BERYL A. HOWELL, Chief Judge.
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.
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 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,
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, 18-20, 24.
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.
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).
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, ___ U.S. ___, 133 S.Ct. 1059, 1064, 185 L.Ed.2d 72 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (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 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, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (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. 516, 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, 72 S.Ct. 329, 96 L.Ed. 367 (1952)); United States v. South Fla. Asphalt Co., 329 F.2d 860, 865 (5th Cir.1964), cert. denied 379 U.S. 880, 85 S.Ct. 149, 13 L.Ed.2d
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.
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 criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction[.]").
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.2010); 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," Baoanan v. Baja, 627 F.Supp.2d 155, 162 (S.D.N.Y.2009), however, for official acts performed "in the exercise of [the
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.
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. 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,
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.
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 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 v. Al-Awadi, 607 F.Supp.2d 509, 518 (S.D.N.Y.2009)), and "`not on the nature of the underlying conduct,'"
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 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.
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.
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 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
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 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.,
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
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.
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."
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).
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
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.
An order consistent with this Memorandum Opinion will be contemporaneously entered.