United States v. Kazzzaz

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 26, 2014
• Docket: 12-50532
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 26 2014 FOR THE NINTH CIRCUIT MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

UNITED STATES OF AMERICA, No. 12-50532 Plaintiff - Appellee, D.C. No. 2:12-cr-00348-RGK-1 v.

AHMED SARCHIL KAZZAZ MEMORANDUM* Defendant - Appellant.

Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding

Argued and Submitted July 8, 2014 Pasadena, California

Before: BERZON and CLIFTON, Circuit Judges, and ROSENTHAL, District Judge.**

Ahmed Sarchil Kazzaz pleaded guilty to an indictment charging him with

one count of conspiracy to defraud and to commit offenses against the United

States, six counts of paying kickbacks to a government contractor’s employees to

obtain subcontracts and renewals, one count of wire fraud, and four counts of mail

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ** The Hon. Lee H. Rosenthal, of the United States District Court for the Southern District of Texas, sitting by designation. fraud. In this appeal, Kazzaz asserts that the District Court erred in finding that his

plea satisfied the Federal Rule of Criminal Procedure 11(b)(3) requirement for a

factual basis.

The government urges that Kazzaz’s appellate waiver forecloses the

arguments he makes on appeal. But neither an appellate waiver nor a guilty plea

precludes an appeal if the plea is not taken in accordance with Federal Rule of

Criminal Procedure 11. United States v. Bibler, 495 F.3d 621, 624 (9th Cir. 2007)

(citing United States v. Portillo-Cano, 192 F.3d 1246, 1252 (9th Cir. 1999)); see

also United States v. Brizan, 709 F.3d 864, 866 (9th Cir. 2013).

We review unpreserved Rule 11 challenges for plain error. United States v.

Escamilla-Rojas, 640 F.3d 1055, 1061 (9th Cir. 2011) (citing United States v.

Santiago, 466 F.3d 801, 803 (9th Cir. 2006)). Our review satisfies us that the

record provided a sufficient factual basis for the plea, and we affirm. We need not,

and do not, address whether the challenges Kazzaz raises are proper under Rule 11

after a guilty plea and appeal waiver.

A. Extraterritoriality

Kazzaz argues that the presumption against the extraterritorial application of

criminal statutes applies under Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247

(2010), and that the record, including the facts that he stipulated to in his plea

agreement, do not show the required domestic nexus. Because the stipulated facts show a sufficient domestic nexus with the

United States for the mail-fraud and wire-fraud counts, we need not address

whether these statutes have extraterritorial application. The “elements of

mail fraud under 18 U.S.C. § 1341 are: (1) the existence of a scheme to

defraud, and (2) using or causing the use of the mails to further the scheme.”

United States v. Serang, 156 F.3d 910, 914 (9th Cir. 1998). The mail-fraud

statute “forbid[s] and mak[es] criminal any use of the mails for the purpose

of executing [a] scheme to defraud or to obtain money by false

representations.” Parr v. United States, 363 U.S. 370, 389 (1960) (internal

quotation marks omitted, last alteration in original). The elements of wire

fraud are similar: “(1) a scheme to defraud, (2) use of the wires in

furtherance of the scheme and (3) a specific intent to deceive or defraud.”

United States v. Garlick, 240 F.3d 789, 792 (9th Cir. 2001). As with the

mail-fraud statute, the focus “is upon the misuse of the instrumentality of

communication.” Id. (internal quotation marks omitted). Kazzaz stipulated

to using the mails to send checks to Alabama and using electronic

communications to transmit a payment to a bank in Alabama. These facts

provide a sufficient domestic nexus for the mail- and wire-fraud claims.

As to the Anti-Kickback Act and conspiracy-to-defraud counts, “in United

States v. Bowman, 260 U.S. 94, 98 . . . (1922), the Supreme Court held that the territorial presumption does not govern the interpretation of criminal statutes that,

by their nature, implicate the legitimate interests of the United States abroad.”

United States v. Corey, 232 F.3d 1166, 1170 (9th Cir. 2000); see also United States

v. Felix-Gutierrez, 940 F.2d 1200, 1204 (9th Cir. 1991). The Anti-Kickback Act

and 18 U.S.C. § 371 by their nature implicate the legitimate interests of the United

States. See United States v. Cotten, 471 F.2d 744, 750 (9th Cir. 1973).

Kazzaz’s Rule 11(b)(3) argument based on the presumption against the

extraterritorial application of the criminal statutes fails.

B. Fraud

Kazzaz also argues that the stipulated facts do not show “traditional” money

or property fraud. The fraud statutes cover “individuals who retain or

misappropriate the money or property of others, regardless of how they acquired

it.” United States v. Jones, 472 F.3d 1136, 1139 (9th Cir. 2007). Kazzaz argues

that the stipulated facts do not show that the kickback payments caused a loss to

the United States, because he made the payments from money he received under

the subcontracts or from his own funds. He argues that the United States paid the

stated contract price and was not deceived into paying more because of the

kickbacks.

Kazzaz, however, pleaded guilty to the allegations in the indictment,

including the allegations charging him with defrauding the United States because the kickbacks “inflat[ed] the cost of these subcontracts and funding increases,”

causing losses. The record shows almost $1 million paid as kickbacks, corrupting

the contracting process, including the contract prices, and causing loss to the

United States.

Had Kazzaz continued to plead not guilty and gone to trial, he could have

argued that the facts support competing “innocent” inferences that a jury might

have credited. But he pleaded guilty, stipulated to the factual basis for his fraud

and conspiracy-to-defraud convictions, and stated that the stipulated facts satisfied

the elements of the offenses. The record and stipulation provide a sufficient

factual basis for those convictions. Contrary to Kazzaz’s argument, the same facts

may support both an honest-services fraud and traditional-fraud conviction. United

States v. Avery, 719 F.3d 1080, 1085 n.3 (9th Cir. 2013) (citing United States v.

Pelisamen, 641 F.3d 399, 406 (9th Cir. 2011)). Rule 11(b)(3) is satisfied.

The District Court met its Rule 11 obligations and properly accepted

Kazzaz’s guilty plea. Even assuming, without deciding, that Kazzaz properly

raised the Rule 11 challenges, they provide no basis to vacate the convictions. We

AFFIRM.