detrimental action was taken against the defendant immediately following the exercise of that right, such a presumption applies only in cases in which a reasonable likelihood of vindictiveness exists. Goodwin, 457 U.S. at 372 (1982). Tri-City’s participation in the pre-trial forfeiture proceedings alerted the prosecutors to the possibility that forfeitable assets could be dissipated through Tri-City. Furthermore, Najjar’s role in Tri-City made Tri-City itself a legitimate target for prosecution. 4 In McNally v. United States, 483 US. 350 (1987), the Supreme Court held that depriving a State of intangible rights did not meet the requirements of 18 U.S.C. § 1341. However, Congress amended § 1341 to protect the intangible right of honest services. 18 U.S.C. § 1346. UNITED STATES v. NAJJAR 19 We have said that [a] prosecutor is not bound by his initial assessment of the case embodied in the original charges. . . . Prosecutors are free to reexamine the appropriate level of prosecution before trial . . . . United States v. Williams, 47 F.3d 658, 664-5 (4th Cir. 1995). That the new information resulting in the superceding indictment came from Tri-City’s attempt to protect assets is immaterial. Accordingly, there is no reasonable likelihood of vindictiveness and no presumption arises. Furthermore, Tri-City has made no competent showing of actual vindictiveness.
Tri-City was convicted of money laundering, possession of motor vehicle parts with obliterated vehicle identification numbers, removing identification for motor vehicles, obstruction of justice, owning, operating, maintaining, or controlling a chop shop, and a RICO offense. Tri-City argues that its convictions are not supported by sufficient evidence and this requires reversal. The verdict of a jury, however, must be sustained if there is substantial evidence, taking the view most favorable to the government to support it. Glasser v. United States, 315 U.S. 60, 80 (1942). We will begin our analysis with Tri-City’s money laundering conviction.
Tri-City was indicted for knowingly engaging in a monetary transaction in excess of $10,000 in property derived from Najjar’s fraudulent activity. The indictment alleged that the laundering stemmed from Najjar’s sale of fraudulently titled automobiles to Tri-City. TriCity argues that [t]he deficiency in the government’s case on this Count is that there is no evidence that anyone acting on behalf of the corporation knowingly participated in a money laundering scheme under § 1957. (emphasis in original). Money laundering under 18 U.S.C. § 1957 is a monetary transaction in criminally derived property that is . . . derived from specified unlawful activity. 18 U.S.C. § 1957(a). Title 18 U.S.C. § 1957(f)(2) 20 UNITED STATES v. NAJJAR defines criminally derived property as any property constituting, or derived from, proceeds obtained from a criminal offense. In order to support a conviction for money laundering, there must be proof beyond a reasonable doubt that the defendant knowingly participated in a monetary transaction involving criminally derived proceeds. With respect to the knowledge element, which we understand to be TriCity’s real challenge to its conviction, the case was presented to the jury as follows: [T]he Government must prove beyond a reasonable doubt . . . that the defendant knew that the property involved in the financial transaction was the proceeds of some form of unlawful activity. I instruct you that this element refers to a requirement that the defendant knew the property involved in the transaction represented proceeds from some form, though not necessarily which form, of activity that constitutes a criminal offense under state or federal law. I instruct you as a matter of law that mail fraud is a criminal offense. As I stated earlier, you may infer that the defendant had knowledge from circumstantial evidence or from evidence showing willful blindness by a defendant. . . . [T]he Government must prove beyond a reasonable doubt . . . that the defendant knowingly engaged in an unlawful monetary transaction . . . . [T]he Government is not required to prove that the defendant knew the particular offense from which the criminally derived property was derived. However, the Government must prove beyond a reasonable doubt that the defendant knew that the transaction involved criminally derived property, which I remind you means any property constituting or derived from proceeds obtained from a criminal offense. If you find that the Government has established beyond a reasonable doubt that the defendant knew that the transaction involved property derived from criminal offense, then this element is satisfied. The defendants did not object to this instruction. There is substantial evidence in the record that principals of TriCity knew that the vehicles they purchased from Najjar were proceeds UNITED STATES v. NAJJAR 21 of criminal activity. For example, the evidence established that Firyal Najjar, Tri-City’s president, was also an employee of Clinton Auto Sales. Firyal Najjar worked at a desk directly across from Basem Najjar in an office filled with stolen car parts throughout the period of investigation. Additionally, the Purchase and Sale Agreement transferring the vehicles to Tri-City noted the investigation by law enforcement officers dealings with the acquisition of certain parts and components of vehicles Maryland State Police investigation, currently pending. This agreement was signed by Firyal Najjar. Firyal Najjar was present during conversations between Jimmy Lee and Basem Najjar about the need to buy and strip a red Acura to create a legitimate excuse for their possession of another red Acura and its parts. During this conversation, Basem Najjar asked Lee to backdate receipts for other vehicle parts so that Najjar could forward them to his attorney. From this, and voluminous other evidence, a reasonable jury could have concluded that Tri-City knowingly participated in a money laundering transaction. Accordingly, we affirm Tri-City’s conviction on this count. We especially note that no issue as to the use of the mails is made here or was made at trial.
The brief of Najjar and Tri-City tacitly admits the sufficiency of evidence to sustain the conviction of Najjar, with which admission we agree. The brief provides, p.78: While Basem Najjar, with the knowledge he was aware of and by his individual acts, may have taken steps to possess motor vehicle parts with obliterated serial numbers (18 U.S.C. § 2321), transport from Maryland to Virginia stolen property (18 U.S.C. § 2314), and/or remove identification from a motor vehicle (18 U.S.C. § 511(a)(1), the evidence is insufficient that Tri-City knew or should have known what Basem Najjar was doing and/or that Basem Najjar was acting within the scope of his employment and to somehow benefit Tri-City. The evidence to convict Tri-City on these three counts is insufficient. 22 UNITED STATES v. NAJJAR So the contention here is that while [a]n agent may be acting for himself and a corporation at the same time, it may not criminally bind the corporation. It is precisely this evidence that is missing in this case. Br. p.78. Tri-City’s arguments fail, however, because Tri-City’s convictions do not rest on Najjar’s crimes committed prior to its incorporation. Najjar continued his criminal activities while employed at Tri-City and, due to the broad grant of authority in the employment agreement coupled with the overwhelming evidence, the jury could easily have found beyond a reasonable doubt that Najjar’s conduct comprising criminal activity was within the scope of his authority as general sales manager and taken for the benefit of Tri-City. Tri-City hired Najjar to be its general sales and operations manager with responsibility for managing, directing and overseeing the daily sales operations of the Company, and all matters related to said operations. The agreement provided that Najjar shall work exclusively for the Company and shall not engage in any professional or business activity which is not for the benefit of the Company. As part of his duties for Tri-City, Najjar bought and sold vehicles using his Motor Vehicle Administration used vehicle dealer’s license. The jury was presented with evidence that no principal in Tri-City reprimanded Najjar or placed limits on his authority to act for Tri-City. Tri-City’s conviction on count 16 was for possessing motor vehicle parts with obliterated identification numbers. Count 17 involved the interstate transportation of stolen vehicle parts. Count 18 involved removing the VIN from an automobile. Tri-City’s convictions on counts 16-18 all deal with motor vehicle salvage and repair and thus the jury could have reasonably concluded that Najjar was acting within the scope of his authority as defined in the broad employment agreement when he undertook his actions.
These counts deal with the obstruction of justice under 18 U.S.C. §§ 1503(a), 1512(b)(3) and 1523(b)(2)(B). They deal with the withholding of information, or presentation of false information, or concealment of information from law enforcement authorities or the grand jury. UNITED STATES v. NAJJAR 23 Najjar does not contest the sufficiency of evidence to the finding of guilty on these counts. The claim of error is that [t]he government failed to prove that Basem Najjar was acting for the benefit of the corporation and not solely in his sole interest. The government points out, however, that corporations have frequently been convicted of obstruction of justice offenses and that there was ample evidence form which the jury could conclude that as Najjar sought to protect himself, he also intended to protect TriCity by concealing crimes he committed as Tri-City’s manager and license holder. We agree with the position of the government and hold that although it may not have been proven that Najjar acted solely in his sole interest, the fact that the record shows he was acting both in the interest of himself and the corporation is sufficient to support the conviction of Tri-City on these counts.
On the chop shop count, the jury was presented with ample evidence of Tri-City’s involvement through Najjar. Tri-City’s premises were the same as Clinton Auto Sales’ and they shared employees. There was testimony from George Perdue that he visited Tri-City numerous times in 1998 and it was full of cars and parts . . . a lot of high dollar parts and cars . . . so much stuff lying around. Further, there was testimony establishing that Tri-City’s premises were used for the storage, stripping, and rebuilding of stolen cars. For example, Roger Baylor testified that he and Najjar picked up the front clip from a red sports car and transported it back to Tri-City. Wright’s search of Perdue’s uncovered the front clip from a stolen red Acura NSX, which was being installed on a yellow Acura NSX salvage vehicle. After the search of Perdue’s, Najjar arranged for Baylor to move stolen parts from the red NSX stored at Tri-City and his home to Lee’s. A conversation between Jimmy Lee and Najjar recorded in November 1998 detailed Najjar’s plan to buy an additional red Acura NSX, cut it up, remove its VIN, and create backdated receipts to cover for the government’s discovery of the stolen parts. Najjar intended to forward these receipts to his attorney who would then forward them on to the government. This conversation took place at TriCity Auto Outlet. From this evidence, and that contained in the volu24 UNITED STATES v. NAJJAR minous record, the jury could easily have found Tri-City guilty of running a chop shop.
The government charged Tri-City and Najjar with a violation of RICO in the indictment as follows: At all times material to this Indictment, defendant BASEM NAJJAR, CLINTON AUTO SALES (a sole proprietorship which employed numerous individuals other than defendant BASEM NAJJAR), defendant TRI-CITY and other persons known and unknown and to the Grand Jury, were an association in fact and constituted an enterprise as that term is defined in Title 18, United States Code, Section 1961(4), that is, a group of individuals and entities associated in fact, which was engaged in and the activities of which affected interstate and foreign commerce. Tri-City, however, attacks the RICO5 conviction by arguing that the government failed to prove the existence of an enterprise and a pattern of racketeering activity. On the latter element, Tri-City argues that there was no common purpose between Najjar and TriCity, and further that there was no structure to the enterprise, only Najjar’s separate interests. Specifically, Tri-City complains that it is improper to put two hats on Najjar, one as an employee of Tri-City, and the other as an individual, in order to show an enterprise and common purpose. We find Tri-City’s arguments here to be without merit and affirm the conviction. First, principles of corporate liability apply in the RICO context. 5 18 U.S.C. § 1962 provides: It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt. 18 U.S.C. § 1962(c). UNITED STATES v. NAJJAR 25 An enterprise in the context of RICO includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. 18 U.S.C. § 1961(4); cf. Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158 (2001). The Supreme Court has stated in this context, [w]hether the Act seeks to prevent a person from victimizing, say, a small business . . . or to prevent a person from using a corporation for criminal purposes . . . the person and the victim, or the person and the tool, are different entities, not the same. Cedric Kushner Promotions, 533 U.S. at 162. A certain degree of distinctness is required for RICO liability; however, where a corporate employee acting within the scope of his authority . . . conducts the corporation’s affairs in a RICO-forbidden way, the only separateness required is that the corporate owner/employee be a natural person and so legally distinct from the corporation itself. Cedric Kushner, 533 U.S. at 163. Thus, there were two distinct entities in this case sufficient for liability under 18 U.S.C. § 1962(c): (1) a person, Basem Najjar, and (2) a corporation, Tri-City Auto Outlet, Inc. For the same reason, Tri-City’s argument, that the common purpose prong was not proven, fails. Najjar, as we have discussed above, was not acting solely on his own behalf, but on behalf of, and with and intent to benefit, Tri-City Auto Outlet. Both Najjar and Tri-City, through Najjar’s agency, sought to further the illegal scheme and so had the requisite common purpose. Furthermore, there was evidence that tended to show at least one other member of Najjar’s family, the President of Tri-City, Firyal Najjar, Basem’s mother, had knowledge of Najjar’s illicit activities and did not seek to halt it. Accordingly, we are of opinion that the jury could reasonably have concluded that TriCity was guilty of a RICO violation beyond a reasonable doubt.