Order — United States v. Aziz Hassan Bey, Letez Osiris Bey, Minister Zakar Ali and Divineseven El, No. 22-CR-169-JPS (Dkt. 92, E.D. Wis.)
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Judge J.P. Stadtmueller of the U.S. District Court for the Eastern District of Wisconsin entered this order in Case No. 22-CR-169-JPS against Aziz Hassan Bey, Letez Osiris Bey, Minister Zakar Ali and Divine-Seven El, who are charged in an eighteen-count Indictment with conspiracy to commit wire fraud, wire fraud, mail fraud and unlawful monetary transactions. The Indictment charges that from in or around June 2020 through July 2021 the defendants conspired to obtain PPP loans and EIDLs under false and misleading pretenses. Magistrate Judge Nancy Joseph recommended on July 18, 2023 that the motions to dismiss be denied, and the moving defendants then moved to withdraw them. The court denies the motions to withdraw, reviews the recommendation on its merits and denies each motion to dismiss; the order is dated the 10th day of August, 2023.
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
Plaintiff, Case No. 22-CR-169-JPS
v.
AZIZ HASSAN BEY, LETEZ OSIRIS BEY,
ORDER
MINISTER ZAKAR ALI, and DIVINE-
SEVEN EL,
Defendants.
1. PROCEDURAL BACKGROUND
Defendants Aziz Hassan Bey (“Aziz Bey”), Letez Osiris Bey (“Letez
Bey”), and Minister Zakar Ali (“Ali”) (together, “Moving Defendants”),
along with Defendant Divine-Seven El (“El”) (with Moving Defendants,
“Defendants”), are charged in an eighteen-count Indictment with
conspiracy to commit wire fraud in violation of 18 U.S.C. § 1349 (Count
One), ECF No. 1 at 5–7, and wire fraud in violation of 18 U.S.C. §§ 1343, 2(a),
and 2(b) (Counts Two Through Eight), ECF No. 1 at 8–9. Moving
Defendants are charged with mail fraud and wire fraud in violation of 18
U.S.C. §§ 1341, 2(a), and 2(b) and 18 U.S.C. §§ 1343, 2(a), and 2(b) (Counts
Nine through Eleven). ECF No. 1 at 10–11. Aziz Bey, Ali, and El are charged
with mail fraud in violation of 18 U.S.C. §§ 1341 and 2(a) (Counts Twelve
through Fourteen). ECF No. 1 at 12–13. Finally, Aziz Bey and El are charged
with unlawful monetary transactions in violation of 18 U.S.C. §§ 1957 and
2(a) (Counts Fifteen through Eighteen). ECF No. 1 at 14.
On April 5, 2023, Ali filed a motion to dismiss the counts of the
Indictment against him. ECF No. 56. On April 12, 2023, Aziz Bey and Letez
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Bey each filed a motion to dismiss the counts of the Indictment against them.
ECF Nos. 61, 62. On April 24, 2023 and April 25, 2023, respectively, Aziz
Bey and Letez Bey each filed an amended motion to dismiss the counts of
the Indictment against them. ECF Nos. 67, 68.1
On July 18, 2023, Magistrate Judge Nancy Joseph issued a Report and
Recommendation recommending that each of the motions to dismiss be
denied (the “R&R”). ECF No. 82. On July 28, 2023, during the fourteen-day
objections period, Moving Defendants each filed a motion to withdraw
their motions (or amended motions if applicable) to dismiss. ECF Nos. 83,
85, 86.
The period in which to file an objection to the R&R has now closed.
ECF No. 82 at 9 (citing, inter alia, General L.R. 72(c), 28 U.S.C. § 636(b)(1)(B),
Fed. R. Crim P. 59(b)). No objections have been filed. The Court will deny
Moving Defendants’ motions to withdraw their motions to dismiss, ECF
Nos. 83, 85, 86, and will review the R&R on its merits. Doing so preserves
the “important social policy and . . . . goals” underlying “[t]he pretrial
motions requirement embodied in Rule 12.” United States v. Salahuddin, 509
F.3d 858, 862 (7th Cir. 2007) (internal citation omitted). For the reasons set
forth below, the Court will adopt Magistrate Judge Joseph’s R&R, ECF No.
82, and will deny each of the above-listed motions to dismiss, ECF Nos. 56,
61, 62, 67, 68.
2. LEGAL STANDARD
When reviewing a magistrate’s recommendation, the Court is
obliged to analyze de novo “those portions of the report or specified
proposed findings or recommendations to which objection is made.” 28
1 El did not file any pretrial motions.
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U.S.C. § 636(b)(1)(C). However, “[t]he district judge has jurisdiction over
the case at all times[,]” and the parties’ lack of objection “does not preclude
further review by the district judge, sua sponte[,]. . . under a de novo or any
other standard.” Thomas v. Arn, 474 U.S. 140, 154 (1985). The Court can
“accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C).
The Court’s review encompasses both the magistrate’s legal analysis and
factual findings. See id.; see also Fed. R. Crim. P. 59(b).
3. FACTUAL BACKGROUND
The Court adopts the facts stated in the R&R, ECF No. 82 at 2–3, and
briefly summarizes those facts here, with additional citations to the
Indictment.
Aziz Bey is the director and registered agent of the Consulate of Al
Maroc (the “Consulate”), which was incorporated in the State of Wisconsin
on or about August 23, 2018. ECF No. 1 at 2. Ali, Letez Bey, and El are listed
as the resident agent or officers of the Consulate in other states where it is
incorporated. Id. The Consulate is not registered with the U.S. Department
of State or recognized as a foreign mission in the United States. Id.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act
was enacted in or around March 2020 to provide emergency financial
assistance to those suffering from the economic effects caused by the
COVID-19 pandemic. ECF No. 1 at 2. The CARES Act authorized forgivable
loans through the Paycheck Protection Program (“PPP”) and the Economic
Injury Disaster Loan (“EIDL”) to eligible small businesses. Id. The PPP loan
application required businesses to acknowledge program rules and make
affirmative certifications to obtain a PPP loan. Id. The EIDL application had
similar requirements, such as provision of the number of employees, gross
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revenues, and cost of goods sold during the twelve-month period prior to
the pandemic. Id. at 3. Any funds issued under PPP or EIDL were to be used
on business obligations, such as payroll, mortgage payments, and the like.
Id. at 2–3.
The Indictment charges that from in or around June 2020 through
July 2021, Defendants conspired to obtain PPP loans and EIDLs under false
and misleading pretenses using interstate wire communications. Id. at 5.
Specifically, it charges that Defendants knowingly submitted and caused to
be submitted numerous EIDL and PPP loan applications containing
materially false representations that were capable of influencing and did
influence lenders’ decisions to provide relief funds. Id. at 5–6. Those
representations included that applicant entities were functional and
operational businesses, that the loan proceeds would be used on covered
expenses, and false descriptions of employees, expenses, revenues, and
costs of goods sold. Id. at 5. The applications also included falsified Internal
Revenue Service forms. Id. at 6. In fact, none of the represented businesses
had paid wages or filed tax returns in the time immediately preceding the
COVID-19 pandemic. Id. Defendants transferred the funds they received to
each other and others associated with the Consulate. Id.
Unemployment insurance (“UI”) was a joint state and federal
program that was expanded in or around March 2020 in response to the
COVID-19 pandemic. Id. at 3. Applicants for UI applied online to state
workforce agencies and had to provide certain certifications, such as that
they met a COVID-19-related reason for being unemployed, partially
employed, or unable to work. Id.
The Indictment charges that from in or around May 2020 through
July 2021, Moving Defendants submitted false and fraudulent applications
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and claims for UI from the states of Georgia and Wisconsin. Id. at 10.
Applications were submitted in the names of other individuals to the states
of Illinois and California, and funds for those individuals were mailed from
banks to the Consulate’s Milwaukee address and addresses in Illinois used
by Ali and the Consulate. Id. at 10–11.
The Indictment further charges that Aziz Bey, Ali, and El submitted
materially false and misleading statements and omissions to the Wisconsin
Department of Motor Vehicles (“DMV”), which led to the Wisconsin DMV
issuing titles to Aziz Bey and the Consulate for multiple vehicles free and
clear of any liens held by lenders. Id. at 12–13. After obtaining the vehicles,
Aziz Bey, Ali, and El sold them to third parties or kept them for their own
use without repaying loan amounts to the lenders. Id. at 13. Defendants
transferred the proceeds to each other and others associated with the
Consulate. Id.
Finally, the Indictment charges that Aziz Bey and El knowingly
engaged in monetary transactions involving criminally derived property in
values greater than $10,000. Id. at 14.
4. ANALYSIS
An indictment “must be a plain, concise, and definite written
statement of the essential facts constituting the offense charged.” Fed. R.
Crim. P. 7(c)(1). “[A]n indictment is legally sufficient if it (1) states all the
elements of the crime charged, (2) adequately informs the defendant of the
nature of the charges against him, and (3) allows the defendant to assert the
judgment as a bar to future prosecutions of the same offense.” United States
v. Vaughn, 722 F.3d 918, 925 (7th Cir. 2013) (citing United States v. Smith, 230
F.3d 300, 305 (7th Cir. 2000)). “[A]n indictment ‘that “tracks” the words of
a statute to state the elements of the crime is generally acceptable . . . .’” Id.
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(quoting United States v. White, 610 F.3d 956, 958–59 (7th Cir. 2010)). In other
words, an indictment “need not exhaustively recount the facts surrounding
the crime’s commission.” United States v. Agostino, 132 F.3d 1183, 1189 (7th
Cir. 1997) (citing United States v. Bates, 96 F.3d 964, 970 (7th Cir. 1996)).
On a pretrial motion to dismiss, an indictment is “reviewed on its
face”; a defendant may not use the motion to dismiss to challenge the
sufficiency of the Government’s proof or the strength or weakness of the
government’s case. White, 610 F.3d at 958 (citing United States v. Risk, 843
F.2d 1059, 1061 (7th Cir. 1988)); see also United States v. Yasak, 884 F.2d 996,
1001 (7th Cir. 1989) (“A motion to dismiss is not intended to be a ‘summary
trial of the evidence.’”) (quoting United States v. Winer, 323 F. Supp. 604, 605
(E.D. Pa. 1971)).
Count One charges Moving Defendants with conspiracy to commit
wire fraud in violation of 18 U.S.C. § 1349. “[T]o support [a] conspiracy
conviction, the Government [i]s required to prove that [the defendant]
knew of the essential nature and scope of the charged conspiracy and that
[the defendant] intended to participate in it.” United States v. Garten, 777
F.3d 392, 399–400 (7th Cir. 2015) (quoting United States v. Anderson, 580 F.3d
639, 646 (7th Cir. 2009)). Moving Defendants argued before Magistrate
Judge Joseph that the “intent to defraud element, which is needed for the
United States to prove its case of wire fraud,” is lacking. ECF No. 82 at 5;
see also ECF No. 56 at 2; ECF No. 67 at 2; ECF No. 68 at 2.
The Court agrees with Magistrate Judge Joseph that the Indictment
adequately pleads the conspiracy charge. ECF No. 82 at 5. “It is not
necessary in a conspiracy indictment to allege with precision all the
elements essential to the offense which is the object of a conspiracy;
allegations clearly identifying the offense defendants conspired to commit
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are sufficient.” United States v. Kahn, 381 F.2d 824, 829 (7th Cir. 1967) (citing
Wong Tai v. United States, 273 U.S. 77, 81 (1927)).
Count One charges that from in or around June 2020 through July
2021, Moving Defendants knowingly submitted EIDL and PPP loan
applications with materially false representations, including IRS
documents with false information, using interstate wire communications.
ECF No. 1 at 5–6. Those representations included the false certification that
the proceeds would be used on covered business expenses, when Moving
Defendants “intended to and in fact used loan fund proceeds impermissibly
for their personal benefit and shared proceeds among each other.” Id. at 6.
The Indictment lists multiple transactions taken in furtherance of the
conspiracy, including the business name, type, owner, date the funds were
received, and amount of funds received. Id. at 6–7. Thus, the Indictment
sufficiently and clearly identifies, inter alia, the essential nature and scope
of the conspiracy, that Moving Defendants knew of the essential nature and
scope of the conspiracy, that Moving Defendants intended to participate in
the conspiracy, and the wire fraud offense that Moving Defendants are
charged with conspiring to commit.
Counts Two through Eight charge Moving Defendants with wire
fraud in violation of 18 U.S.C. §§ 1343, 2(a), and 2(b). Counts Nine through
Eleven charge Moving Defendants with mail fraud and wire fraud in
violation of 18 U.S.C. §§ 1341, 2(a), and 2(b) and §§ 1343, 2(a), and 2(b).
Finally, Counts Twelve through Fourteen charge Aziz Bey and El with mail
fraud in violation of 18 U.S.C. §§ 1341 and 2(a). “The elements of wire fraud
under 18 U.S.C. § 1343 directly parallel those of the mail fraud statute, but
require the use of an interstate telephone call or electronic communication
made in furtherance of the scheme.” United States v. Leahy, 464 F.3d 773, 786
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(7th Cir. 2006) (quoting United States v. Briscoe, 65 F.3d 576, 583 (7th Cir.
1995)). “The requisite elements of these offenses, therefore, are three: (1) a
scheme to defraud; (2) an intent to defraud; and (3) use of the mails or wires
in furtherance of the scheme.” Id. (citing United States v. Henningsen, 387
F.3d 585, 589 (7th Cir. 2004) and United States v. Britton, 289 F.3d 976, 981
(7th Cir. 2002)). Moving Defendants argued before Magistrate Judge Joseph
that Counts Two through Eleven fail to allege use of the wires or mails in
furtherance of the scheme. ECF No. 82 at 6.
Specifically as to Counts Two through Eight, Moving Defendants
contended that the Indictment fails to track the statute by neglecting to
include the language “to be transmitted by means of wire, radio, or
television communication.” ECF No. 82 at 6–7; see also ECF No. 56 at 3; ECF
No. 67 at 3; ECF No. 68 at 3. The Court agrees with Magistrate Judge Joseph
that the Indictment, which describes Moving Defendants’ “Interstate Wire
Transmission[s]” in a chart using this heading, and which proceeds to detail
which form of wire transmission was used for each transaction (i.e., online
submission, email, wire transfer), is sufficient. ECF No. 1 at 9. See United
States v. Alhalabi, 443 F.3d 605, 611 (7th Cir. 2006) (“describing [the] wires
that brought [the defendant] his final ill-gotten gains” sufficient to set forth
the use of wires element).
Specifically as to Counts Nine through Eleven, Moving Defendants
argued that the Indictment fails to track the statute by neglecting to include
the language “places in any post office or authorized depository for mail
matter, any matter or thing whatever to be sent or delivered by the Postal
Service.” ECF No. 82 at 8; see also ECF No. 56 at 3–4; ECF No. 67 at 4; ECF
No. 68 at 4. Aziz Bey and Ali argue the same as to Counts Twelve through
Fourteen. ECF No. 82 at 8; see also ECF No. 56 at 4; ECF No. 67 at 4.
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The Court agrees with Magistrate Judge Joseph that the Indictment
sufficiently states this element. ECF No. 82 at 8. Counts Nine through
Eleven charge that UI funds were loaded onto debit cards that were mailed
from banks to the Consulate’s Milwaukee address and addresses in Illinois
used by Ali and the Consulate. ECF No. 1 at 10–11. The Counts include a
chart using the heading “Mailing and Interstate Wire Transmission,” which
details the manner in which the mails were used and a description of the
items mailed. Id. at 11. Counts Twelve through Fourteen include a similar
chart with the heading “Mailing” that describes the vehicle titles mailed by
Aziz Bey and Ali in connection with the Wisconsin DMV scheme. Id. at 13.
As with wire fraud, the use of the mails element is sufficiently stated where
the indictment informs the defendants “of the manner in which the mails
were used to further the scheme to defraud and the basic description of the
materials mailed.” United States v. Serlin, 538 F.2d 737, 745 (7th Cir. 1976),
disavowed on other grounds by United States v. Holzer, 816 F.2d 304 (7th Cir.
1987).
Finally, Counts Fifteen through Eighteen charge Aziz Bey with
unlawful monetary transactions in violation of 18 U.S.C. §§ 1957 and 2(a).
Aziz Bey did not make any substantive argument to dismiss these counts
before Magistrate Judge Joseph. ECF No. 82 at 9. Even if he had, the
Indictment is sufficient as to these Counts as well. The elements of a § 1957
charge are that the defendant “(1) knowingly engaged or attempted to
engage in a monetary transaction, (2) in criminally derived property, (3) of
a value greater than $10,000, and (4) derived from specified unlawful
activity.” United States v. Black, 469 F. Supp. 2d 513, 538 (N.D. Ill. 2006)
(citing United States v. George, 363 F.3d 666, 675 (7th Cir. 2004)). Counts
Fifteen through Eighteen charge that Aziz Bey knowingly engaged in
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monetary transactions involving funds ranging between $30,122 to $60,000
deposited to/from either his or El’s accounts, which funds are criminally
derived property from the conduct charged in the earlier Counts. ECF No.
1 at 14. Thus, for all these reasons, each Count of the Indictment is
sufficiently stated, Magistrate Judge Joseph’s R&R will be adopted in full,
and Moving Defendants’ motions to dismiss will be denied.
5. CONCLUSION
For the reasons earlier described, the Court denies Moving
Defendants’ motions to withdraw their motions (or amended motions if
applicable) to dismiss. ECF Nos. 83, 85, 86. Therefore, and based on the
foregoing, the Court finds it appropriate to adopt in full Magistrate Judge
Joseph’s R&R and deny each of the following: (1) Ali’s April 5, 2023 motion
to dismiss the counts of the Indictment against him, ECF No. 56; (2) Aziz
Bey’s April 12, 2023 motion to dismiss the counts of the Indictment against
him, ECF No. 62; (3) Letez Bey’s April 12, 2023 motion to dismiss the counts
of the Indictment against him, ECF No. 61; (4) Aziz Bey’s April 24, 2023
amended motion to dismiss the counts of the Indictment against him, ECF
No. 67; and (5) Letez Bey’s April 25, 2023 amended motion to dismiss the
counts of the Indictment against him, ECF No. 68.
Accordingly,
IT IS ORDERED that Magistrate Judge Nancy Joseph’s Report and
Recommendation, ECF No. 82, be and the same is hereby ADOPTED in
full;
IT IS FURTHER ORDERED that Defendant Minister Zakar Ali’s
motion to dismiss the counts of the Indictment against him, ECF No. 56, be
and the same is hereby DENIED;
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IT IS FURTHER ORDERED that Defendant Letez Osiris Bey’s
motion to dismiss the counts of the Indictment against him, ECF No. 61, be
and the same is hereby DENIED;
IT IS FURTHER ORDERED that Defendant Aziz Hassan Bey’s
motion to dismiss the counts of the Indictment against him, ECF No. 62, be
and the same is hereby DENIED;
IT IS FURTHER ORDERED that Defendant Aziz Hassan Bey’s
amended motion to dismiss the counts of the Indictment against him, ECF
No. 67, be and the same is hereby DENIED;
IT IS FURTHER ORDERED that Defendant Letez Osiris Bey’s
amended motion to dismiss the counts of the Indictment against him, ECF
No. 68, be and the same is hereby DENIED;
IT IS FURTHER ORDERED that Defendant Aziz Hassan Bey’s
motion to withdraw his motion to dismiss and amended motion to dismiss,
ECF No. 83, be and the same is hereby DENIED;
IT IS FURTHER ORDERED that Defendant Letez Osiris Bey’s
motion to withdraw his motion to dismiss and amended motion to dismiss,
ECF No. 85, be and the same is hereby DENIED; and
IT IS FURTHER ORDERED that Defendant Minister Zakar Ali’s
motion to withdraw his motion to dismiss, ECF No. 86, be and the same is
hereby DENIED.
Dated at Milwaukee, Wisconsin, this 10th day of August, 2023.
BY THE COURT:
J.P. Stadtmueller
U.S. District Judge
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