United States v. Al Sharaf ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA
v. Criminal No. 15-mj-139 (BAH)
HANAN AL SHARAF,
Defendant.
MEMORANDUM OPINION
The government filed a criminal complaint, on March 5, 2015, charging defendant Hanan
Al Sharaf, a former Financial Attaché assigned to the Kuwaiti Embassy in Washington, D.C.,
with conspiracy to money launder, in violation of 18 U.S.C. § 1956(h). See Crim. Compl., ECF
No. 1 at 1; id., Aff. in Support of Crim. Compl. and Arrest Warrant (“Shelley Aff.”), ¶ 2.
Pending before the Court is the defendant’s motion to dismiss the criminal complaint on the
ground of residual diplomatic immunity under the Diplomatic Relations Act of 1978, 22 U.S.C. §
254d. See Def.’s Mot. to Dismiss the Crim. Compl. on the Grounds of Diplomatic Immunity and
Memo. of Law in Support (“Def.’s Mem.”), ECF No. 34 at 1. For the reasons explained below,
the defendant’s motion to dismiss the criminal complaint is denied. 1
I. BACKGROUND
The defendant served as the Financial Attaché to the Kuwait Health Office, an office
maintained by the Kuwait Health Ministry, in Washington, D.C. from approximately August 10,
2011 until December 9, 2014. Shelley Aff. ¶ 4; Def.’s Mem. at 2. She first entered the United
States in July 2011 under an A-2 Non-Immigrant Visa and, again, in January 2014 under an A-1
Non-Immigrant Visa. Shelley Aff. ¶ 4. According to the United States Department of State, A-1
1
This case was initially assigned to the former Chief Judge and, on his retirement, was subsequently re-
assigned, on March 24, 2016, to the undersigned Chief Judge.
1
and A-2 visas are only available to those persons “traveling to the United States on behalf of
[their] national government[s] to engage solely in official activities for that government.” Def.’s
Mem., Ex. 5 (“State Dept’s Visas for Diplomats and Foreign Government Officials”) at 1, ECF
No. 34-6.
The Kuwait Health Ministry’s mission in Washington D.C. is to “pay for health care
costs incurred by Kuwaiti nationals receiving medical treatment in the United States.” Shelley
Aff. ¶ 6. The defendant’s core responsibilities as the Financial Attaché to the Kuwait Health
Office was to “review[] claims for payment from medical providers, process[] claims for
payment [to medical providers], and personally approv[e] such payments.” Report and
Recommendation (“R&R”) at 10, ECF No. 49; Def.’s Resp. Gov’t’s R&R Obj. (“Def.’s R&R
Resp.”), ECF No. 53 at 3; Gov’t’s Mot. Opp’n, Ex. D (“Prelim. Hrg. Tr.”) at 23, ECF No. 38-4.
To perform her duties, the defendant was a signatory on the Health Ministry’s bank accounts.
Shelley Aff. ¶ 23.
On March 5, 2015, the government filed a criminal complaint against the defendant,
charging her, under 18 U.S.C. § 1956(h), with conspiracy to “knowingly conduct . . . financial
transactions with . . . proceeds of . . . unlawful activities . . . knowing that the transactions were
designed . . . to conceal or disguise the nature, the location, the source, the ownership, and the
control of the proceeds of specified unlawful activity . . . and that the criminally derived property
involved in each transaction as of a value greater than $10,000.” Shelley Aff. ¶ 2. The
government alleges that, first, the defendant conspired to “create shell companies, using names
that closely resembled actual health care providers,” in the States of Virginia and Maryland, and
opened bank accounts in the name of these shell companies in U.S. banks in Maryland. Id. ¶¶ 9,
2
18–20, 24. 2 Second, the defendant conspired to create fake medical invoices for unperformed
medical services on behalf of the shell companies. Id. ¶¶ 9, 15. Third, the defendant conspired
to pay the fake invoices by wiring funds, or issuing checks, from the Kuwait Health Ministry’s
bank account, opened in Washington, D.C., into the U.S. bank accounts controlled by the
defendant in the names of the shell companies. Id. ¶¶ 9, 12, 26. Fourth, the defendant and the
co-conspirators withdrew in cash the funds deposited by the Kuwait Health Ministry into the
shell companies’ U.S. Bank accounts. Id. ¶¶ 9, 15. Lastly, to conceal the embezzlement, the
defendant allegedly directed her co-conspirators, who were her subordinates in the Kuwait
Health Office, to edit transaction records associated with these unauthorized payments. Id. ¶¶ 9,
15. The defendant also allegedly accepted, in her office at the Kuwait Embassy in Washington,
D.C., a bag containing between $5,000 and $10,000 in cash from a co-conspirator. See Gov’t’s
Mot. Opp’n at 10 (citing Prelim. Hrg. Tr. at 11:3–13:12).
On July 1, 2015, the defendant moved to dismiss the criminal complaint, see Def.’s
Mem., which motion was referred to a Magistrate Judge for a Report and Recommendation, See
Order Referring Case, ECF No. 47. 3 On September 14, 2015, the Magistrate Judge
recommended granting the defendant’s motion and dismissing the criminal complaint, see R&R
at 1, to which recommendation the government timely objected, see Gov’t’s Objections to the
2
The shell companies incorporated by the defendant and her co-conspirators were named “UPMC Global
Services,” “Hopiken Medical Services,” and “Med Star Physician LLC,” which closely resemble the names of the
actual medical providers UPMC Global Care, John Hopkins Medicine and MedStar, respectively. Shelley Aff. ¶ 25.
3
The defendant was arrested and brought before a Magistrate Judge on March 6, 2015, at which time the
Magistrate Judge granted the government’s motion for three-day temporary detention. Minute Entry, dated March
6, 2015. On March 9, 2015, the defendant was released on personal recognizance and placed into the High Intensity
Supervision Program/Permanent Home Confinement. Release to PSA’s High Intensity Supervision Program, ECF
No. 5. Additionally, the defendant was ordered, inter alia, “to deposit into the registry of the Court a $100,000 cash
bond,” to surrender her passport and all other immigration documents, and prohibited from leaving the United States
or entering or being within 10000 feet of any airport, embassy or consulate. Conditions to Release on Bond at 1,
ECF No. 5-1. Her status has remained unchanged during the pendency of her motion to dismiss the criminal
complaint.
3
Magistrate Judge’s Proposed Findings and Recommendations Regarding Defendant’s Motion to
Dismiss (“Gov’t’s R&R Obj.”), ECF No. 51. For the reasons set out below, the Report and
Recommendation is rejected, and the defendant’s motion is denied.
II. LEGAL STANDARD
A. Federal Rule of Criminal Procedure 59(b)
District court judges “may refer to a magistrate judge for recommendation” dispositive
motions, such as a motion to dismiss or quash an indictment or information. FED. R. CRIM. P.
59(b)(1). Parties may file written objections to the magistrate judge’s findings and
recommendations “[w]ithin 14 days after being served with a copy of the recommended
disposition.” FED. R. CRIM. P. 59(b)(2). The magistrate judge’s recommendation is subject to
de novo review by the district court, which may “accept, reject, or modify the recommendation . .
. .” FED. R. CRIM. P. 59(b)(3); D.D.C. LOCAL CRIM. R. 59.2(c).
B. Federal Rule of Criminal Procedure 12(b)
Pursuant to Federal Rule of Criminal Procedure 12(b), a defendant “may raise by pretrial
motion any defense, objection, or request that the court can determine without a trial on the
merits,” including a “motion that the court lacks jurisdiction.” FED. R. CRIM. P. 12(b)(1) & (2).
“‘Federal courts are courts of limited jurisdiction,’ possessing ‘only that power authorized by
Constitution and statute.’” Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (quoting Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). Indeed, federal courts are “forbidden .
. . from acting beyond our authority,” NetworkIP, LLC v. FCC, 548 F.3d 116, 120 (D.C. Cir.
2008), and, therefore, have “an affirmative obligation ‘to consider whether the constitutional and
statutory authority exist for us to hear each dispute,’” James Madison Ltd. ex rel. Hecht v.
Ludwig, 82 F.3d 1085, 1092 (D.C. Cir. 1996) (quoting Herbert v. Nat’l Acad. of Scis., 974 F.2d
4
192, 196 (D.C. Cir. 1992)). Absent subject matter jurisdiction over a case, the court must
dismiss it. Arbaugh v. Y & H Corp., 546 U.S. 500, 506–07 (2006).
“Federal courts have subject-matter jurisdiction over federal criminal prosecutions by
virtue of 18 U.S.C. § 3231, which vests the district courts with the power to hear ‘all offenses
against the laws of the United States.’” United States v. Yousef, 750 F.3d 254, 259 (2d Cir.
2014). This jurisdiction is limited, however, by the Diplomatic Relations Act of 1978, codified
at 22 U.S.C. § 254 et seq., which implements this country’s treaty obligations under the Vienna
Convention on Diplomatic Relations (“VCDR”). Specifically, the Diplomatic Relations Act
provides that “[a]ny action or proceeding brought against an individual who is entitled to
immunity with respect to such action or proceeding under the Vienna Convention on Diplomatic
Relations . . . or under any other laws extending diplomatic privileges and immunities shall be
dismissed.” 22 U.S.C. § 254d. A particular individual’s immunity “may be established upon
motion or suggestion by or on behalf of the individual, or as otherwise permitted by law or
applicable rules of procedure.” Id. Under the VCDR, in turn, “a diplomat enjoys immunity from
the criminal jurisdiction of the host country,” subject to certain restrictions. Aidi v. Yaron, 672 F.
Supp. 514, 518 (D.D.C. 1987).
When considering a motion to dismiss for lack of jurisdiction, “a court assumes the truth
of th[e] factual allegations” contained in the criminal complaint. United States v. Ballestas, 795
F.3d 138, 149 (D.C. Cir. 2015) (citing Boyce Motor Lines v. United States, 342 U.S. 337, 343
n.16 (1952)); United States v. South Fla. Asphalt Co., 329 F.2d 860, 865 (5th Cir. 1964), cert.
denied 85 S. Ct. 149 (1964) (“On consideration of a motion to dismiss, all well pleaded facts are
taken to be true; and if the same constitute a criminal offense, the information is good and must
not be dismissed.”).
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III. DISCUSSION
The defendant contends that the criminal complaint against her should be dismissed
because her actions are immune from criminal prosecution under the Diplomatic Relations Act,
22 U.S.C. § 254d. See Def.’s Mem. at 1. The government counters that diplomatic immunity
does not apply to the charged actions because (1) the defendant lacks authority to assert
diplomatic immunity on her own behalf and only the State of Kuwait may do so, see Gov’t’s
Mot. Opp’n at 7, and (2) even if the defendant could personally assert diplomatic immunity, the
“acts giving rise to the charges in the criminal complaint” are not covered by the VCDR, id. at 9.
Since the defendant relies on the Diplomatic Relations Act, and, by incorporation, the VCDR,
the legal framework of the VCDR is set out below, followed by discussion of each of the
government’s arguments that this law is no bar to prosecution.
A. The Vienna Convention on Diplomatic Relations
The VCDR, incorporated by reference in the Diplomatic Relations Act, is an international
treaty that lays out “an international convention on diplomatic intercourse, privileges and
immunities.” VCDR preamble, April 18, 1961, 23 U.S.T. 322, T.I.A.S. 7502. The stated
purpose of the VCDR is “not to benefit individuals but to ensure the efficient performance of the
functions of diplomatic missions as representing States.” Id. Recognizing that “foreign
representatives may carry out their duties effectively only if they are accorded a certain degree of
insulation from the application of the laws of the host country,” Gov’t’s Mot. Opp’n, Ex. C
(Decl. of Legal Adviser of the Department of State, dated June 10, 1985) at 8, ECF No. 38-3, the
VCDR provides, to all those entitled, diplomatic immunity “from criminal prosecution and
protection from most civil and administrative actions,” Tabion v. Mufti, 73 F.3d 535, 537 (4th
Cir. 1996); see also VCDR art. 31, ¶ 1 (“A diplomatic agent shall enjoy immunity from the
6
criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and
administrative jurisdiction[.]”). 4 Thus, the Diplomatic Relations Act “makes pellucid that
American Courts must dismiss a suit against anyone who is entitled to immunity under either the
VCDR or other laws ‘extending diplomatic privileges and immunities.’” Brzak v. United
Nations, 597 F.3d 107, 113 (2d Cir. 2010) (quoting 22 U.S.C. § 254d).
Consistent with the purpose of diplomatic immunity to facilitate the carrying out of a
diplomat’s duties in representing a foreign nation, “diplomats lose much of their immunity
following the termination of their diplomatic status,” or after a reasonable time for departure has
passed. Swarna v. Al-Awadi, 622 F.3d 123, 133 (2d Cir. 201); VCDR art. 39, ¶ 2 (“When the
functions of a person enjoying privileges and immunities have come to an end, such privileges
and immunities shall normally cease at the moment when he leaves the country, or on expiry of a
reasonable period in which to do so . . . .”). “[S]ome form of residual immunity is necessary,”
Baonan v. Baja, 627 F. Sup. 2d 155, 162 (S.D.N.Y. 2009), however, for official acts performed
“in the exercise of [the former diplomat’s] functions as a member of the mission,” VCDR art. 39,
¶ 2. These prior official functions constitute “in law the acts of the sending State.” Baoanan,
627 F. Supp. 2d at 162 (quoting EILEEN DENZA, DIPLOMATIC LAW: COMMENTARY ON THE
VIENNA CONVENTION ON DIPLOMATIC RELATIONS 439 (3d ed. 2008)). To sue a former diplomat
for such official acts “would be indirectly to implead the sending state.” Id. (quoting same).
Consequently, a former diplomat, such as the defendant, whose appointment to the Kuwait
Embassy as a diplomat has ended, 5 is entitled only to the “less expansive immunity,” Swarna,
4
Article 31, paragraph 1 of the VCDR provides three exceptions to civil immunity but those exceptions are
not relevant here because the defendant is facing criminal prosecution rather than a civil suit.
5
The defendant was terminated from her diplomatic position at the Embassy of Kuwait on December 9,
2014. Shelley Aff. ¶ 4. The criminal complaint was filed three months later, on March 5, 2015. See generally
Crim. Compl.
7
622 F.3d at 134, that remains with former diplomats for “official functions” performed during
her tenure.
B. The Defendant May Assert Residual Immunity on Her Own Behalf
The government initially disputed the defendant’s right to assert her entitlement to
immunity when the sending State, Kuwait, has not done so on her behalf. 6 Gov’t’s Opp’n Mot.
at 8. In making this argument, the government relied on the preamble to the VCDR, which
highlights that “‘the purpose of such privileges and immunities is not to benefit individuals but to
ensure the efficient performance of the functions of diplomatic missions at representing States.’”
Id. at 7 (quoting VCDR preamble). The government reasoned that residual immunity “ultimately
belongs to the sovereign rather than the officials,” id. (citing Breard v. Greene, 523 U.S. 371,
378 (1998)), and, therefore, the sending state has “sole discretion . . . to assert an individual’s
immunity from a foreign state’s judicial process, if in fact any such immunity exists,” id. at 8.
The Magistrate Judge rejected this argument as “border[ing] on the frivolous,” R&R at 6, and the
government did not revive this point in its objections to the recommendation to dismiss the
criminal complaint, see generally Gov’t’s R&R Obj. Consequently, this argument may be
deemed waived. FED. R. CRIM. P. 59(b)(2) (“Failure to object . . . waives a party’s right to
review.”).
In any event, to the extent that the government’s objection to the R&R is intended to
preserve this argument, the effort is unavailing. The plain language of the Diplomatic Relations
Act expressly states that diplomatic “immunity may be established upon motion or suggestion by
. . . the individual,” without any requirement of action by the sending State. 22 U.S.C. § 254d.
6
The government does not dispute that the defendant acquired full diplomatic immunity, as defined by the
VCDR, for the period from August 10, 2011 to December 9, 2014, see Gov’t’s Opp’n Mot., Ex. 1 (Letter from
Assistant Chief of Protocol of the U.S. Department of State regarding the diplomatic status of the defendant, dated
March 16, 2015), ECF No. 38-1,
8
Moreover, the legislative history confirms that “an application for a dismissal of an action can be
made by the diplomat himself.” S. Rep. No. 95-958, at 5 (1978). The Department of State also
interprets the VCDR to allow individual diplomats to assert immunity on their own behalves, see
Gov’t’s Mot. Opp’n, Ex. B (State Department’s “Diplomatic and Consular Immunity: Guidance
for Law Enforcement and Judicial Authorities”) at 25–27 (enumerating the methods by which
individuals may demonstrate entitlement to diplomatic immunity), ECF No. 38-2, and as the
enforcing agency, this interpretation is granted “substantial deference,” United States v. Al-
Hamdi, 356 F.3d 564, 570 (4th Cir. 2004) (internal quotations and alteration omitted).
Indeed, the D.C. Circuit has held that “[i]t is enough that [the diplomat] has requested
immunity, that the State Department has recognized that the person for whom it was requested is
entitled to it, and that the Department’s recognition has been communicated to the court.”
Carrera v. Carrera, 174 F.2d 496, 497 (D.C. Cir. 1949); see also Sabbithi v. Al Saleh, 605 F.
Supp. 2d 122, 125 (D.D.C. 2009). The defendant in this case meets all of these conditions. She
has requested immunity, see generally Def.’s Mem.; the State Department has recognized that
she was a former diplomat entitled to privileges and immunities from August 10, 2011 to
December 9, 2014, see Letter from Assistant Chief of Protocol of the U.S. Department of State
regarding the diplomatic status of the defendant, dated March 16, 2015; and the State
Department’s recognition of her formal diplomatic status was communicated to the Court.
Additionally, the record contains no indication that Kuwait has expressly waived the defendant’s
residual immunity, should it apply.
Accordingly, the defendant is entitled to assert diplomatic immunity notwithstanding that
the sending State has not bolstered this assertion with any express statement of support.
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C. The Charged Acts Are Not Protected by the Defendant’s Residual Immunity
The defendant’s assertion of diplomatic immunity rests on the residual immunity
provided in VCDR art. 39, ¶ 2, to former diplomats, which covers only “acts performed by such
a person in the exercise of his functions as a member of the mission.” VCDR art. 39, ¶ 2; Def.’s
Mem. at 6. The government disputes that residual immunity applies here to bar the instant
prosecution because “[t]he acts giving rise to the charges in the criminal complaint were not
performed in the defendant’s exercise of her official functions as the Financial Attaché for the
Kuwait Embassy Health Office.” Gov’t’s Mot. Opp’n at 9.
Residual immunity applies only to actions that are “directly imputable to the state or
inextricably tied to a diplomat's professional activities,” Swarna, 622 F.3d at 135, or actions that
“fall within the ‘ambit’ of the diplomatic agent’s ‘professional responsibilities,’” Brzak, 597 F.3d
at 113 (citations omitted). “[A]cts that are ‘incidental’ to the exercise of his functions as a
member of the mission” are not protected. Swarna, 622 F.3d at 134. Consistent with the
Department of State’s interpretation of VCDR art. 39, ¶ 2, “only ‘official acts’ and ‘official
functions’ were protected under Article 39(2)’s provision for residual immunity.” Swarna, 622
F.3d at 135 (citing Decl. of Legal Adviser of the Department of State, dated June 10, 1985).
To determine whether the charged acts are protected as an “exercise of [the defendant’s]
functions as a member of the mission,” the court “must not judge, ‘whether the underlying
conduct actually occurred, or whether it was wrongful.’” Swarna, 622 F.3d at 137 (quoting
Brzak, 597 F.3d at 113). “Rather, our consideration is a functional one, which ‘parallels the
objective tests we have adopted in applying other forms of immunity.’” Id. (quoting Brzak, 597
F.3d at 113 n**). As the defendant concedes, “whether the defendants enjoyed residual
immunity . . . depend[s] on whether the claims ‘relate to’ acts taken in the course of the
10
diplomat’s official conduct, or instead whether the claims involve private conduct that was
‘entirely peripheral’ to those official functions,” Def.’s R&R Resp. at 10 (citing Swarna, 607
F.2d at 518), and “‘not on the nature of the underlying conduct,’” id. (quoting Brzak, 551 F.
Supp. 2d at 319).
Here, the criminal complaint charges the defendant with conspiracy to commit money
laundering, by conspiring to: (1) incorporate shell companies in Maryland and Virginia; (2) to
open bank accounts in Maryland “in the name of the shell companies;” (2) “create fictitious bills
issued from the shell companies to the [Kuwait] Health Ministry;” (3) “prepare invoices for
services that were not provided;” (4) “issue checks in the name of” the shell companies as
purported payment of the false invoices; (5) “receive $1 million in cash from the embezzled
funds;” and (6) “accept[] a bag of cash from a co-conspirator, containing between $5,000 and
$10,000.” Gov’t’s Mot. Opp’n at 10 (internal quotation marks omitted).
The defendant describes these factual allegations as “all . . . allegedly carried out at the
diplomatic mission with other mission employees, and made possible because of her mission-
related functions.” Def.’s Reply in Supp. of Def.’s Mot. to Dismiss the Criminal Compl. on the
Grounds of Diplomatic Immunity (“Def.’s Reply”) at 6, ECF No. 45. As such, she contends that
these alleged actions are, “at a minimum, ‘inextricably tied’ to her ‘professional activities,’”
which “‘included overseeing a staff that reviewed claims for payment from medical providers,
processing claims for payment, and personally approving such payments.’” Id. (quoting Shelley
Aff. ¶¶ 6–7). More generally, the defendant urges the Court not to “parse the claim in search of
underlying acts that, if true, would be outside the scope of a diplomat’s official functions.”
Def.’s R&R Resp. at 13. Yet, this is the precise task before the Court: to scrutinize the charged
11
acts objectively and evaluate whether they fall within the defendant’s official functions subject to
her residual immunity.
The defendant, however, is not charged with stealing her employer’s funds, to which she
had authorized access by virtue of her position as the Financial Attaché to the Kuwait Health
Office in the Kuwait Embassy. To the contrary, a review of the charged acts demonstrates that
the defendant is accused of executing a complex scheme designed to conceal the source of the
embezzled funds by exploiting mechanisms provided under Maryland and Virginia law. These
charged acts plainly fall outside any sphere of the defendant’s “exercise of [her] functions as a
member of the mission.” VCDR art. 39, ¶ 2. 7 The defendant’s official responsibilities regarding
the payment of U.S. medical bills of Kuwaiti citizens did not require, and were not furthered in
any way, by (1) the incorporation of U.S. shell companies, let alone giving those shell companies
names designed to mimic those of actual health care providers; (2) the opening of U.S. bank
accounts on behalf of those U.S. shell companies; (3) the creation of fictitious bills from those
shell companies; and (4) the distribution to her and co-conspirators of funds from the accounts of
the shell companies. See Shelley Aff. ¶¶ 9, 12, 15, 18-20, 24, 26. Furthermore, other than the
source of the funds being funneled through the U.S. shell companies and the associated bank
accounts, none of these acts were undertaken “in the course of ‘implementing an official policy
or program” of, or to benefit, the State of Kuwait at all. Gov’t’s Mot. Opp’n at 13–14 (quoting
7
Indeed, the State of Kuwait has denied that the charged acts were part of the defendant’s “official duties.”
On September 21, 2015, the Department of State issued a diplomatic note requesting that Kuwait either “confirm
that the acts listed in the attachment were not performed in the exercise of Ms. al Sharaf’s functions as a diplomat at
the Embassy of Kuwait,” or, “if any of the alleged acts are considered by the government of Kuwait to be part of her
official functions, the Department of State requests the government [to] waive any residual immunity to permit the
criminal case to proceed against her.” United States’ Notice of Suppl. Auth., Ex. 1 (Diplomatic Note Issued to the
State of Kuwait, dated Sept. 21, 2015) at 1–2 (emphasis in original), ECF No. 52-1. The State of Kuwait responded
that “the activities set forth in the Attachment to the aforesaid Diplomatic Note [were] . . . not performed in
connection with, or in the furtherance of, the duties or official functions of a diplomatic employee.” Id., Ex. 2
(Kuwait’s Response to the Diplomatic Note, dated Oct. 1, 2015) at 1, ECF No. 52-2.
12
Swarna, 607 F. Supp. 2d at 517). In fact, assuming the charged facts to be true, as the Court
must, the defendant’s conspiratorial actions caused harm to Kuwait, resulting in the theft of
“over $1.3 million designated for the medical treatment and expenses incurred by Kuwaiti
citizens in the United States.” Id. at 12.
The defendant argues that she is nonetheless entitled to immunity because the charged
acts were “allegedly carried out by Health Office employees who worked under Ms. Al Sharaf,”
and, therefore, “were inextricably tied to defendant’s diplomatic duties,” Def.’s R&R Resp. at
13–14. She emphasizes that, even if these charged acts did not “fall into the ambit” of her
professional responsibilities, the “core of the Defendant’s acts, as alleged in the complaint,
actually fell within the scope of the Defendant’s official functions.” Id. at 13 (internal quotations
omitted; emphasis in original). These arguments are unavailing.
1. Defendant’s Management Role Does Not Immunize Her Alleged
Conduct
Ironically, the defendant seeks to use the allegation that her co-conspirators in the
charged money laundering scheme were her subordinates as a critical factual basis for assertion
of residual immunity. Def.’s R&R Resp. at 13–14. Merely because the defendant may have
engaged others with whom she worked in corrupt activities does not, however, cloak her actions
with the immunity intended to protect the exercise of her official functions. To put it bluntly, the
defendant is not entitled to immunity for every act that she directed her subordinates to perform
when those acts are outside of the scope of her and her subordinates’ official duties.
The defendant’s reliance on Brzak v. United Nations, 597 F.3d 107 (2d Cir. 2010) and De
Luca v. United Nations Organization, 841 F. Supp. 531 (S.D.N.Y. 1994), for her theory that the
defendant’s position as a manager immunizes all of her activities with her subordinates, is
misplaced. See Def.’s R&R Resp. at 14. In both of these civil cases involving claims against the
13
United Nations (“UN”) and current or former UN officials, the defendants were found to enjoy
residual “functional immunity” for their treatment of the plaintiffs. Contrary to the defendant’s
theory, however, these cases illustrate the circumscribed nature of the residual immunity
afforded to employees for their conduct during their employment.
In Brzak, the plaintiffs alleged that, after one of the plaintiffs complained internally about
a defendant former UN supervisor inappropriately touching her at a meeting, both plaintiffs,
including a second supportive plaintiff, were subjected to “manipulat[ed]” work assignments and
denied promotions, which actions the plaintiffs claimed amounted to sex discrimination under
several federal statutory and state common law theories. 597 F.3d at 110. The Second Circuit
scrutinized the factual allegations underlying the claims regarding the defendants’ alleged
actions affecting “the conditions of her employment,” including “changes of her work
assignments” and “the defendants conduct in investigating [the plaintiff]’s claims,” and found
that “[t]hese allegations involve personnel management decisions falling within the ambit of the
defendants' professional responsibilities” that were “relate[d] to the management of the office[.]”
Id. at 113. The Court therefore concluded that those claims predicated on “personnel
management decisions” were barred under residual immunity, but expressly declined to opine
about whether such functional immunity applied to the state law claim of battery, over which the
Court declined to exercise supplemental jurisdiction after dismissal of the federal claims. Id. at
113–14.
The factual allegations supporting the claims at issue in Brzak fell precisely within the
scope of the defendants’ official management duties and, even if those duties were exercised
improperly or even illegally, the claims were barred. By contrast, here, the defendant’s alleged
conduct of creating shell companies with associated bank accounts in order to conceal her
14
embezzlement of funds from her employer fall far outside her—and her subordinates’—official
duties.
Likewise, the plaintiff in De Luca alleged that the UN and current and former UN
officials unlawfully withheld his taxes and asserted claims “breach of contract, forgery,
negligence and the violation of federal civil rights and employee medical benefits law.” 841 F.
Supp. at 532–33. The underlying factual allegations against the former U.N. Secretary-General
and the former Assistant Secretary-General, who were entitled to residual immunity under the
VCDR, were based in their “fail[ure] to reimburse plaintiff for his 1988 taxes,” “supervision of
the U.N. office of Human Resources Management, which plaintiff asserts failed to respond to
complaints he filed about the taxes,” and “the creation of the 1987 tax audit that the plaintiff
claims were intended to retaliate against the U.S”—all acts that were indisputably part of the
former diplomats’ official functions. Id. at 534. Consequently, the claims against these former
UN officials were dismissed as barred under residual immunity.
Notably, the De Luca court expressly distinguished the nature of the factual allegations at
issue from those in a criminal case where immunity under § 7(b) of the International
Organizations Immunities Act (“IOIA”), 22 U.S.C. § 288 et seq., 8 was denied to a UN inventory
clerk indicted on forty-four counts of grand larceny, since the alleged crimes involved thefts
against his co-workers and these thefts were not “either ‘directly or remotely related to the
functions of his U.N. employment.’” Id. at 535 (discussing People v. Coumatos, 224 N.Y.S.2d
504, 510 (Sup. Ct. 1961), later opinion, 224 N.Y.S.2d 507 (Sup. Ct. 1961), aff'd mem. 20 A.D.2d
8
Section 7(b) of the IOIA provides current U.N. officers and employees functional immunity similar to the
residual immunity afforded to former diplomats under the VCDR. See 22 U.S.C. § 288d(b) (“Representatives of
foreign governments in or to international organizations and officers and employees of such organizations shall be
immune from suit and legal process relating to acts performed by them in their official capacity and falling within
their functions as such representatives, officers, or employees . . . .”).
15
850 (N.Y. App. Div. 1964)). The De Luca court explained that “Coumatos is clearly inapposite
as plaintiff's claims challenge actions which defendants have taken in implementing U.N.
employment and financial policy.” Id.
The charged acts here may have occurred while the defendant had management
responsibilities as part of her employment with the Kuwait Embassy, but that fact is not
dispositive. Rather, as the analyses in Brzak and De Luca make clear, the critical inquiry is
whether the factual allegations underlying the claim describe conduct that is part of the
defendant’s official “management of the office.” See also Swarna, 622 F.3d at 139 (noting that
Brzak, 597 F.3d at 114, left “open the question of whether a U.N. official’s alleged commission
of the tort of battery against a U.N. employee constituted activity outside the scope of residual
immunity,” and holding that residual immunity would apply “[o]nly if the commission of such
crimes could be considered an official act”); Jimenez v. Delgado, 978 F. Supp. 2d 726, 731–32
(S.D. Tex. 2013) (barring, on the ground of consular immunity, the plaintiff’s wrongful
termination claims because “managing and supervising consular employees is a ‘consular
function’” and “terminating employees’ employment or not renewing their employment contracts
are acts ‘performed in the exercise of’ that function”); Ford v. Clement, 834 F. Supp. 72, 73, 75–
76 (S.D.N.Y. 1993) (Sotomayor, D.J.), aff’d without opinion, 29 F.3d 621 (2d Cir. 1994), cert.
denied, 115 S. Ct. 449 (1994) (finding consular immunity applies where the defendant was
accused of engaging in “a campaign of harassment designed to force [the plaintiff] out of the
Consulate,” because the allegations implicate “the management and supervision of” the plaintiff,
which “indeed lie at the core of any efforts by the [defendant] to perform [his] designated
functions”). 9
9
Jimenez v. Delgado and Ford v. Clement rely on consular immunity under the Vienna Convention on
Consular Relations, rather than residual immunity under the VCDR, but the reasoning of these courts is still
16
Here, the defendant avers that the scope of her managerial duties involved “overseeing a
staff that reviewed claims for payment from medical providers, processing claims for payment,
and personally approving such payments.” Def.’s Reply at 6. Engaging personally, or directing
her subordinates, to engage in conduct designed to conceal the embezzlement of their employer’s
funds is simply not related to reviewing or processing claims for payment from medical
providers and does not entitle her to residual immunity under the guise of managing
subordinates.
2. Defendant’s Official Responsibilities For Certain Funds Does Not
Immunize All Conduct In Her Handling of Those Funds
The defendant also argues that her official responsibilities for processing medical claims
payments should immunize any part of her conduct that involves handling these funds, even if
the manner in which she did so was illegal. As the defendant puts it, she is immune from the
charged crime because “the core of the Defendant’s acts, as alleged in the complaint, actually
fell within the scope of the Defendant’s official functions.” Def.’s R&R Resp. at 13 (internal
quotations omitted). The defendant’s argument is predicated on a misapprehension of the crime
charged.
The criminal complaint charges the defendant with conspiracy, in violation of 18 U.S.C.
§ 1956(h), “to commit violations of 18 U.S.C. § 1956(a)(1)([B])(i) and 1957.” Crim. Compl. at
1. The latter two criminal statutes, which are the alleged objects of the charged conspiracy,
persuasive because, as other courts have noted, consular immunity and residual diplomatic immunity are “virtually
identical.” Rana v. Islam, 305 F.R.D. 53, 60-61 (S.D.N.Y. 2015). Notably, article 43 of the Vienna Convention on
Consular Relations, which provides consular immunity, is almost identical to article 39 of the VCDR. Compare
Vienna Convention on Consular Relations art. 43, ¶ 1, April 24, 1963, 21 U.S.T. 77, T.I.A.S. 6820 (“Consular
officers . . . shall not be amenable to the jurisdiction of the judicial or administrative authorities of the receiving
State in respect of acts performed in the exercise of consular functions.” (emphasis added)), with VCDR art. 39, ¶ 2
(“However, with respect to acts performed by such a person in the exercise of his functions as a member of the
mission, immunity shall continue to subsist.” (emphasis added)). Both immunities are functional immunities that
require analysis of whether the charged acts were “performed in the exercise” of consular or diplomatic functions.
17
prohibit financial transactions “involv[ing] the proceeds of specified unlawful activity . . .
knowing that the transaction is designed in whole or in part to conceal or disguise the nature, the
location, the source, the ownership, or the control of the proceeds of specified unlawful activity,”
18 U.S.C. § 1956(a)(1)(B)(i), and “knowingly engag[ing] . . . in a monetary transaction in
criminally derived property of a value of greater than $10,000 and is derived from specified
unlawful activity, 18 U.S.C. § 1957. In other words, the defendant is not charged with
embezzlement from her employer of the medical claims’ payments. Instead, she is charged with
conspiring to launder the ill-gotten funds by creating shell companies, opening bank accounts for
the shell companies and withdrawing cash from those bank accounts to conceal the funds’
source—precisely those charged acts that are not “inextricably tied” to her professional
responsibilities.
The government acknowledges that central to the conspiracy charge is that “the
Defendant used her position as the Financial Attaché for the Kuwait Health Office to facilitate
criminal conduct.” Gov’t’s R&R Obj. at 3. This acknowledgement, however, does not detract
from the conclusion that the crucial charged acts that form the gravamen of the money
laundering conspiracy objectively cannot be seen as an “exercise of [the defendant’s functions as
a member of the [diplomatic] mission,” within the meaning of the Diplomatic Relations Act, 22
U.S.C. § 254d, and the VCDR art. 39, ¶ 2. As another court has succinctly put it in the
analogous context of consular immunity, “an act in furtherance of a conspiracy by a consular
officer which takes advantage of the privileges of that position does not suddenly make it a
consular function.” United States v. Cole, 717 F. Supp. 309, 322–23 (E.D. Pa. 1989). 10 See also
10
The defendant attempts to distinguish from Cole on the ground that “Cole involved application of the
Vienna Convention on Consular Relations, and ‘differences exist in the scope of privileges and immunities’ under
the two conventions.” Def.’s R&R Resp. at 53 (emphasis in original) (quoting Tachiona ex rel. Tachiona v.
Mugabe, 186 F. Supp. 2d 383, 391 (S.D.N.Y. 2002)). As discussed in note 9, while other differences may exist,
18
Joseph v. Office of Consulate General of Nigeria, 830 F.2d 1018 (9th Cir. 1987) (permitting the
plaintiff to bring tort claims alleging vandalism against a consular employee who lived in the
house leased by the Consulate because the tortious acts were “not ‘performed in the exercise of’
the [the defendant’s] consular function as a resident of the [] house, or of any of [the defendant’s]
other consular functions”); State v. Doering-Sachs, 652 So. 2d 420, 424 (Fla. Dist. Ct. App.
1995) (the defendant consular employee was not immunized from criminal prosecution for
resisting arrest and aggravated assault where none of these acts were in furtherance of his
consular duties to deliver consular documents).
The defendant’s alleged criminal activity of creating and using shell companies and bank
accounts to conceal her transactions in embezzled funds has neither “a logical connection” to the
official responsibilities that the defendant was supposed to fulfill, nor provides “a reasonable
means to the fulfillment” of any official function.’” Berdakin v. Consulado de La Republica de
El Salvador, 912 F. Supp. 458, 463–464 (C.D. Cal. 1995) (articulating a two-pronged test to
determine whether consular immunity applies to conduct alleged to have been “in the exercise
of” a consular function (quoting Gerritsen v. Escobar y Cordova, 721 F. Supp. 253, 259 (C.D.
Cal. 1988))). Simply put, while residual immunity may bar legal action against even illegal acts
performed by a diplomat in an effort to carry out diplomatic functions or duties successfully,
when the activity being scrutinized was not necessary or a part of any official function or
responsibility, the VCDR provides no protection.
IV. CONCLUSION
consular immunity and residual diplomatic immunity are both functional immunities, and, therefore, any analysis
regarding whether an alleged act is “performed in the exercise of consular functions,” Vienna Convention on
Consular Relations art. 43, ¶ 1, is helpful to the pertinent analysis whether the charged acts are “performed . . . in the
exercise of [the defendant’s] functions as a member of the [diplomatic] mission,” VCDR art. 39, ¶ 2.
19
The factual allegations providing the basis for the criminal complaint against the
defendant were not an exercise of her official functions as a member of the mission and,
therefore, no residual immunity bars the prosecution of the defendant for that charged criminal
conduct. Accordingly, the defendant’s motion to dismiss the criminal complaint is denied. 11
An order consistent with this Memorandum Opinion will be contemporaneously entered.
Date: May 2, 2016.
Digitally signed by Hon. Beryl A. Howell
DN: cn=Hon. Beryl A. Howell, o=U.S.
District Court for the District of Columbia,
ou=Chief Judge,
email=Howell_Chambers@dcd.uscourts.go
v, c=US
Date: 2016.05.02 20:23:20 -04'00'
_________________________
BERYL A. HOWELL
Chief Judge
11
The government recently moved, on April 20, 2016, for a status hearing on the defendant's pending motion
to dismiss. See Gov’t's Notice of Expiration of Speedy Trial Period and Request for Status Hearing, ECF No. 58;
Gov’t's Motion for Status Hearing, ECF No. 59 (referencing ECF No. 58). Since the defendant's pending motion to
dismiss is resolved in this Memorandum Opinion and accompanying Order, the government's motion for a status
hearing is denied as moot.
20