Appendix — Allibhai v. United States

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Supreme Court of the United States

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SULTAN ALLIBHAI AND YASMIN ALLIBHAI,

Petitioners,

V

THE UNITED STATES OF AMERICA,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

APPENDIX

J. RONALD SIM

Counsel of Record

LYNN M. REILLY

STOEL Rives BOLEY

JONES & GREY

3600 One Union Square

600 University Street

Seattle, WA 98101

(206) 624-0900

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1

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 90-1354

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

VERSUS

YASMIN ALLIBHAI and SULTAN ALLIBHAIT,

Defendants-Appellants.

Appeals from the United States District Court

For the Northern District of Texas

(August 6, 1991)

Before SMITH AND DUHE, Circuit Judges, and

POLOZOLA, District Judge.*

DUHE, Circuit Judge:

Raising a variety of complaints, appellants Yasmin and

Sultan Ailibhai challenge their convictions and sentences for

money laundering. They argue that the gover.:ment un-

justifiably targeted them in its sting operation, that the

district court improperly instructed the jury on the entrap-

ment defense, and that the court erred in excluding the

testimony of their expert witness. The appellants also argue

that the district court improperly applied the sentencing

guidelines, contending that the court based its sentencing

decisions on irrelevant or erroneous factual findings. Find-

ing no error, we affirm.

* District judge of the Middle District of Louisiana, sitting by designation.

2

Facts and District Court Proceedings

Acting on a tip from the Customs Service that Nizamudin

Alibhai had been illegally transferring large sums of cash

out of the United States, agents initiated an investigation

of suspected money laundering activities in the Dallas area.

Their information led them to a Dallas bank, where

Nizamudin and the appellant Sultan Allibhai purportedly

maintained accounts. Although agents confirmed Nizamudin

and Sultan were not related, the appellant was nonetheless

targeted by the government in its investigation.

In order to gain access to Sultan and other suspected

money launderers, the government enlisted the cooperation

of Al Hassam, a former Dallas resident who was, like Sultan

and others on the government’s list of suspects, an Ismaili

Muslim!. The agents contacted Hassam, presented him with

a list of primarily Ismaili names, and asked him if he recog-

nized any of those listed. Hassam indicated that Sultan was

a childheod schoolmate, but he professed he was unaware

of his involvement in any illegal activities.

The agents decided that Hassam would pose as an

insurance agent interested in exporting large sums of honest

or ill-gotten gains out of the United States for clients. Hassam

contacted Sultan in Dallas, renewed their acquaintance, and

invited him and his wife Yasmin to meet him at his hotel.

At that meeting, Hassam indicated that he was looking for

a money launderer, and asked Sultan for a recommendation.

Sultan advised Hassam that he need look no further, as he

had previously engaged in such activities in Africa.

Hassam and Sultan eventually agreed on the details of

their business arrangement: money skimmed from the

' The appellants make much of their affiliation with the Ismaili Muslim

community, a small subsect of the Shi'ite Muslim faith. As a leader in

the Dallas Ismaili community, Sultan collected the sums the Ismaili

faithful were obliged to tithe to the Aga Khan, sending the money out

of the United States. Sultan suggests that these legitimate activities first

aroused the suspicions of government agents.

3

proceeds of legitimate businesses or derived from illicit drug

trafficking would be transported out of the country by Sultan.

For his efforts, Sultan would receive a “handling fee”

equivalent to two and one-half percent of the sums laundered.

Other details regarding their first transaction were left

unresolved, and Hassam returned to his home in Virginia.

Over the next three months, Sultan and Yasmin

cooperated with Hassam in completing several transfers of

money out of the United States. Typically, Hassam would

meet Sultan at an appointed location, deliver to him a large

sum of money in either large bills or cashier’s checks, and

provide Sultan with information as to where the money

should be delivered. Sultan would carry the cash out of the

country, neglecting to declare it on the U.S. Customs forms

that require disclosure of cash sums in excess of $10,000.

After arriving in Brussels or Toronto, Sultan would deposit

the money into an account in a specified bank. Later, he

would cause the money to be transferred via wire to bank

accounts in the United States established and maintained

for the purposes of such sting operations.

Throughout this time, Yasmin assisted Sultan in these

activities by relaying messages to him from Hassam, or

occasionally accepting cash deliveries from Hassam in her

husband’s stead. On at least one occasion, Yasmin made the

actual delivery of the money to Brussels.

Later, the government substituted undercover agent

Ralph Jacoby for Hassam as Sultan’s contact. Jacoby repre-

sented to Sultan that he needed very large sums derived from

illegal drug operations exported out of the country. Jacoby

and Sultan agreed to do business on terms similar to those

arranged with Hassam, with Sultan expressing interest in

trafficking even larger sums than before. For the next several

months, Sultan and Yasmin continued transporting money

out of the country, frequently enlisting the aid of two co-

defendants not parties to this appeal.

4

By the year’s end, the government felt it had sufficient

evidence to bring Sultan, Yasmin, and the two co-defendants

to trial, so it suspended the sting operation for approximately

six months. The government later reactivated the scheme,

hoping to ferret out additional members of Sultan’s organiza-

tion. With renewed interest, Sultan and Yasmin revived their

laundering activities, dealing with Agent Jacoby as before.

By the time of their arrest, the players had laundered over

$1.5 million dollars, for which the Allibhais received over

$76,000 in commissions.

Sultan, Yasmin, and two co-defendants were tried on

twenty-four counts of conspiracy, money laundering, failing

to file IRS currency transaction reports, failing to file customs

reports, travel in interstate commerce with the intent to carry

on unlawful activities, and wire fraud. Sultan was convicted

on all counts, while Yasmin was convicted on three and

acquitted on three. From those convictions, Sultan and

Yasmin take this appeal.

Targeting: A Right to Be Let Alone?

The appellants premise their contention that they were

impermissibly targeted by the government’s sting operation

on two separate grounds. First, they argue that the govern-

ment engaged in outrageous conduct, and, lacking reasonable

suspicion that they were involved in any illegality, violated

their “right to be let alone.” Alternatively, Sultan argues that

targeting based upon religious affiliation violates their first

amendment right to freedom of religion. We reject both

contentions.

In United States v. Russell, 411 U.S. 423, 93 S.Ct. 1637,

36 L.Ed.2d 366 (1973), the Supreme Court foreshadowed the

evolution of an outrageous conduct defense deriving from the

fifth amendment due process clause. Although the court con-

cluded that predisposition to commit a crime forecloses

5

application of the entrapment defense, it conceded that “we

may some day be presented with a situation in which the

conduct of law enforcement agents is so outrageous that due

process principles would absolutely bar the government from

... obtain[ing] a conviction.” Jd. at 431-32, 93 S.Ct. at 1642-43.

Since Russell, courts have addressed the availability of the

outrageous conduct defense, always recognizing that it “can

only be invoked in the rarest and most outrageous circum-

stances.” United States v. Tobias, 662 F.2d 381, 387 (5th Cir.

1981), cert. denied, 457 U.S. 1108, 102 S.Ct. 2908, 73 L.Ed.2d

1317 (1982).

Based on these principles, the appellants argue that the

government's conduct in approaching Sultan with the money

laundering scheme was egregious enough to constitute a due

process violation. A litany of cases in which more extreme

government behavior was upheld by courts suggests a con-

trary conclusion. In Russell, when the target of a government

sting operation confessed difficulty in obtaining a scarce drug

precursor, the government supplied it to him, and later pro-

vided a buyer for the finished product. Even so, our court

refused to characterize the government’s conduct as “out-

rageous.”

Similarly, in Tobias, a suspect canceled an order for

cocaine precursor chemicals placed with a DEA-operated

sham company, complaining of his inability to perform the

complicated synthesis steps. Undercover DEA agents sug-

gested he attempt the simpler PCP synthesis process, and

provided him with the needed chemicals, “recipes,” and

instructions to make the drug. Our court found no due process

violation, noting that Tobias’s “insistent participation” in the

PCP production scheme foreclosed a finding of outrageous

government conduct. See also, United States v. Simpson, 813

F.2d 1462 (9th Cir.), cert. denied, 484 U.S. 898, 108 S.Ct. 233,

98 L.Ed.2d 192 (1987) (where the court upheld the govern-

ment’s actions in persuading an informant to offer sexual

favors to entice a targeted person into selling her heroin);

United States v. Emmert, 829 F.2d 805 (9th Cir. 1987) (where

6

an agent’s offer of $20,000 and the use of threats and

intimidation to persuade an impoverished college student to

locate a cocaine supplier were not considered “outrageous”).

In light of those authorities, we find no due process violation

in this context either.

We also join our sibling circuits in rejecting the sug-

gestion raised by the Allibhais that the government should

have reasonable suspicion that an individual is involved in

some illegality before targeting him in a sting operation.

Relying on Olmstead v. United States, 277 U.S. 438, 48 S.Ct.

564, 72 L.Ed.2d 944 (1928), the Allibhais contend the “right

to be let alone” protects citizens from unwarranted and

capricious governmental intrusions.” Accordingly, they ask

that this court impose a reasonable suspicion requirement

on the government even though other circuits have refused

similar invitations. We likewise decline.

Those circuits that have addressed this issue have

uniformly dismissed the notion that the government must

have a pre-existing basis for suspecting criminal activity

before targeting an individual in an investigation.* The only

contrary decision was recently reversed en banc, bringing

the Ninth Circuit in accord with the others.‘

As the court recognized in United States v. Jacobson, 916

F.2d 467, 469 (8th Cir. 1990) (en banc), cert. granted in part,

* Their argument derives from Justice Brandeis’s famous dissent in

Olmstead, in which he characterized the “right to be let alone” as “the

most comprehensive of rights and the most valued by civilized men.”

Olmstead, 277 U.S. at 478, 48 S.Ct. at 564.

3 See e.g., United States v. Jacobson, 916 F.2d 467, 469 (8th Cir. 1990)

(en banc), cert. granted in part, 59 U.S.L.W. 3723 (April 26, 1991); United

States v. Miller, 891 F.2d 1265, 1269 (7th Cir. 1989); United States v.

Jenrette, 744 F.2d 817, 824 & n.13 (D.C. Cir. 1984), cert. denied, 471 U.S.

1099, 105 S.Ct. 2321, 85 L.Ed.2d 840 (1985); United States v. Jannotti,

673 F.2d 578, 609 (3d Cir.) (en banc), cert. denied, 457 U.S. 1106, 102 S.Ct.

2906, 73 L.Ed.2d 1315 (1982); United States v. Myers, 635 F.2d 932, 940-41

(2d Cir.), cert. denied, 449 U.S. 956, 101 S.Ct. 364, 66 L.Ed.2d 221 (1980).

4 See United States v. Luttrell, 889 F.2d 806 (9th Cir. 1989), vacated

in part and modified, 923 F.2d 764 (9th Cir. 1991).

7

59 U.S.L.W. 3723 (April 26, 1991), these decisions are

premised upon the realization that “[a defendant] has no con-

stitutional right to be free of investigation.” Jacobson, 916

F.2d at 469. Thus, “the mere fact the undercover investiga-

tion is started without reasonable suspicion ‘does not bar the

conviction of those who rise to its bait.’ ” Id., quoting Jannotti,

673 F.2d at 609. We note that as a practical matter,

investigative agencies will rarely expend their limited man-

power and resources on a mere whim, or in fabricating

criminal activity. In circumstances where an investigation

unfortunately ensnares a non-predisposed individual, the

defense of entrapment serves as an effective bar to conviction.

Accordingly, we find no basis upon which to create a contrary

rule from that of our siblings.

Finally, we address the appellants’ contention that they

were impermissibly targeted, in violation of their first amend-

ment rights, because they are Ismaili Muslims. The Allibhais

note that the government utilized the informant Hassam,

himself an Ismaili, to gain access to their close-knit com-

munity. Hassam was initially questioned about possible

money laundering activities involving Ismailis, and was pre-

sented with a list of almost exclusively Ismaili suspects.

These facts notwithstanding, we find no impropriety.

Although its holding does not specifically address

investigative targeting, the Supreme Court’s recent opinion

in Employment Division Dept. of Human Resources v. Smith,

110 S.Ct. 1595, 108 L.Ed.2d 876 (1990) provides some insight

into the interplay between the first amendment and the

enforcement of criminal laws. In that case, two Native

Americans were fired because of their use during a religious

ceremony of peyote, a controlled hallucinogenic substance.

When the state ruled that their “misconduct” disqualified

them from receiving unemployment benefits, they filed suit,

arguing that the ruling violated their first amendment free

exercise rights. In approving the state’s actions, the court

noted, “[wle have never held that an individual’s religious

beliefs excuse him from compliance with an otherwise valid

8

law prohibiting conduct that the state is free to regulate.”

110 S.Ct. at 1600.

Although we recognize that this is not a Free Exercise

Clause case, we consider the court’s teachings in Smith per-

suasive on this issue. Ismaili Muslims are not “relieved...from

obedience to a general law not aimed at the promotion or

restriction of religious beliefs.” Jd., quoting Minersville School

Dist. Bd. of Educ. v. Gobitis, 310 U.S. 586, 594-595, 60 S.Ct.

1010, 1012-1013, 84 L.Ed. 1375 (1940). Thus, where the

government seeks to enforce a “valid and neutral law of

general applicability,” Smith, 110 S.Ct. at 1600, the fact that

an investigation incidentally targets a specific religious group

does not render the investigation violative of the first amend-

ment. We reject any contrary suggestion, and uphold the

district court’s decision not to dismiss the indictment.

Expert Testimony

The Allibhais attempted to call John Costain as an expert

witness to testify as to the meaning of taped conversations

between the Allibhais, Hassam, and Jacoby. Costain, then

a private investigator, had significant law enforcement

experience, but admittedly had never handled a money

laundering case. In response to the government’s objection,

the trial court requested a proffer of the scope of Costain’s

testimony, going as far as to permit defense counsel to

examine Costain out of the presence of the jury.

The court ruled that the defense was impermissibly

attempting to use Costain’s testimony to buttress Sultan’s.

Furthermore, since the court concluded the content of the

taped conversations was within the understanding of lay

jurors, it ruled the jury was in as good a position as Costain

to interpret the meaning of those conversations. Finally, the

court indicated that the limited probative value of Costain’s

testimony was outweighed by the risk that the jury would

be confused by his analysis. ;

Sultan notes that the court permitted the government’s

9

witnesses, Agents Marshall and Jacoby, to speculate as to

the significance of certain statements made by Sultan and

Yasmin, as well as to comment on why certain evidence was

never discovered. Accordingly, they argue the trial court

erred in refusing to permit them to rebut that testimony with

Costain’s.

Reviewing the trial court’s decision on the admissibility

of that evidence for an abuse of discretion, United States v.

Schmidt, 711 F.2d 595, 598 (5th Cir.), cert. denied, 464 U.S.

1041, 104 S.Ct. 705, 79 L.Ed.2d 169 (1983), we are persuaded

by the government’s arguments to the contrary. As noted,

Marshall and Jacoby testified regarding events in which they

participated, such as taped conversations, or the execution

of search warrants. In contrast, Costain’s testimony repre-

sented a third party’s appraisal of events in which he was

not involved.

We are also impressed by the district court’s painstaking

in limine review of the proffered testimony. By permitting

defense counsel to elicit sample testimony from Costain out-

side the presence of the jury, the Allibhais were afforded

ample opportunity to demonstrate the admissibility of the

evidence. See United States v. De Luna, 763 F.2d 897, 912

(8th Cir.), cert. denied, 474 U.S. 980, 106 S.Ct. 382, 88 L.Ed.2d

336 (1985).

Finally, as to the district court’s determination that

Costain’s testimony was excludable based on the risk of jury

confusion, see Federal Rule of Evidence 403, we note that

our court gives particular deference to the trial court’s assess-

ment in this realm. United States v. Edelman, 873 F.2d 791,

795 (5th Cir. 1989). Accordingly, we find no abuse of dis-

cretion in the trial court’s ruling.

The Jury Charge

Although neither appellant challenges the jury’s finding

regarding entrapment, both contend that the trial court’s

instruction as to that defense was erroneous. Assuming

10

without deciding that both appellants were entitled to the

entrapment charge,° we find no reversible error.

The appellants first object to the portion of the charge

that addresses acceptable conduct of undercover agents:

The undercover activity may take many forms, including

persuasion, fraudulent representations, threats, coercive

tactics, harassment, promises of reward or pleas based

on need, sympathy, or friendship.

The Allibhais note that this language has never been

sanctioned by this circuit, and that by approving such tactics,

the district court eviscerated the entrapment defense. As both

parties concede, we review a jury instruction to determine

whether “the charge, as a whole, is a correct statement of

the law and whether it clearly instructed the jurors as to the

principles of law applicable to the factual issues confronting

them.” United States v. Stacey, 896 F.2d 75, 77 (5th Cir. 1990).

A trial judge is given substantial latitude in tailoring an in-

struction so long as it fairly and adequately addresses the

legal issues presented. United States v. Pool, 660 F.2d 547,

558 (5th Cir. Unit B 1981).

Although our court has never specifically reviewed the

exact language contained in this charge,® we have approved

° The government maintains because Yasmin was recruited to par-

ticipate in the money laundering scheme by her husband rather than a

government agent, she cannot claim she was “entrapped” as a matter of

law. See United States v. Sarmiento, 786 F.2d 665, 667-668 (5th Cir. 1986).

Yasmin challenges that contention, arguing that her presence at the initial

meeting between Hassam and Sultan subjected her to the risk of entrap-

ment. Because we find no reversible error in the charge, we need not

resolve that factual dispute.

® We note that the Ninth Circuit has approved identical language in

United States v. North, 746 F.2d 627 (9th Cir. 1984), cert. denied, 470 U.S.

1058, 105 S.Ct. 1773, 84 L.Ed.2d 832 (1985). Rejecting North’s contention

that the instruction improperly sanctioned threats and coercive activities

on the part of law enforcement agents, that court noted that viewing the

instruction as a whole, it “clearly distinguished between the issues of

(continued on page 11)

11

instructions that suggest that behavior typically unbecom-

ing law enforcement officials is appropriate in the context

of an undercover operation. See e.g., United States v. Mattoni,

698 F.2d 691, 694 (5th Cir. 1983) (where our court approved

an instruction indicating that “agents had a right to assume

other identities, change their character, [and] make offers

to sell or provide controlled substances”); Pool, 660 F.2d at

557 (where an instruction that “it is proper for a government

agent to pretend to be someone else and to offer either directly

or through an informer or other decoy to engage in an unlaw-

ful transaction” was upheld); United States v. Fera, 616 F.2d

590 (5th Cir. 1980) (approving an instruction that it is “some-

times necessary and permissible for the government to use

stratagems, artifices, ruses, and undercover agents or

investigators that may use assumed names and conceal their

true identities...”).

Furthermore, because the entrapment defense “focus{es]

on the intent or predisposition of the defendant to commit

the crime ... rather than upon the conduct of the Govern-

ment’s agents,” Hampton v. United States, 425 U.S. 484, 488,

96 S.Ct. 1646, 1649, 48 L.Ed.2d 113 (1976), the charge is

adequate if it focuses the jury’s attention on whether “the

Government’s deception actually implantied] the criminal

design in the mind of the defendant ...” Russell, 411 U.S. at

436, 93 S.Ct. at 1645. Because we find that this charge, as

a whole, adequately focused the jury’s inquiry on the ques-

tion of predisposition, we find no reversible error.

Next, the appellants complain that the charge instructing

the jury to consider the applicability of the entrapment

defense separately as to each count of the indictment was

improper. We are unpersuaded.

* (Continued)

improper government behavior and North’s predisposition to commit illegal

acts.” Jd. at 631. We reject the appellants’ suggestion that the Ninth Cir-

cuit’s subsequent opinion in United States v. Hoyt, 879 F.2d 505, 510 &

n.5 (9th Cir. 1989) implicitly rejects, dilutes, or limits that court’s holding

in North.

12

As the government notes, the Fifth Circuit Pattern Jury

Instructions admonish juries to consider each count in an

indictment separately from other joined counts. See Fifth

Circuit Pattern Jury Instructions § 1.24 (1990). It is apparent

that the charge actually benefitted the Allibhais, since it per-

mitted the jury to consider the applicability of the defense

to each count. Absent such a charge, if the jury found Yasmin

and Sultan were not entrapped at the outset of the sting, it

would not need to consider whether subsequent events af-

fected their predisposition to engage in later laundering ac-

tivities. Accordingly, the Allibhais may not claim prejudice

from any instruction, since it places an even greater burden

on the government. United States v. Garrett, 583 F.2d 1381,

1388-89 (5th Cir. 1978).

Finally, the appellants contend that the trial judge should

have instructed the jury not to consider evidence of Sultan’s

prior money laundering activities in Africa. In support of the

district court’s decision to refuse the requested instruction,

the government cites United States v. Larson,-722 F.2d 139,

143 n.8 (5th Cir. 1983), cert. denied, 466 U.S. 907, 104 S.Ct.

1688, 80 L.Ed.2d 161 (1984), a case holding that a jury may

properly consider evidence of pre-indictment activities when

the defendant asserts the entrapment defense. Although

Larson involved conduct occurring in the United States, we

find no logical basis to exclude Sultan’s African activities

from the scope of the Larson holding.

I.

Yasmin and Sultan each raise several challenges to the

district court’s application of the sentencing guidelines, dis-

puting both the court’s factual findings and its application

of the guideline provisions to those findings. The Allibhais’

sentences must be upheld unless they demonstrate they were

imposed in violation of the law, as a result of an incorrect

application of the guidelines, or were outside the range of

the applicable guidelines and were unreasonable. 18 U.S.C.

§ 3742(e); United States v. Ebertowski, 896 F.2d 906 (5th Cir.

13

1990). This court must give “due regard to the opportunity

of the district court to judge the credibility of witnesses” by

accepting its findings of fact unless they are clearly erroneous.

18 U.S.C. 3742(e). Beyond even the clearly erroneous stan-

dard, this court must give “due deference to the district court’s

application of the guidelines to the facts.” United States v.

Woolford, 896 F.2d 99 (5th Cir. 1990). Finding no error, we

uphold the sentences imposed by the district court.

Organizer Status

Sultan argues that the district court improperly enhanced

his sentence under section 3B1.1(a) based on its finding that

he was the “organizer or leader of a criminal activity that

involved five or more participants or was otherwise exten-

sive.” Although Sultan does not dispute that he was the

organizer of the money laundering ring, he does quibble with

the court’s finding that his organization was “otherwise

extensive.” Relying on cases from other circuits, Sultan

argues that such a finding has typically been sustained when

the government infiltrates an ongoing money laundering

business involving “clients” other than the undercover

operatives. See e.g., United States v. Donahue, 885 F.2d 45

(3d Cir. 1989); United States v. Cuevas, 847 F.2d 1417 (9th

Cir. 1988), cert. denied, 489 U.S. 1012, 109 S.Ct. 1122 (1989).

We are unpersuaded.

The evidence adduced at trial and in the sentencing

investigation reveals that Sultan’s organization was indeed

extensive. His money laundering scheme took him to at least

two foreign countries, and spanned almost three years.

Furthermore, by the time of his arrest, Sultan had laundered

over one million dollars, and had expressed the willingness

and capability to handle even larger sums of ill-gotten gains.

Although the scheme involved only four participants,* Sultan

* Because we conclude Sultan's organization is “otherwise extensive”

within the meaning of § 3B1.1\a), we need not address the government’s

strained argument that unwitting employees of the Belgian and Canadian

banks used by Sultan may be included in determining whether “five or

more participants” were involved in the scheme

14

“used the unknowing services of many outsiders” such as

bank employees, a fact deemed relevant in the Commentary

to the section. See U.S.S.G. § 3B1.1, comment. (n.2)

Accordingly, we find no error in the district court’s applica-

tion of this enhancement provision.

Acceptance of Responsibility

Both Yasmin and Sultan contend that the district court

erred in denying them the two level reduction for acceptance

of responsibility. Under U.S.S.G. § 3E1.1, such a reduction

is permitted “lilf the defendant clearly demonstrates a recog-

nition and affirmative acceptance of personal responsibility

for his criminal conduct.” U.S.S.G. § 3E1.1. Because the

sentencing judge is in the best position to gauge genuine con-

trition, “the standard of review under this provision is even

more deferential than under the clear error standard.” United

States v. Roberson, 872 F.2d 597, 610 (5th Cir.), cert. denied,

110 S.Ct. 175, 107 L.Ed.2d 131 (1989). Reviewing the district

court’s assessment accordingly, we find no error.

Relying on the Sixth Circuit’s opinion in United States

uv. Fleener, 900 F.2d 914, 918 (6th Cir. 1990), the appellants

argue that the district court improperly denied them the

section 3E1.1 reduction based on their decision to plead the

defense of entrapment. Even if we were bound by that

decision, we would still disagree with the Allibhais’ inter-

pretation of it. In Fleener, the government concocted a sting

operation targeted at individuals trafficking in child

pornography. At trial, Fleener argued that he had been

entrapped by the undercover agent; the jury disagreed, and

found him guilty. At sentencing, the district court found he

had accepted responsibility for his actions, and afforded him

the two-level reduction. The government appealed, arguing

that the defendant’s resort to the entrapment defense com-

pletely barred application of section 3E1.1. The Sixth Circuit

affirmed, however, holding that “the district court did not

err in considering a reduction for acceptance of responsibility

even though [Fleener] raised an entrapment defense at trial.”

15

Thus, the Fleener decision does not entitle a defendant

to the reduction, but merely permits a district court to con-

sider section 3E1.1 even when the defendant pleads entrap-

ment.® In this case, the district judge noted that even though

the Allibhais professed contrition at sentencing, their

attitudes at trial “did not comport with the sort of attitude

that this reduction in offense level is for.” Even assuming

that some of the sentencing judge’s remarks suggest he con-

sidered the Allibhais’ resort to the entrapment defense, these

remarks are irrelevant, since the judge need not give reasons

for his denial of the section 3E1.1 reduction in this circuit.

United States v. Hardeman, No. 90-8342 (5th Cir. May 31,

1991). We will not disturb the district court’s decision to deny

the reduction for acceptance of responsibility.

Calculating Yasmin’s Base Offense Level

Yasmin first contends that the district court erroneously

calculated her base offense level by considering laundered

sums for which her husband was convicted, but for which she

was acquitted. We disagree.

Because the government need only establish facts for use

in sentencing by a mere preponderance of the evidence, our

court has held that the sentencing court may rely on facts

underlying an acquitted count if the preponderance standard

is satisfied. United States v. Juarez-Ortega, 866 F.2d 747, 748

(5th Cir. 1989). Although the jury was not convinced beyond

a reasonable doubt that Yasmin was criminally responsible

for the total sum laundered, the district court concluded that

* We also note the significance of the posture of the Fleener decision.

Unlike our case, the government challenged the district court’s decision

to award the reduction. Reviewing that decision deferentially, the Sixth

Circuit affirmed. Here, the appellants request that this court reverse the

district court’s assessment of the law and facts of this case. As our court

has noted, and as the Fleener court recognized, our deferential standard

of review “will nearly always sustain the judgment of the district court

in this area.” Fleener, 900 F.2d at 917, quoting United States v. Thomas,

870 F.2d 174, 176 (5th Cir. 1989). ‘

16

the evidence preponderated towards her involvement in even

the acquitted counts. We find no error in that decision, and

thus reject her contention.

Next, Yasmin contends that the district court improperly

applied section 2S1.3(aX1XC) to enhance her base offense level

because she “reasonably should have believed that the

[laundered] funds were criminally derived property.” In sup-

port of this argument, she relies on polygraph reports and

her own statements that she thought the money was

legitimately procured. However, the district court need not

credit Yasmin’s self-serving testimony, and is free instead

to consider other evidence, such as the way Yasmin handied

the funds, in concluding that she was aware of their

character. We are unwilling to disturb the district court’s

credibility determination in this regard.

Minimal/Minor Participant Status

Yasmin also argues that she was entitled to a reduction

in her base offense level because she was a relatively

insignificant player in her husband’s scheme. We are

unmoved.

Guideline section 3B1.2 provides a two to four level

reduction in the base offense level for those offenders found

to be relatively less culpable than others involved in the same

scheme or conspiracy. See United States v. Buenrostro, 868

F.2d 135, 137 (5th Cir. 1989). The guidelines define “minimal

participant” as one who demonstrates a “lack of knowledge

or understanding of the scope and structure of the enterprise.”

U.S.S.G. § 3B1.2, comment. (n.1). A “minor participant” is

similarly defined as one who is “less culpable than most other

participants, but whose role could not be described as

minimal.” Jd. (n.3). Because most offenses are committed by

participants of roughly equal culpability, our court has noted

that “it is intended that [the adjustment] will be used

infrequently.” United States v. Nevarez-Arreola, 885 F.2d 243,

245 (5th Cir. 1989). We are unpersuaded by Yasmin’s sug-

gestion that either classification applies to her.

17

Yasmin performed an important role in the laundering

scheme: she relayed messages between Sultan and their

“clients,” counted the money to verify the sums, and on at

least one occasion actually transported the money to Belgium.

We find no clear error in the district court’s conclusion that

Yasmin was not a minor or minimal participant in these

activities.

Constitutionality of the Guidelines

Finally, Yasmin argues that the district court’s applica-

tion of the guidelines unconstitutionally deprived her of due

process of law. Her contention that the court improperly con-

sidered hearsay testimony has been repeatedly dismissed by

this court. United States v. Ammirato, 670 F.2d 552, 557 (5th

Cir. 1982). Her arguments that the district court improperly

attributed sums specified in the acquitted counts to her, and

that she was erroneously denied a reduction for acceptance

of responsibility, have been adequately addressed, and

present no further constitutional concerns.

We also dismiss her argument that she has been

punished because of her religious affiliation with the Ismaili

Muslim faith. Yasmin points to a statement in the PSR noting

that she should have been aware, “as an Ismaili Muslim,”

of the frequent practice of exporting cash out of the United

States to the Aga Khan. However, the probation officer added

that the activities for which Sultan and Yasmin were indicted

were not connected to those religious practices. In fact, the

court ne , cr: even mentioned Yasmin’s religious faith at sen-

tencing. Accordingly, we find that the guidelines afforded

Yasmin all the due process to which she was entitled.

Conclusion

For the foregoing reasons, the judgment of the district

court is

AFFIRMED.

18

AFFIDAVIT OF MAHOMED JAFFER

Background and Credentials

i.

My name is Mahomed Jaffer. I am a graduate of the

University of Dublin, Ireland (BA Hons. LLB), and a

Barrister at Law from London. I am a practising

Advocate of the High Court of Sind and of the Supreme

Court of Pakistan. I am the senior partner of Orr

Dignam and Co., Karachi — a firm of advocates

specializing in Corporate and International Law.

I am a member of the Ismaili Muslim Community and

have held or hold the following appointments made by

His Highness the Aga Khan, the Imam of the Ismailis.

a.

President of the Ismailia District Council for

Dacca, East Pakistan (1961 - 1969).

Member of the Ismailia Federal Council for

Pakistan (1969 - 1976).

Hon. Secretary and subsequently Vice Chairman

of the Aga Khan Foundation, Pakistan Branch

(1974 onwards).

Member of the governing body of the Aga Khan

Hospital and Medical College Foundation

(AKHMCF) Karachi (1976 onwards).

Member — Owners Representative Board

AKHMCF (1976 onwards).

Member of the Ismaili Constitution Review Com-

mittee (1984 - 1987).

Chairman, His Highness Prince Aga Khan Shia

Imami Ismaili International Conciliation and

Arbitration Board (July 1987 onwards).

19

h. Director, Aga Khan Rural Support Programme,

Pakistan (1983 onwards).

Historically and until today, Ismailis consider it a privilege

and honor to serve the Imam of the time and the Ismaili Com-

munity and in this respect I continue a family tradition of

service extending over many decades. For example my father

served the 48th and 49th Imams for over fifty years in India,

Syria and East Africa in an honorary capacity in numerous

Councils, administrative and other assignments.

This affidavit is submitted by me to assist the reader in

understanding the Ismaili faith and the Ismaili community.

In particular, I wish to provide information to explain the

practice of our community in making offerings to the Imam,

and to explain why these offerings are made in secret and

with the utmost confidentiality.

Ismailis in History

3. The Shia Imami Ismaili Muslims believe like all

Muslims worldwide in the unity of Allah, and that the

Holy Prophet Muhammad is the last and final Prophet

of Allah. They believe that Islam, as revealed in the

Holy Koran is the final message of Allah to mankind

and is universal and eternal. Monotheism is one of the

fundamentals of Islam, and of the Ismaili Muslim inter-

pretation and Practice of Faith. The Ismaili Shia

Muslim community represents today some 20 million

people, in some 50 countries, located principally in the

Soviet Union, China, Afghanistan, Iran, Pakistan,

India, BanglaDesh, Kenya, Tanzania, Uganda,

Ruanda, Burundi, Zaire, Madagascar, the United King-

dom, the United States, Canada, Malaysia, the Gulf

countries, Syria, France, Portugal, etc.

4. The hereditary Ismaili Imamat is one of the oldest

institutions of the Islamic world. After the death of the

Holy Prophet Muhammad in AD 672, the majority of

20

Muslims accepted leadership of the faith by public

choice. This majority became known as the Sunni

Muslims. The minority — known as Shia — believe, in

accordance with their doctrine, tradition and inter-

pretation of history that the Holy Prophet appointed

- his cousin and son-in-law, Hazrat Ali to be the first

Imam to continue the interpretation and teaching of

Allah’s final message and to guide the followers. The

Holy Prophet Muhammad proclaimed that the Imamat

should continue by heredity through Hazrat Ali and

his daughter Hazrat Bibi Fatima and their descen-

dants. From that time succession to the Imamat has

been by way of designation, it being the absolute

prerogative of the Imam of the time to appoint his suc-

cessor from amongst any of his male descendants.

In the course of history divergences emerged as to the

succession to the Imamat of the Shia Muslims, the

principal one being at the time of the seventh Imam

(about 765 A.D.). The majority of Shias followed and

accepted the succession of a particular Imam, which

succession they believe continued up to the time of the

twelfth Imam — who disappeared in infancy — after

which they believe the Imam is in “permanent

seclusion.” Such Shia are mainly in Iran and are known

as the Twelver Shia.

The minority of the Shia Muslims accepted the

succession of Imam Ismail as the seventh Imam, about

765 A.D. and thus became known as the Ismailis. The

Ismaili Muslims of today therefore have a history and

unbroken tradition extending to 1400 years.

The Ismailis believe that the authority of the Imam

is testified by the act of allegiance by the follower to

the Imam which is the act of acceptance by the follower

of the permanent spiritual bond between the Imam and

the follower. This allegiance unites all Ismaili Muslims

worldwide in their loyalty, devotion and obedience to

10.

21

the Imam within the Islamic concept of universal

brotherhood. It is distinct from the allegance of the

individual follower to his land of abode, where his

loyalty is to the country of which he is a citizen.

Today the Ismaili Muslims believe in and revere Shah

Karim Al-Hussaini, His Highness Prince Aga Khan

as the Forty-Ninth Imam of the Ismaili Muslims, in

direct lineal descent from the Holy Prophet

Muhammad through Hazrat Ali and Hazrat Bibi

Fatima. The present Imam, Shah Karim Al-Hussaini,

succeeded his late Grandfather to the office of Imamat

on 11th July 1957, 32 years ago.

From the time of Hazrat Ali the Imams of the Ismaili

Muslims have ruled over territories and peoples in

various areas of the world at different periods of history

and have exercised spiritual as well as temporal

authority over their followers. For example during the

Fatimid period of history (10th to 12th Century A.D.)

the Ismaili Imams ruled from Egypt over vast ter-

ritories all the way to North Africa. In keeping with

the Shia Muslim tradition of promoting intellectualism

and individualism, they encouraged research and

learning everywhere they governed and established the

Al-Azhar University in Cairo in AD 970, which con-

tinues as a major seat of learning even today. There

have been many Ismaili scholars of world renown who

have been pioneers in their respective fields. One

example is Avicenna (Ibn Sina AD 980-1037), an out-

standing physician whose “Book of Healing” and “The

Cannon of Medicine” remained classic medical! texts

for centuries.

Historically and in accordance with Ismaili tradition,

the Imam of the time is concerned with the spiritual

advancement as well as the improvement of the quality

of life of his followers. Traditionally, it is the Imam’s

teaching which lights the followers’ path to spiritual

22

enlightenment and vision. In temporal matters, the

Imam guides the followers, and motivates them to

develop their potential.

Voluntary Offerings and Tradition of Secrecy

11.

12.

As with all religions, all Muslims are enjoined to give

in the name of their faith. Sunni and Shia Muslims

each have different rules governing these offerings, and

these differences are recognized by both religious and

secular law in most Islamic countries.

An Ismaili Muslim makes voluntary offerings to the

Imam, as part of his religious duties and as an act of

piety. Such offerings are strictly personal and uncon-

ditional and in no sense is the Imam a trustee or

accountable to the follower for such offerings. The

offerings are for the Imam individually and not for any

member of his family. In former times such offerings

were frequently made in person to the Imam. Since this

is not possible in modern times, the offerings are made

to the Mukhi — an honorary lay appointee of the Imam.

Most Ismaili communities around the world have one

or more Mukhis who preside for Ismaili prayers in con-

gregational gatherings in Jamatkhanas — places desig-

nated by the Imam for congregational gatherings. Once

such offerings are made to the Imam through the

Mukhi the Ismaili follower is not aware of nor con-

cerned with what happens thereafter. He has fulfilled

his religious duty by tendering such offerings to the

appointed representative of the Imam, the Mukhi.

In particular, each Ismaili considers his spiritual

allegiance to the Imam to be a highly personal matter

of faith and voluntary offerings to the Imam as a

private matter between him and his spiritual leader

as part of his religious duty. The offerings are made

by virtue of the spiritual bond between the Imam and

the individual follower, and it has been historically and

13.

14.

23

is today of the essence that they remain totally secret.

This privileged bond of faith and trust between the

individual Ismaili and the Imam of the time is both

an historical and fundamental principle of the Shia

Ismaili interpretation and practice of the Islamic faith

and is never breached by the Ismaili or by the Imam.

In the course of history, the Shia Muslims, and the

Ismaili Muslims among them, have faced persecution

for their faith. The specific Ismaili religious traditions

mean that even today Ismailis in countries such as

Afghanistan, China, Soviet Union and Iran live in fear

and threat of persecution. As such and because of their

specific religious tradition many Ismailis keep the prac-

tice of their faith private including the practice of

making offerings to the Imam.

Since 1957, when the present Imam assumed office, so

many political and religious upheavals have occurred

in the developing world where most of the Ismailis live,

that the privacy of their faith has continued to be a

central objective. In the 1970's for example as a result

of persecution by Idi Amin and by African Sunni

Muslims in Uganda, the entire Ismaili Community had

to flee and large numbers of them migrated to the

United States, Canada and the United Kingdom where

they have now settled thanks to the help and support

received from the Governments of these countries. In

addition, the persecution by the Marxist government

in Mozambique caused the entire Ismaili community

in that country to flee to Portugal within the last

decade.

As Muslims have struggled to define their relationship

with the non-Muslim industrialized West, the Islamic

world has tended to split into “Modernists” and “Fun-

damentalists.” His Highness the Aga Khan as Imam,

and his immediate predecessor as Imam, Sir Sultan

Mohamed Shah Aga Khan III, have refused to reject

24

today’s world. They have, for example, advocated that

women should play their rightful place in all activities

of the Ismaili Community and in the societies in which

they live. They have been pioneers in insisting that

Ismaili Muslim women should not be veiled. As a con-

sequence of Ismaili intellectualism, their strong sense

of community and mutual support and their refusal to

relegate the interpretation of their faith to medieval

times, Ismailis face overt and sometimes aggressive

hostility and criticism from segments of orthodox or

fundamentalist Islam.

Social Welfare and Cultural Activities of the Aga Khan

15.

16.

In keeping with the traditional role of the Ismaili

Imam, responsible both for the interpretation of the

faith, as well as a source of leadership for members of

the community to improve the quality of their lives,

the Imams of the Ismaili Muslims have emphasized,

encouraged and supported social welfare projects to

help people improve their health, education and living

standards. All such “social” projects, which have been

open to all races and faiths, are funded largely by the

Imams from the voluntary offerings of their followers

and from their personal resources.

In order to structure the Imamat’s social development

activities in an organized manner, comprehensible to

Ismailis and non-Ismailis alike, His Highness the Aga

Khan established in Geneva, Switzerland, the Aga

Khan Health Services (AKHS) and the Aga Khan

Education Services (AKES) which are non-profit

organizations with branches, subsidiaries and affiliates

in many countries of the developing world in Asia and

Africa. These enormous commitments in education and

health care are largely concentrated in the developing

world. They have grown rapidly in recent years to

assist the populations of Third World countries of Asia

of

18.

25

and Africa, and the Ismaili Community, to address the

consequence of insufficient Government resources

being made available to health and education. The

shrinkage of Government resources has been caused

by the dual forces of economic shrinkage and demo-

graphic explosion. At this time the Aga Khan Health

Services provide health care to over 2,000,000 people

per year, while the Education Services benefit over

500,000 children annually.

The Aga Khan Health Services network of health

institutions, projects and programs includes hospitals

in Bombay, India, in Nairobi, Mombasa and Kisumu

in Kenya, and in Dar-es-Salaam in Tanzania, and the

Aga Khan University teaching hospital in Karachi,

Pakistan.

AKHS also operates over 200 maternity and child

health centres, diagnostic clinics, dispensaries and day

care centres. AKHS is particularly involved in pro-

moting large scale primary health care programmes

such as for vaccination, prevention of disease and

elimination of goitre, for which it has received

considerable recognition and support from the World

Health Organization and UNICEF.

Similarly the Aga Khan Education Services operates

over 300 educational institutions ranging from pre-

primary to secondary and high schools, day care centres

and student hostels, to specialized schools for the handi-

capped. Some 500,000 students receive education and

participate in these programmes annually and there

are over 5,000 young boys and girls who are recipients

of scholarships, bursaries and educational assistance

studying at all levels of education throughout the world

in no less than 20 countries.

In addition to the Aga Khan Health and Education

Services, His Highness the Aga Khan has established

26

four major international institutions, all non-sectarian

which act as umbrella institutions for local service pro-

grams. They are:

1. Aga Khan Foundation

Aga Khan Foundation, a philanthropic non-

sectarian institution, applies its resources to

innovative approaches and programmes of broad

utility in resolving selected key problems of

development in the fields of health, education and

rural development.

Among the many projects and programmes spon-

sored by the Aga Khan Foundation in Asia and

Africa is the Aga Khan Rural Support Programme,

Pakistan, established in 1983 as a non-profit

development company with which I am personally

familiar. Its primary objectives are to reduce

poverty and to improve the quality of life of the

inhabitants in the remote and virtually inaccessible

high mountain valleys of the Northern Areas of

Pakistan.

The projects and programmes of AKRSP have

benefitted over a million rural people and have

attracted international funding, from several U.S.

Agencies like USAID, and from CIDA, the UK

Overseas Development Agency and the European

Economic Community. An independent evaluation

was undertaken in 1988 by the World Bank which

commented very favorably on the methods and

achievements of AKRSP and found AKRSP

activities “have produced outstanding results.”

. The Aga Khan University

The Aga Khan University is an international

university established by law in the Islamic

Republic of Pakistan.

The Aga Khan University (AKU) — the first

ee

privately funded University in Pakistan has

established its first faculty — The Faculty of Health

Sciences in Karachi in 1983. This includes a School

of Nursing, a Medical College and a teaching

hospital of 721 beds. The cost of establishing this

University — over $300 million — was contributed

by His Highness, the Aga Khan Foundation, and

other well wishers, both in Pakistan and abroad.

It is already making a significant contribution to

medical education and research in Pakistan and

elsewhere in the developing world, in particular due

to its central role in the networking of Aga Khan

Health units and programmes in India, Bangla-

desh, Kenya, Tanzania, Syria, etc. It emphasizes

strongly primary care, for the under privileged and

those living in the poorest areas and has already

received considerable recognition.

AKU has entered into agreements with leading

academic institutions including Harvard Univer-

sity in the United States and McMaster and McGill

Universities in Canada, who are contributing to

faculty and curriculum development at the Faculty

of Health Sciences.

Aga Khan Fund for Economic Development

Aga Khan Fund for Economic Development fosters

and supports economic development particularly in

the developing countries, through projects which

increase productivity, enhance income-earning

opportunities and optimise the profitable use of

local resources and reduce national and inter-

national third world indebtedness.

Aga Khan Trust for Culture

Aga Khan Trust for Culture identifies the con-

tribution of Islamic civilizations to the human

heritage in arts, literature, science, architecture,

scholarship and other areas of learning. Aga Khan

28

Trust for Culture supports, encourages and pro-

motes Islamic culture,the values it embodies and

the forms of expression that ensure its authenticity,

identity, creativity and continuity, and seeks to

return some aspects of cultural life to modern pro-

ductive activity in the Third World such as through

programmes of rehabilitation of historic cities.

Constitution and Structure of the Ismaili Community

19.

20.

Ismaili Muslims believe that by virtue of his office as

Imam, the Imam enjoys full authority of governance

over and in respect of all religious and community

matters of his followers. In accordance with the needs

of the time, the Imams have given to their followers

rules of conduct and constitutions in conformity with

the Islamic concepts of unity, brotherhood, justice,

tolerance and goodwill. Constitutions were thus given

and were in force in many countries, but due to rapid

changes in the lands of their abode and the strong

recent internationalization of the Community, par-

ticularly towards the industrialized world, and the need

for administrative structures to meet modern require-

ments, His Highness the Aga Khan appointed a Con-

stitution Review Committee in 1984 of which I was a

member. This Committee undertook a very compre-

hensive survey lasting three years of the needs and

requirements of the Ismailis worldwide for the next 25

years and submitted its report to the Imam.

On December 13, 1986, His Highness Prince Aga Khan,

The Forty-Ninth Imam of Shia Imami Ismaili Muslims

ordained the Constitution of the Shia Imami Ismaili

Muslims, applicable to all Ismaili Muslims worldwide

in order to better secure their peace and unity, religious

and social welfare, to foster fruitful collaboration

between different peoples, to optimize the use of

resources, and to enable Ismaili Muslims to make a

——————————

29

valid and meaningful contribution to the improvement

of the quality of life of the societies in which they live.

This constitution superseded the several constitutions

applicable to [smailis in different countries.

21. Under the Ismaili Constitution a careful adminis-

trative structure has been established worldwide,

which includes National Councils, Tarigqah and

Religious Education Boards (Tariqah means the prac-

tices of faith), Grants and Review Boards and National

Conciliation and Arbitration Boards. In addition there

is an International Conciliation and Arbitration Board

to assist any Ismaili to settle any differences or dis-

putes with another party residing in another country

in relation to commercial, business and civil liability

matters, domestic and family matters, and in relation

to matters of disciplinary action and to act as a final

appellate authority in respect of decisions of any

National Conciliation and Arbitration Board. In

addition specific rules and regulations for different

individual countries have been made by the Imam and

provide for more detailed national administrative

structures and m..tters. This was necessary to take

account of different specific living environments in

countries such as secular India, Islamic Pakistan, the

Christian World, etc.

22. For the United States of America, there is established

under the Ismaili Constitution a National Council and

local Councils for Eastern, Mid-Western, South

Western and Western United States. There is also a

Tariqah and Religious Education Board with local

Boards, a Grants and Review Board with local Boards,

and a Conciliation and Arbitration Board with local

Boards. Appointments to all Boards are made by the

Imam for a term of three years. :

23. The aims and objects of the Councils in relation to their

respective areas of jurisdiction are the social

24.

25.

26.

27.

30

governance, administration, guidance, supervision and

coordination of the activities of the Ismailis and their

institutions and organizations, and their functions

include to foster the unity of Ismailis, to preserve, pro-

tect and strengthen their social and cultural heritage,

to endeavor to secure continuing improvement in their

quality of life through appropriate policies and pro-

grams in education, health, social welfare, housing,

economic welfare, cultural and women’s activities, and

youth and sports development.

The functions of the Tariqah and Religious Education

Board include to provide religious education, for the

training of religious teachers and for research and pub-

lication, including provision of a comprehensive pro-

gram and curriculum of religious education, and pub-

lication of books and relevant religious material.

The functions of the Grants and Review Board include

to ensure compliance with proper standards of finan-

cial discipline, accountability, and cost and manage-

ment effectiveness by institutions which receive

financial support from the Imam of the Ismailis.

The functions of the Conciliation and Arbitration Board

include to assist in the conciliation process between par-

ties in differences or disputes arising from commercial,

business and other civil liability matters, and domestic

and family matters and to act as an arbitration and

judicial body to hear and adjudicate upon such matters

and in respect of disciplinary action for the breach of

the Ismaili Constitution and any Rules and Regu-

lations made thereunder.

In strict keeping with the historical hereditary and

institutional role of the Ismaili Imam, the provision

of Jamatkhanas or congregational gathering halls and

their maintenance as well -as the entire range of

activities of all Council, Boards and Institutions

31

established by the Ismaili Constitution are met by His

Highness the Aga Khan as Imam from voluntary

offerings made by Ismaili Muslims. In addition, all

activities of the Apex Institutions and the programs

and projects they sponsor and which serve Ismailis and

non-Ismailis alike, are funded by the Imam and other

cosponsors. The total annual contribution of the Imam

is between $110 million and $120 million. These Apex

Institutions also solicit and receive donations for their

programs from well-wishers and supporters, Ismailis

and non-Ismailis, including many international aid

agencies.

All programs sponsored by all institutions funded by

the Imam or the Apex institutions are non-sectarian

and open to all without restriction as to religious faith

or any other restriction. They include AKF, AKU,

AKTC, AKHS, AKKES, all of which render a genuine

public service to those whom they serve and which are

officially recognized for tax and other purposes, in most

of the countries in which they operate.

Imam’s Domicile in Geneva, Switzerland

28.

Since Ismailis live increasingly in many countries

throughout the world, wiih different types of govern-

ments and sometimes contrasting interests (India and

Pakistan, Kenya and Tanzania, Afghanistan and the

Soviet Union) it is essential for the lnam to select a

place of domicile ensuring to him political neutrality,

stability and complete freedom to fulfill his

institutional responsibilities.

The city of Geneva, Switzerland, was selected and four

generations of the Imam’s family including the 48th

Imam, have been domiciled there. The present Imam

and his three children were born in Geneva. Switzer-

land is politically neutral and has a currency free to

circulate worldwide. In addition, Geneva is a major

32

international center where many international

organizations are located for it provides them too an

enabling environment. Geneva is also a recognized

ecumenical center.

Many of the international agencies with which the Aga

Khan Development Network collaborates, including

W.H.O. and the Red Cross, are based in Geneva. All

the key components of the Network such as AKF,

AKUF, AKHS, AKES, AKTC, AKFED are incor-

porated in Switzerland and report annually to the

Federal Authorities in Bern.

29. The headquarters of the League of Nations (now suc-

ceeded by the United Nations) was in Geneva, and the

predecessor of His Highness Prince Karim Aga Khan

as Imam — Sir Sultan Mohamed Aga Khan — was the

first president of the League of Nations.

The Imam’s late father, uncle and brother have held

or still hold high diplomatic office in the United

Nations.

PASS:

MAHOMED JAFFER

)

District of Columbia ) ss:

)

Subscribed and sworn to before me, this_13_ day of

November , 19 89.

Notary Public

My Commission Expires _ 11/30/93

33

The Ismailis: A Short Survey

Jere L. Bacharach

Chair, Department of History

Director, Middle East Center

University of Washington

Seattle, WA.

This is intended to be a short survey on the background of

the Ismailis. My goal will be to rapidly survey the emergence

of Islam in the seventh century A.D. and then the split

between Sunnis and Shi'ites, followed by comments on the

subsequent development of subsects within Shi’ism. I will

concentrate on a group called the Fatimids who were also

called Ismailis. The Fatimids then split and a small group

called the Nizaris appeared in Iran. In the early nineteenth

century the leader of the Nizaris acquired the title Agha

Khan and hence some people called his followers Agha

Khanis. The center of the group’s activities shifted to South

Asia, particularly India, where they were often called Khojas.

In the middle of the nineteenth century the Agha Khan won

undisputed leadership of the community through a series of

cases in the Bombay High Court. Today, the members of this

sect can be found throughout the world, but particularly in

India, East Africa, Britain, and Canada with a small body

in the United States. Throughout this account I shall refer

to them as Ismailis although they went through a variety

of name changes — Ismailis, Fatimids, Nizaris, Agha Khanis,

Khojas, Ismailis.

For Muslims, Islam is understood to mean submission to God

[Allah is the Arabic word for God]. In order that humans

understand the correct path, God chose Muhammad, an Arab

living in the city of Mecca, as his final Prophet. God’s words

as received by Muhammad in Arabic and recorded by his

followers [Muslims], constitute the Muslim holy book or

Quran [also spelt Koran]. When Muhammad died in 632,

there was no clear indication as to who should have been the

34

next leader. The majority of Muslims believed that the

historical record of who became leader was meant to be even

if they can’t understand God’s reasons for it. This group of

Believers are called Sunnis. In fact, with the exception of

Iran, the majority of Muslims in virtually every other country

in the world are Sunnis. Sunni Muslims are expected to pay

a voluntary alms tax (zakat) which is often collected by agents

of the state and rarely goes directly into the hands of the

religious elites.

There was a minority of Muslims who came to feel that after

the death of Muhammad, leadership of the community should

have gone to Ali who was Muhammad’s first cousin and

husband of Muhammad’s daughter Fatima. The Arabic word

for partisans or party is shi’a and thus those who wished Ali

to be successor to Muhammad became known as the Party

of Ali or Shi’a Ali which was quickly shortened to shi’a [other

forms of the word include shi’ites while their beliefs are called

shi’ism.]. The most important difference between Sunnis and

Shi’ites was that the latter believed that Ali and then his

descendants were to be leaders of the community. Most

Shi'ites also believed that these descendants of Ali were

divinely inspired, something like the belief in the infallibility

of the Pope by pious Catholics.

Over the next century and a half the Shi’ites began to split

into a variety of subgroups. One, called the Twelvers, believed

that the twelfth member of the family of Ali had gone into

occultation, that is, he had withdrawn from the earth and

had not died. Until he returned, the religious leaders of the

Twelvers would act on his behalf and they would receive

directly the alms [zakat] from their followers. To jump ahead

of my story, in the eighteenth century the Twelver religious

leaders who now represent the majority of Muslims in Iran

had a series of debates about the powers of the religious

leaders who were acting for the Hidden Twelfth leader. They

agreed that those clerics with the highest degree of iearn-

ing should act in his place and should interpret doctrine as

well as collect the alms without giving those sums to the

35

State. They also created a series of titles for the more learned

religious leaders with the highest called Ayatollahs. There-

fore, the former Ayatollah Khomeini derived his religious

power from a particular Shi'ite tradition and his financial

resources when in exile from the Shi'ite tradition of paying

alms directly to their religious leaders without any

accounting for the sums.

I should also add that since Sunnis tended to persecute

Shi'ites, all the branches tended to go underground and often

followers pretended to be Sunnis in order to avoid persecution.

This concern about being persecuted for being a Shi'ite has

continued into the twentieth century.

Another group of Shi'ites in the ninth century believed that

leadership of the community should have gone to Ismail. This

group was called the Ismailis or Seveners since Ismail was

the seventh in their line of successors. The Ismailis then

claimed that the leadership went to a family who claimed

descendant from Ismail through the line of Ali and Fatima

and were called Ismailis (or Fatimids). In 969 the dynasty

captured Egypt and built for themselves a new capital called

Cairo.

Another crisis arose in the 1090’s in Cairo when the political

leaders put a boy on the throne as Fatimid leader in order

to control him. A group of Ismaili Shi’ites in Iran and Syria

believed that the true leader shouid have been a man called

Nizar. This group which was very active became known as

the Nizaris. They then took a radical step and claimed that

the concept of divine leadership could be passed on to some-

one who was not biologically related to the dynasty in Egypt

(or to Ali for that matter). Therefore the leader of the Nizaris

(claiming to be the true Ismailis) established himself in Iran

and began to propagate his beliefs in that region. This period

of Nizari activities came to an end in the 1250’s when the

Mongols destroyed their headquarters in Iran.

The Nizari [Ismaili] movement then went underground with

most of the followers claiming to be Sunnis but accepting

36

the doctrines of the Nizari leader. They also paid alms taxes

directly to that leader or his representatives. Ironically, while

facing persecution in Iran, members of the Nizari sect found

a more fertile field in India and began spreading their beliefs

there. In India the followers of the Ismaili-Fatimid-Nizari tra-

dition were called Khojas. According to most scholarly

accounts, they also began incorporating a number of Hindu

ideas into their practices and belief system, although

members of the Nizari [Ismaili] community would deny it.

In the nineteenth century a number of extremely significant

developments took place within the community. In 1819, in

reaction to the murder of the Nizari leader by some Sunnis,

the ruler of Iran who needed the support of the Nizari com-

munity, publicly recognized the new leader of the Nizari com-

munity and gave him the title Agha Khan. This is how the

leader acquired the title and why some outsiders call the com-

munity the Agha Khanis. The first Agha Khan died in 1881,

the second in 1885, the third in 1957, and the current leader

of the Ismailis holds the title of the Fourth Agha Khan.

Unfortunately developments in Iran went badly for the

Ismailis and by 1840 the Agha Khan had to flee to India

where a large community of followers had already emerged,

especially in Bombay. In the 1840’s the Agha Khan became

involved in a major court case involving the issue of

inheritance within the community. The result of this case

was that the Khojas [Ismailis] were recognized as a sect of

Islam but with their own special inheritance laws.

Two decades later an even more important case arose

involving a direct challenge to the power of the Agha Khan

to collect alms and not have to account for them. The specifics

of the case included a challenge of the Agha Khan to appoint

mukhis (treasurers) who could also serve as the loca! religious

leader in the Ismaili house of worship called a Jama’a Khana.

The presiding British High Court Judge, Justice Joseph

Arnould, used this as an opportunity to collect as much

historical data on the community as was possible and most

37

modern studies of the community draw upon his work as a

base. Justice Arnould declared that the Khojas were Shi’ ites

of the Ismaili persuasion; that by being members of the com-

munity Khojas [Ismailis] had given an implied consent to the

position of the Agha Khan; that all gifts such as alms given

to the Agha Khan were his to use as he saw fit, although

the Justice noted the long record of charitable activities by

the Agha Khan; and that the Agha Khan had a particular,

religious position as a leader whose claim could be traced to

the Nizaris in Iran to the Fatimids in Egypt and back to Ali.

(The Imamate]. The British courts reconfirmed the Agha

Khan’s financial powers and religious position again in 1885.

The powers, prestige, and responsibilities of the Agha Khan

are incredible when we compare them with most other

religious traditions. And, if one is to be a believing, practicing

member of the Ismaili community, it is necessary to accept

them. In terms of a financial obligation, an Ismaili is to give

between one-tenth and one-eighth of his income to the Agha

Khan as alms. [Unlike Sunni Islam, this alms is called a

dassondh which means one-tenth.!} The principal agent for

collecting or transmitting the sums is the mukhi who is to

be an honored member of the community. Neither the mukhi

nor other local officials keep accounts of the sums raised but

are to pass the money on to higher officials until it reaches

the Agha Khan or agents designated by him to represent him.

There are a number of traditions about what happens to the

Believer who fails to pay the alms tax. One says that those

failing to pay the dassondh and to recognize the infallibjlity

of the Imam [Agha Khan], will pass through a cycle of 84

rebirths before being considered for salvation. For those who

fulfill their obligations, salvation comes immediately.

Another tradition records that the Ismaili who fails to pay

the dassondh, the one-tenth will turn to fire, the remaining

nine-tenths to wood and everything he owns will burn.

Because the Ismailis have been persecuted in a number of

areas, the most recent being East Africa, and because they

Hittin

38

lack a national homeland, the dassondh or tithe was collected

in bullion, cash, or other easily transmitted forms of wealth.

The process was kept secret for fear that the enemies of the

sect including the State would confiscate the money. Neither

the mukhi nor any other member know how much money

is annually given nor how it is used.

In 1936 in honor of his golden jubilee, the Third Agha Khan

was given his weight in gold; in 1946 he was given his weight

in diamonds for his Diamond Jubilee. While these are excep-

tional activities, it does indicate that the Ismailis through

the mukhis donate large sums to their leader. Fortunately,

the community has an outstanding reputation for charitable

work [although contributions are nox tax deductible]. Support

from the Agha Khan is associated with hospitals, schools,

development projects in areas where there are large numbers

of Ismailis as well as in the Third World in general. Ismailis

also have an excellent reputation for public service. For

example, the uncle of the present Agha Khan served as head

of the U.N. Commission on Refugees for many years. He now

lives in retirement in Geneva.

Author’s background:

As for my credentials, I hold a Ph.D. from the University of

Michigan where I specialized in Islamic history. My B.A. is

from Trinity College (Hartford, Conn.) and my M.A. is from

Harvard. I joined the University of Washington in 1967 as

an Assistant Professor of Middle Eastern history. I am cur-

rently a full professor, chair of the Department of History,

and Director, Middle East Center, Jackson School of Inter-

national Studies. I have authored or edited three books and

about 40 articles. In addition, I co-produced a twelve part t.v.

series on Islamic history and art and co-curated five

exhibitions entitled The Warp and Weft of Islam.