Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 1 of 10 PAGEID #: 242 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

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1 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 1 of 10 PAGEID #: 242 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION UNITED STATES OF AMERICA, Plaintiff, CASE NO. 2:17-CR-233(3) CHIEF JUDGE SARGUS vs. AZAT MARTIROSSIAN, a/k/a AZAT MARTIROSYAN, Defendant. GOVERNMENT S REQUEST TO HOLD DEFENDANT S MOTION TO DISMISS THE SUPERSEDING INDICTMENT IN ABEYANCE The United States, by and through undersigned counsel, respectfully requests that the Court hold in abeyance Defendant Azat Martirossian s motion to dismiss Counts 9 through 19 of the Superseding Indictment (ECF No. 28). The defendant s motion raises two substantive arguments, both of which are meritless and, moreover, are based on the very facts and evidence that will be established at trial. However, the defendant is a fugitive who refuses to submit to this Court s jurisdiction, and the fugitive disentitlement doctrine should bar consideration of his motion until he appears in the United States to answer the charges against him. Accordingly, the United States respectfully requests that this Court hold the defendant s motion in abeyance for the reasons set forth below. MEMORANDUM On May 24, 2018, the grand jury in the Southern District of Ohio returned a Superseding Indictment charging Defendant Azat Martirossian and two others with conspiracy to commit money laundering in violation of 18 U.S.C. 1956(h) (Count 9), and money laundering in

2 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 2 of 10 PAGEID #: 243 violation of 18 U.S.C (Counts 10 19). (ECF No. 13.) The charges relate to a bribery scheme concerning corrupt payments made to and by Ohio-based Rolls-Royce Energy Systems, Inc. ( RRESI ). The defendant is an Armenian national who has been residing in Beijing, China with his family. The People s Republic of China has no extradition treaty with the United States. The defendant, therefore, remains a fugitive, although the United States is actively seeking to take him into custody. Despite his status as a fugitive, the defendant now moves to dismiss Counts 9 through 19 of the Superseding Indictment, charging him with one count of conspiracy to commit money laundering and 10 counts of money laundering. The defendant s two substantive arguments are that (1) the money laundering charges, which emanate from corrupt wire transfers sent into and out of a United States bank account in order to secure a contract for a U.S. company, are barred by alleged extraterritorial limitations (ECF No. 28-1, at 12-13); and (2) the Superseding Indictment, which outlines the criminal scheme and the defendant s specific role in over 30 pages, fails to assert facts supporting the charges against him (ECF No. 28-1, at 13). The defendant is wrong. As alleged in the Superseding Indictment, the defendant is charged with a money laundering conspiracy and substantive money laundering based on sales of RRESI equipment that was assembled in Columbus, Ohio, and the charged conduct includes the corrupt payments and laundered funds that were paid to and from RRESI s Columbus, Ohio-based bank account. (ECF No. 13, at 25 27). This easily satisfies the extraterritorial requirements of the money laundering statute. See 18 U.S.C. 1956(f)(1) ( There is extraterritorial jurisdiction over the conduct prohibited by this section if... in the case of a non-united States citizen, the 2

3 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 3 of 10 PAGEID #: 244 conduct occurs in part in the United States. ) (emphasis added). 1 The defendant s second, and related, argument that the Superseding Indictment fails to allege facts to support the charges is a thinly-veiled attempt to argue that the evidence does not support the government s claims, essentially inventing and asking this Court to grant summary judgment in the criminal process. For good reason, the law provides that only after the government has presented its case should a judge and jury grapple with the legal and factual sufficiency of that evidence. Russell v. United States, 369 U.S. 749, 791 (1962). The Superseding Indictment, with over 30 pages of specific allegations, including, by the defendant s count, at least 31 paragraphs that specifically reference the defendant s role in the scheme (ECF 28-1, at 9), is far in excess of what the law requires to plead an adequate indictment. See, e.g., United States v. Douglas, 398 F.3d 407, 413 (6th Cir. 2005) ( We have said that to be sufficient an indictment must satisfy two requirements: first, the indictment must set out all of the elements of the charge offense and must give notice to the defendant of the charges he faces; second, the indictment must be sufficiently specific to enable the defendant to plead double jeopardy in a subsequent proceeding, if charged with the same crime based on the same facts. (internal quotes and cites omitted)). 2 1 The defendant s motion conflates conduct in the United States with physical presence in the United States. The money laundering statute requires the former, not the latter, as the latter would permit criminals to launder proceeds of their crimes through U.S. financial institutions unchecked. See, e.g., United States v. Garcia, 533 Fed. Appx. 967, 982 (11th Cir. 2013) ( The requirements for extraterritorial jurisdiction [under 18 U.S.C. 1956(f)] were met here. The evidence showed that the transferred funds originated in the United States. Thus, a portion of each transaction occurred in the United States. ); United States v. All Assets Held at Bank Julius, 251 F.Supp.3d 82, 93 (D.D.C. 2017) (holding that transfers into and out of the United States occur in part in the United States under 18 U.S.C. 1956(f) ); United States v. Stein, Crim. A. No , 1994 WL at *4 5 (E.D. La. June 23, 1994) ( It is plain from both the purpose of section 1956 and its legislative history that Congress did not intend to limit section 1956 so that it would only apply to defendants who are actually present in the United States. ). The defendant has not cited a single case to suggest otherwise. 2 The defendant s claim that the Superseding Indictment fails to allege that the defendant was knowingly involved the monetary transfers (ECF 28-1, at 14) ignores the explicit allegations in the Superseding Indictment that the defendant possessed the requisite knowledge and intent to enter into the money laundering conspiracy and causing and aiding and abetting the relevant transfers (ECF 13, at 26-27). 3

4 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 4 of 10 PAGEID #: 245 However, before this Court and the United States are forced to expend valuable resources further litigating the merits of his motion, this Court should initially stay consideration of the motion until the defendant agrees to submit to the jurisdiction of the court and be arraigned on the charges against him. The long-established fugitive disentitlement doctrine, based upon the premise of mutuality, limits a fugitive s access to the courts where he is only willing to submit his case for adjudication for the limited purpose of obtaining a favorable outcome. Molinaro v. New Jersey, 396 U.S. 365, 366 (1970); Kacaj v. Gonzales, 163 F. App x 367, 368 (6th Cir. 2006) (doctrine is a discretionary tool); see also In re Prevot, 59 F.3d 556, 562 (6th Cir. 1995). Until a defendant is willing to submit his case for compete adjudication win or lose he should not be permitted to call upon the resources of the court for the determination of selective claims. United States v. Stanzione, 391 F. Supp. 1201, 1202 (S.D.N.Y. 1975) (applying the doctrine and refusing to hear the defendant s motion to dismiss the indictment until he submitted to the jurisdiction of the court for full resolution of the case). Although the Sixth Circuit Court of Appeals has not yet addressed the doctrine in the context of a criminal pretrial motion, the Sixth Circuit has recognized, accepted, and applied the doctrine in other contexts. See Shigui Dong v. Holder, 426 F. App x 418 (6th Cir. 2011) (applying doctrine to immigration appeal); Garcia-Flores v. Gonzales, 477 F.3d 439, 441 (6th Cir. 2007) (same); In re Prevot, 59 F.3d at 562 (applying doctrine to context of International Child Abduction Remedies Act case). Notably, at least one other district court within the Sixth Circuit has applied the doctrine to a pretrial motion and, more specifically, in the context of a motion to dismiss the indictment. United States v. Bakri, No. 3:00-CR-76-TAV-CCS-2, 2014 WL , at *2 3 (E.D. Tenn. Apr. 30, 2014) (finding that defendant was a fugitive because he had remained in Jordan despite 4

5 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 5 of 10 PAGEID #: 246 his knowledge of the indictment and retained local counsel throughout the case). Other district courts have routinely adopted the practice of applying the doctrine in the pretrial motion context. See United States v. Bokhari, 993 F.Supp.2d 936, 938 (E.D. Wis. Jan. 6, 2014) (finding that [c]ourts have applied the doctrine, as here, to pretrial motions in criminal cases (citations omitted)); United States v. Chung Cheng Yeh, No. CR WHA, 2013 WL , at *2 (N.D. Cal. May 15, 2013) (same); United States v. Kashamu, 656 F. Supp. 2d 863, 866 (N.D. Ill. 2009) (holding that the fugitive disentitlement doctrine can apply to pretrial motions in criminal cases, subject to the discretion of the Court ); United States v. Oliveri, 190 F. Supp. 2d 933, 936 (S.D. Tex. 2001) (recognizing that [a]lthough the fugitive disentitlement doctrine is often invoked during the appellate process, it also applies to pretrial motions made by fugitives in the district courts ). Applying the doctrine here, the Court must examine (1) whether the defendant is a fugitive, and (2) whether any special circumstances exist that warrant an exception to the doctrine s application. Kashamu, 656 F. Supp. 2d at 867. A fugitive is someone who weeks to evade prosecution by either actively avoiding the authorities, or remaining in a geographic location that is out of the authorities reach. Id. In the Sixth Circuit, specifically, the defendant must conceal[] himself with the intent to avoid prosecution. United States v. Greever, 134 F.3d 777, 780 (6th Cir. 1998) (citations omitted). This intent can be inferred from the defendant s knowledge that he was wanted and his subsequent failure to submit to an arrest. Id. (citation omitted). It is undisputed that the defendant has been aware of his status as an investigation target since at least as early as September 5, 2017, when he acknowledged receiving a copy of a Department of Justice target letter, which was transmitted to him on August 31, By 5

6 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 6 of 10 PAGEID #: 247 transmitting the target letter, the government took the unusual step of initiating contact with the defendant to advise him that charges would be brought against him. Moreover, the defendant has known of the current charges against him since May 24, 2018, when the government provided his counsel with a courtesy copy of the Superseding Indictment that the grand jury returned against him that day. It is also undisputed that the defendant has intentionally remained outside of the United States despite this knowledge. Indeed, he has retained multiple counsel to represent him throughout the duration of this case. 3 The defendant is purposefully avoiding facing the charges against him and is, consequently, a fugitive. There are also no special circumstances that exist precluding application of the fugitive disentitlement doctrine in this case. Cf. United States v. Noriega, 683 F. Supp. 1373, (S.D. Fla. 1988) (finding special circumstances existed to allow defense counsel to make special appearance on client s behalf to argue validity of indictment because defendant was de facto head of foreign government, was a case of first impression that involved delicate issues, and case was fraught with political overtones ); United States v. Shapiro, 391 F. Supp. 689, 693 (S.D.N.Y. 1975) (finding that mutuality concerns were alleviated due to defendant agreeing to surrender to court s jurisdiction if merits of his pretrial motion were decided against him). Here, none of these circumstances exist, nor is the United States aware of any other special circumstances in this case. The defendant s reliance on In re Hijazi, 589 F.3d 401 (7th Cir. 2009), a case from outside the Sixth Circuit, is misplaced. In Hijazi, there were significant policy considerations that persuaded the court to rule on the motion that simply are not present in this case. For example, 3 The defendant s claim that he voluntarily cooperated extensively with U.S. enforcement authorities, (ECF 28-1, at 6), is incorrect. The defendant agreed to meet with federal prosecutors and law enforcement agents on the express condition that such meetings occur only in locations outside the United States. During the meetings, the defendant made numerous false statements that are contradicted by the documentary evidence and other witness testimony. 6

7 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 7 of 10 PAGEID #: 248 the Hijazi court was particularly disturbed that the district court had held the defendant s motions to dismiss in abeyance for over two years, during which time Hijazi could not visit his family in Lebanon. See Hijazi, 589 F.3d at The court also suggested that the two-year abatement arguably raised speedy trial concerns that weighed in favor of consideration of the defendant s motion. Id. at Here, the charges against the defendant have only been pending for one month and there is no evidence in the record to support a finding that he has been removed from his family or otherwise suffered an illegitimate restraint on his freedom. In addition, unlike the defendant in Hijazi, the government here actually reached out to the defendant to give him every opportunity to address his claims in the United States before he was indicted, but the defendant instead chose to remain in China, where he resides with his spouse. Moreover, the Hijazi court found that the factors above were exacerbated by the relative weakness of the government s case; indeed, Hijazi s single co-defendant was tried two times without a conviction before he finally pleaded guilty to a single misdemeanor count and did not agree to cooperate against Hijazi. Hijazi, 589 F.3d at 405. Here, the government has secured cooperation plea agreements from at least four cooperating witnesses who have pleaded guilty to one or more felonies, admitted to their role in the criminal scheme, and are prepared to testify at trial against the defendant. See United States v. Keith Barnett, 2:16-cr-248 (S.D. Ohio); United States v. Louis Zuurhout, 2:17-cr-122 (S.D. Ohio); United States v. Andreas Kohler, 17-cr-113 (S.D. Ohio); and United States v. James Finley, 2:17-cr-160 (S.D. Ohio). The Hijazi court also found persuasive the fact that the Wire Fraud Act and Major Fraud Act, with which Hijazi had been charged, were ambiguous on their face about their extraterritorial reach and raised important questions. Id. at ; see 18 U.S.C (silent on the question of extraterritorial reach); 18 U.S.C. 1031(a) (same). Here, as explained above, the extraterritorial application of the money 7

8 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 8 of 10 PAGEID #: 249 laundering statutes at issue is explicitly set forth in the statute itself. 18 U.S.C. 1956(f)(1) ( There is extraterritorial jurisdiction over the conduct prohibited by this section if in the case of a non-united States citizen, the conduct occurs in part in the United States.... ). Further, the court found it particularly significant that Hijazi actually surrendered himself to the Kuwaiti authorities when he learned of the United States indictment against him. Hijazi at , 412. There is no reason to believe that the defendant similarly turned himself in to Chinese (or other) authorities in order to answer the allegations in the United States indictment, but has instead retained multiple defense counsel to seek to dismiss the charges against him without ever appearing in the United States. The government respectfully submits that this Court should follow the other courts in the Sixth Circuit and elsewhere who have addressed the fugitive disentitlement doctrine in similar circumstances as the defendant s and declined to reward a fugitive like the defendant by expending valuable judicial resources on his premature motion at this time. See, e.g., United States v. Shalhoub, 855 F.3d 1255, 1265 (11th Cir. 2017) ( Notwithstanding what the Seventh Circuit [in Hijazi] has stated on this issue, we submit that Shalhoub has an adequate remedy: appearance in the district court. (internal quotes and cites omitted)); In re Kashamu, 769 F.3d 490, 494 (7th Cir. 2014) (rejecting a motion to dismiss by a foreign national defendant who never stepped foot in the United States and who had been indicted 16 years earlier, noting that [i]f [the defendant] wants to fight the charges, he has only to fly from Lagos to Chicago; there are loads of reasonably priced flights ); United States v. Vaulin, 2017 WL , *5-6 (N.D. Ill. Aug. 4, 2017) (distinguishing Hijazi and denying motion to dismiss on fugitive disentitlement grounds, where a Polish defendant was fighting extradition, noting that the defendant appears willing to [participate in the criminal case] only from a safe distance and should not reap the benefit of purposefully evasive behavior, 8

9 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 9 of 10 PAGEID #: 250 and issuing a ruling in these circumstances could encourage such behavior, rather than voluntary surrender ). CONCLUSION For these reasons, the United States respectfully requests that Defendant Azat Martirossian s motion to dismiss Counts 9 through 19 of the Superseding Indictment (ECF No. 28) be held in abeyance unless and until the defendant submits himself to the jurisdiction of the United States Marshals Service for the Southern District of Ohio or is taken into custody by the same. In the alternative, and to the extent the Court does not grant the government s request to hold this motion in abeyance, the United States requests an extension of 30 days to respond to the defendant s motion. Such an extension would allow the government to fully address the defendant s substantive claims. Respectfully submitted, SANDRA MOSER Chief, Fraud Section BENJAMIN C. GLASSMAN United States Attorney s/vanessa S. Snyder VANESSA S. SNYDER Trial Attorney Criminal Division, Fraud Section U.S. Department of Justice 1400 New York Ave., NW Washington, DC Office: (202) Fax: (202) Vanessa.Snyder@usdoj.gov s/jessica H. Kim JESSICA H. KIM (87831) Assistant United States Attorney 303 Marconi Boulevard, Suite 200 Columbus, Ohio Office: (614) Fax: (614) Jessica.Kim@usdoj.gov 9

10 Case: 2:17-cr EAS Doc #: 41 Filed: 07/02/18 Page: 10 of 10 PAGEID #: 251 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing was served this 2 nd day of July 2018, electronically upon all counsel of record. s/jessica H. Kim JESSICA H. KIM ( ) Assistant United States Attorney 10