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U.S. v. ALSUGAIR

April 8, 2003

UNITED STATES OF AMERICA
v.
TARIK I. ALSUGAIR.



The opinion of the court was delivered by: Stephen M. Orlofsky, United States District Judge

OPINION

This is the second time that Defendant Tarik I. Alsugair ("Alsugair") has moved to dismiss the criminal indictment brought against him. Alsugair had been previously indicted for violating the federal mail-fraud statute, 18 U.S.C. § 1341 (2002), and this Court dismissed the original indictment for its failure to adequately allege one of the required elements of mail fraud, the deprivation of property. See United States v. Alkaabi, 223 F. Supp.2d 583, 591 (D.N.J. 2002).

Once again, this Court is called upon to address the question of whether an alleged scheme to defraud the Educational Testing Service, Inc. ("ETS"), by using imposters to take the Test of English as a Foreign Language ("TOEFL") on behalf of other students, constitutes a deprivation of property within the meaning of the mail-fraud statute. For the reasons set forth below, I conclude that the superseding indictment adequately alleges that Alsugair obtained property from ETS. Accordingly, I shall deny Alsugair's motion to dismiss the superseding indictment.

FACTUAL AND PROCEDURAL BACKGROUND

The Test of English as a Foreign Language, commonly known as the TOEFL, is administered by ETS, a New Jersey corporation that designs and administers standardized exams.*fn1 See Alsugair Indictment ("Indict.") ¶ 1(A). Many schools and colleges throughout the United States require foreign students to pass the TOEFL examination as a condition of admission to their academic programs. Id. Moreover, pursuant to federal regulations, a foreign student has to be a full-time student enrolled at a federally approved school, college, or university in order to obtain a student visa and, thus, to legally reside in the United States to pursue a course of study. Id. ¶ 1(c).

The superseding indictment, filed on October 12, 2002, charges Alsugair with conspiracy to violate the federal mail-fraud statute, in violation of 18 U.S.C. § 371, and with the substantive charge of mail fraud, in violation of 18 U.S.C. § 1341.*fn2 The Government alleges that Alsugair violated these criminal statutes by having an imposter take and pass the TOEFL on his behalf. See Indict., ¶ 2. The imposter allegedly appeared at a test site and falsely identified himself as the student who had to take the exam. Id. ¶ 3. This imposter, posing as the student, had his photo taken at the test site, sat for the TOEFL exam, and directed that the exam results be mailed to a predetermined location in California. Id. Once the test results arrived, the real student's photograph was substituted for the imposter's photograph, id., and the fraudulent TOEFL exam results were then mailed to schools requiring the real student's exam results in a phony ETS envelope. Id. ¶ 3.

This Court heard oral argument on Alsugair's motion to dismiss the original indictment, which charged Alsugair with depriving ETS of its property interest in "maintaining the integrity of its testing process." See Alkaabi, 223 F. Supp.2d at 588. Applying the rule of lenity, I concluded that maintenance of the integrity of a testing process is not a traditionally recognized property right, and I dismissed the indictment. Id. at 590-91. The Government subsequently filed a superseding indictment, which is the subject of Alsugair's pending motion to dismiss. The superseding indictment alleges that ETS was deprived of the following property interests:

(i) materials bearing its trademarks, such as the TOEFL exam and score report, (ii) its copyrighted materials, such as the TOEFL exam and its questions, (iii) the ETS-specified test administration and scoring services for the TOEFL exam, and (iv) the value of ETS's goodwill, which is an asset of ETS and is based in part on maintaining the integrity of the testing process.
Indict. ¶ 1(F). On March 28, 2003, I heard oral argument, superbly presented by both Mr. Leone for the Government and Mr. Fishman for the Defendant, on Alsugair's motion to dismiss the superseding indictment. In addition to his motion to dismiss the superseding indictment, Alsugair has moved to strike surplusage from the indictment and to suppress evidence that was seized from his residence pursuant to a search warrant.

ALSUGAIR'S MOTION TO DISMISS THE INDICTMENT

Legal Standard Governing Motions to Dismiss Under Fed.R.Crim.P. 12(b)
Alsugair once again moves, pursuant to Fed.R.Crim.P. 12(b), to dismiss the indictment brought against him.*fn3 Fed R. Crim. P. 12 provides, in relevant part, that "[a]ny defense, objection or request which is capable of determination without the trial of the general issue may be raised before trial by motion." Id. (West 2003). "Defenses and objections based on defects in the indictment or information" must be raised prior to trial. Fed.R.Crim.P. 12(b). At this pre-trial stage a "motion to dismiss an indictment is not a permissible vehicle for addressing the sufficiency of the government's evidence." United States v. DeLaurentis, 230 F.3d 659, 660-61 (3d Cir. 2000). Alsugair, however, is not challenging the sufficiency of the evidence to be presented against him at trial, but challenges the facial sufficiency of the allegations contained in the indictment brought against him. Id. at 661. "[F]or purposes of Rule 12(b)(2), a charging document fails to state an offense if the specific facts alleged in the charging document fall beyond the scope of the relevant criminal statute, as a matter of statutory interpretation." United States v. Panarella, 277 F.3d 678, 685 (3d Cir. 2002). Once again, I must determine whether the facts as alleged in the indictment adequately allege the elements of mail fraud under 18 U.S.C. § 1341.

The "Property" Element of the Mail-Fraud Statute

The mail-fraud statute, 18 U.S.C. § 1341, provides in relevant part:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises . . . for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter . . . shall be fined under this title or imprisoned not more than 20 years, or both.
Id. (West 2003) (emphasis added).

"Absent contrary direction from Congress, we begin our interpretation of statutory language with the general presumption that a statutory term has its common-law meaning." Scheidler v. Nat'l Org. for Women, 123 S.Ct. 1057, 1064 (2003). The United States Supreme Court has explained that "the original impetus behind the mail-fraud statute was to protect the people from schemes to deprive them of their money or property." McNally v. United States, 483 U.S. 350, 356 (1987). Although the statute contains disjunctive language, McNally makes clear that 18 U.S.C. § 1341 does not reach any "scheme or artifice to defraud," id., but is "limited in scope to the protection of property rights." McNally, 483 U.S. at 358-60; see also Cleveland v. United States, 531 U.S. 12, 19 (2000) (1909 amendment to Section 1341 signaled no intent by Congress to depart from the common understanding that the words "to defraud" commonly refer to wronging one in his property rights). Consequently, a scheme or artifice to defraud that does not violate any property interest cannot violate the mail-fraud statute.

The parties contest the scope of the property violation that must be alleged in order to satisfy the elements of mail fraud. Both parties agree that the mail-fraud statute requires the victim of the fraud to be deprived of property. It is less clear, however, whether the statute requires the perpetrator of the fraud to have obtained that same property from the victim. The Government contends that a defendant may violate Section 1341 even if he does not obtain property from the victim of the fraud, as long as "a scheme or artifice to defraud" exists. Gov't Br. at 38-43. Not surprisingly, Alsugair contends that "that no mail fraud conviction is possible unless the defendant obtained the property from the victim who is thereby deprived of the property." Def.'s Mem. in Supp. of Mot. to Dismiss., at 7.

The United States Supreme Court recently discussed "obtaining" property in a case brought under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), Scheidler v. Nat'l Org. for Women, 123 S.Ct. 1057 (2003), in which anti-abortion protestors challenged their convictions for blocking patients' and employees' access to and attempting to shut down abortion clinics, see Scheidler v. Nat'l Org. for Women, 510 U.S. 249, 253-54, 114 S.Ct. 798, 801-02 (1994). The Scheidler defendants were prosecuted under RICO for committing extortion under the Hobbs Act, 18 U.S.C. § 1951 (2003), which defines extortion as "the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right," id., 18 U.S.C. § 1951(b)(2).

The Supreme Court reversed the defendants' Hobbs Act convictions, holding that they "did not commit extortion because they did not `obtain' property from respondents as required by the Hobbs Act." Scheidler, 123 S.Ct. at 1061. In arriving at this conclusion, the Court refrained from tracing the outer boundaries of extortion liability under the Hobbs Act. Id. at 1064. The Court took great care to note that it neither endorsed nor rejected the view that "liability might be based on something as intangible as another's right to exercise exclusive control over the use of a party's business assets." Id. Indeed, the Court cited a case brought ...


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