United States v. Youssef Abdelbary ( 2012 )

Filed: November 19, 2012
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-4910(L)
(7:10-cr-00067-SGW-1)
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
YOUSSEF HAFEZ ABDELBARY,
Defendant – Appellant.
No. 11-5000
(7:10-cr-00067-SGW-1)
UNITED STATES OF AMERICA,
Plaintiff – Appellant,
v.
YOUSSEF HAFEZ ABDELBARY,
Defendant – Appellee.
O R D E R
The Court amends its opinion filed October 31, 2012,
as follows:
On page 12, line 13 of text -- the date “June 27” is
corrected to read “June 21.”
For the Court – By Direction
/s/ Patricia S. Connor
Clerk
2
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-4910
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
YOUSSEF HAFEZ ABDELBARY,
Defendant – Appellant.
No. 11-5000
UNITED STATES OF AMERICA,
Plaintiff – Appellant,
v.
YOUSSEF HAFEZ ABDELBARY,
Defendant – Appellee.
Appeals from the United States District Court for the Western
District of Virginia, at Roanoke. Samuel G. Wilson, District
Judge. (7:10-cr-00067-SGW-1)
Argued: September 21, 2012 Decided: October 31, 2012
Before SHEDD, KEENAN, and THACKER, Circuit Judges.
Affirmed in part, reversed in part, vacated in part, and
remanded by unpublished opinion. Judge Shedd wrote the opinion,
in which Judge Keenan and Judge Thacker joined.
ARGUED: Paul Graham Beers, GLENN, FELDMANN, DARBY & GOODLATTE,
Roanoke, Virginia, for Appellant/Cross-Appellee. Joseph W. H.
Mott, OFFICE OF THE UNITED STATES ATTORNEY, Roanoke, Virginia,
for Appellee/Cross-Appellant. ON BRIEF: Timothy J. Heaphy,
United States Attorney, Terrance Jones, Third Year Law Intern,
OFFICE OF THE UNITED STATES ATTORNEY, Roanoke, Virginia, for
Appellee/Cross-Appellant.
Unpublished opinions are not binding precedent in this circuit.
2
SHEDD, Circuit Judge:
A jury convicted Youssef Abdelbary of wire fraud, money
laundering, currency structuring, bankruptcy fraud, and perjury.
After trial, the district court granted Abdelbary’s Rule 29
motion for judgment of acquittal on the wire fraud and money
laundering convictions. Abdelbary raises various issues on
appeal, including the sufficiency of the evidence on the
currency structuring convictions and the order of restitution of
attorney’s fees to Jordan Oil Company, Inc., a victim of
Abdelbary’s crimes. The Government cross-appeals the district
court’s granting of the Rule 29 motion. For the following
reasons, we affirm the currency structuring convictions, reverse
the judgment of acquittal on the wire fraud and money laundering
counts, vacate the award of restitution, and remand.
I.
A.
Youssef Abdelbary owned and operated a gas station and
convenience store in Dublin, Virginia. Abdelbary leased the
property and bought the gas he sold from Jordan Oil. 1 While
running this business, Abdelbary used a branch of the Carter
1
Between the time he opened the store in 2003 and 2006,
Abdelbary dealt with a company affiliated with Jordan Oil. From
September 2006, Abdelbary dealt with Jordan Oil. For
simplicity, we refer to both of these companies as Jordan Oil.
3
Bank and Trust in Christiansburg, Virginia, where he made more
than one hundred transactions, each involving more than $10,000.
At the time of the first deposit of this size, Ralph Stewart, a
local manager for Carter Bank and Trust, explained to Abdelbary
about the currency transaction reports (“CTRs”) that had to be
filed on a transaction involving more than $10,000.
Abdelbary’s relationship with Jordan Oil grew contentious
in late 2007 and early 2008. When Abdelbary failed to make a
payment due to Jordan Oil in early February 2008 for gas it had
delivered, Jordan Oil ceased its deliveries to Abdelbary.
Jordan Oil sued soon thereafter to collect the money that
Abdelbary owed, which totaled about $250,000. The following
day, Abdelbary began withdrawing currency in amounts less than
$10,000. Over the next eight days, Abdelbary withdrew
$59,879.31 from his account in eleven transactions. The
litigation against Jordan Oil continued through the spring of
2008. Eventually, at the end of May, this litigation concluded
when Jordan Oil obtained a final judgment against Abdelbary for
$247,759.79 and Abdelbary’s counterclaim was dismissed.
The next month, Abdelbary engaged in a series of credit
card transactions in which he charged his personal credit cards
at his store in multiple equal amounts in a span of a few
minutes. The value of these purchases was credited to the
account at Carter Bank and Trust that Abdelbary used for his
4
business, and he then withdrew this money, totaling $52,350,
from that account in amounts less than $10,000.
Abdelbary met with a bankruptcy attorney in July 2008.
Abdelbary initially told this bankruptcy attorney that he wanted
to get back at Jordan Oil, but Abdelbary eventually concluded
that he would file for bankruptcy. When Abdelbary submitted his
bankruptcy filing, he denied having made any gifts within one
year or having transferred any property within two years of the
filing. Additionally, Abdelbary stated at the bankruptcy
creditors’ meeting that he had not transferred any assets to a
family member. Despite these statements, Abdelbary had sent
$76,000 to his brother in Egypt during those previous two years.
B.
Based on these events, Abdelbary was charged in a twenty-
count indictment with wire fraud, 18 U.S.C. § 1343, money
laundering, 18 U.S.C. § 1956(a)(1)(B)(i) and (ii), currency
structuring, 31 U.S.C. § 5324(a)(1) and (3) and § 5324(d),
bankruptcy fraud, 18 U.S.C. § 152(3), and perjury, 18 U.S.C. §
1623. A jury convicted Abdelbary on all counts.
After the jury returned its verdict, the district court
granted Abdelbary’s Rule 29 motion for judgment of acquittal on
the wire fraud and money laundering counts. The district court
read the indictment as requiring the Government to prove beyond
a reasonable doubt that Abdelbary incurred the credit card
5
charges in June 2008 with the intention of filing for bankruptcy
and thus not repaying those companies. The district court held
that the Government had not met this burden and therefore
dismissed those counts of the indictment.
At sentencing, the district court sentenced Abdelbary to
twenty-four months in prison. The court entered a criminal
forfeiture judgment against Abdelbary for $112,229.31 and also
ordered Abdelbary to pay restitution to Jordan Oil of $84,079.35
for attorney’s fees incurred during the bankruptcy proceeding.
The district court cited both the voluntary, 18 U.S.C. § 3663,
and mandatory, 18 U.S.C. § 3663A, restitution provisions during
the hearing without ever specifying the provision on which it
was relying.
II.
We turn first to Abdelbary’s claim that the evidence was
insufficient to support the convictions for currency
structuring. When a defendant challenges the sufficiency of the
evidence to support his conviction, he “bears a heavy burden.”
United States v. Beidler, 110 F.3d 1064, 1067 (4th Cir. 1997)
(internal quotation mark omitted). “In reviewing the
sufficiency of the evidence supporting a criminal conviction,
our role is limited to considering whether ‘there is substantial
evidence, taking the view most favorable to the Government, to
6
support it.’” Id. (quoting Glasser v. United States, 315 U.S.
60, 80 (1942)). The conviction must be upheld if, drawing all
reasonable inferences in favor of the Government, “any
reasonable trier of fact could have found [the defendant] guilty
beyond a reasonable doubt.” United States v. Allen, 491 F.3d
178, 185 (4th Cir. 2007) (alteration in original). Ultimately,
“[r]eversal for insufficient evidence is reserved for the rare
case ‘where the prosecution’s failure is clear.’” Beidler, 110
F.3d at 1067 (quoting Burks v. United States, 437 U.S. 1, 17
(1978)).
Under 31 U.S.C. § 5324(a), a person cannot structure
currency transactions in such a way to avoid the reporting
requirements of 31 U.S.C. § 5313(a) or § 5325. Federal law
criminalizes two types of structuring. The first type,
imperfect structuring, is prohibited by § 5324(a)(1) and
proscribes conduct designed “to defeat the bank’s responsibility
to report.” United States v. Peterson, 607 F.3d 975, 980 (4th
Cir. 2010). The second type, perfect structuring, is prohibited
by § 5324(a)(3) and criminalizes conduct designed “to avoid
triggering the bank’s duty to report.” Id. The Government must
prove three elements to support a conviction under either §
5324(a)(1) or § 5324(a)(3): (1) the defendant knowingly engaged
in structuring; (2) the defendant knew of the reporting
requirements under federal law; and (3) the purpose of the
7
transaction was to evade the requirements. United States v.
$79,650.00 Seized from Bank of Am. Account Ending in 8247 at
Bank of Am., 7400 Little River Tpk., Annandale, Virginia, in the
Name of Girma Afework, 650 F.3d 381, 384 (4th Cir. 2011) (citing
the instructions of the trial judge without criticism); see also
United States v. MacPherson, 424 F.3d 183, 189 (2d Cir. 2005).
Abdelbary was charged with three counts of imperfect
structuring and two counts of perfect structuring based on the
withdrawals from February and June 2008. Given our deferential
standard of review, we hold that the Government offered
sufficient evidence at trial from which a reasonable juror could
have found Abdelbary guilty. First, Abdelbary clearly engaged
in structuring. He made eleven withdrawals in amounts less than
$10,000 in February, totaling $59,879.31. J.A. 1904. Then, in
June, Abdelbary again made eleven withdrawals in amounts less
than $10,000, this time totaling $52,350.
Turning to the second element, the Government was required
to prove that Abdelbary knew of the reporting requirements under
federal law. Despite Abdelbary’s contention, the record
provides sufficient evidence from which a reasonable juror could
find that the Government met its burden. Ralph Stewart
testified that he told Abdelbary about the CTRs and the filing
requirements. J.A. 87. Although Stewart never testified that
he told Abdelbary explicitly that the CTRs were required by
8
federal law and sent to the government, such testimony is not
required for the jury to have convicted Abdelbary. 2 Carter Bank
and Trust had filed 135 CTRs based on Abdelbary’s transactions
before Abdelbary abruptly began a new pattern of withdrawals
involving less than $10,000. This attempt to hide illegal
activity is itself evidence that Abdelbary knew his conduct was
illegal. See Beidler, 110 F.3d at 1069 (“[W]e hold that
evidence that a defendant has structured currency transactions
in a manner indicating a design to conceal the structuring
activity itself, alone or in conjunction with other evidence of
the defendant’s state of mind, may support a conclusion that the
defendant knew structuring was illegal.”). That Abdelbary may
not have been as sophisticated a businessman or developed as
complex a scheme to avoid the reporting requirement as other
people convicted of currency structuring does not mean that
Abdelbary was not engaged in illegal structuring. See, e.g.,
MacPherson, 424 F.3d at 194–95 (discussing the defendant’s
background as a businessman); Beidler, 110 F.3d at 1070
2
Stewart testified that the CTR requirements have existed
since the 1970s and that he tells customers about “the CTR
filing requirements . . . as a routine matter.” J.A. 87. From
this testimony, a reasonable juror could have inferred that this
conversation included Stewart mentioning that these
“requirements” were imposed by federal law. Nevertheless, the
record contains sufficient evidence to convict Abdelbary even
without this inference.
9
(discussing the defendant’s use of different branches of a bank
to hide his transactions). 3
Finally, the third element—that the purpose of the
transactions was to avoid the reporting requirement—is
established by the same evidence that satisfied the second
element. The fact that Abdelbary began this pattern of
withdrawals below the $10,000 threshold only after he
encountered serious financial difficulty based on the dispute
with Jordan Oil supports the conclusion that his purpose was to
avoid the reporting requirements in order to hide his assets.
See id. (discussing how a defendant’s behavior can be evidence
of his intent). Therefore, the record contains sufficient
evidence to uphold the convictions on the currency structuring
counts.
III.
We next address the Government’s cross-appeal of the
district court’s decision to grant Abdelbary’s Rule 29 motion on
the wire fraud and money laundering counts. When we review a
3
Abdelbary argues that the Government admitted during its
closing argument that Abdelbary did not know who gets the
report. This statement is not an admission that Abdelbary was
unaware of the legal reporting requirement. Read in the context
of the defense’s closing argument, this statement was simply an
admission that Abdelbary did not know whether Jordan Oil could
access the CTRs. J.A. 301–02, 314–15.
10
district court’s decision to grant a motion for judgment of
acquittal, we must reverse the district court’s decision and
reinstate the jury verdict “if there is substantial evidence,
taking the view most favorable to the Government, to support
[the jury verdict].” United States v. Mitchell, 177 F.3d 236,
238 (4th Cir. 1999) (quoting United States v. Steed, 674 F.3d
284, 286 (4th Cir. 1982)). Wire fraud has “two essential
elements: (1) the existence of a scheme to defraud and (2) the
use of . . . [a] wire communication in furtherance of the
scheme.” United States v. Curry, 461 F.3d 452, 457 (4th Cir.
2006). Money laundering has four elements: (1) the defendant
conducted or attempted to conduct a financial transaction
related to interstate commerce; (2) the transaction involved the
proceeds of specified unlawful activity; (3) the defendant knew
that the proceeds were from unlawful activity; and (4) the
defendant knew that the transaction was designed, at least in
part, to conceal or disguise the proceeds of the unlawful
activity. United States v. Wilkinson, 137 F.3d 214, 221 (4th
Cir. 1998). 4
4
The money laundering charges were predicated on the wire
fraud. The parties’ arguments focus on the wire fraud charges,
so we focus on that issue as well. The money laundering
convictions thus stand or fall based on the outcome of the wire
fraud convictions.
11
We agree with the Government that the record contains
sufficient evidence to uphold the convictions. Assuming without
deciding that the district court properly interpreted the
indictment, 5 the record contains sufficient evidence from which a
reasonable juror could have found that Abdelbary planned to file
for bankruptcy at the time he incurred the credit card charges
in June 2008. In that month, Abdelbary made a series of rapid
purported purchases in his convenience store with his personal
credit cards. For example, on June 12, he charged $7,500 in
fifteen $500 increments, all during a nine-minute span. J.A.
188–89, 1906. Two days later, Abdelbary charged $22,700, also
in $500 increments, during a twenty-six minute span. J.A. 1906–
07. Then, on June 21, Abdelbary again charged his credit cards
in rapid succession, this time taking fourteen cards over their
limit and two others to their limit. J.A. 1903. During these
few weeks, Abdelbary was also making withdrawals from his bank
account in less than $10,000 increments. J.A. 1905. Abdelbary
never made payments on any of this credit card debt. 6
5
The Government also argues that the district court read
the indictment too narrowly. Because we decide this issue on
another ground, we do not address this argument.
6
Abdelbary notes that he previously paid his credit card
bills, J.A. 217–18, and that payments stopped only after Jordan
Oil levied its May 2008 judgment against Abdelbary’s bank
account, J.A. 2005. Although this is one possible
interpretation of what happened, it is not the only one. The
(Continued)
12
Less than a month later, in the middle of July, Abdelbary
met with a bankruptcy attorney. According to the bankruptcy
attorney, in their first meeting, Abdelbary told the attorney
that he wanted to sue Jordan Oil again, not to file for
bankruptcy. J.A. 102. But the jury was free to reject this
testimony as incredible, especially in light of other testimony
in this case. For example, Abdelbary proceeded to provide false
information to the bankruptcy attorney for filings in that
proceeding about whether he had made any gifts within one year
or transferred any property within two years of the filing, J.A.
1944–45, and to lie at the creditors’ meeting about whether he
transferred assets to family members, J.A. 350. Abdelbary also
hid other assets during the bankruptcy proceedings, including
$20,000 in currency in his house that was discovered only during
the execution of a search warrant. J.A. 210. Additionally,
Abdelbary also never disclosed to the bankruptcy trustee that he
had received $49,590 from family in Egypt in the spring of 2009,
while the bankruptcy proceeding was pending. J.A. 1902.
Taken together, this evidence is sufficient for a
reasonable juror to conclude that Abdelbary used his credit
jury could reasonably conclude, based on all of the evidence,
that Abdelbary was not intending to pay the credit card bills
when he incurred those charges.
13
cards in June 2008 with the intent of ultimately filing for
bankruptcy. He engaged in a series of rapid credit card charges
at his convenience store, never made any payments on those
charges, met with a bankruptcy attorney soon thereafter, and
then filed for bankruptcy, during which he lied about his assets
on multiple occasions. Viewed in the light most favorable to
the Government, this evidence is sufficient for the jury to
conclude that the credit card charges were made with the intent
of filing for bankruptcy so that Abdelbary could keep the cash
he obtained from those credit card charges to use after his
dispute with Jordan Oil concluded without having to repay the
credit card companies. See Mitchell, 177 F.3d at 240.
IV.
Finally, we address the issue of the restitution award.
The district court ordered Abdelbary to pay $84,079.35 in
restitution to Jordan Oil for attorney’s fees related to the
bankruptcy proceeding. A district court’s decision to award
restitution is reviewed for abuse of discretion. United States
v. Leftwich, 628 F.3d 665, 667 (4th Cir. 2010).
Federal law provides two forms of restitution,
discretionary restitution under the Victim and Witness
Protection Act (“VWPA”), 18 U.S.C. § 3663, and mandatory
restitution under the Mandatory Victim Restitution Act (“MVRA”),
14
18 U.S.C. § 3663A. These are two different restitution schemes,
and each scheme requires the district court to make specific
factual findings. Under the VWPA, the district court must
determine “the financial resources of the defendant,” as well as
consider any other “appropriate” factors. 18 U.S.C. §
3663(a)(1)(B)(i)(II). Under the MVRA, the district courts must
set a payment schedule based on findings about the defendant’s
financial resources, projected earnings, and other financial
obligations. 18 U.S.C. § 3664(f)(2); see also Leftwich, 628
F.3d at 668 (discussing the structure of the VWPA and the MVRA).
Here, the district court failed to state under which act it
was ordering restitution. On multiple occasions during the
hearing at which the district court ordered restitution, the
district court referenced § 3663, J.A. 2356, 2358, 2378; yet,
when the district court imposed the restitution award, the court
said it was imposing “mandatory restitution,” J.A. 2379.
Recently, this Court faced a similar situation in which a
district court failed to specify whether restitution was based
on the VWPA or the MVRA. See Leftwich, 628 F.3d at 668–69.
There, we noted that “[i]n light of the substantially different
requirements of the MVRA and the VWPA, the failure of the
district court to indicate which statute it was applying
prevents this Court from effectively conducting appellate review
of the district court’s exercise of discretion.” Id.15
Therefore, consistent with Leftwich, we vacate the
restitution award and remand the case for further proceedings at
which the district court can identify which act it is applying
and can make the factual findings required by that act.
V.
Based on the foregoing, we affirm Abdelbary’s conviction
for currency structuring. We reverse the district court’s
judgment of acquittal on the wire fraud and money laundering
convictions and remand for reinstatement of the jury verdict and
entry of judgment against Abdelbary. Finally, we vacate the
award of restitution and remand the case to the district court
for proceedings consistent with this opinion. 7
AFFIRMED IN PART, REVERSED IN PART,
VACATED IN PART, AND REMANDED
7
We have examined the remaining issues that Abdelbary
raises in his brief and find them to be without merit.
16