UNITED STATES of America
v.
Muhamed MUBAYYID and Emadeddin Z. Muntasser, Defendants.

476 F.Supp.2d 46, 99 A.F.T.R.2d 2007-1362, 2007-2 USTC P 50,527

Criminal No. 05-40026-FDS.

March 8, 2007.

Background: Defendants moved to dismiss indictment charging them with
making false statements, conspiracy to defraud United States, and
making false statements on tax returns, arising out of their failure
to disclose Muslim organization for which they were seeking tax exempt
status allegedly supported jihad activities in Afghanistan, and
organization's connection with earlier militant organization.

Holdings: The District Court, Saylor, J., held that:

(1) defendants could be indicted despite claim that exemption
application disclosure requirements violated their First Amendment
freedom of religion rights;

(2) materiality requirement for indictment was satisfied;

(3) defendants could be indicted for conspiracy even though many
activities involved religion;

(4) question whether group was "successor" or "outgrowth" of any other
group was not impermissibly vague; and

(5) defendants were not subjected to selective or vindictive
prosecution.

Dismissal denied.

See, also, 476 F. Supp.2d 42, 2007 WL 716071.

[*47] Michael C. Andrews, Law Offices of Michael C. Andrews, Boston,
MA, Elizabeth A. Lunt, Malick W. Ghachem, Norman S. Zalkind, Susan
Estrich, Zalkind, Rodriquez, Lunt & Duncan LLP, Boston, MA, Harvey A.
Silvergate, Cambridge, MA, for Defendants.
B. Stephanie Siegmann, Aloke Chakravarty, Donald L. Cabell, U.S.
Attorney's Office, Michael D. Ricciuti, Kirkpatrick & Lockhart
Nicholson Graham LLP, Boston, MA, for United States of America.

MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS

SAYLOR, District Judge.

This is a criminal prosecution under 18 U.S.C. § 1001 (false
statements), 18 U.S.C. § 371 (conspiracy to defraud the United
States), and 26 U.S.C. § 7206(1) (false statements on tax returns). In
essence, the indictment charges that defendants Muhamed Mubayyid and
Emadeddin Z. Muntasser fraudulently obtained a charitable exemption
under § 501(c)(3) of the Internal Revenue Code for an entity known as
Care International, Inc. According to the indictment, defendants
concealed the fact that Care solicited and distributed funds for, and
issued publications supporting and promoting, Islamic holy war
("jihad") and holy warriors ("mujahideen").

Defendants have moved to dismiss the indictment on multiple grounds,
not all of which are entirely clear. In essence, defendants appear to
contend that the indictment should be dismissed (1) because the
prosecution violates defendants' rights of free speech and free
exercise of religion under the First Amendment; (2) because the
indictment and prosecution violate defendants' right to fair notice
under the Due Process Clause of the Fifth Amendment; and (3) because
the prosecution was [*48] unlawfully selective and vindictive in
violation of the Due Process and Equal Protection Clauses of the Fifth
Amendment. For the reasons set forth below, the motion will be denied.

I. Background

On May 11, 2005, a grand jury returned an indictment charging
defendants Mubayyid and Muntasser with one count of scheming to
conceal material facts in violation of 18 U.S.C. § 1001(a)(1) and one
count of conspiring to defraud the United States in violation of 18
U.S.C. § 371. The indictment also charges Mubayyid with three counts
of filing a false tax return in violation of 26 U.S.C. § 7206(1) and
Muntasser with one count of making false statements in violation of 18
U.S.C. § 1001(a)(2). [FN1]

FN1. Muntasser has moved separately, under seal, to dismiss the false
statements charge under § 1001(a)(2). The Court will address that
motion in a separate memorandum and order.

In support of these charges, the indictment alleges the following
facts.

A. Al-Kifah Refugee Center and Incorporation of Care International,
Inc.

In the early 1990's, Emadeddin Muntasser was involved in operating the
Boston branch office of the Al-Kifah Refugee Center, an organization
that supported Muslim holy warriors ("mujahideen") engaged in violent,
religious-based conflict ("jihad"). [FN2] The Boston office of AlKifah
published a pro-jihad newsletter entitled "Al-Hussam," which is an
Arabic term meaning "the Sword."

FN2. The indictment defines "jihad" to mean "violent, religiously-
based [sic] military conflict overseas." Indictment, ¶ 1. Defendants
dispute this definition, contending that "jihad" in fact means "utmost
effort" or "struggle" and refers to the obligation of all Muslims to
promote and defend Islam. However, in considering a motion to dismiss,
the Court assumes all allegations set forth in the indictment to be
true. United States v. Sampson, 371 U.S. 75, 78-79, 83 S.Ct. 173, 9
L.Ed.2d 136 (1962). Accordingly, for purposes of this motion to
dismiss, the Court will accept the indictment's definitions.

In 1993, media reports linked Al-Kifah's New York office to the
bombing of the World Trade Center. Shortly thereafter, Muntasser
founded and incorporated Care International, Inc., in Massachusetts.
According to its articles of incorporation, Care was "organized
exclusively for charitable, religious, educational, and scientific
purposes including, but not limited to, engage in, establish, promote,
contribute and carry out human welfare, charitable and relief
activities, programs, projects, organizations, institutions and
funds." Muntasser served as its president from 1993 to 1996. [FN3]

FN3. The role of Mubayyid, if any, in the affairs of Care from 1993,
when it was founded, to 1997, when he became its treasurer, is not set
forth in the indictment.

The indictment alleges that Care, like Al-Kifah, was engaged in
activities involving the solicitation and expenditure of funds to
support and promote the mujahideen and jihad. It further alleges that
Care was located at Al-Kifah's Boston office and assumed publication
of its AlHussam newsletter.

B. Alleged Misrepresentations in IRS Form 1023

Shortly thereafter, Muntasser filed an application with the Internal
Revenue Service, pursuant to 26 U.S.C. § 501(c)(3), seeking tax-exempt
status for Care on the grounds that it was a charitable organization.
An organization seeking such an exemption must submit an IRS Form 1023
(Application for Recognition of Exemption Under Section 501(c)(3) of
the Internal [*49] Revenue Code). Form 1023 requires the organization
to demonstrate that it is organized and operated exclusively for
charitable purposes, and that any non-exempt purpose is incidental and
not substantial to its operation. [FN4] The IRS's initial
determination as to whether an organization qualifies for tax-exempt
status is based upon the information provided in Form 1023.

FN4. Form 1023 instructs applicants:

Provide a detailed narrative description of all the activities of the
organization--past, present, and planned. Do not merely refer to or
repeat the language in your organizational document. Describe each
activity separately in the order of importance. Each description
should include, at a minimum, the following: (a) a detailed
description of the activity including its purpose; (b) when the
activity was or will be initiated; and (c) where and by whom the
activity will be conducted.

The Form 1023 filed by Muntasser stated that Care was recently
incorporated; that it would become operational shortly; and that it
would provide charitable services, such as "provid[ing] assistance to
victims of natural and man-made disasters ... primarily in Bosnia and
later in African countries .... [and] develop[ing] a program for
orphan sponsorships." Copies of Care's articles of incorporation and
by-laws were attached to the Form 1023.

Among other things, the Form 1023 asked whether "the organization [is]
the outgrowth of (or successor to) another organization, or does it
have a special relationship with another organization by reason of
interlocking directorates or other factors," and required the
applicant to "explain" if the answer was "yes." Muntasser answered
"no" to this question.

Muntasser filed the Form 1023 on behalf of Care in June 1993. He
signed the form under the pains and penalties of perjury, affirming
that the "application, including the accompanying schedules and
attachments, ... to the best of my knowledge ... is true, correct, and
complete."

The indictment alleges that defendants knowingly and willfully schemed
to conceal material information from the IRS in connection with the
application-specifically, that Care planned to solicit and distribute
contributions for, and issue publications supporting and promoting,
jihad and the mujahideen. The indictment further alleges that
defendants schemed to conceal the fact that Care was an outgrowth of,
and successor to, Al-Kifah.

The IRS granted Care tax-exempt status in October 1993. The letter
notifying Muntasser of this decision instructed him to report any
changes in Care's "purposes, character, or method of operation" to the
IRS. [FN5]

FN5. If the IRS grants an organization tax-exempt status under §

501(c)(3), any donations made to that organization are tax-deductible.
The indictment alleges that between 1993 and 2003, Care collected
approximately $1.7 million in tax-deductible donations.

C. Alleged Misrepresentations in IRS Form 990

An organization that has been granted tax-exempt status pursuant to §
501(c)(3) is required to file an IRS Form 990 (Return of Organization
Exempt from Income Tax) for each year in which its contributions
received exceed $25,000. The information provided in Form 990 is used
by the IRS to determine, among other things, whether an organization
that has been granted tax-exempt status remains so qualified. If the
IRS determines that an organization is no longer operating
consistently with its tax-exempt status, that status will be revoked.

Muhamed Mubayyid served as Care's treasurer from 1997 to 2003. From
1993 to ...

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UNITED STATES OF AMERICA,
v.
Muhamed MUBAYYID and Emadeddin Z. Muntasser, Defendants.

No. 05-40026-FDS.
2005.

Defendants' Motion to Dismiss and Incorporated Memorandum

Respectfully submitted, Muhammed Mubayyid, By his attorney, Michael C.
Andrews BBO# 546470), 21 Custom House Street, Boston, MA 02110, (617)
951-0072.

Emadeddin Z. Muntasser, By his attorneys, Norman S. Zalkind (BBO #
538880), Elizabeth A. Lunt (BBO# 307700), Malick W. Ghachem (BBO
#661018), Zalkind, Rodriguez, Lunt & Duncan LLP, 65a Atlantic Ave.,
Boston, MA 02110.

Susan R. Estrich, Robert Kingsley Professor of Law and Political
Science, University of Southern California Law School, University
Park, MC-0071, Los Angeles, CA 90089-0071.

Harvey Silverglate (BBO # 462640), 607 Franklin St., Cambridge, MA
02139.
Now come Defendants Emadeddin Z. Muntasser and Muhammed Mubayyid and
respectfully move, pursuant to Fed. R. Crim. P. 12(b), that this
Honorable Court dismiss the above-captioned indictment. As reason
therefor, Defendants state that the government's theory of their
criminal liability for false statements and concealment of material
facts under 18 U.S.C. § 1001(a)(1) and for a Klein conspiracy under 18
U.S.C. § 371, as reflected in the allegations stated in the
indictment, is barred by the First Amendment to the United States
Constitution, by the requirement of fair notice and the corresponding
rule of lenity, by the IRS's own regulations and instructions, and by
Supreme Court precedent concerning selective prosecution. [FN1]

FN1. These are issues which the Court can and should decide before
Defendants are subjected to a prosecution which is doomed as a matter
of law from the outset. "It is perfectly proper, and in fact mandated,
that the district court dismiss an indictment if the indictment fails
to allege facts that constitute a prosecutable offense." United States
v. Coia, 719 F.2d 1120, 1123 (11th Cir. 1983). See, e.g., United
States v. Brown, 925 F.2d 1301, 1302 (10th Cir. 1991); United States
v. Risk, 843 F.2d 1059, 1061 (7th Cir.1988); United States v. Garcia-
Ortiz, 1992 WL 71803 (N.D. Ill. 1992) at *5; United States v.
Castellano, 610 F.Supp. 1359, 1397 (S.D.N.Y. 1985). "The court must
decide every pretrial motion before trial unless it finds good cause
to defer a ruling." Fed. R. Crim. P. 12(d). Here, there is no good
cause to defer a ruling and every reason to address the issues before
subjecting Defendants and the Court to a lengthy trial at which
Defendants' contentions as to the unconstitutionality of the
government's theory and the insufficiency, as a matter of law, of the
facts alleged in the indictment to state a false statement/concealment
of material facts violation or a Klein conspiracy offense will be
amply borne out. That the Court may need to hold an evidentiary
hearing and find facts does not preclude resolution of the issue at
this juncture. See Coia, 719 F.2d at 1123.

As further reasons therefor, Defendants refer the Court to the
Memorandum incorporated herein and to the documents from the public
record [FN2] attached as an Appendix to this motion. [FN3]

FN2. This Court may take judicial notice of matters in the public
record on a hearing of a motion to dismiss. See U.S. v. Briddle, 212
F.Supp. 584, 589 (D.C.Cal. 1962) ("This Court has the power to receive
evidence - including evidence adduced by means of judicial notice -
upon the hearing of the defendants' motions to dismiss the indictment
at bar .... [I]t is now too clear for debate, as a matter of common
knowledge, that the 1933 economic emergency ended long before 1962.
Accordingly, this Court should and does now judicially notice the
fact."); and Arturet Velez v. Reynolds Tobacco Co., 429 F.3d 10, 13 n.
2 (1st Cir. 2005) (on motion to dismiss, court may consider "facts
subject to judicial notice"). An affidavit attesting to the
authenticity of the document copies included in the Appendix is
attached to this motion.

FN3. Defendants move to dismiss Count Six of the indictment on the
selective prosecution grounds set forth infra at 44, and on grounds
stated in a sealed motion filed concurrently with the instant motion.

REQUEST FOR ORAL ARGUMENT

Defendants request oral argument on the within motion.

LOCAL RULE 7.1(A)(2) STATEMENT

Counsel (by Malick W. Ghachem, Esq.) have conferred with Stephanie
Siegmann, AUSA, and have attempted in good faith to resolve or narrow
the issues.

MEMORANDUM

I. Introduction

On May 13, 2005, Judge Rya Zobel of the United States District Court
for the District of Massachusetts, sitting in the Eastern Division in
Boston, announced that after a series of delays by the government, she
was scheduling a hearing to decide on the merits of a naturalization
petition filed three years earlier by Emadeddin Muntasser, now the
defendant in the instant criminal case. [FN4] Judge Zobel had earlier
denied the government's request for a remand to the Department of
Homeland Security. She had twice allowed the Government stays to
produce additional evidence that would justify denying Mr. Muntasser
his citizenship; both times the Government failed to produce such
evidence.

FN4. Emadeddin Z. Muntasser v. Michael Chertoff et al., No. 04-
CV-1259- RWZ (Electronic Clerk's Notes for proceedings held April 7,
2005). Mr. Muntasser's naturalization petition is attached hereto as
App. at 00001.

In evident retaliation for Mr. Muntasser's naturalization lawsuit, and
in a transparent effort to block Judge Zobel's potential - and, we
believe, likely - grant of citizenship, the government secured this
facially unconstitutional indictment. It is also evident that the
government cynically manipulated its ability to select the proper
venue for hearing this case, apparently in order to avoid the risk of
being assigned the same federal judge presiding over Mr. Muntasser's
naturalization petition in a manner perhaps too independent for the
executive branch's taste, and in order to secure a judge and jury pool
that the government perceived as more favorable to it. On the Criminal
Case Cover Sheet that the Government filed under seal with its
Criminal Complaint on April 6, 2005, the Government first indicated
(correctly) "Boston and elsewhere" and "Suffolk and elsewhere" as the
city and county wherein the alleged instant offenses took place. The
Government then crossed out the words "Boston" and "Suffolk" and
replaced both with "Worcester." See App. at 00006. This was done even
though the charitable organization that is at issue in the criminal
case, Care International, is a Boston-based rather than Worcester-
based organization.
That this indictment is flawed on its face is manifest. That it
represents a series of blatant efforts at manipulation of a
citizenship case and forum shopping in this criminal case is clear
from the government's own handwriting. That it reflects a transparent
effort to manipulate the venue and judicial assignment system of the
federal courts should not be ignored.
Muntasser submitted his application for naturalization nearly four
years ago, on October 18, 2002. When interviewed by the U.S.
Immigration and Naturalization Service (INS) a year later, on November
6, 2003, he submitted amendments to the application which completed
and corrected any omissions in the application filed by prior counsel;
he was told that his application was complete and that all that
remained were for his fingerprints to be cleared by the FBI. Under 8
U.S.C. § 1447(b), the Department of Homeland Security then had 120
days from the date of Mr. Muntasser's interview to decide the
application. No decision was forthcoming. At that point, Mr. Muntasser
had the right to file suit, which he did on June 8, 2004, more than
seven months after his naturalization interview. Twice in that
lawsuit, the Government sought to postpone the required hearing, which
Judge Zobel permitted, to give the Government more time to respond,
but she refused to remand the proceeding to the Department of Homeland
Security, holding that the defendant had a right to a hearing and a
decision before the district court. She set a hearing date of May 12,
2005 and made clear to the Government that no further delays would be
permitted. [FN5]

FN5. "The next hearing will take place on May 12th, and I do not
expect the government to ask for a further continuance at that time,
despite its request for more time now. We will go forward at the next
- on the next date." See App. at 00013 (transcript of April 7, 2005
scheduling conference in Emadeddin Z. Muntasser v. Michael Chertoff et
al., No. 04-CV- 1259-RWZ).

On the day before the citizenship hearing was to take place in Boston,
and even though everything related to the instant criminal case had
taken place in the Eastern Division, the government secured an
indictment of Mr. Muntasser by a grand jury sitting in the Central
Division of Massachusetts. The indictment alleged false statements,
concealment of material facts, and a Klein conspiracy with respect to
protected First Amendment activities that occurred between 1993 and
1996. [FN6] As noted above, on the Criminal Case Cover Sheet that
accompanied the Government's criminal complaint, and in a stunningly
frank acknowledgment of the extent of its forum shopping, the
Government crossed out "Boston" and "Suffolk" and scribbled
"Worcester" in their place for purposes of designating a presumably
safe venue for the instant case. See App. at 00006. [FN7]

FN6. The indictment also alleged a single false statement involving a
1995 overseas trip with respect to Mr. Muntasser's naturalization
application.

FN7. See also Defendants' Motion for Jury Selection from the Eastern
Division of Massachusetts and the Affidavit of Attorney Malick W.
Ghachem attached thereto (filed October 5, 2006).

Judge Zobel later denied the Government's motion to dismiss Mr.
Muntasser's naturalization lawsuit, retaining jurisdiction and
ordering a stay pending the conclusion of ...

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