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 2003, Care--acting through Muntasser, [*50] Mubayyid, and
others-filed various Form 990 returns with the IRS. Question 76 on
each Form 990 asked whether the organization has engaged in any
activity not previously reported to the IRS. None of the returns
reported any changes in Care's activities from the Form 1023, or
disclosed that Care was engaged in activities involving the
solicitation and expenditure of funds to support and promote the
mujahideen and jihad, including the distribution of pro-jihad
publications.

D. Alleged Misrepresentations to FBI and INS

Finally, the indictment alleges that Muntasser made material
misrepresentations and omissions to the Federal Bureau of
Investigation and to the Immigration and Naturalization Service. [FN6]
Muntasser was interviewed by the FBI's Joint Terrorism Task Force in
April 1999 and April 2003. At both interviews, Muntasser stated that
Care was a charitable organization and did not disclose that it was
engaged in activities supporting jihad and the mujahideen. During the
April 1999 interview, Muntasser disclosed a trip he made to Pakistan
in 1994 or 1995, but concealed the fact that during that trip he also
traveled to Afghanistan in furtherance of Care's activities. During
the April 2003 interview, he expressly denied traveling to
Afghanistan.

FN6. The relevant functions of the former Immigration and
Naturalization Service have been subsequently transferred to the
Department of Homeland Security.

In October 2002, Muntasser submitted an Application for Naturalization
to the INS. In the naturalization application, he did not disclose his
association with Care or Al-Kifah and the fact that he had traveled to
Afghanistan. However, when interviewed by the Department of Homeland
Security in November 2003 and April 2004, Muntasser admitted his
membership in AlKifah and Care from 1993 to 1996 and having traveled
to Pakistan and Afghanistan in 1994 and 1995.

II. Analysis

Fed.R.Crim.P. 12(b)(2) provides that "[a] party may raise by pretrial
motion any defense, objection, or request that the court can determine
without a trial of the general issue." Here, defendants have filed a
pretrial motion seeking to dismiss the indictment in its entirety.

"An indictment, or a portion thereof, may be dismissed if it is
otherwise defective or subject to a defense that may be decided solely
on issues of law." United States v. Labs of Virginia, Inc., 272 F.Supp.
2d 764, 768 (N.D.Ill.2003); see also United States v. Flores, 404 F.3d
320, 324 (5th Cir.2005); United States v. Tawahongva, 456 F.Supp.2d
1120, 1125 (D.Ariz.2006). In considering a motion to dismiss an
indictment, the Court assumes all facts in the indictment to be true
and views all facts in the light most favorable to the government.
United States v. Sampson, 371 U.S. 75, 78-79, 83 S.Ct. 173, 9 L.Ed.2d
136 (1962); United States v. Ferris, 807 F.2d 269, 271 (1st Cir.1986).
To the extent a motion to dismiss relies on disputed facts, the motion
should be denied. United States v. Covington, 395 U.S. 57, 60, 89
S.Ct. 1559, 23 L.Ed.2d 94 (1969); see also United States v. Caputo,
288 F.Supp.2d 912, 916 (N.D.Ill.2003).

"An indictment returned by a legally constituted and unbiased grand
jury, like an information drawn by the prosecutor, if valid on its
face, is enough to call for trial of the charge on the merits."
Costello v. United States, 350 U.S. 359, 363, 76 S.Ct. 406, 100 L.Ed.
397 (1956). The Supreme Court has held that "an indictment is
sufficient if it, first, contains the elements [*51] of the offense
charged and fairly informs a defendant of the charge against which he
must defend, and, second, enables him to plead an acquittal or
conviction in bar of future prosecutions for the same offense."
Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d
590 (1974) (citing Hagner v. United States, 285 U.S. 427, 52 S.Ct.
417, 76 L.Ed. 861 (1932); United States v. Debrow, 346 U.S. 374, 74
S.Ct. 113, 98 L.Ed. 92 (1953)). [FN7]

FN7. Defendants also contend that the indictment should be dismissed
because they did not make false statements or conceal material
information on Forms 1023 or 990. Specifically, defendants state that
Care's articles of incorporation, which were attached to the Form 1023
submitted by Muntasser, indicated that it was organized for
"religious" and "educational" purposes. They then contend that the
activities that they allegedly concealed--soliciting and expending
funds to support and promote jihad and the mujahideen, and publishing
pro-jihad materials--were in fact "religious" and "educational" in
nature. At oral argument, defendants also contended that the only
"support" the government will be able to prove at

trial that Care provided to the mujahideen was in the form of aid to
widows and orphans of mujahideen fighters in Afghanistan. They also
note that in Form 1023, Muntasser disclosed that Care would "provide
assistance to victims of ... man-made disasters" (which, defendants
contend, includes war and rebellion) and that it would develop
sponsorship programs for orphans in various countries including
Afghanistan.

Effectively, defendants are asking the Court to make an evidentiary
determination as to what activities they engaged in and as to whether
they made adequate representations on their IRS forms. The Court may
not conduct such inquiries at this stage of the proceeding. See United
States v. Maceo, 873 F.2d 1, 3 (1 st Cir.1989) ("A court should not
inquire into the sufficiency of the evidence before the indicting
grand jury....").

A. The First Amendment Claims

Defendants first contend that the prosecution violates their rights of
free speech and free exercise of religion as protected by the First
Amendment. Defendants argue at some length that the government is
attempting to criminalize constitutionally protected activities, such
as collecting funds for charitable activities, distributing
literature, and expressing religious and political beliefs. That
argument, however, entirely mischaracterizes the nature of the
indictment. Defendants are not being prosecuted for engaging in those
activities; they are being prosecuted for concealing those activities,
in their application for tax-exempt status and elsewhere.

In addition to their general claim that the government is attempting
to criminalize protected activity, defendants assert three specific
First Amendment claims: (1) that the prosecution substantially and
unlawfully burdens the free exercise of their religion; (2) that the
information they allegedly concealed was not material, because the IRS
could not properly deny them § 501(c)(3) status based on their speech
or religious activities; and (3) that the overt acts underlying the
conspiracy charge are constitutionally protected activities that may
not properly form the basis for a criminal prosecution. Each of these
contentions is without merit.

1. The Alleged Burden on Free Exercise of Religion

Under the Religious Freedom Restoration Act ("RFRA"), 42 U.S.C. §
2000bb, the federal government may not "substantially burden a
person's exercise of religion even if the burden results from a rule
of general applicability," except where the burden "is in furtherance
of a compelling governmental interest" and "is the least restrictive
means of furthering that compelling governmental interest." 42 U.S.C.
§ 2000bb-1. See Gonzales v. O Centro Espirita Beneficente Uniao Do
Vegetal, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006).

[*52] Defendants cite that authority in support of their motion to
dismiss, but fail to specify how the statute or the underlying
principles apply in the context of this prosecution. Defendants do not
contend that their religion requires that they conceal information,
defraud the government, or make false statements. They do not contend
that the charging statutes--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)--burden their free
exercise rights. And they do not appear to contend that the
requirement set forth in 26 C.F.R. § 1.501(c)(3)-1(b)(1)(v), that an
applicant for tax-exempt status "submit a detailed statement of its
proposed activities," somehow places a substantial burden on the
exercise of their religion. [FN8]

FN8. Defendants did not seek to obtain tax-exempt status for Care as a
church or religious organization, and indeed the Form 1023 application
and Form 990 returns contain no references to religious activities.

The Court sees no reason why providing a complete and truthful
description of the organization's planned activities in order to
obtain tax-exempt status--whether or not those activities are
religiously motivated-- inhibits or substantially burdens the exercise
of religious freedom. Accordingly, the claim of undue burden on the
free exercise of religion is without merit.

2. The Alleged Lack of Materiality

Defendants next contend that the information they allegedly concealed
was not material because that information could not properly have
influenced the IRS's determination as to whether Care qualified for §
501(c)(3) status.

To subject a defendant to criminal liability, a false statement must
be "material." See United States v. Notarantonio, 758 F.2d 777, 785
(1st Cir.1985). A materially false statement is one that "had a
natural tendency to influence, or was capable of influencing, the
decision of a government agency in making a determination required to
be made." Id. (quotation and internal citation omitted). "The
government need not show that the agency was actually influenced by
the statements involved." Id.

The indictment expressly states that had defendants provided truthful
information concerning Care's activities to the IRS, Care would not
have been accorded tax-exempt status. Indictment, ¶ 15. Defendants,
however, contend that under the "unconstitutional conditions"
doctrine, the IRS could not have constitutionally denied Care's
application for § 501(c)(3) based on the information that was
concealed, and therefore the information was not material.

Under the "unconstitutional conditions" doctrine, the government may
not condition the granting of a benefit on the beneficiary's surrender
of a constitutional right, even if the government could withhold that
benefit altogether. See Regan v. Taxation with Representation of
Wash., 461 U.S. 540, 545, 103 S.Ct. 1997, 76 L.Ed.2d 129 (1983);
Clifton v. Federal Election Comm'n, 114 F.3d 1309, 1315 (1st Cir.
1997). Thus, for example, in Speiser v. Randall, 357 U.S. 513, 78
S.Ct. 1332, 2 L.Ed.2d 1460 (1958), the Supreme Court held that a
California rule that conditioned a tax exemption on the taxpayer
signing a declaration that he would not advocate the violent overthrow
of the government was an unconstitutional condition. In so holding,
the Court stated that "[t]o deny an exemption to claimants who engage
in certain forms of speech is in effect to penalize them for such
speech." Speiser, 357 U.S. at 518, 78 S.Ct. 1332.

Here, defendants contend that the IRS could not have denied Care's
application for § 501(c)(3) status based on the fact
[*53] that it engaged in constitutionally protected activities, such
as soliciting funds, publishing literature, and expressing religious
or political views. Although it is true that the IRS may not deny tax-
exempt status based solely on the exercise of First Amendment rights,
it does not follow that this prosecution is improper.

First, defendants do not have a right, constitutional or otherwise, to
provide false responses to the IRS, even to questions they contend the
IRS had no right to ask. The Supreme Court has stated that

it cannot be thought that as a general principle of our law a citizen
has a privilege to answer fraudulently a question that the Government
should not have asked. Our legal system provides methods for
challenging the Government's right to ask questions--lying is not one
of them. A citizen may decline to answer the question, or answer it
honestly, but he cannot with impunity knowingly and willfully answer
with a falsehood.

Bryson v. United States, 396 U.S. 64, 72, 90 S.Ct. 355, 24 L.Ed.2d 264
(1969). As the Court in Bryson indicated, "[a] statutory basis for an
agency's request for information provides jurisdiction enough to
punish fraudulent statements under § 1001." 396 U.S. at 71, 90 S.Ct.
355. Here, the IRS clearly had statutory and regulatory authority to
inquire about Care's proposed activities. See, e.g., 26 C.F.R. §
1.501(c)(3)1(b)(1)(v) (expressly requiring an applicant for tax-exempt
status to "submit a detailed statement of its proposed activities").
Accordingly, defendants may be prosecuted for providing knowingly
false responses regarding those activities. [FN9]

FN9. Defendants further contend that the IRS cannot insist that an
applicant for tax-exempt status answer questions about his or her
organization's political convictions, religious affiliation, or belief
system. For example, defendants contend that the IRS could not require
an applicant to answer whether the organization will adhere to Islamic
precepts. It is unclear why defendants are making this argument, as it
has

no apparent relevance to the present case. Forms 1023 and 990 did not
ask any such question of the defendants, and defendants are not being
prosecuted for concealing Care's political convictions, religious
affiliation, or belief system.

Second, the unconstitutional conditions doctrine would not preclude
the IRS from denying Care § 501(c)(3) status based on the nature of
its activities. Although defendants are correct that "the government
may not deny a benefit to a person because he exercises a
constitutional right," the government need not subsidize defendants'
First Amendment activities out of public funds. Regan, 461 U.S. at
545, 103 S.Ct. 1997. Through the Internal Revenue Code, Congress has
provided that only a limited class of charitable activities should be
subsidized by the § 501(c)(3) tax exemption. See 26 U.S.C. § 501(c)
(3). [FN10] The IRS could reasonably conclude that Care's efforts to
support and promote armed conflict are not charitable or religious in
nature and could deny tax-exempt status on [*54] that basis. See
Regan, 461 U.S. at 545, 103 S.Ct. 1997. [FN11] The government is not
required to grant a tax subsidy to organizations providing funds to
support violent activities. Alternatively, the IRS might have
concluded that the activities were against public policy and denied
tax-exempt status on that basis. See Bob Jones Univ. v. United States,
461 U.S. 574, 586, 103 S.Ct. 2017, 76 L.Ed.2d 157 (1983). [FN12]

FN10. Section 501(c)(3) permits tax-exempt status for the following
types of organizations:

Corporations, and any community chest, fund, or foundation, organized
and operated exclusively for religious, charitable, scientific,
testing for public safety, literary, or educational purposes, or to
foster national or international amateur sports competition (but only
if no part of its activities involve the provision of athletic
facilities or equipment), or for the prevention of cruelty to children
or animals, no part of the net earnings of which inures to the benefit
of any private shareholder or individual, no substantial part of the
activities of which is carrying on propaganda, or otherwise
attempting, to influence legislation (except as otherwise provided in
subsection (h)), and which does not participate in, or intervene in
(including the publishing or distributing of statements), any
political campaign on behalf of (or in opposition to) any candidate
for public office.

FN11. Care could have, at least theoretically, adopted a dual
structure, with one organization exclusively organized and operated
for charitable exempt purposes (and thereby entitled to § 501(c)(3)
status),

and with another separate organization engaged in non-charitable
activities.

FN12. Defendants argue that support of mujahideen in Afghanistan did
not become contrary to the public policy of the United States until
1995, after Care's Form 1023 was submitted. Even assuming that to be
true--and the Court expresses no view on the subject--disclosure of
Care's true activities would nonetheless have been material to the IRS
in the decision-making process.

Finally, even assuming that the IRS could not deny Care's tax
exemption based on its constitutionally-protected activities, it does
not follow that information regarding these activities is immaterial
to the § 501(c)(3) determination. "The test is not whether the false
statement was the determinative factor in [a government agency's]
decision, but rather, whether the statement had a natural tendency to
influence the [government agency]." United States v. Mitchell, 388 F.
3d 1139, 1143 (8th Cir.2004) (citing United States v. Robertson, 324 F.
3d 1028, 1030 (8th Cir.2003) (holding that, although the defendant
made a confession sufficient to support a conviction for the charged
crime, the defendant's associated false statements to investigating
law enforcement officers were still material because they had a
natural tendency to influence the course of the investigation)).
Information regarding Care's activities, even if not the dispositive
factor, would have a natural tendency to influence the IRS's
investigation of Care's § 501(c)(3) eligibility. For example, had the
IRS known that Care planned to support armed fighters engaged in
military conflict, it might have subjected its § 501(c)(3) application
to closer scrutiny. The IRS might have requested additional
information regarding Care's intended expenditures, in order to ensure
that it was not materially supporting terrorism or engaging in other
illegal activity. The Court cannot conclude that information regarding
Care's proposed activities was necessarily immaterial as a matter of
law. [FN13]

FN13. Defendants also point to 26 C.F.R. § 1.501(c)(3)-1(d)(2), which
states as follows:

[t]he fact that an organization, in carrying out its primary purpose,
advocates social or civic changes or presents opinion on controversial
issues with the intention of molding public opinion or creating public
sentiment to an acceptance of its views does not preclude such
organization from qualifying under section 501(c)(3) so long as it is
not [an organization that attempts to influence legislation by
propaganda or otherwise].

According to defendants, this regulation precluded the IRS from
treating

Care's speech and religious activities as material to the tax
exemption analysis.

That regulation, however, states merely that an organization's
advocacy for social or civic changes, and its presentment of opinions
on controversial issues, will not preclude it from qualifying for §
501(c)(3) status. It does not provide that an organization can avoid
submitting information concerning its proposed activities--a
requirement that is specifically mandated in another IRS regulation, §
1.501(c)(3)-1(b)(1)(v)--nor does it preclude the IRS from considering
such activities in determining whether the organization qualifies as a
charity. Finally, even if the regulation did prevent the IRS from
denying tax-exempt status based on Care's activities, it simply does
not follow that information regarding those activities is necessarily
immaterial to the decision-making process.

For the all of these reasons, defendants' contention that the
allegedly concealed information [*55] could not have influenced the
IRS's tax exemption determination, and therefore was not material,
must be rejected.

3. The Overt Acts Charged in the Conspiracy

Count Two of the indictment charges defendants Muntasser and Mubayyid
with conspiracy to defraud the United States in violation of 18 U.S.C.
§ 371. Defendants contend that this charge is based on activities that
are protected by the First Amendment and therefore must be dismissed.
Specifically, defendants describe the following activities engaged in
by Care-- which are listed in the indictment either as the manner and
means of the conspiracy, or as overt acts of the conspiracy--as
constitutionally protected:

· publishing "reports and articles in support of the mujahideen in its
newsletter or on its website."

· distributing "brochures entitled 'Zakat Calculation Guide,' in which
the mujahideen was identified as one of the eight categories of
eligible recipients."

· publishing a website that "contained direct solicitations for tax
deductible donations to support the mujahideen."

· publishing and distributing "a newsletter, Al-Hussam ... which
actively promoted 'jihad,' or holy war, involving 'mujahideen,' or
Islamic holy warriors."

· publishing "articles about the military operations and activities of
the mujahideen on its website."

· printing and distributing "solicitations for tax deductible
donations to support the mujahideen."

· publishing and distributing "an English translation of 'Join the
Caravan,' a pro-jihad book authored by Abdullah Azzam."

The Court need not determine whether these activities are in fact
protected by the First Amendment, because even constitutionally
protected speech may constitute an overt act in a conspiracy charge.
See United States v. Donner, 497 F.2d 184, 192 (7th Cir.1974); see
also United States v. Rahman, 189 F.3d 88, 117 (2d Cir.1999)
("Notwithstanding that political speech and religious exercise are
among the activities most jealously guarded by the First Amendment,
one is not immunized from prosecution for ... speech-based offenses
merely because one commits them through the medium of political speech
or religious preaching."). It is the "agreement that is punishable in
a conspiracy charge and not the overt act itself." United States v. Al-
Arian, 308 F.Supp.2d 1322, 1342 (M.D.Fla.2004). The conspiracy charge
is therefore valid and not subject to dismissal.

B. The Due Process Claims--Fair Notice

Defendants next contend that they were not provided fair notice that
their conduct was illegal, in violation of their rights to due process
of law under the Fifth Amendment. "Due process requires that a
criminal statute provide adequate notice to a person of ordinary
intelligence that his contemplated conduct is illegal, for 'no man
shall be held criminally responsible for conduct which he could not
reasonably understand to be proscribed.' " Buckley v. Valeo, 424 U.S.
1, 77, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (internal citation
omitted). A criminal statute must "give fair warning of the conduct
that it makes a crime." Bouie v. City of Columbia, 378 U.S. 347,
350-51, 84 S.Ct. 1697, 12 L.Ed.2d 894 (1964). The rule of lenity, a
manifestation of the fair warning requirement, "ensures fair warning
by so resolving ambiguity in a criminal statute as to apply it only to
conduct clearly covered." [*56] United States v. Lanier, 520 U.S. 259,
266, 117 S.Ct. 1219, 137 L.Ed.2d 432 (1997). The rule of lenity,
however, is only applicable when no other means is available to
resolve statutory ambiguity. See United States v. Johnson, 529 U.S.
53, 59, 120 S.Ct. 1114, 146 L.Ed.2d 39 (2000).

Defendants do not suggest that the charging statutes are themselves
ambiguous, nor do they claim they did not know it was illegal to make
false statements to the government, to conspire to defraud the
government, or to make false statements on tax returns. Rather,
defendants' due process argument appears to be premised on three
theories. First, they argue that numerous government-funded charities
engaged in precisely the types of activities that now form the basis
for this prosecution, and that defendants therefore could not have
known that these activities were unlawful. Second, they argue that
defendants were not given clear notice that information concerning
Care's support of jihad and the mujahideen was material to the
government's § 501(c)(3) determination, and therefore had to be
disclosed on Forms 1023 and 990. Third, they argue that, the question
on Form 1023 asking whether Care was the "successor" to or "outgrowth"
of another organization was "fundamentally ambiguous" and that
therefore prosecution under a false statement theory is improper.

1. Alleged Activities of Other Organizations

First, defendants argue at considerable length that various other
organizations engaged in similar activities to support and promote
jihad and the mujahideen and were nonetheless granted § 501(c)(3)
status. Although it is not clear, defendants appear to argue that they
could have reasonably relied upon these prior IRS determinations in
determining what constitutes charitable conduct and activities needed
to be disclosed on Forms 1023 and 990.

Whatever the merits of this argument as a factual defense--and the
Court expresses no view on the subject--it constitutes, at most, an
evidentiary issue, and certainly not a basis for dismissing the
indictment. Furthermore, and in any event, there is no evidence in the
record that defendants were even aware of these organizations or their
tax-exempt status, or that they reasonably relied on any prior rulings
of the IRS.

2. Alleged Lack of Notice as to What Information Was Material to the
IRS

Second, defendants contend that they were not given clear notice that
their activities were material to the § 501(c)(3) determination, and
that they were thus unaware that they had to disclose these activities
to the IRS. This contention is likewise without merit. Form 1023
clearly instructs the applicant to "[p]rovide a detailed narrative
description of all the activities of the organization--past, present
and planned." IRS Form 1023 (emphasis added). The applicable IRS
regulation is equally clear, requiring the applicant to "submit a
detailed statement of its proposed activities." 26 C.F.R. § 1.501(c)
(3)-1(b)(1)(v). More fundamentally, however, whether defendants knew
the information was material is irrelevant. In determining whether a
defendant knowingly and willfully made false statements in violation
of 18 U.S.C. § 1001 and 26 U.S.C. 7206(1), the issue is "defendant's
knowledge of the falsity of the statements," not "defendant's
knowledge of the statement's materiality to the federal agency
involved." Notarantonio, 758 F.2d at 785 n. 4; see also United States
v. Boulerice, 325 F.3d 75, 82 (1st Cir.2003).

3. Alleged Vagueness of "Successor" or "Outgrowth" Question

Third, defendants challenge the portion of the indictment that charges
[*57] them with concealing that Care was an "outgrowth of" and
"successor to" Al-Kifah. Defendants contend that the terms "outgrowth"
and "successor," set forth in Question 5 of Part II of the 1993
version of Form 1023 ("Question 5") were fundamentally ambiguous, and
therefore cannot form the basis of a prosecution for making a false
statement.

A question that is "fundamentally ambiguous" cannot support a false
statement prosecution. See, e.g., United States v. Richardson, 421 F.
3d 17, 33 (1st Cir.2005); United States v. Farmer, 137 F.3d 1265,
1268-69 (10th Cir.1998). "When the question that led to the allegedly
false response is fundamentally ambiguous, we cannot allow juries to
criminally convict a defendant based on their guess as to what the
defendant was thinking at the time the response was made." United
States v. Manapat, 928 F.2d 1097, 1101 (11th Cir.1991). Otherwise,
however, issues of ambiguity are for the jury to resolve. United
States v. Damrah, 334 F.Supp.2d 967, 972 (N.D.Ohio 2004) ("Generally,
questions of ambiguity are left to the jury to resolve."); Richardson,
421 F.3d at 33 ("where a question is only arguably ambiguous, 'it is
for the jury to decide ...' "). In considering a potentially ambiguous
question, context is "critically important." Richardson, 421 F.3d at
33.

The difference between a question that is "fundamentally ambiguous"
and merely "ambiguous" cannot be exactly defined.

To precisely define the point at which a question becomes
fundamentally ambiguous, and thus not amenable to jury interpretation,
is impossible. Courts have nevertheless recognized that ... [a]
question is fundamentally ambiguous when it is not a phrase with a
meaning about which men of ordinary intellect could agree, nor one
which could be used with mutual understanding by a questioner and
answerer unless it were defined at the time it were sought and offered
as testimony.

Richardson, 421 F.3d at 34 (quotation and internal citation omitted).
In the words of the Second Circuit, "The phrase 'fundamentally
ambiguous' has itself proven to be fundamentally ambiguous." United
States v. Lighte, 782 F.2d 367, 375 (2d Cir.1986).

Defendants are charged here with answering the following question
falsely:

Is the organization 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?

The terms "outgrowth" and "successor" were not defined in the
instructions, which simply stated the following: "Examples of special
relationships are common officers and the sharing of office space or
employees."

The question is not whether the terms "outgrowth" or "successor" are
arguably ambiguous, or are susceptible of different shades of meaning,
or difficult to apply in certain contexts; it is whether they are
"fundamentally ambiguous" as a matter of law. As noted, there is no
fixed boundary between a question that is "fundamentally ambiguous"
and one that is merely "ambiguous." Nonetheless, under the
circumstances, the Court concludes that persons of ordinary intellect
would understand that an applicant was required to disclose, at the
very least, (1) whether the organization was an offshoot or spin-off
of another organization, or grew directly out of that organization
("outgrowth") or (2) whether it succeeded to, followed, continued the
activities of, or took the place of another organization
("successor"). See Damrah, 334 F.Supp.2d at 977 (defendant was put on
fair notice that he was obligated to notify the INS of his
"affiliation" with the Al-Kifah Refugee Center and other
organizations). [*58] The Court therefore concludes that Question 5
was not fundamentally ambiguous, and that the portion of the
indictment charging defendants with concealing Care's relationship
with Al-Kifah is valid.

C. The Due Process and Equal Protection Claims--Selective or
Vindictive Prosecution

Defendants further contend that the indictment must be dismissed
because they are being selectively prosecuted on the basis of their
religion and vindictively prosecuted in retaliation for Muntasser's
filing of a naturalization lawsuit. Defendants, however, have failed
to meet the heavy burden of producing clear evidence of selective or
vindictive prosecution.

The Attorney General and United States Attorneys retain "broad
discretion" as to whom to prosecute. Wayte v. United States, 470 U.S.
598, 607, 105 S.Ct. 1524, 84 L.Ed.2d 547 (1985) (quotation and
internal citation omitted). "[S]o long as the prosecutor has probable
cause to believe that the accused committed an offense defined by
statute, the decision whether or not to prosecute, and what charge to
file or bring before a grand jury, generally rests entirely in his
discretion." United States v. Armstrong, 517 U.S. 456, 464, 116 S.Ct.
1480, 134 L.Ed.2d 687 (1996) (quoting Bordenkircher v. Hayes, 434 U.S.
357, 364, 98 S.Ct. 663, 54 L.Ed.2d 604 (1978)); see United States v.
Goodwin, 457 U.S. 368, 380 n. 11, 102 S.Ct. 2485, 73 L.Ed.2d 74 (1982)
(prosecutor has "broad discretion" to select the charges against an
accused).

Furthermore, the "decision to prosecute is particularly ill-suited to
judicial review." Wayte, 470 U.S. at 607, 105 S.Ct. 1524. As the
Supreme Court has explained:

Such factors as the strength of the case, the prosecution's general
deterrence value, the Government's enforcement priorities, and the
case's relationship to the Government's overall enforcement plan are
not readily susceptible to the kind of analysis the courts are
competent to undertake.

Id. Judicial inquiry of prosecutorial decisions also threatens "the
performance of a core executive constitutional function." Armstrong,
517 U.S. at 465, 116 S.Ct. 1480. "Examining the basis of a prosecution
delays the criminal proceeding, threatens to chill law enforcement by
subjecting the prosecutor's motives and decisionmaking to outside
inquiry, and may undermine prosecutorial effectiveness by revealing
the Government's enforcement policy." Id. (quoting Wayte, 470 U.S. at
607, 105 S.Ct. 1524).

Although prosecutorial discretion is broad, "it is not 'unfettered.' "
Wayte, 470 U.S. at 608, 105 S.Ct. 1524 (quoting United States v.
Batchelder, 442 U.S. 114, 125, 99 S.Ct. 2198, 60 L.Ed.2d 755 (1979)).
Prosecutorial selectivity in the enforcement of criminal laws is
subject to constitutional restraints, and thus "may not be based on
'an unjustifiable standard such as race, religion, or other arbitrary
classification.' " Armstrong, 517 U.S. at 464, 116 S.Ct. 1480 (quoting
Oyler v. Boles, 368 U.S. 448, 456, 82 S.Ct. 501, 7 L.Ed.2d 446
(1962)). Similarly, "the Due Process Clause of the Fifth Amendment
restrains a prosecutor from punishing a defendant 'for exercising a
protected statutory or constitutional right.' " United States v.
Dwyer, 287 F.Supp.2d 82, 87 (D.Mass.2003) (quoting Goodwin, 457 U.S.
at 372, 102 S.Ct. 2485). Nonetheless, the Supreme Court has repeatedly
stated that the standard of proving selective or vindictive
prosecution claims "is particularly demanding, requiring a criminal
defendant to introduce 'clear evidence' displacing the presumption
that a prosecutor has acted lawfully." Reno v. American-Arab Anti-
Discrimination Comm., 525 U.S. 471, 489, 119 S.Ct. 936, 142 L.Ed.2d
940 (1999) (citing Armstrong, 517 U.S. at 463-65, 116 S.Ct. 1480).

[*59] 1. Selective Prosecution

Defendants appear to argue that they are the subjects of unlawful
selective prosecution. Although it is far from clear, it appears that
they are asserting that they have been prosecuted because of their
religion.

To overcome the presumption of prosecutorial good faith, the defendant
must prove by "clear evidence" that the decision to prosecute (1) had
a discriminatory effect and (2) was motivated by a discriminatory
purpose. Armstrong, 517 U.S. at 465, 116 S.Ct. 1480; Wayte, 470 U.S.
at 608, 105 S.Ct. 1524; see United States v. Magana, 127 F.3d 1, 8
(1st Cir.1997) (to prove selective prosecution, defendant must
demonstrate by clear evidence "both that she has been singled out for
prosecution when others similarly situated have not been prosecuted
and that the prosecutor's reasons for doing so were impermissible")
(internal citation omitted). Here, defendants have failed to make
either showing.

a. Discriminatory Effect

To establish discriminatory effect, defendants must prove that
similarly situated individuals of a different religion could have been
prosecuted, but were not. See Armstrong, 517 U.S. at 465, 116 S.Ct.
1480. A similarly situated person is "one who engaged in the same type
of conduct, which means that the comparator committed the same basic
crime in substantially the same manner as the defendant." United
States v. Smith, 231 F.3d 800, 810 (11th Cir.2000).

In their motion to dismiss, defendants contend that non-Muslim
charities engaged in (and continue to engage in) activities similar to
those conducted by Care. As an example, defendants point to the Jewish
National Fund, which defendants contend published information on its
website about Israel's military successes, and about the plight of the
widows and orphans of Israeli soldiers. Defendants also suggest that a
number of Jewish charities have conducted emergency appeals to provide
aid to the victims of the conflict between Israel and Lebanon.
Defendants also point to the activities of Catholic and Protestant
groups in Ireland.

Defendants fail to show, however, that these organizations have
committed the same crime in substantially the same way as defendants.
They have not proven that any of these groups fraudulently obtained
tax exemptions by making materially false statements, or by concealing
information regarding their activities or relationships with other
groups. Nor have defendants demonstrated that these non-Muslim
charities filed fraudulent tax returns or conspired to defraud the
United States. Absent such evidence, defendants cannot establish
discriminatory effect.

b. Discriminatory Purpose

Even if defendants could show discriminatory effect, they still would
not prevail on their selective prosecution claim, as they have failed
to establish that the government has acted with a discriminatory or
impermissible purpose.

To show discriminatory purpose, defendants argue that only one prior
prosecution in this Circuit involved allegations that the founder of
an organization granted tax-exempt status materially misrepresented
his organization as charitable in nature. Even assuming this
prosecution is unique, however, that fact does not render the
government's actions discriminatory. As this Court has previously
stated,

there is nothing inherently wrong or suspicious in a prosecution that
is legally and factually unique. While the government may not, of
course, single out a defendant for prosecution on race, religion, or
other improper basis, it is not confined solely to routine
prosecutions [*60] or well-worn statutory theories. Moreover, it is
entitled to re-evaluate its priorities and adapt to new threats.

United States v. Lewis, No. 05-40001, slip op. 13 n. 11 (D.Mass. May
11, 2006).

Standing alone, the unique nature of this prosecution is insufficient
to overcome the presumption that the government exercised its
prosecutorial functions in good faith. Because defendants have failed
to prove, by clear evidence, that the government's reasons for
bringing this prosecution were illegitimate, their claim of selective
prosecution cannot stand.

2. Vindictive Prosecution

"It is hornbook law that a federal court may dismiss an indictment if
the accused produces evidence of actual prosecutorial vindictiveness
sufficient to establish a due process violation, or even if he
demonstrates a likelihood of vindictiveness sufficient to justify a
presumption." United States v. Stokes, 124 F.3d 39, 45 (1st Cir.1997).
Here, defendants attempt to establish a "likelihood of vindictiveness
sufficient to justify a presumption" by relying solely on the timing
of the indictment. According to defendants, Muntasser filed a lawsuit
on June 8, 2004, in response to the Department of Homeland Security's
failure to act on his 2002 petition for naturalization. After granting
the government two continuances in that case, Judge Zobel of this
district scheduled a hearing for May 12, 2005, and indicated that no
further delays would be permitted. On May 11, 2005, the day before the
scheduled hearing, the grand jury returned the indictment at issue
here. Defendants argue that the present prosecution was brought in an
effort to block Judge Zobel's potential grant of citizenship to
Muntasser. [FN14]

FN14. The government has submitted a affidavit from Special Agent
James Marinelli of the FBI Joint Terrorism Task Force indicating that
the investigation of defendants began prior to the time Muntasser
filed his naturalization lawsuit.

Timing alone is not sufficient to meet the heavy burden of proving, by
clear evidence, that the prosecutor acted with a vindictive purpose.
See, e.g., Goodwin, 457 U.S. at 382 n. 15, 102 S.Ct. 2485 (presumption
may not exist where "the only evidence [a defendant] is able to
marshal in support of his allegation of vindictiveness is that the
additional charge was brought at a point in time after his exercise of
a protected legal right"); United States v. Pimienta-Redondo, 874 F.2d
9, 13 (1st Cir.1989) ("the presumption does not apply indiscriminately
to all instances of detrimental action treading close upon the heels
of a defendant's exercise of some legal right" and should not "serve
to block a legitimate response to criminal conduct") (quotation and
internal citation omitted); United States v. Falcon, 347 F.3d 1000,
1005 (7th Cir.2003) (affirming district court's denial of motion to
dismiss for vindictive prosecution where defendant only offers
evidence of suspicious timing for claim); United States v. Awan, 459
F.Supp.2d 167, 187 (E.D.N.Y.2006) ("In all events, attributing the
timing of the government's decision to animus is, without more, mere
speculation."). Accordingly, defendants' vindictive prosecution claim,
like their selective prosecution claim, is without merit.

Because defendants have failed to prove, by clear evidence, that they
have been singled out for prosecution when others similarly situated
have not been prosecuted, and that the prosecutor's reasons for doing
so were discriminatory, vindictive, or otherwise impermissible, their
claims of selective and vindictive prosecution must be rejected.

[*61] III. Conclusion

For the foregoing reasons, defendants' motion to dismiss is DENIED.

So Ordered.