Free Memorandum - District Court of Arizona - Arizona

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PAUL K. CHARLTON United States Attorney District of Arizona KEVIN M . RAPP Assistant U.S. Attorney Two Renaissance Squ are 40 N. Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Arizona State B ar No. 012026 [email protected] Telephone (602) 514-7500

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA United States of America, CR-03-261-PHX-FJM Plaintiff, v. 1. Sam ih Fadl Jamal, 6. Mamoun Al-Jammal, 18. Mounir Daly, 26. Ibrahim Elrawy, Defendants. The United States of America, by and through counsel undersigned, hereby submits a Memorandum re: Forfeiture Hearing. This memorandum is based on the attached points and authorities, the files and records of this case, and on such further argument and evidence as may be adduced at the hearing. GOVERNMENT'S MEMORANDUM RE: FORFEITURE HEARING

Respectfully submitted this 2nd day of September, 2005. PAUL K. CHARLTON United States Attorney District of Arizona /S/ Kevin M. Rapp KEVIN M. RAPP Assistant U.S. Attorney

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. Introduction On

MEMO RANDUM OF POINTS AND AUTHORITIES

May 11, 2005, the government filed a motion detailing the seized assets that it

intended to forfeit. This memorandum provides an evidentiary basis for the forfeiture of those assets. Second, as to defendants Samih Jamal ("Jamal"), Mamoun Al Jamal ("Al Jammal"), Ibrahim Elrway ("Elrawy"), and Mounir Daly ("Daly") the government is seeking a money judgement for $2,600,000.00, for which the defendants are jointly and severally liable. As to Jamal and Al Jammal only, the government is seeking a money judgement equal to $221,529.00, representing the money involved in the structuring financial transaction violations (Counts 9, 11-19; superseding indictment), for which both defendants are jointly and severally liable.

II. Assets to be Forfeited.

On May 11, 2005, the government filed a motion re: forfeiture hearing and notice of property to be forfeited. (See Motion at Docket. #950) Contained therein are the assets the government is seeking to forfeit. Additionally, the United States alleged those assets in the second superseding indictment as subject to criminal forfeiture.(See superseding indictment filed October 7, 2004, at Docket. #578) At a forfeiture hearing the court must determine if, by a preponderance of evidence, the property constituting, or derived from, proceeds the person(s) obtained directly or indirectly, as the result of such violation(s). United States v. Garcia-Guizar, 160 F.3d 511; 518 (9 th Cir. 1999); See Title 18 U.S.C. 982. Attached as exhibit A, is a declaration by FBI Special Agent Michael A. Nordwall which contains a summary of the evidence that supports a forfeiture of the property alleged in the superseding indictment.

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III. Money Judgement

In addition to the forfeiture of seized assets all trial defendants

were noticed by the

government of the intent to seek a money judgement of $2,600,000.00 based upon the guilty verdicts for money laundering and interstate transportation and receipts of stolen property violations. (See Motion at Docket No. 950) And, as to Jamal and Al-Jammal an additional money judgement equal to $221, 529.00 is sought based upon the guilty verdicts as to Counts 9 and 11-19. ( See Government's Motion Re: Forfeiture Hearing And Notice of Property to Be Forfeited pg. 5 , lns. 22-26, at Docket No. 950). At trial, Tamer Swailem testified to receipts and checks issued by the Jamal Trading Company to many persons obtaining formula by theft, including known shoplifters, students working for Jamal, independent store owners and other wholesalers either purchasing from or selling to Jamal. Additionally, law enforcement conducted several undercover operations where Jamal and others received infant formula which had been represented a stolen. What follows is a break down of payments to shoplifters, independent store owners, students, losses attributable to the undercover operations conducted with Jamal, and payments to other wholesalers.

A. Jamal's Payments to Shoplifters Totaled $1,981,163.30.

1. Marwan Jamal, Samih Jamal's brother, was one of the more prolific shoplifters involved in the conspiracy. Many witnesses testified to Marwan Jamal's theft activities. Evidence at trial included Marwan Jamal's arrest for shoplifting. The total amount of receipts issued by Jamal and/or JTC to Marwan Jamal for infant formula totaled $1,062, 653.84. (See also Marwan Jamal's plea agreement, at Docket No. 416) 2. Fadel Hindi was a leader of an organized shoplifting group operating in the Phoenix area. Evidence at trial showed that Hindi recruited shoplifters to scour stores in the Phoenix 3

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metropolitan area to steal formula. Hindi was issued receipts for infant formula by Jamal/JTC totaling $29,089.23. 3. Abdelslam Abdelsalam, Hindi's partner, who testified at trial about their theft

activities, was issued receipts for infant formula from Jamal/JTC totaling $172, 226.00. 4. Hani Sarawan a shoplifter who pleaded guilty and had receipts for infant formula issued by Jamal/JTC totaling $134, 545.22. (See Hani Sarawan Plea Agreement, Docket No. 455) 5. Kamel Al Fahdeli another shoplifter who pleaded guilty who received receipts and checks from Jamal/JTC totaling $351, 217.17. (See also Fahdeli Plea Agreem ent) 6. Daly was arrested many times for shoplifting and admitted that he was obtaining formula by theft had receipts totaling $38, 711.46 from Jamal/JTC. 7. Anis Hemdani, a partner of Daly's, who had been shoplifting had checks issued by Jamal/JTC totaling $30, 724.67. 8. Ahmed Ahulaisi, a fugitive whom witnesses identified as a shoplifter, received checks totaling $3,547.00 from Jamal/JTC. 9. Walid Jamal is a fugitive and is Jamal's cousin, who obtained formula by shoplifting. Checks issued by Jamal/JTC to Walid Jamal totaled $139,917.00. 10. Rami Awwad obtained formula for Samih Jamal. Law enforcement arrested him for shoplifting once and evidence at trial demonstrated that he was obtaining formula by theft. Checks issued by Jamal to Awwad totaled $19,000.00. arrested several times for

B. Jamal's Payments to 1.

Independent Store Owners Totaled $405,199.71.

Nidal Al-Shendi was issued receipts by Jamal/JTC totaling $114,351.71.

Evidence at trial showed that Al-Shendi was purchasing enfamil with iron for $5.00 per can which was below the retail cost. Additionally, government witness Cynthia Bonds identified AlShendi as a store owner who instructed her to steal formula. Lastly, an undercover operation demonstrated that Al Shendi was knowingly purchasing stolen infant formula. 4

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2. Shariff Hamdan testified about purchasing formula he knew was stolen and was then sold to Jamal/JTC. Checks issued to Hamdan by Jamal/JTC totaled $12,000.00. 3. Martha Colwell and Sharon Fay King, owners and operators of the Nice Twice store, received receipts for infant formula from Jamal/JTC totaling $278,848.00. Testimony at trial showed that they were purchasing stolen formula.

C. Jamal's Payment to Foreign Students totaled $460,404.00. 1. Alaa Obeid was issued $89,000.00 in checks for stolen formula from Jamal/JTC. 2. Abdul Hamze was issued $36,404.00 in checks for stolen formula from Jamal/JTC. 3. Khaled Noaman was issued $145,000 in receipts for stolen formula from Jamal/JTC. 4. Mustapha Khodr was issued $190,000.00 in receipts for stolen formula from Jamal/JTC. D. Undercover Operations Resulted in a Loss of $166,752.00. The investigation involved five separate undercover operations targeting JTC and its employees. Four took place at a warehouse located in West Phoenix. The fifth began in Quartzite, AZ where employees of Jamal assisted in the unloading of a W al-Mart truck. After the formula was loaded on a truck rented by Jamal it was transported back to the JTC where Jamal and others unloaded the truck and repackaged it for sale to Ramy and Mamoun Al Jammal. The total amount of formula involved in all five undercover operations was 2,316 cases. There are six cans to a case. Each case retails for approximately $72.00. Accordingly, the loss amount involved in the undercover operations was approximately $166,752.00. E. Jamal's Payments to Wholesalers or other Warehouse Operators Dealing in Infant Formula Totaled $870,275.00. 1. As demonstrated at trial, Elrawy operated a warehouse in Houston, Texas similar

23 to that of Jamal. Evidence at trial showed that Elrawy was purchasing substantial amounts of 24 formula from shoplifters. He entered a contract with another warehouse operator in Phoenix 25 (and co-defendant) Slimane Hamzaoui and Jamal. Hamzaoui paid Elrawy $150,000.00 in 26 checks for infant formula. Additionally, during the life of the conspiracy Jamal paid Elrawy 27 28 5

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$33, 682.00 for stolen formula. 2. Jamal paid Al Jammal $554,347.00 for stolen formula during the life of the conspiracy. 3. Jamal paid Mamoun Al Jammal partner (and nephew) Ramy Jamal approximately $132,246.00 for stolen formula. F. Al Jamm al's Payment's for Stolen Infant Formula totaled $768,393.00. 1. Checks issued from Al Jammal to Rami Jamal and RJ Grocery totaled $214,046.00. 2. Checks issued from Jamal/JTC to Al Jammal totaled $554,347.00 G. Elrawy Payments for Stolen Infant Formula Totaled $406,356.77. 1. Again, Jamal purchased formula from Elrawy and issued checks totaling $33,682.00. 2. Receipts issued by Elrawy for formula purchased during 2000-2001 totaled $4,029,878.77. H. Daly's Payments for Infant Formula Totaled $69,436.13. 1. Daly, who was arrested numerous times for shoplifting and admitted that he was obtaining formula by theft, received $38, 711.46 from Jamal/JTC for stolen formula 2. Anis Hemdani, a partner of Daly's, and also arrested on several occasions for shoplifting, had receipts from Jamal/JTC totaling $30, 724.67. I. The Aggregate of Structured Checks alleged in Counts 9 and 11-19 is $221, 529.00. The jury found Jamal and Al Jammal guilty of Counts 9 and 11-19 of the second superseding indictment with the structuring of financial transactions to avoid a currency transaction reporting requirement. 1 Accordingly, the government requests that the court order a money judgement in the amount of $221,529.00.

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Jamal was also found guilty of structuring a financial transaction in count 11. 6

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. Conclusion Based on the foregoing, the government urges the court to order the forfeiture of the assets alleged in the superseding indictment and further specified in exhibit A.. Additionally, the government requests that the court enter a money judgement against defendants Jamal, Al 7 IV. Each Defendant is Responsible for Reasonably Foreseeable Losses. In all cases, the defendants knew others stole the baby formula because the price paid was so absurdly below market level that theft was the only explanation. These paym ents together total $8,023,558.07 worth of baby formula, calculated conservatively using the

defendant's below-market rate. In other words, the loss amount is actually greater because Jamal, Al Jammal and Elrawy were purchasing infant formula from shoplifters below the wholesale rate. Moreover, all defendants are liable for the reasonably foreseeable losses caused by coconspirators. United States v. Brown, 66 F.3d 124, 128 (6 th Cir. 1995) (holding defendant liable for the gain of the entire conspiracy, and not simply her share); United States v. Narvaez, 995 F.2d 759 (7 th Cir. 1993) (holding defendant responsible for entire amount stolen in furtherance of the conspiracy, instead of what defendant personally stole). It is reasonably foreseeable that after establishing a scheme that made stealing, buying and reselling stolen baby formula into a full-time job, all co-conspirators could reasonably foresee that others involved in the scheme would be buying and selling stolen formula. Accordingly, the total losses, reaches $8,323,558.07. Nevertheless, the government is seeking a money judgement of only $2.6 million, for which the defendants are jointly and severally liable. And, the government is further seeking a money judgment as to Jamal and Al Jammal equal to $221,529.00 representing the amount of money involved in the structuring of financial transactions, for which both defendants are jointly and severally liable.

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Jammal, Elrawy and Daly in the amount of $2.6. And, as to Jamal and Al Jammal a money judgment equal to $221,529.00.

Respectfully submitted this 2nd day of September, 2005. PAUL K. CHARLTON United States Attorney District of Arizona /S/ Kevin M. Rapp KEVIN M. RAPP Assistant U.S. Attorney

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CERTIFICATE OF SERVICE I hereby certify that on September 2, 2005, I electronically transmitted the attached document to the Clerk's Office using the CM /ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:

Robert J. Kavanagh Attorney for Samih Jamal Lawrence Kazan Debus Kazan & Westerhausen LTD Attorney for Mamoun Al-Jammal David Lockhart Attorney for Ibrahim Hassan Elrawy Nancy Hinchcliff Attorney for Mounir Daly

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