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United States v. Turi

United States District Court, D. Arizona

October 21, 2014

United States of America, Plaintiff,
v.
Marc Turi, et al., Defendants.

ORDER

DAVID G.F. CAMPBELL, District Judge.

Defendants Mark Turi and Turi Defense Group have filed a motion to dismiss the indictment. Doc. 12. The motion is fully briefed and Defendants have withdrawn their request for oral argument. Defendants have also filed a motion to strike surplusage from the indictment. Doc. 30. The motion is fully briefed. The Court will grant the motion to dismiss in part and deny the motion to strike.

I. Background.

Since 2008, Defendant Turi "has been a State Department-registered broker of defense articles'" pursuant to the Arms Export Control Act ("AECA"), 22 U.S.C. § 2778. Doc. 12 at 2.[1] Turi and his company, Defendant Turi Defense Group, Inc., "have supplied, and provided logistical support for the supply of, defense articles in furtherance of U.S. Government policy in Iraq and Afghanistan, among other places." Id. The indictment alleges that in early 2011, Defendants submitted two "Letter[s] of Prior Approval" to the Directorate of Defense Trade Controls ("DDTC") requesting approval from the State Department for Defendants to broker weapons from Eastern Europe to the National Transitional Council ("NTC") of Libya. Doc. 3 at 8-9. These requests for prior approval were denied on March 22, 2011. Id. at 9. Defendants allegedly attempted to amend their requests, but their amended request was denied in May 2011. Id.

The indictment alleges that Defendants also submitted a request for prior approval to broker the same weapons to the Government of Qatar. Id. This request was approved in a letter from the DDTC dated May 5, 2011. Although Defendants sought approval to broker weapons to Qatar, the indictment alleges that the intended end user of the weapons was the NTC in Libya. Id. at 11. The indictment also alleges that Defendants, seeking a possible alternate to Qatar, submitted another request for prior approval to broker the same weapons to the United Arab Emirates ("UAE"), but again intended the end user to be the NTC in Libya. Id. at 14.

Defendants were indicted on four counts in February 2014. See Doc. 3. Counts one and three allege violations of 22 U.S.C. § 2778(c) and 22 C.F.R. §§ 126.1, 127.2, and 127.3. Counts two and four allege violations of 18 U.S.C. § 1001(a)(3). Section 2778(c) provides that any person "who willfully, in a registration or license application or required report, makes any untrue statement of a material fact or omits to state a material fact required to be stated therein, " shall be subject to fines of no more than $1, 000, 000 or imprisonment of no more than 20 years, or both, for each violation. 22 U.S.C. § 2778(c). Section 1001(a)(3) provides that any person who, in any matter within the jurisdiction of the United States, knowingly and willfully "makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry, " shall be fined or imprisoned for no more than five years. Counts one and two concern the request for the proposed Qatari transaction, while counts three and four concern the request for the UAE transaction. 18 U.S.C. § 1001(a)(3).

II. Motion to Dismiss.

Defendants argue that counts one and three must be dismissed because their requests for prior approval of the transactions with Qatar and the UAE do not constitute a "license application" under 22 U.S.C. § 2778(c). They also argue that counts in the indictment are multiplicitous.

A. License Applications Under § 2778(c).

Section 2278(c) criminalizes only a specific kind of false statements and material omissions - those made in a "registration or license application or other required report." 22 U.S.C. § 2278(c). The indictment alleges that Defendants made untrue statements "in an application for a license to broker weapons." Doc. 3, ¶¶ 26, 30 (emphasis added). The government does not argue in response to Defendants' motion that the requests for prior approval were either a "registration" or "other required report" within the meaning of § 2778(c). Doc. 12 at 7. Thus, the question is whether Defendants' requests for prior approval constituted a "license application" under § 2278(c).

Each side cites statutory and regulatory language in support of its position. The government argues that brokering activities clearly require a license under the statute, and that the regulations use the terms "license" and "approvals" interchangeably, suggesting they mean the same thing. Defendants cite a definition of "license" in the regulations that they claim is inconsistent with the government's allegations in this case. Defendants also note several places where the regulations refer to "license or prior approval, " suggesting that "license" and "approval" do not have the same meaning. Defendants argue that the statute and regulations are ambiguous and ask the Court to apply the rule of lenity. United States v. Santos, 553 U.S. 507, 514 (2008) ("The rule of lenity requires ambiguous criminal laws to be interpreted in favor of the defendants subjected to them.").

After carefully reviewing § 2778 and reading the regulations as a whole, the Court finds that Defendants' requests for approval constituted a "license application" within the meaning of § 2778(c). Admittedly, if portions of the regulations are read in isolation, they can appear to be inconsistent or ambiguous. But when the statute and regulations are read together, and the organization and structure of the regulations are considered, their meaning is sufficiently plain to support the government's allegations in this case. The Court also notes that the regulations at issue have been amended frequently during the last decade. The versions discussed below, unless noted otherwise, are those that were in effect when Defendants submitted their requests for prior approval in March and June of 2011.

The statute at issue ___ 22 U.S.C. § 2778 ___ provides that "every person... who engages in the business of brokering activities with respect to the... transfer of any foreign defense article... shall register with the United States Government[.]" 22 U.S.C. § 2778(b)(1)(A)(ii)(I). Defendants engaged in such brokering activities when they sought to arrange a transfer of weapons from Eastern Europe to Qatar and to the UAE. But the statute requires more than registration. It also provides that "[n]o person may engage in the business of brokering activities described in subclause (I) without a license, issued in accordance with this chapter, except that no license shall be required for such activities undertaken by or for an agency of the United States Government." 22 U.S.C. § 2778(b)(1)(A)(ii)(III) (emphasis added). Thus, the statute clearly required Defendants not only to register with the government, but also to obtain a "license" before engaging in brokering activities with Qatar or the UAE.[2]

The relevant regulations are found in Title 22 of the Code of Federal Regulations (concerning foreign relations), Chapter I (concerning the Department of State), and Subchapter M (concerning international traffic in arms). Each side cites to various portions of these regulations in support of its argument. The Court ...


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